The Road to Serfdom

Originally published by me elsewhere on 11/07/2010

In The Road to Serfdom, Friedrich Hayek compares the outlook and actions of individualists (people who value freedom from coercion, private property, free markets, and equality of opportunity) with those of collectivists (people who value redistribution of wealth, equality of result, social engineering, and government control or ownership of parts of the economy). As an Austrian who watched Germany’s socialist movement morph into fascism in the years leading up to WWII, he was distressed that many of the processes that brought about this transformation were being replicated in Britain. He wrote this book as a warning to the British people, and later authorized its distribution in America as Reader’s Digest book. Some of the issues that the book addresses are listed below. I use the words “collectivist” and “leftist” interchangeably.

Leftist incrementalism
Collectivists want to “fundamentally transform” society, but in Western societies they have adopted a piecemeal process to effect this change. Having watched German society fundamentally transform itself, Hayek wanted the West, particularly Britain and America, to be aware of this incrementalist approach, so we’d recognize that it’s happening within our borders and move to oppose it. Or as Hayek said:

Just because in the years ahead of us political ideology is not likely to aim at a clearly defined goal but toward piecemeal change, a full understanding of the process through which certain kinds of measures can destroy the bases of an economy based on the market and gradually smother the creative powers of a free civilization seems now of the greatest importance.

Continue reading “The Road to Serfdom”

Obama’s Budgetary Smoke and Mirrors

Originally posted elsewhere on 4/5/2011

As in magic, it’s all about misdirection. Here are two big ones that Obama tried out during his surprise appearance today at the Whitehouse’s daily press briefings.

  • The president expressed his exasperation that over the past one, two or three months Congress has not been able to come to an agreement about the budget. He is purposely trying to make it look as though Republican intransigence is preventing a 2011 bugdet from being passed. However, his party was in complete control of the Congress when the president proposed his budget in February 2010 until the 2011 fiscal year began on October first of last year. But in an act of cowardice, the Democratic leadership didn’t want their members to be on record for their vote prior to the last election. Following the Democratic “shellacking,” Democrats continued to control Congress until the new Republican House members were inaugurated in January.
  • $73 billion proposed cuts by the Democrats are not real cuts. They are based on the president’s proposed budget in which Obama sought to increase spending over current levels. It’s like a store raising the price on an item, then knocking it back to the suggested list price and trying to pass off the list price as a “sale” price. In order to be a real cut, it must be a cut of existing spending levels.

Are those storm clouds on the U.S. economic horizon?

Originally posted elsewhere on 4/18/2011


  • S&P rates outlook on U.S. debt as negative. An analyst at National Review, explains what happens if U.S. treasury bonds are actually downgraded:

    The journey to insolvency can be quick, or it can be slow, but most analysts agree that the first signpost along the way will be the withdrawal of the U.S.’s coveted AAA bond rating. And when that happens, woe be unto him that owns government bonds.

    Throughout modern history, the U.S. has had a relatively low cost of funds because Moody’s and the other ratings agencies have given it the highest rating possible. If Uncle Sam loses that rating, then borrowing costs will increase. These higher costs will make the U.S. fiscal situation more untenable, inviting subsequent downgrades and an ultimate death spiral that can be stopped only by massive policy intervention.

    According to the Wall Street Journal, an S&P analyst:

    puts the chance of the U.S. losing its coveted AAA rating within two years at one in three.

Continue reading “Are those storm clouds on the U.S. economic horizon?”

There just aren’t enough rich people to get us out of this hole

Originally posted elsewhere on 4/5/2011

Check out this Bill Whittle video. Bill tries to explore some ways that the federal government could pay for the Obama administration’s proposed 2011 budget. Restricting this exercise to 2011 spending alone, it soon becomes apparent that it’s impossible to raise the money the administration intends to spend this year by making the rich “pay their fair share” as progressives like to put it. The video is based on an analysis of the budget that Iowahawk worked out.


Bi-winning the Future of the Economy

Originally posted elsewhere on 3/11/2011 in reference to Obama’s “Winning the Future” slogan, and Charlie Sheen’s declaration that he’s “bi-winning”

Just looking at those issues of great economic concern, here are a few that Obama is currently bi-winning:

  • Bill Gross, the manager of the world’s biggest mutual fund, has stopped investing in the U.S., having sold all the fund’s holdings in United States Treasury notes. Instead Gross has begun investing in Spain, yes Spain, one of the PIGS of Europe, so called because of their faltering economy and indebtedness. According to Gross,

    [Spain] has a better balance sheet than the United States.

Continue reading “Bi-winning the Future of the Economy”

The Fed, Food Riots, and China

Originally published elsewhere by me on 1/21/2011

Is Federal Reserve policy having unintended consequences around the world?

As you know, civil unrest in Tunisia has brought down the government. You are probably aware that Egypt is also teetering on the brink. President Mubarak’s son, Gamal Mubarak, and his son family have fled to London. Today I read a rumor that President Mubarak’s wife, Suzanne Mubarak, has also fled to London. Our Secretary of State, Hillary Clinton, said Tuesday:

Our assessment is that the Egyptian government is stable and is looking for ways to respond to the legitimate needs and interests of the Egyptian people.

I’m not seeing the stability.
Continue reading “The Fed, Food Riots, and China”

Thomas Sowell on The Fed

Here’s an excerpt from an interview of Thomas Sowell by John Hawkins:

Now, in recent years we started to hear more people calling to get rid of the Federal Reserve. Good idea, bad idea? What are your thoughts?
Good idea.
Good idea? What do you think we should replace it with? What do you think we should do?
Well it’s like when you remove a cancer what do you replace it with?

Wow! Read the whole thing.