Economics

Peter Schiff the Prophet

Mark Horne directed my attention to a 2007 discussion where the panel mocks Peter Schiff. As Horne observes: “Who is laughing now?”

And the bill came tumbling down…

Jeffrey Tucker celebrates:

House rejects the bill. A magnificent repudiation of the Fed, the Treasury, Bush, Wall Street welfarists, inflationists, and stabilizers of all sorts. The costs of what the Fed has already done are going to be massive and felt for many years. But at least Congress has so far, and this time, not participated in the evil.

It’s a great birthday gift for Ludwig von Mises.

Iraq: America’s Tax Burden

While the US economy continues to suffer, a new report shows that Iraq will generate $86 billion “this year from oil revenues, primarily driven by the high price of oil being paid by Americans and others,” says Rep. Maxine Waters. But instead of using that money to help in the reconstruction of Iraq, Americans are the ones paying for such massive tasks. Iraq has now become the new center for America’s welfare program.

Ayn Rand’s Philosophy…

As a self-professing advocate of the free market, I often come across Ayn Rand. Rand–who is committed to objectivism and Aristotelian logic–defines her philosophy thusly:

My philosophy, in essence, is the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute. (Appendix to Atlas Shrugged)

It does not take long to see Rand’s worldview. She is overtaken by the idea of man as the all in all of human existence, and thus, he–man–is to achieve the highest and noblest activity in this life; live within the greatest amount of happiness for tomorrow we die. Unlike many atheists who deny the need for absolutes, Ayn scolds such approach. Rather, she held that reason is the only objective tool available to know anything.

Though she refused to label herself a Libertarian, immoral and anarchistic libertarians exalt Rand as a model of laissez-faire capitalism. Indeed Rand was an arch defender of the free market and a formidable opponent of Marxism and Socialism, but her philosophical foundation exalted man above all else and made man a god unto himself. She urged a pursuit of gain outside of any religious commitment; she desired autonomous reason in a God-ordered world. Rand’s contributions to political and economic theory is helpful in many ways, but her contribution is marred by her suppression of truth.

The Lesson of Economics…

books.jpgHenry Hazlitt is superb in his analysis of economics. What he wrote 50 years ago is still a vivid reminder that greedy politicians live to demagogue. These agents of self interest appear to solve the economic dilemmas of our time as the deus ex machina. They are convinced that their bailouts and handouts will be sufficient to stimulate an economy that has been dying for decades. They take heed to economists who see only the short-term effects of a policy. As Hazlitt summarizes:

This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups (Henry Hazlitt, Economics in One Lesson, pgs.15-16).

Most politicians are short-sighted because when they are elected they are already making plans to be re-elected. In light of that, they overlook what Hazlitt calls “secondary consequences” (16). They do not consider the long-term effects of their quick solutions. The only economic policy worth considering is the one that looks beyond present bubbles and financial stresses. Good economy needs to consider all possible consequences and its effects on all classes, not just one particular group.

As an example of this short-sightedness, the Congress and the White House passed a deal that would give each tax-payer a $600 tax rebate. The intention, of course, is to stimulate the economy and avoid a recession. They want immediate effects. But what the government wants is not usually in your best interest. Economist Gary North phrases the question thusly:

What is the best thing to do with your income tax refund, i.e., the return of your enforced, interest-free”loan” to the U.S. Treasury?

Among his suggestions are two that befit a long-term view of economics:

If you have any credit card debt, pay off principal. If you have no credit card debt, pay down some other
debt, other than your mortgage.

The government wants to stimulate the economy by encouraging consumers to spend, but a wise household will turn that around and use that money to invest or to pay debt. The government of your own home takes precedence over the selfish ambitions of politicians.

Mark Larsen endorses Ron Paul

Mark Larsen endorses Ron Paul on the air after an interview with Mitt Romney.

Don Luskin and Paul’s Economic Principles…

 This is a gloriously favorable article about Ron Paul’s policies.
If I’m right and Ron Paul doesn’t just fade away as the primary season progresses, he’ll make a real difference. His anti-war message would make life difficult for Hillary Clinton, by drawing away the most pacifist elements of the Democratic base. But it’s on the economics side where I think he could make the biggest impact. In an election year in which bigger government, higher taxes, and protectionism seem to have so much momentum, Paulonomics may be just what is needed to rebalance the debate in favor of growth.

Christians and Economics

In these last few years the shape of American politics has been overwhelmed with economic naiveté. Christians have been largely unresponsive to politicians who have economic awareness, but strongly favoring Christians who are socially conservative. This dichotomy is incomprehensible. The answer to this bizarre distinction stems from a lack of economic knowledge. This lack of knowledge pervades the evangelical world which thinks that if a social conservative president is elect, then all things will fall into place. The reality is that political discourse cannot disconnect economy and morality. The late Dr. Ronald Nash once wrote:

…if a Christian wishes to make pronouncements on complex social, economic and political issues, he also has a duty to become informed about those issues. [1]

If Christians are committed to a Biblical view of the world, then “Thou shalt not murder” and “Thou shalt not steal” will be treated with equal importance. Christians cannot fight for the right of the unborn while despising the right to economic liberty. If abortion is eliminated and economic tyranny emerges, then we will have lost this battle.


[1] Nash, Social Justice and the Christian Church, pg. 1

The Economic Lessons of Bethlehem by Lew Rockwell

At the heart of the Christmas story rests some important lessons concerning free enterprise, government, and the role of wealth in society.

Milton Friedman: A Sane Voice for Our Times by John Armstrong

The late Milton Friedman (1912-2006), winner of the Nobel Prize in economics, was one of the best and the brightest of the twentieth century. He not only impacted scholars and academics but he also impacted the lives of ordinary people the world over, but not in ordinary ways. You would be hard pressed, if the truth is known, to name one economist in our lifetime who impacted so many lives for so much good as Milton Friedman. I am utterly serious in saying this. I am thus appalled at how few Christians know or care about the thought of this man and how much it contributed to the good of so many in this world. More