In the News

I leave for Costa Rica Wednesday, out of Orlando ($285 vs. flying out of Jax for $600+!!). I'm going alone, and I've only barely been out of the southeastern region of the U.S. in my entire life. I'm really looking forward to this, as I believe it will be a significant chapter in my long journey of personal development. I paid a very large, non-monetary price for this trip, and the closer I get to it, the more all signs say GO. I'll surf while I'm there, and I'm planning to do some yoga classes, too. I'm hoping I can find a cheap golf range to play at, and hopefully I'll find a job. I don't plan to sleep much at all, and I will probably drink a lot less coffee and beer and eat a lot more fruit and protein bars.

When I get back, I'll waste no time in heading to Tallahassee for FSU's Applied Master's program in Economics. I don't plan on working the entire year, for I wish to dedicate it wholly to the program and, probably more importantly, to learning another language and furthering my knowledge of economics. Towards the end of my senior year, I was starting to pull everything together that used to confound me before. Economics is itself like a language, and I feel I'm really starting to not only learn it for myself but also to develop my own dialect. Call it arrogant, but I believe I can put a new emphasis on it all, that is, make it accessible to new and otherwise indifferent crowds of people. I know exponentially more now than I did a year ago, and that's with working 25+ hours a week and taking nonsense classes at the same time. Anyway, I'm almost more excited to go to Tallahassee than I am Tamarindo. Who would've thought?

I'll probably rename the blog when I get back. I think I'm going to make a blog about my adventures in Costa Rica, but I don't want to commit to anything because I'm not sure what computer access will be like while I'm there. I won't have a phone or my own lap top, either (or even a camera!).

It's funny, I was so ready to get out of school. Now I just want back in. Well, not exactly. But these in-between times are so boring that I don't know what to do with myself. This will all be different in less than a week!

I come back July 28th. See ya then.

The Market Test

Last night I was at a bar at the beach that featured "Mensday Wednesday," a night where men drink free from 10-12. I'm always very wary about "free stuff," because there is always a catch. Last night was no different, and I'll list what these draw backs were:

1) Men did drink free, but not just any beverage. In fact, only one drink was "free," the house "lager," which I'm pretty sure was poured from a keg of Milwaukee's Best. It was disgusting.

2) Guys were given ~5 oz. dixie cups with which to drink from. Now, this wouldn't be too much of an issue if it wasn't for the fact that the keg was behind the bar, and you had to wait for the bartender to get you a refill. And since most guys had the "free" mentality, tips were not forthcoming, thus the bartender had very little incentive to give you snappy service. The lines were notorious.

3) The keg ran out at 11:19 PM and was not refilled. So, really, it was "Mensday Wednesday" for 1 hour and 19 minutes.

Needless to say, I refused to stand in a ridiculous line for a 5 oz. portion of horse spit beer. Pabst Blue Ribbons were $2, and I was happy. I will not go back to this bar on a Wednesday, and I think many other people feel the same. The market has spoken.

So, I argue that "free stuff" actually has costs, though not monetary, that are much greater than a dollar price. Last night there was little drinking taking place, and neither the bar tenders nor the customers were very happy (which was the total opposite of what everybody wanted before they went out). Sure, some people saved a few dollars, but I'd be willing to bet that on net, most everybody suffered psychic losses.

Reminds me of "free admission" at Chuck E. Cheese. Sure, it's free, and even the games are cheap, but the quality of service is poor, games are poorly kept, and there's a gang member at every quarter slot. I'd go there if the price were higher.

Graduation

So, I graduate from college in a little over a week with my B.A. in Economics and minor in math. Alas, I must rename my blog, lest I mislead serious readers into thinking I'm a know-nothing college kid (because now I'm a know-nothing graduate). What should I rename the 'ol blog?

I'm remembering a South Park episode, where Eric Cartman describes his experiences at theme parks... and amongst his recollection he says something about, "cantankerous kinks" or something to that effect.

Hmmm. This blog is about cantankerous kinks, isn't it?

The search continues.

Update: Cartman doesn't talk about cantankerous kinks but instead "rare Kartankulas plinks!" I found the transcript on the net (not the video because my computer is far too slow to watch it). I thought the part where Cartman talks about lines was so great that I'm uploading the transcript of that part here, as follows:

Cartman: Oh, but I'm not buying the park to get people to come.

Mr Foon: You... you're not?

Cartman: No no no! I'm buying it to keep people out! [Chris and Frank look at each other] Don't you see? Forever it has been my dream to have my very own theme park, so that I could be alone in it, all day, every day. I love theme parks. [zoom in] But the lines! Everywhere you go, people, crowds, [shot of people waiting to enter "The Mine Shaft"] The rides are great, but... [a shot of crowds on Main Street] All the lines, lines, LINES! [shot of people waiting to enter a ghost ride, another shot of a kids' mine shaft ride; another of Cartman pissed off, eyes squeezed shut, with waiting times floating past him] If there's one thing I hate, [a shot of two lines of people entering his head] all the lines, lines, lines, LINES!! [opens his eyes, and a moment later...] And then there get to be so many people [his eyes roll around independently of each other] that they make FastPass. [a shot of people in a FastPass line] So then there's lines for FastPass. [zoom out to show Cartman in line for a FastPass] You stand in line to get a ticket to stand in line later. Then there's lines for the bathrooms [two lines for the Waterworks Restrooms], lines for the drinks [Astro Food line], lines for cantakuras [Seussian characters play strange instruments for the people in line] and rare Kartankulas Plinks! [a vendor sells them - they are a fruit treat shaped like strawberries] ...And, so you see, this park is for me. Nobody else will be allowed in it. [Emphasis added]

Teacher's Unions and Unemployment

I read a very profound statement in Man, Economy, and State today that, although known to any worthwhile economist, is almost vaguely or not even treated at all in high school and college econ principles texts. I'm on Rothbard's chapter on monopoly. The passage (pp.707-708) is as follows:

"[When] [t]he union has thus achieved a restrictionist wage rate... a sacrifice has been made... there are now fewer workers hired... What happens to them? These discharged workers are the main losers in this procedure. Since the union represents the remaining workers, it does not have to concern itself, as the monopolist would, with the fate of these workers. At best, [the unemployed workers] must shift... to some other-nonunionized- industry. The trouble is, however, that the workers are less suited to the new industry. Their having been in the now unionized industry implies that their DMVP in that industry was higher than in the industry to which they must shift; consequently, their wage rate is now lower."

But this next part is what I find amazing, that I've never read in any formal textbook (but is so elementary). Rothbard continues:

"Moreover, their entry into the other industry depresses the wage rates of the workers already there. Consequently, at best, a union can achieve a higher, restrictionist wage rate for its members only at the expense of lowering the wage rates of all other workers in the economy." [Emphasis added]

I do believe there exists economic laws irrespective of time and place. In this case, an increase in supply will decrease the equilibrium price- in this case, the price of labor, or the wage rate. So not only do labor unions use the heavy hand of the government to force employers into negotiations (and more importantly, settlements), but also these entities decrease everybody else's standard of living in the form of decreased wages by the reallocation of previously employed workers.

Let us not think that unionization in this and other countries is such a small proportion of the labor force, either; this analysis applies in full to occupations and industries that require intense licensing (e.g., medical services) and that outright prohibit competition (e.g., public utilities, public schooling).

Some people might object that public schooling is subject to the constraints of competition via private schools. This is untrue for many reasons, but principally, two: 1) Private schools are subject to many, if not all, of the same requirements concerning curriculum and facilities; they can scarcely operate outside of the realm of what the state legislature will let them. 2) Education is compulsory; kids can't choose whether to go or not. Consumer choice is the backbone of competition: By eliminating a vast array of choices available to children and young adults, be it the workforce or some other way to spend their initial 18 years of life, compulsory education has eliminated a large part of what constitutes competition. Thus, even if argument (1) is granted, the fact that kids have to attend school means that both public and private schools don't have to try nearly as hard to maintain a level of quality and price that would impel ordinarily free children to attend.

It's as if all adults were forced to buy magazines of a certain type. Before such a mandate was enforced, magazines had to compete amongst the thousands of other products that you would have ordinarily bought with your money (not just other magazines). But it's worse than this where schooling is concerned, because on top of eliminating substitute products to spend your tuition money on, the educational establishment is cartelized and monopolized to hell and back. You have the worst of both worlds in the case of schooling, because at least in the magazine example wider profit margins would encourage entrepreneurs to enter the forced magazine industry. Where schooling is concerned, that's not a viable option. To modify our magazine example, adults are forced to buy the kind of magazines that are cartelized and will blow any of its competitors to smithereens with brute force. Now imagine the kind of quality of magazines you'd expect to read.

Back to my original point, this monopolization of sorts not only dis-employs the workers in the original industry but also decreases the wages of everybody else as those workers find work elsewhere. Multiply that by the amount of licensing and paperwork it takes to work in any given occupation, and it's no wonder why U6 unemployment is at 16.9 % (and why we have to use 6 different measures in the first place ;) )

Accounting Tricks

Would somebody mind explaining to me how people who live off taxes pay taxes? The two concepts are mutually exclusive: you're either a net tax consumer or a net tax payer.

I know, he has book sales, blaze blaze, but I'm speaking of a larger "phenomenon" where we think in terms of every laborer/property owner/etc. paying taxes. This is simply false, as one must fall into the category of net consumer or net payer of taxes relative to all the 'benefits' received from the guvamint.

Saying that public officials, like the vice president or the mayor, or college professors or the city garbage guy all pay taxes is ridiculous, because they all derive their incomes from taxation. The "paying out of taxes" at the end of the day is an accounting maneuver, nothing more.

Think of it like this: A man sticks you up in a dark alley for whatever is in your pockets. You scream and plead with him that you need that money for rent and dinner, but he doesn't listen, and insists that you throw your wallet into his bag. He assures you, "Hey, now, I'm in this just as much as you are," as he throws his own wallet into his bag. He then walks off with the bag.

I feel better, don't you?

The Economics of Credit Reports

I stumbled upon a Mises.org video originally aired on CNN that pits J.H. Hubert against some "consumer advocate." Hubert argues that credit checks for potential employees are, by common sense, indicative of a given employee's work reliability, that is, a lower score should be positively correlated with more work absences, tardies, etc. as compared to a person with a higher credit score. I like the argument because it is intuitively appealing. The "consumer advocate," however, maintains that there are no statistical studies proving that this correlation necessarily holds, and so employers shouldn't be allowed to discriminate on the basis of a FICO score.

Riiight. Empiricists sound really dumb sometimes.

But, I went through 3/4 of the video and didn't hear the most basic argument from an economics standpoint come up, that is, that if the demand for laborers with lower credit scores fall, then the demand for laborers with higher credit scores must by de facto increase, establishing a wage differential between the two classes. If, as our "consumer advocate" maintains, there really is no difference between work reliability and overall performance between the two classes, then there are profits to be made by "daring" entrepreneurs willing to hire from the lower-scoring group. These profits would be noticed by other entrepreneurs, and over time, the demand for lower-scoring laborers would increase which will, by default, decrease the demand for higher-scoring laborers, eliminating any wage differential between the two groups.

Thus, our "consumer advocate's" argument is shown to be a paper tiger, because there's really nothing to worry about.

Unless we assume that employers are stupid and can't recognize profit opportunities. But if this is true, why doesn't our "consumer advocate" become a hiring manager somewhere, making the big bucks by hiring people with poor credit?

Frankly, I like the argument that, "It's my business, my job that I'm looking to give to somebody else, and it's nobody else's damn business who I hire for it."

Sin Escolaridad Más

I went to the library today and checked out two books in spanish, those being La Casa en Mango Street and Che Guevara Habla a la Juventud. Ever since late August of '09, I've been learning the spanish language. I used Rosetta Stone for 5 months, and since January I've been reading spanish books with a spanish dictionary nearby. I can read most simple things and understand it spoken to me, but speaking it is another story. Hence why I'm going to Costa Rica for 3 months on May 19th, and the rest is history.

Anyway, La Casa en Mango Street is a book that I was assigned when I was in Spanish III in high school. I remember the very day I was assigned the book, and how I stared blankly at its pages with not an ounce of hope in my soul that I'd get through it. I defeated myself, in a way, for I didn't read the book (nor pass the class). I didn't give a damn, frankly.

But now, in a span of 8 months, I can read this book! I flip through the pages with almost ease, sounding out the beautiful letters aloud as if I were painting a Rembrandt. I'm absolutely amazed at the results that I (or anybody) can achieve when I actually want to do something. Foreign tongues used to scare the bajezzas out of me, but I'm very much looking forward to learning both french and german come next August. It has little to do with IQ and everything to do with the will to learn.

What does this have to do with political economy or economics?

Compulsory schooling is a sham. I graduated believing that the professors were supposed to teach me something, that more schooling and more training and more formal education were my vectors to success. This is so incredibly and emphatically untrue that I pity all those graduating seniors going on to Harvard and Yale and the like. You know, the kind of people that look at a recession and say, "Hope I'm not out of the job..." Because now, I can look at a recession and say, "I don't feel like participating in this. I can always create my own job, anyway." Compulsory schooling, by its very definition, cannot teach you this skill because you aren't allowed to choose among the skills and talents you're best at and further develop.

From my 18+ year experience in school, and my substitute teaching experience, and my sister's experiences, and all the tutoring I've done during college, I've realized that compulsory schooling sucks the drive and the need to learn, to better oneself, out of most people. These students are so damn reliant on the professor to hand them knowledge that they don't even realize they were born with their own faculties. Compulsory schooling is worse than inefficient and futile;

it's immoral.

Entrepreneurial Idea?

I was thinking tonight about items that have big prices but can be shared among consumers. For example, computer programs such as Microsoft Office or the language learning program Rosetta Stone, are both on the expensive side as far as single consumers go, especially if neither products will bring with them monetary remuneration.

But, perhaps, a Craig's List of sorts could be set up for isolated consumers wanting to go in with other consumers on such products? For instance, I want Rosetta Stone French and RS German, and I'm sure another consumer SOMEWHERE in the world wants to do the same, and the RS software can be used twice. Not only would this 'sharing' cut the $600 price in half, but also both me and the other customer would be less willing to rip an illegal copy off the internet. Thus, both consumers and producers are made better off.

Of course, how many consumable goods can be duplicated in such a way as computer programs? I can only think of things like Photoshop, Office, and Rosetta Stone. The products have to be duplicable. I think.

Either way, this idea does set up an information exchange, which is essential to markets. I think it would work, though it would not necessarily bring in big profit margins to the host of the exchange. Would some products be made so incredibly accessible to previously isolated consumers that product prices would rise substantially? No telling, but I like the idea.

Hmmmm.

More on Strawberries and Such

Back to our Strawberry producers here, it's obvious that because the strawberry farmers were destroying their crops, they made entrepreneurial errors. That is, the decision to continue producing strawberries that was made before the growing season was wrong. Obviously, these producers should have invested less time/labor/capital/other resources in the production of strawberries than otherwise. If the strawberry farmers could go back in time, they would correct for this error, and reduce the amount of factors that went into the production of their crops.

But they can't go back in time. They look to the future with their presently owned resources and products, and make decisions based upon future prospects. Destroying some of their surplus crop raises the per unit price of strawberries, enabling them to produce more than otherwise in the future.

I think that's what our strawberry critics forget: production is future oriented. Producers can't look at the past and base their production decisions off of this alone. What the critics are asking strawberry farmers to do is to compound the errors already made in production. Assuming that strawberry farmers could go back in time, it's as if the critics are asking them not to, to instead produce so many strawberries as to reduce their profit margins and hence their incentives and abilities to continue with production in the future, and ultimately to serve the demand of consumers in the market.

In other news, William Easterly's The White Man's Burden was a fantastic read about the follies of foreign aid, about how local, on-the-ground strategies that attack small problems related to poverty and squalor are often much more effective than grand utopian schemes of eliminating an entire feature of poverty (say, hunger or AIDS) in one fell swoop. I feel as though I understand the IMF, World Bank, etc. much better than I did a month ago. Without giving them much justice, I would have to say they're mostly 'bureaucratic clap-traps:' Big talk without the strategies to make for effective walk.

But, I've been told that I have a bad case of confirmation bias.

Bad Argument

I've read and talked to a lot of people whom are opposed to the recently passed healthcare legislation. Often, they have really good points as to why it's no good and won't achieve its ends. However, there's a defense that even many respectable economists use that I believe is lame. That is, that

"a clear majority of Americans oppose this healthcare bill."

Brushing aside the fact that we have no idea if a "clear majority" opposes this or not because most people haven't ever talked to a pollster in their lives, this argument is fundamentally flawed. It rests on the premise that majorities mean something, that if a majority of Americans wanted this bill, then it'd be OK.

It means that the mass genocide of Jews in the late '30s and early '40s was OK only if a majority of Germans gave the thumbs up; that bombing the WTC was only OK if a majority of extremists agreed; and that Chinese communism is justified only if most of its citizens don't mind.

This is clearly ridiculous.

Majority opinion confers absolutely no legitimacy upon any argument whatsoever. Even if 100% of all people believed that healthcare legislation was right (and thus could lower costs), or that protectionism was good for them, or that 2 x 1 = 89, they are still in every case wrong. It doesn't matter how many idiots they have on their side.

Strawberry Fields Forever

TBO: "Wholesale prices that were $17 to $19 for a flat of eight containers have now fallen to $5 to $6 a flat, Grooms and Parke said. Parke said some farmers have tried shipping berries to stands to sell on consignment, but if they only return $3 a flat on each shipment, they lose money on each deal."

No, it's greed, according to Yahoo!. Apparently, the right thing for everybody to do is run at losses; let's just produce things that nobody wants to pay for. Or at least that's what the homeless shelter folks would have us do. In a way, though, they are a loss that society is running itself. They know no better.

In other news, I spoke to a German family at work today. I overheard them speaking their native tongue, and not knowing what it was at first, I inquired about their nationality, and followed up with a terrific joke. The conversation went like this:

Me: "What nationality are y'all?

German Father: Jocularly, "We're German. Is that OK with you?"

Me: "Well, sure, I guess we can all forgive and forget, right?"

German Family: Silence.

The parents looked stunned and confused. The children just looked confused. Did he really say that?

Yes, yes I did.

In Other News...

In the neon circle: What's in the bill is irrelevant now. Not like anybody besides the privileged political class and wealth looters need to know the 'benefits,' anyway.

In the red: Notice that there has never been a "Pepsi shortage" or a "sock shortage?" Yet when an entire populace of a state is made to fund public utilities, we face blackouts, shortages, congestion, and overall piss-poor quality relative to most other goods consumed freely. Even in the light of this, they still got 216.

What a joke.

Deflation vs. Malinvestment

Reading through an investor's newsletter this morning, I came across snippets that almost contradict each other. I'll explain that. But it's as though some (most) mainstream investors and academicians want to have the cake and eat it too. It's like me going to work, hoping it's not busy, and still making bank; it ain't happening.

This guy says: "Now, there is no exact way to determine the right size of the money supply. It definitely needs to grow each year by at least the growth in the size of the economy, the population, and productivity, or deflation will appear. But if money supply grows too much then you have inflation." [Emphasis mine]

He clearly injects the deflationary bogey, and of course doesn't explain the implications of it, but instead implies that it is clearly and at all times bad and catastrophic, which is emphatically untrue. We'll see why here:

"More than five million homeowners are behind on their mortgages; There are over six million Americans who have been unemployed for at least six months, a record 40% of the ranks of the jobless; The private capital stock is growing at its slowest rate in nearly two decades; Roughly 30% of manufacturing capacity is sitting idle; Nearly 19 million residential housing units, or about 15% of the stock, is vacant; Commercial real estate values are down 30% over the past year; The average American worker has seen his/her level of wealth plunge $100,000 over the last two years, even with the recovery in equity markets this past year; Bank credit is contracting at an unprecedented 15% annual rate so far this year as lenders sit on a record $1.3 trillion of cash" [Emphasis mine]

I've highlighted the words and phrases that are ubiquitous in any recession that the Fed (or any central bank) has presided over, those being 'unemployed, low stock growth rate, idle capacity, vacancies, decreased values, decreased wealth, decreased credit.'

I have studied under the school which says that if you fear deflation, and combat it with low interest rates and artificial injections of liquidity in the market, you're going to get all of the bad things associated with bad investments, namely, idle stock, underemployment, and lower asset values. You cannot avoid the former without encountering the latter.

Deflation is not bad per se (Ask the 1880s). There is no reason to believe that long-term deflation is anymore pernicious than long-term inflation. I've simplified it, but succinctly put, expectations matter. More on that here.

4,051 Decks of Cards

were used to make this incredible structure. I couldn't embed that particular video, but here's another of the same man:

Wake Me Up Tomorrow

"The Federal Reserve is currently rolling over all maturing Treasury securities, but in the future it may choose not to do so in all cases."

From Bernanke's testimony on the Fed's exit strategy, before the Committee on Financial Services, U.S. House of Representatives, in Washington, D.C. on February 10, 2010.

Cultural Economics

I watched most of "Life and Debt" tonight, in my ongoing search for information regarding the IMF, World Bank, etc. It's a documentary about IMF and World Bank loans that are often granted on harsh terms and with less regard to the borrower's interest as compared to the lender's (remember, these loans are for the specific purpose of advancing the borrower, not the lender). Also probed was globalization and the opening up of Jamaica's ports in conjunction with the devaluing of Jamaica's currency, and how these actions destroyed many domestic industries. All the while, the movie is narrated by a woman who has an obvious disdain for western culture and wealth.

But, it was a good experience. I wasn't convinced by its anecdotal evidence of the evils of free trade. However, I was intrigued by how much the U.S.'s protectionist policies (subsidies & tariffs) adversely affected Jamaica's wellbeing (e.g., Chiquita and Dole bananas are protected Latin American imports). Also intriguing, the IMF insisted upon devaluation based upon their snap shot of the world market, in order to boost Jamaican domestic industry relative to the rest of the world. But because Jamaica is so dependent on exports, many domestic industries (and citizens) suffered in the long term.

And it goes on and on. The video was mildly educating, more so for people who are already familiar with the system, to give them a human emphasis on textbook economics.

I'm coming to see economic development more and more something that cannot be forced upon people. IMF and World Bank loans, whether they come with strict conditions or not, tend all the more to destabilize global resource flows: there are just too many variables to account for. On the one hand, you can devalue a country's currency to stimulate domestic industry, but on the other hand, doing this will destabilize domestic industry. Or, liberating trade barriers subjects smaller economies to un-liberated trade barriers of large countries, hurting the small countries all the more; this is, of course, not an argument against opening up trade barriers, but instead against protectionism as a whole. However, now you have an entire community of folks who think that free trade impoverished their culture. Are you better off in the grand scheme of things?

Also interesting in my studies of these organizations is how efficiently (that is, inefficiently) knowledge can travel between agents at the top level to the people that they're trying to help. You have westernized, government-sponsored loan agencies attempting to help third-world, non-english speaking cultures. There's so much that can and does go wrong, and yet, the IMF and World Bank are still here.

A Follow-up

I want to make it clear that cutting the salt intake of Americans is not the aim of an "industry crackdown." It's simple: people who aren't dieing from high blood pressure-related complications will die from something else. After all, people must die at some point. Thus, life-sustaining care will manifest itself in some other area, and that's something that the study doesn't take into account.

Let me reiterate: let's assume that the tax on salt would indeed cut salt intake by 6 percent, and "[result] in 327,892 fewer strokes and 306,173 fewer heart attacks." Let us assume further that the cut in salt consumption would make many high blood pressure medications superfluous, saving the government money in these areas insofar as people use government assistance programs and the like. This is not unreasonable, per se, and I wouldn't debate it.

But we must consider that often, individuals with high salt intakes have a bad diet to boot, and there arises a whole caboodle of problems that, frankly, kill people. If we're still talking about people who use the government dole to pay for their medical care, there's no reason to believe that a new set of complications wouldn't be covered by such aid. Worse, still, is if people live longer while on government medical aid; costs haven't decreased in such a scenario.

The problem with this study is that it's just a snapshot of the state of things minus people with high blood pressure. This is understandable, but no less fallacious, considering the impossible task it would be to map out all the other scenarios and ways that people could die if not from high blood pressure-related complications, and how these paths would affect medical costs for the government.

It's like justifying a tax on tobacco by citing lower medical costs. But that's dubious, if smokers die at a younger age, requiring less medical care than otherwise, thus saving money in the long-run.

So, it isn't about costs. It never was/is/will be about costs, because the government multiplies the cost of anything it breathes legislation on.

Instead, this is about control. Every damn thing they do is about controlling every facet of your life.

The Elephant and the Ant

This is why you don't give anybody the authority to take your income and monopolize arbitration.

"Working with the food industry to cut salt intake by nearly 10 percent could prevent hundreds of thousands of heart attacks and strokes over several decades and save the U.S. government $32 billion in healthcare costs, U.S. researchers said on Monday."

The U.S. government wouldn't have to save a damn dime in healthcare costs if it wasn't in the entitlement field in the first place.

"The team estimated that a government-industry effort could cut Americans' salt intake by 9.5 percent."

There is no "government-industry effort" when the former party has compulsory jurisdiction over the latter. As Thomas Sowell put it, "When there is a partnership between an ant and an elephant, who do you suppose makes the decisions?"

The writers of this article know that the above is true, because just a few lines later they write,

"By contrast, a tax on salt would cut salt intake by 6 percent, resulting in 327,892 fewer strokes and 306,173 fewer heart attacks, the team calculated... If cooperation is not voluntary, new regulations on sodium content of processed and prepared foods might be necessary..."

With this said, I must observe that conservative pundits are too late when they talk about the dangers of giving more control to the government over our health matters. This article clearly proves that they already have too much control.

49 Stars And Counting

Hope you saved your Haiti-aid receipts: Another quake, this time in Chile.

Thankfully, however, this one didn't wreak near as much destruction, so we won't have to see humanitarian plight every time we turn on the tube. That is by far the worst part about disasters, disease, and celebrity deaths/scandals: I have to see/hear about it everywhere I go.

And before you say it, I'm not insensitive. I just don't care much for countries that deliberately made themselves poor through inane policy over the years. You can cite "building codes" all day long as a major factor in saving lives, but that's not necessarily true, because building codes keep marginal builders out of the market, possibly hurting a far greater number of people that don't have a natural disaster speaking up for them.

Have you noticed that H1N1 hype has just plummeted to nothingness? What happened to all of that? Kind of like every other potential plague... false alarm. This is why I don't take media hype seriously, even when it involves tsunamis and food poisoning. It never materializes like the professionals say it will.

And I was looking forward to having only 49 states. One step closer to smaller government, eh?

Around The World In A Few Weeks

There is a dearth of formalized material about the international monetary system relative to the Fed, U.S. fiscal policy, and many other macroeconomic features of the U.S. economy in standard macro and monetary textbooks, or so I've found.

So, I spent a lot of today looking for stuff that would help me better understand it all. I started my search with the IMF, because it seems very political and thus should put a human face on these concepts for me.

I found a book about World Bank and IMF aid to Pakistan. It's pretty decent, even though it relies exclusively on econometrics and empirical analysis. I read a bit of it today, and have established that as far as Pakistan goes, between 1972 and 1999, IMF aid is negatively related to gross output. Imagine that!

I found a 33 minute video with Paul Krugman and some other important guys. It was not helpful at all; it was more of an emotional appeal about the conditionalities of IMF loans, if you could even call it that, than an educational video about the causal mechanisms of the IMF. I saw one on Jamaica a year ago, before I cared about this stuff, and it played the same guitar string. This reaffirms my suspicion that the IMF is very politicized, at least externally, and like so many other issues plaguing economic debates, true knowledge of the subject is possessed by few.

Tonight I went to Wikipedia to learn about IMF SDRs, and then to CATO to learn why SDRs will likely never become an international currency.

All in all, a productive day. I'm going to dabble on the IMF for another week, then onto the World Bank, and then so on.

No Good

I was looking over an intro Macroecon book, through the chapter about the Fed and specifically the federal funds rate. Here's what I found funny:

"Memory Hint- Are you trying to keep the federal funds rate and the discount rate straight in your mind? The words "federal funds" begins with two f's. If you push them together, they look like two sleeping bags side by side. You can use this to help you remember the federal funds rate is the overnight lending rate."

Really, sleeping bags? Let's see... "ff". Nope, horrible. That 'trick' is more to remember than what the fed funds rate is itself, anyway.

Cute, but fail.

The Problem That Begets The Rest

Dr. Mario Rizzo talks here about French politicians getting their panties in a knot over a restaurant chain serving halal food in order to attract Muslim customers. From what I hear, French society is quite secular and worships at the alter of 'reason.'

I translate this as worship of political correctness and everything that is not individualism. Notice that non-ecclesiastical governments specifically discourage religion, nonviolent crimes, and anything else that doesn't propagate and extend their sphere of control. That is largely the state of affairs in many OECD countries, and the U.S. takes a few steps down this path every day.

I bring this up because Dr. Rizzo hits upon a theme that pervades my thought:

"Even more fundamentally, private property involves the right of private individuals to make decisions about resource use. And since some uses are incompatible with others, private property must imply the right to exclude." [Emphasis mine]

Very few people follow that last line of reasoning to its logical conclusion, and even Dr. Rizzo himself is, I'm pretty sure, a supporter of democracy as a form of government. The right to exclude, however, precludes this possibility.

If there was one idea that would bring about a revolution in the way policy is designed and the way people live their lives, it is that a civil society can only be based on the right to exclusion. If more folks realized this and accepted it, I feel that many 'problems' would be exposed for the paper tigers that they are and would be solved instantaneously.

Instead, ignorance of exclusion lands us right where we are today.

Some People Just Don't Get It

It's incredible how supporters of the left think they can engineer the economy like it's nobody's business. It doesn't matter how many times price controls fail; they're going to do it, anyway. Take, for instance, the following:

This is the Yahoo! news feed. The first link I've circled is a link to a video of Obama's new healthcare proposal, which involves, among other things, "giving the federal government new power to block excessive rate increases by health insurance companies,” [NY Times]. The link right below it leads to a story discussing the 'hidden' consequences of recent credit card reform, which involves, among other things, a restriction of overall consumer credit and annual fees that had been up to this point done away with for many credit card customers.

They're like the zombies in video games that walk into a closed door, and because they don't know how to open it, they just keep walking into it, hoping the result to change. They see only what's on the other side of the door, but have no idea about how to get there.

Racism as a Consumer's Good

Legal Insurrection blogged here about the concept of "white privilege," and how there is an actual organization out there that aims to "Involve a multitude of people... in the discussion of how white privilege, white supremacy, and oppression affect their everyday lives." There is an annual "White Privilege Conference" going on and I'm assuming that this is somewhat pervasive throughout particular universities and community activist groups around the nation. The WPC webpage (or an affiliate, I don't care) is here, so you know I'm not making this up. I will not, however, give these nobodies anymore space than I already have on this blog.

Instead, I want to break out the horse pill that nobody can seem to swallow: I don't see racism as a bad thing, per se. I don't see the preservation of culture, habit, and familiarity as a social bad. On the contrary, racially homogeneous communities have a knack for remaining tightly knit and cooperative amongst themselves (Think Jewish ghettos and Asian communities within this country). I'm no expert, and I am not saying that high correlation of relatively peaceful interrelationships and racial homogeneity is causation. But the urge to associate with like-minded, physically similar folks with a common lineage is not something to spurn. I'm willing to bet that 'racist' inclinations are ingrained on the biological level. That is, nature is often the primary cause of racist sentiments, and nurture then exacerbates those natural tendencies. This need not always be the case, but at the same time, if the foregoing is even sometimes true, then it implies that anyone and at anytime, be him black, white or else, is biologically inclined to discriminate.

This does not imply racial violence, but this does mean that there exists the possibility that white (black) business owners will tend to higher a white (black) man over a black (white) man, given both are of equal skill. This does mean that racially integrated communities will have 'disintegrating' tendencies, and no amount of social engineering can change that.

If this is the case, then the WPC and all similar movements are futile. Even if we somehow erased history clean of all racial bigotry and pernicious discrimination, it would still manifest itself as a social preference. Kind of like how I don't like the taste of carrots, but I love me some raw salmon.

I can't apologize for that.

A Follow-up

While fresh on private property rights, I must go back to my previous post about ridiculous "libertarians" and "economists."

Yesterday, a man crashed his plane into an IRS office. He is quoted as saying before the crash,

"I have had all I can stand. I choose not to keep looking over my shoulder at 'big brother' while he strips my carcass."

Although I don't agree with the means this man employed to get back at 'big brother,' I think it is unjustified to say that he was unjustified. This goes back to the theory of law and property that I subscribe to (here in MP3). Essentially, I own 1) myself, 2) anything that I appropriate that is not already appropriated, and 3) I am free to exchange with others and can come to own the property that I acquire in exchange. This is the foundation of a civil and functional society. Thievery is inherently self-defeating because there is no justification for giving any number of people the authority to take from others what was not originally appropriated or exchanged for themselves. If one man can do it, all men will do it.

The way that a private property society is reinforced is simply self defense. I am justified for hitting back when the thief hit me first. So, is our IRS bomber doing what he has the right to do? I'd say so. I don't think that in the long run it does us any good, but it cannot be denied that he focused his attack on the very agency that robs him. The workers within might be semantically 'innocent,' but most people in this country support taxation and thus, whether they are aware that they are technically thieves or not, they are apart of the problem. Call me self-righteous, but I am sticking to a firmly-grounded gun.

This is why I was so hot at Tyler Cowen for saying that there "exists a case for a VAT." This is simply not true. There is never a case for taxation, be it income, value-added, property, etc. There is never a case for thievery. I know it allows economists to dabble and play and have a grand time, but taxation is not justifiable.

Moreover, even if we discount the private property theory of law and look at this issue from a purely 'economic' standpoint, hooking up the federal government to another form of life support will not get us any closer to long-run equilibrium. This kind of cop-out obfuscates the issue at hand, and that issue is the monopolization of the use of force. This pernicious detail is the bleeding, pumping heart of our economic woes, and it should not be forgotten.

Avatar: A Libertarian Exercise

I saw Avatar for the second time tonight (but in 3D IMax). It was entertaining, not amazing, and I wouldn't have ever seen it again had it not been for the 3D part. I found many politically interesting things, though:

This is the main character, Jake Sully, fighting the evil humans at the end of the movie. He's fighting humans because they want to extract a precious mineral, unobtainium (valuable stuff), from the Navi's (the blue people) home world. Extraction involves destroying the Navi's sacred trees and land, and all the wildlife therein.

James Cameron is a leftist, and the entire movie reeks of corny environmentalism and hatred of anything capitalist and U.S. military (it's great how the 'agenda' always pits those two on the same side, ain't it?). I found it funny, though, that towards the end of the movie, Jake Sully makes a speech to his Navi buddies that they will not let the 'sky people' (humans) take their land. Essentially, the movie ends up being about a battle for property rights. Cameron, whether he knew it or not, blew the chance of Avatar being a propaganda piece for environmentalism. Environmentalism scorns private property, because property owners usually don't care about slugs and ferns as much as environmentalists would like them to.

Cameron, though, couldn't pull out the unifying climax at the end without a rallying point. That rallying point had to be the land owned by the Navi. Americans wouldn't have bought anything less than that. Our culture does not think in terms of the commune-ideal that intellectuals and utopian leftists would like them to.

Even if a given culture did, I'd hesitate before saying that this movie would have been nearly exciting had there not been a battle over property. Think about any 'epic' movie, from Braveheart, to Dances With Wolves, and even Star Wars: they all revolve around pitting property-takers against property-owners.

Ironic, but one could argue that this movie is way more libertarian than it is leftist.

I Don't !@#@$&* Know

When guys like this write stuff like this, I feel like I've been asleep at the wheel the entire time.

Sometimes I'm not sure if they do it just to get hits on their blogs/books/TV shows/etc. or if they really are as ridiculously eccentric as they appear to be. If the former, all the more power to you. You remind me of an unamusing Glen Beck, and nobody was really taking you seriously in the first place. You're a no-count.

If the latter, please, stop. Go home. Stay inside and unplug the router. Your 'hit' books were a waste of time, anyway. Your writing style is no fun to read, and the only person more confused than each of your ardent followers is yourself.

My criticism stems from reading books and articles from 'professionals' like the guy above, not just this particular article. Specifically, their writing style and subject matter is so aberrant that it's annoying. Reminds me of economists and sociologists that claim they'll have you "looking at the world totally anew after you hear/read this!" Except, I never do. I only become more cynical about working with these total narcissists in the future, and maybe accidentally reading three or less words from them again.

Maybe I'm just not the kind of reader I need to be to stomach their silliness. I've always liked textbooks and straight facts focused on a subject, not books on how to get my kids to do the dishes and where I should eat at in New York, both in the same book.

Maybe I'm dumb. Honestly, I really think it might be this one. So many people have wet dreams about guys like this; what's my problem?

1.5 Years In The Making

I've studied economics at an increasing rate over a 1.5 year span. I started with neoclassical textbooks, then read Reisman, and then was introduced to Mises and the Austrian school. However, I really didn't know much about anything until I read Man, Economy, and State last summer. Until then, I didn't have a reliable paradigm to work off of. Sure, I had knowledge of political economy and the like, but nothing that really let me sink my teeth into economic history, abstract theory, predictions, etc. Also, in acquiring my B.A., I've been bogged down by math and science classes that, in their own right, are interesting, but have nothing to do with economics. I'm really hoping I get into the school of my choice so I can dedicate in full my next few years to this stuff.

But if I had to do it all again, or, if I could give somebody just starting out some advice on how to go about acquiring a solid economics background, I'd say this: Start with Rothbard's Man, Economy, and State (Do not purchase the study guide). Then immediately follow with Landreth and Colander's History of Economic Theory. Then, go back to Man, Economy, and State, and in tandem with this, dabble on the footnotes and recommended readings of MES, to acquire a firmer understanding of the subject matter. After this (or alongside), I strongly recommend a neoclassical monetary economics book: Checchetti's Money, Banking, and Financial Markets is really good (get one from another author to gain a broader point of view, too). After these, one should be well-equipped to tackle Human Action, any of Hoppe's books, Knight's Risk, Uncertainty, and Profit, and the list goes on. This should all take about 1.5 years, and would leave one with plenty of time to complete all other undergraduate work, no matter the degree.

One might say that my recommendations are lop-sided, but that's wrong. I had to work my way through the muck and nastiness of the books that leave you with nothing to remember or think about in the long-term.

For instance, I made the mistake of reading Human Action when I was just starting out. I wanted to be ahead of the game, but it left me feeling more lost than I had started. And, I wasn't able to enjoy gems like this:

"Animals are bestial and inhuman precisely because they are such as the iron law of wages imagined workers to be." (Mises, Human Action, 1963, p.628).

The above statement is made so much more appreciable when you have a knowledge of not only who Malthus is and why animals are factors of production, but also when you realize the controversies that surround(ed) such thought, too. The above statement is also the more special when you realize how many economic historians look upon Menger, Mises, and the Austrian school with ignorance, disdain, pompous arrogance, and as "ideologically biased." You realize that the mainstream is flat wrong concerning the school, and it leads you to question the assumptions you've carried your entire life about 'facts,' science, and mainstream scholastic thought.

I'm really enjoying reading Man, Economy, and State again, and going through the footnotes and the actual texts that Rothbard cites (like Mises!). It makes me look forward to the next 30 years, and the work I will pioneer.

The End

is near. April 30th, 2010, at 4 PM, I will no longer be an "undergrad."

Who Cares About Bill?

AP sent me the above photo early this morning. Don't worry, Willy, I'm second to Twitter with my girlfriend, so I know how you feel.

But really, does anybody care about Bill Clinton anymore? Not like this guy made front page news with his heart, and I can't even find any stories on Yahoo!'s main page anymore. I'm willing to bet Fox news lost revenue when they ran the alert on their network.

If 1) how many stories about a particular event are written and 2) how long any particular story stays alive is any indication of consumer preference/interest, Bill Clinton ranks low.

Update: Yesterday, the 11th, Bill ranked #2 on Google's 'Hot Searches' list. Today, he doesn't even make the top 20.

I rest my case.

Trash On The Steps

Look very closely at this picture. Notice the 14 or 15 people shoveling the Capitol steps, on a day when the Capitol is closed due to snow. Also notice that only 2 out of the 14 or 15 are actually shoveling; the rest are looking around in a stupor (I've arrowed them). Also notice how much snow is still left on the ground even with all that "man-power."

I wish I could say that if it wasn't for the stimulus, this wouldn't be happening, but that's false. This happens every season. And then this caption elsewhere:

I wish Washington would stay frozen. Our standard of living would go way up.

My Trump Card

Rothbard's articulation of utility being an ordinal, and not a cardinal, concept comes in handy. When all else fails, I pull it out of my little bag of econ tricks. I did it just now in a paper I wrote about open markets for organs, and how the Organ Transplantation Act of 1984 kills people. I tried to upload the paper to the blog but I don't think I can upload files here.

Anyway, what stinks about such a trump card is that it's unheard of in the mainstream. By accepting Rothbard's point, you have to also accept the fact that coercive government as a whole is not only pernicious but unjustifiable, too. So, by default, I can't really use this defense outside of free market circles.

Does anybody know of a good refutation of Rothbard's welfare analysis?

Fed Stuff

Dr. Robert Murphy here writes in totally unambiguous words and terms, what the Fed is. He attacks it with more force and on more points than I did below.

It's a damn shame that not only does my Monetary Economics book (for Junior/Senior college students) not connect the dots about the giant counterfeiter called the Fed (but instead feigns justification for it), but it and all other Monetary books I've looked at about the Fed simply leaves out one or more features of the Fed-Treasury connection altogether.

The following connection is the one that I've never known about, that NO macro nor monetary book has ever disclosed, and in fact I just learned about it today:

The Fed can roll over the U.S. Treasury's bonds that come to maturity. The Fed can give rain checks on debt due to it by Uncle Sam.

"You know, I'll just pay for my 3.8 trillion dollar budget... ummm... never!"

Between artificially low interest rates the Treasury already gets to borrow at (because the Fed remits its 'profits' on interest back to the Treasury) and the fact that the Fed's demand for Treasury securities pushes up the bond price and thus lowers their yields, PLUS the Treasury never having to pay a debt in full, there is no surprise as to why the govamint might want to take over, in full, the health industry. We now realize that taxation is not primarily a means to raise revenue but is instead for exacting retribution and to better mold the social landscape into their ideal community.

The government controls its own wallet, plus the prices people pay for its 'services.' It also controls most educational institutions and the methods taught therein, thus it has considerable sway over intellectual opinion. If it can get its hands around the health industry AND legislate over a natural byproduct of our metabolism (CO2), the private sector will be completely enslaved by the public apparatus. You can't vote your way out of a situation like that.

My Monopoly Position

That's right, I have one and I didn't even have to use the govamint to get it!

O'Charley's, a restaurant two buildings down from my place of employment, went belly-up this morning, and less competition means more profits for me! Now it's us versus Christopher Seafood Co., all alone in the wide-open parking lot of Wal-Mart, Tropical Smoothie, and Ross. Yes, we were getting quite a few O'Charley's residuals all day, and I did pretty handsomely for a Saturday.

I figured I'd go and sabotage Christopher's grills or refrigerator compressor (even better because they'll likely serve spoiled food before they know it's ruined, and they'll have a law suit on their hands), thus solidifying our locational monopoly at the southwest corner of Kernan and Atlantic Blvd.!

All in a day's work. Long live Me, the King.

Wait... damn it. I just realized that I'm sure to be reported to the FTC and the DOJ Antitrust Division.

Crap.

An Inverse Business Cycle

Consider this: If the U.S. treasury can issue securities purchasable by private brokers and individuals, and if the Fed can and emphatically does purchase these same securities through open market purchases as a way to maintain interest rates and the integrity of the financial market, and if any profits that the Fed makes above its 'operating costs' goes back to the treasury, then:

1) Isn't Uncle Sam essentially getting loans at a big discount? Here's how I see it: tax revenues pay back the bonds issued by the treasury that are in hands of the Fed. The Fed pays itself and returns what's left over to treasury. Depending on how much is left over determines the discount on the loan. Now, I haven't stated anything new here, for this is what this guy is saying. In fact, Machaj calls it the modern "print on demand" scheme, and he's right. But he's missing something, and that's my number 2 point.

2) As this is totally unscripted and I have no facts to back this up, but instead a strong intuitive argument, the Fed turns up the heat in times of economic crises with its massive open market purchases and low fed funds target rates. I'd be willing to bet that more treasuries, and I mean significantly more, treasuries are purchased in times of economic downturns (In fact, the current recession is proof of this). But if this is true, then referring to 1), a significant amount of that money goes straight back to the treasury. And if this is true, then one could argue that the government has a business cycle that is the opposite of the one characterizing the private sector. That's right: Uncle Sam benefits off of our misfortune.

Add my second point onto the fact that in times of crises, popular liberal tax-whatever-moves and Keynesian spend-whatever-isn't-nailed-to-the-floor policies run rampant, and we have a knarly witch's brew of government mayhem. This theory explains more comprehensively why the current administration does nothing to make more attractive investment prospects at home; this explains why trillion-dollar deficits, over-reaching climate bills, and a total takeover of the U.S. health industry are all on the table and being played. This is precisely why the congress and president scoff at anything related to making and maintaining jobs in the private sector. This crisis is exactly what they want to happen; they couldn't do this stuff without it.

Economic recovery = Bad news for the nanny state. End of story.

The Ivy League Paradox

Universal education, or state-mandated education for all, is prevalent throughout the civilized world. Ironically, it is the scissor that cuts the threads of civilization. Forget the Paradox of Thrift. I call this the Ivy League Paradox.

Instead of intensifying the social division of labor in terms of education and intellectual endeavors, universal education dumbs down the content & concepts of its courses in order to be 'all-inclusive.'

In the free market, folks tend to find themselves in places where their needs and wants are best met, that is, where they can obtain the most resources while at the same time enjoying the greatest psychic benefit. The only way, short of theft and thievery (which is inherently discouraged in the market), that man can provide for his wants is to serve others in exchange relationships. Man realizes that if he is to maximize his wealth, it is in his interest to do that which society values most. Man will also take into account the disutility of labor, and through his judgment man will weigh such disutility in light of the gain to be made through the providing of wants of others. Only men on the individual level can pursue and obtain the right mix of these two factors in order to maximize their overall psychic benefit, because only they truly know what makes themselves happy.

Even in the hampered market we live in, we see the division of labor at work every day. College kids choose a major to their liking while at the same time weighing the incomes associated with their choices; Steve Jobs, excellent at entrepreneurship, makes great products that others can only dream about doing; Brett Favre and Drew Brees are quarterbacks for the NFL, as opposed to investment bankers and limo drivers; people with high time preferences and little resolve to acquire an advanced education tend to find themselves in entry level positions, such as restaurant cooks and ditch diggers, where they balance their own disutility of labor in the form of studying and specializing in a specific field against their desire for income and wealth. Even in the absence of state planning, everybody kind of goes where they not only want to go but also where they are best suited to go, relative to the desires of everybody else. I don't want Brett Farve managing my finances and I sure as hell don't want my coworkers at the restaurant operating on my heart and prescribing my Dad's medications.

Enter compulsory education, mandated by the State. People who have no desire to educate their minds, must. People who have not the ability to make anything of a formal education, must still go through the motions, even though it benefits nobody except those that derive a psychic income from the knowledge that 'society is smart.' Instead of folks entering the workforce at age 10, providing for others goods and services that they desire, and moreover finding out what they are best at doing at an early age and then specializing in that field, they must delay their talents and skills. People who otherwise would have been brilliant landscapers, excellent mom-and-pop store managers, shrewd investors and ingenious inventors are likely stuck in the theoretical mathematics department at a small college, or are integrated into a political machine vying for power, or were disenchanted with the whole process and now produce bastard children. Anecdotal hyperbole, but very real. But this is the paradox: what was supposed to produce more geniuses, a generally better-educated populace, and at the very least a literate body of citizens is failing to do so, and this failure is inherent in the very nature of compulsory education.

Imagine compulsory swim teams and running squads: Few individuals are biologically capable of such activities. If participation in these sports were mandated and forced upon a population, any standards currently in place for those who run because of innate ability or the sheer will to do so would ipso-facto have to fall in intensity in order to produce an acceptable 'pass rate.' That is, the quality of runners as a whole would fall relative to what it would have been. This has to happen or else the program is exposed as the fraud it is because half or more of all entrants are failing out. The resources dedicated to bring everybody up to the level of the 'ideal runner' are being wasted, and instead are producing something else that nobody not only intended to produce, but didn't want in the first place.

Ivy league institutions and gifted programs prove far too much. The reason for their existence underlines the fact that not everybody, and in fact very few individuals on earth, are capable of the intense intellectual division of labor called scholarly education. These institutions are in fact outgrowths of the division of labor, whereas mandatory public schools and community and public colleges, financed by taxpayer compulsion, are physical manifestations of the revolt against intellectual specialization. Granted, even Ivy league schools are funded by the taxpayer, they are still given sizable grants by private individuals, far more than are generally public institutions. If this is not enough, look no further than at the scholars at think tanks such as the Mises Institute, which is provided for solely by donor contributions and product sales, and produces outstanding work, judged so by its customers.

You can well guess what the state of education would look like in a free market. Think a lot less grade schools and 2- and 4-year universities, and a lot more specialized institutions with extremely stringent requirements, funded by donor contributions and corporate support. Indeed, why would customers of failing school systems continue to shell out dollars for those students who have no interest in learning, and more so for students who will not apply anything he learned to the practical world after schooling? The fact that education is at current compulsory proves this feature of a free market.

What Spending Freeze?

Liberal pundits and bloggers across the net, found

here

here

here

here

here

&

here,

are decrying Obama's upcoming proposal for a spending freeze, and comparing it to the likes of Herbert Hoover.

I've pulled a chart from the Budget of the United States Government, and right below we can see federal spending during Hoover's time as President (March 4, 1929 – March 4, 1933), and I've included a few years before and after, too:

I've made it perfectly clear with clever arrows and plus signs that total outlays increased every year of Hoover's presidency. Granted, this does not prove that spending is less than it otherwise would have been, but not only is Hoover not of the thrifty magnitude the pundits above describe him to be, I can't even find on record talk about some federal "spending freeze" during the 1929-1933 era. None of the pundits site this alleged factoid, and I've looked through a history teacher and Wikipedia. I'd like to believe that these folks are more than just talking points, so if you know something I don't, enlighten me!