Mises and Madison

"With respect to the two words 'general welfare,' I have always regarded them as qualified by the DETAIL of powers connected with them. To take them in a literal and unlimited sense would be a METAMORPHOSIS of the Constitution into a character which there is a host of proofs was not contemplated by its creators." -April 20, 1831 Letter from James Madison (dubbed Father of the U.S. Constitution for his role in drafting of the text; see also The Federalist Papers, published on behalf of the American system as one of limited government of by and for the people of A Free Republic)~

"MODERN CRYPTODESPOTISM, which arrogates to itself the name of liberalism, finds fault with the negativity of the concept of freedom. The censure is spurious as it refers merely to the grammatical form of the idea and does not comprehend that all civil rights can be as well defined in affirmative as in negative terms. THEY ARE NEGATIVE AS THEY ARE DESIGNED TO OBVIATE AN EVIL, NAMELY THE OMNIPOTENCE OF THE POLICE POWER [OF GOVERNMENT], AND TO PREVENT THE STATE FROM BECOMING TOTALITARIAN." -Ludwig von Mises in chapter 21, The Theory of Money and Credit~

Prov. 11:3 - If the foundations be destroyed, what shall the righteous do?

Sunday, July 31, 2011

How Democrats And Fake Republicans Destroyed The Economy And Why Socialism Doesn't Work: THE HARD FACTS AND RAW NUMBERS REVEAL ALL

These are the numbers that show the kind of "change" socialist radicals have wrought upon us.

The record is there for all to witness for themselves. As Michael Medved pointed out in Townhall.com: 


"Following the 1994 GOP congressional takeover (for the first time in 40 years [under Clinton]), business conditions dramatically improved, with the unemployment rate declining to an average of 4.77 percent [versus the previous 6.5 percent]

"During two years of all-Democrat rule (1993-1994), the federal deficit averaged 3.35 percent of the gross domestic product, but the subsequent six years (under GOP congressional leadership) brought deficits averaging less than zero -- with surpluses from 1998 through 2001.

"Some commentators suggest that these figures show that Washington works best when different parties control White House and Congress, BUT THE 2006 MIDTERM VICTORY FOR DEMOCRATS during George W. Bush's presidency spelled economic calamity.

"In W's first six years, with his GOP allies dominating Capitol Hill, Bush deficits averaged 1.91 PERCENT OF THE GDP -- well below the 60-year postwar average. AFTER HOUSE SPEAKER NANCY PELOSI, D-CALIF., and SEN. MAJORITY LEADER HARRY REID, D-NEV brought their free-spending ways to House and Senate, DEFICITS SOARED TO A DANGEROUS 4.74 PERCENT over the next two years -- and continued to skyrocket to a projected (and appaling) 10.27 PERCENT FOR THE FIRST TWO YEARS OF OBAMA.

"The unemployment rate went from an average of 5.29 percent during Bush's first six years (with Republican majorities) to 6.57 percent after the Dems came to power -- and an excruciating 9.4 PERCENT (AVERAGE) DURING THE FIRST 18 months of OBAMA."
In a famous interview with Nancy Pelosi CBS's Bob Schieffer asked if Obama can be viewed as a failure as well in light of the overall situation to which Pelosi responded by arguing that Republicans "control the agenda" even though Republicans won the House of Representatives (which Pelosi previously ruled over America from through her socialist 'we have to pass a law before you get to read it' approach to governing and special benefits) just last November and the Democrats still control both the Presidency and the Senate!

Here's the link to that interview, by the way: "Bob Schieffer Scolds Pelosi For Congress Doing 'Basically Nothing' on Economy" http://www.mediaite.com/tv/cbs-bob-schieffer-scolds-nancy-pelosi-for-congress-doing-basically-nothing-on-economy/

Republicans and those who believe in limited government and free trade are fighting an uphill battle. Milan Kundera whose books were banned under Communist rule in Czechoslovakia once said, "the struggle of man against power is the struggle of memory against forgetting." So it's no wonder that people who are commiting great errors in the name of revolution and certain ideas and doctrines wish to erase the inconvenient truth about the past and about now.

This is why the former Speaker of the House, a speaker of socialist deceit, distortions and sophistry, who is far from alone by the way (as she represents the radical Marxist establishment that dominates academia, government and institutions of consequence and influence), decided, on Face the Nation, to blow more smoke about "the future" and about more socialist policies rather than deciding to face the truth that the rhetoric she chose to accuse Republicans with in the past really applied to herself and her subversive Democrat and fake Republican (i.e. McCain et al) comrades in government, academia and in the organizations that are undermining and harming America today. Of course this wouldn't be in her interest, but only in a sense.. In the selfishly ideological sense.

The realization that man may act selfishly in ways that are not exclusively monetary, as philosophers have argued and pointed out in the past, may be for her own good in the long run - as it may lead her and others like her to the revelation of greater truths vis a vis economics and politics (and perhaps even deeper personal understandings and intellectual growth.)

Here is an opportunity to examine the idea of another dimension and aspect to selfishness besides the common one we all hear about as highlighted by the rhetoric of class warfare: financial greed. The question regarding other dimensions to selfishness and self interest is key to explaining why socialism doesn't work.

In his Theory of Money and Credit, F.A. Hayek's predecessor, Ludwig von Mises, highlights and argues that "Private ownership of the means of production tends to shift control of production to the hands of those best fitted for this job and thus to secure for all members of society the fullest possible satisfaction of their needs."

I remember quoting this in a YOUTUBE debate with someone under the screenname "Imdslam" who actually tried to argue that the more that people are allowed to develop and exchange with eachother the less they have. This is what he said @ "thexcount" (my youtube sn): "Outsourcing happens because big business tells us Free trade will create jobs here and increase tax revenue. total lie and proven wrong."

And with regard to the Mises quote about the benefits received by all members of society and private ownership in a free market / free trade economy and people who make alot of money I pointed out: "a big incentive for CEOs to bring success and profit and low prices to consumers is in their shares of stock which is part of their pay deal. THE world is full of competition, billions of people. Its not up to the govt how much one should be allowed to grow." I also argued that "class warfare is petty and backwards thinking. Not progressive at all, but as we can see the results again and again: counterproductive." It is immature and juvenile. Also, the Marxist class/warfare approach and nanny-state fosters mediocrity and dependency rather than ingenuity, growth, development and the entrepreneurial spirit.

Furthermore, I argue(d): "outsourcing is a fact of life that can't be prohibited without violating the principles of freedom. Such as anyone's right to do business in the next town or the next city.; It's basically like saying you can't open an airplane plant in South Carolina just because you have done business in Oregon or Washington. Restricting free trade and inflating the cost of free trade is counterproductive. And if you are such a humanitarian u should be happy that anyone opens business and jobs ANYWHERE."

There is a very important principle that needs to be understood here and this is pointed out by Adam Smith, author of An Inquiry Into The Causes of the Wealth of Nations. It is that "The property which everyman has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable."

Now what exactly is happening when bureaucrats decide that they can or should be involved in "creating jobs" or spending money that is not theirs in ways which cross the line which Thomas Jefferson explained was part of America's framework for "a wise and frugal government, which SHALL RESTRAIN MEN FROM INJURING ONE ANOTHER, which shall leave men free to regulate their own pursuits of industry and improvement.."

This is a major contradiction to today's establishment and teaching which I trace the roots of in my paper and survey of socialism. These ideas and principles are a major contradiction to the idea that government planners, politicos and bureaucrats should be directing, planning, and (yes) manipulating the economy and the citizens who form it as if it were some sort of destructive force or natural disaster and disorder as if the people were sheep to be herded and prodded in this direction or that by saintly and annointed bureaucrats and government officials. As history has revealed again and again, these people really have a talent for knowing how to spend other people's money for their own good.

They are very good at pointing the economy in the right direction, just as FDR did when he prolonged America's great depression by SEVEN YEARS according to UCLA economists Harold L. Cole and Lee E. Ohanian who found that Roosevelt's policies thwarted economic recovery - I would add in a similar fashion to Obama's prolonged, sustained and increased unemployment. Here's the link

I should mention, at least in passing, that Socialism is not confined to strictly financial/monetary aspects of the human economy in a broader and more general sense because in culture socialism can be the application of "massive use of political power" (as Ralph Raico has pointed out) applied against society as its masters and rulers at the time may see fit. This is probably one of the reasons that religious authoritarians such as those in the middle east (i.e. Arab Socialism) as well as intellectual authoritarians (i.e. "Communist vanguarders" who realize they stand against the interests of those with free will) have been comfortable with the socialist arrangement and power it bestows upon their so-called governments.

Of course socialists come in many stripes but none of them are compatible with the American model. I would add Keynesianism to the list of failed attempts.

See also Keynes and the Reds by Ralph Raico

And here is Ron Ross in Fatal Flaws of Keynesian Economics:
"The Chicago School's research led them to conclude that INDIVIDUALS ARE RELATIVELY DELIBERATE AND SOPHISTICATED IN HOW THEY MAKE ECONOMIC CHOICES. Keynesians and their liberal followers apparently think individuals are short-sighted and simple minded.

"An elemental but too often overlooked reality about our economy is that it is based on voluntary exchange. Voluntary exchange is an even more fundamental feature of our economy than is the market. A market is any arrangement that brings buyers and sellers together. IN OTHER WORDS, THE PRIMARY PURPOSE OF A MARKET IS TO MAKE VOLUNTARY EXCHANGE POSSIBLE."

But what happens under Keynsian "stimulus" type schemes and de-facto politico manipulation or "planning" (that is social engineering in the market by government functionaries rather than by the community making its own arrangements) in the economy?

One example I would cite is the outstanding economic event known as the 2008 housing crash and financial crisis (which involved 27 MILLION risky and subprime loans, half of all mortgages in the U.S. according to The American Spectator in its May 2011 issue article by Peter Wallison, What Hath Government Wrought?)

Here is Thomas C. Taylor in An Introduction to Austrian Economics, detailing the consequences of the disruptive and disasterous bubble effect which distorting and irrational malinvestment practices and policies produces:

"Decreased interest rates in the early stages of the credit expansion emerge as FAULTY SIGNALS to entrepreneur-producers about the real savings available for business investment purposes. Business decisions are made as if the ratio of present (consumer) goods to future (capital) goods has dropped, when in actuality no such things have occured. Additional investments in capital goods broadening and lengthening the structure of production are spurred as a business boom gets underway. Resources are diverted into the production of capital goods, and the prices of such resources are concomitantly bid up in the process. Yet the cue that the entrepreneur-producers have followed, the interest rate, has been FALSIFIED by the effects of the credit expansion. Real savings appropriately available for additional capital goods formation has not increased. Under the conditions of a short-lived credit expansion, the boom can only be temporary. The demand for consumer goods has not dropped, and the impropriety of enlarging and lengthening the production process as if it had is revealed once the credit expansion is terminated. The costs invested are seen as unjustified because the longer waiting time to complete and implement the additional capacity to produce is inappropriate in view of the unaffected demand for consumer goods. Production expansions cannot be finished, and the structure of production, which involves the coordination of numerous links in the lengthened production chain, is thrown out of smooth running order. Liquidations and rearrangements of production are necessary in order to correct the undesireable and 'unforseen' effects of the malinvestments. The actual consumption-savings ratio is once again able to dictate the balance between shorter and longer or more roundabout approaches to production. The correction or adjustment process is what is commonly referred to as a recession or depression. If the duration of the credit expansion is not short, then the extent of malinvestments is compounded and the inevitable and eventual correction process is intensified."

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