If only the free-market right still had such a powerfully persuasive "technician advising the state how to be more efficient", our economy might now be slightly less screwed. Maybe it would help were "advising the state to be more efficient" less widely considered "evil work".
We need less efficient government. Friedman never grasped this. Rothbard did. The few Establishment economists and columnists who have read Rothbard have never forgiven him for this...
Friedman was the main apologist for fiat money in the free market camp. He believed in free market liberty, but not where it is really important: education (vouchers based on state-confiscated money) and money itself (central banking based on a grant of state power: a monopoly). Murray Rothbard challenged both ideas. He therefore remains a pariah to the Establishment.
Bill Bonner writes:
And here we find a political movement The Daily Reckoning can stand…far…behind... the part that actually wants the US government to default.
Whoa! We know what you’re thinking. A default would be dangerous. Suicidal. Unthinkable. Ben Bernanke. Tim Geithner. Larry Summers. They all said so! The old folks wouldn’t get their medicine. The soldiers wouldn’t get their ammunition. Tops would go back onto honey pots all over the Washington DC area. The whole system would fall into anarchy and pandemonium. There would be riots. Revolution. Bourbon would disappear from the liquor store shelves. The dead would rise from their graves and the living would fall into the open holes. A man would be happy to see his dead wife alive again. Another would be even happier to see his living wife dead!
Well, maybe they’re right. It would probably be a catastrophe. A disaster. But let’s take the chance anyway!
Because the real problem is debt. The quicker it is eliminated…the faster the economy can get back to work.
So, don’t raise the debt ceiling. Let the feds figure out how to get by like everyone else – spending no more than they take in as income. Is that really so tough?
Beware politicians whose legislation bears a grandiose title. You can be certain their schemes will accomplish the opposite of their purported intent. Such is the case with the Wall Street Reform and Consumer Protection Act signed into law one year ago today. The massive 2,300-page tome - commonly known as Dodd-Frank - promised to fix the financial system, streamline regulation and end bailouts. Like so much of President Obama’s legislative achievements, this bill promised much, delivered little and cost a great deal.
By the Government Accountability Office’s reckoning, implementation will require $1.25 billion in new spending. It’s not cheap marshaling an army of 2,800 newly minted federal bureaucrats wielding fresh power over the private sector. Over the next decade, businesses will shell out $27 billion in fees, assessments and tithes to their new regulatory masters, according to Congressional Budget Office estimates.
The enterprise was a knee-jerk reaction to the financial crisis of 2008, where the feds had just bailed out the investment bankers at Bear Stearns and elsewhere. Rep. Barney Frank, Massachusetts Democrat, and then-Sen. Christopher J. Dodd, Connecticut Democrat, insisted creation of agencies like the Financial Stability Oversight Council and the Bureau of Consumer Financial Protection would crack down on Wall Street and end the ingrained idea that some firms are “too big to fail.”
The actual result has been a mountain of red tape. At least 400 new federal rules will be layered on top of existing regulations. New bureaucracies will have overlapping jurisdiction with existing regulatory bodies...
Far from getting rid of bailouts, Dodd-Frank institutionalized them. Title II empowered the Federal Deposit Insurance Corporation with “orderly liquidation” authority, giving the agency discretion to intervene between a financial institution and its creditors in any way it sees fit... That means the “too big too fail” ethic still applies.
Dodd-Frank has largely severed the relationship between risk and return, which is the necessary discipline imposed by a free market. Now, the big banks get to keep the rewards, but American taxpayers bear the risk...
Dodd-Frank has been an expensive exercise in command and control by the federal government. It encourages crony capitalism while undermining free markets and limiting competition. A year later, the folly of this legislation has only grown more apparent.
In 2010, American consumers bought almost as much merchandise at low-priced Walmart ($307.7 billion in U.S. retail sales) as they purchased from the next five largest U.S. retailers combined ($324.5 billion): Kroger ($78.3 billion), Target ($65.8 billion), Walgreen ($61.2 billion), Home Depot ($60.1 billion) and Costco ($58.9 billion). 
...Wrote the French libertarian philosopher in his 1850 classic, The Law:“See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.”
The obvious – and fallacious – rebuttal here is that Wall Street fat cats earn tens, hundreds, maybe even thousands of times the salary of government employees. And that’s true. But you don’t have to pay it. If you don’t agree with excessive executive compensation, don’t buy that company’s products. Don’t invest in its stock. Simple. Of course, that won’t stop the government gifting your tax dollars to its Wall Street buddies…but you can hardly blame the grafters on The Street for taking what’s offered. Call it corporatism. Call it crony capitalism. Call it whatever you like. Just don’t call it the free market.
But just because the state can avoid consequences in the short term, that doesn’t mean it can avoid them indefinitely. “Imperial suicide,” as Bill calls it, is nothing new. In 1917, the year of Russia’s October Revolution, Vladimir Ilyich Lenin offered a few predictions for the century ahead:
“Germany will militarize herself out of existence,
England will expand herself out of existence,
and America will spend herself out of existence.”Had he known the inherent shortcomings of his own political ideology, Bolshevism’s bad boy might also have added, “And Russia…she will plan herself out of existence.”
As for the United States, it seems she is not content with simply spending more than she produces, foisting the unfunded obligations onto future generations; instead, she militarizes, expands, spends AND plans toward her own demise…as all once great empires eventually do.
The fight for recovery is over. The feds have waved the white flag. Maybe…The Labor Department came out with the latest employment numbers last week. They were atrocious. Only about a fifth as many new jobs as economists expected. Which shows you three things.
First, economists can’t really predict levels of employment, growth, prices, or anything else. And they are especially bad at it when they have the wrong idea of how things work.
Second, the feds have failed. They have been completely unable to make any progress against the downturn.
Third, this is not a recovery. Widely reported in the media was the opinion that the employment numbers were ‘disappointing for the second year of a recovery.’ Well…yes. Because it’s not a recovery. It’s a Great Correction. And this is just what you’d expect.
For the last 4 years – since the beginning of the financial crisis in ’07 to today – economists, analysts, investors and policymakers have had the wrong idea. They thought they were dealing with an ordinary (though perhaps severe) recession, which they thought would be followed by an ordinary (though perhaps weak) recovery.
Not at all! It was not an ordinary post-war recession. So, the ordinary counter-cyclical policy measure – more credit! – didn’t work. This time, the economy already had too much credit. Which is to say, too much debt. It didn’t do any good to add more debt. Households were already drenched in it.
They couldn’t absorb any more. They couldn’t increase their spending by borrowing more money. So, spending couldn’t go up…
Instead, households are struggling to maintain their standards of living in the face of rising consumer prices and flat…or falling…incomes.
And now, the mainstream financial press is finally catching on. Heck, even the US Secretary of the Treasury, Tim Geithner, may be opening his eyes.
In the debate about raising the debt ceiling, the reality is often lost that the top 10 percent of income earners—those making more than $113,799 in 2008 (the latest year available from the IRS)—already pay 69.9 percent of the income taxes. The same top 10 percent, however, earn only 45.8 percent of the income.
The IRS also reports that in 2008, the top 25 percent of income earners—those earning $67,280 or more—pay 86.34 percent of the income taxes, yet earn only 67.38 percent of all income in the U.S.
Higher than $10,000
$5,001 – $10,000
$5,000
$2,500 – $5,000
“The breakthrough was realizing that schizophrenia and Keynesianism have many of the same symptoms,” said Dr. Charles Rivers of the Harvard School of Medicine. “For example, both conditions cause delusions. A schizophrenic may think that the CIA is trying to kill him, while many Keynesians believe that government spending stimulates the economy.”
The obvious connection, as I’ve pointed out on many occasions, is that America is becoming a European-style welfare state and it is unavoidable that we will suffer from European-style economic malaise.
P.S. It should be noted that America’s anemic economic performance in recent years is not solely Obama’s fault. As the White House repeatedly points out, he inherited a downturn. That is completely accurate. My complaint, however, is that Obama promised hope and change but instead has exacerbated the big government policies of his predecessor.
