Lessons In Economic Unstimulus
July 12, 2009 · By Charles Anthony
Shawn Ritenour of the Mises Institute analyzes the performance of Obama’s economic plan so far:
From an economic perspective, Obama’s stimulus plan is equivalent to a giant welfare scheme. Instead of the money going to lower income Americans, however, it is meant to go to municipal bureaucrats of various stripes. Instead of productive American citizens determining what to do with their own scarce resources, the state is stepping in and dictating how they will be used. Consequently, such spending is essentially government consumption, which is what vulgar Keynesians think we need now more than ever. Such economists are shocked — shocked! — to find out that Americans are now saving any increases in income instead of blowing it on even more consumer goods. Not to worry, however. If private citizens do not consume enough for official tastes, the government always can.
I often stop by mises for a bit of common sense economics. Unfortunately I can’t think of a single Western power that is listening, including Canada. Governments at all levels are completely out of control. They have become completely beholden to lobbyists and powerful special interest groups. It’s a no-win situation for the average voter.
It’s useful to check your sources.
The Mises Institute is a Libertarian Foundation whose stated goal is to “undermine statism in all its forms”. Hardly the folks you’d turn to for an unbiased assessment of the impact of a state-driven stimulus package.
The one thing that George Bush, Barack Obama and John McCain all agreed on was that this financial crisis was that this financial crisis was deep, that it would require state intervention, and that its resolution would be a matter of years, not days or months.
So let’s stop taking the patient’s temperature five seconds after administering the aspirin to decide whether it’s working, shall we?
It is better to check economic theory.
Those cronies certainly agreed that the financial crisis would be deep but they never offer an explanation why they require state intervention. Whereas the Mises Institute offers an explanation for why state intervention makes the recession deeper and longer.
Most importantly, the Mises Institute offers an alternate explanation of the state intervention. Namely, the goal of the intervention is to redistribute wealth from the working class to the elite parasitic class.
So, you can believe that the state intervention will help the recession when in actual fact, it is just a way to steal from the poor and give to the rich.
Furthermore, the patient’s temperature is not being taken five seconds after administering the poison. Rather, the Mises Institute has been sending a consistent message for decades: printing money provides a false economic signal and provokes malinvestment.
“Those cronies certainly agreed that the financial crisis would be deep but they never offer an explanation why they require state intervention.”
“Most importantly, the Mises Institute offers an alternate explanation of the state intervention.”
So did the former offer an explaination or not?
Talk about a consensus! ;)
Sorry, Charles: your response simply confirms that an ideologically driven “think-tank” will continue to produce analyses consistent with their ideology.
As opposed to what? Really, can you name a think-tank that isn’t ideological in some way?
And to follow up, so what? Are the ideas espoused by an “ideologically driven “think-tank” tainted in some way?
Sorry, Dalton, but I frankly do not care to make up for your ignorance in economic theory nor for your inability to read.
Your dismissal of the basic economic principles spelled out by the author of the article I quoted is based on one single thing: your prejudice because it was printed on the Mises site. You can not get passed your prejudice. Your objection is the both ideologically and intellectually stupid.
Somebody really needs to tell Shawn Ritenour that someone’s drawn a comedy moustache on his photo.
“Your dismissal of the basic economic principles spelled out by the author of the article I quoted is based on one single thing: your prejudice because it was printed on the Mises site.”
- Charles Anthony.
“It is impossible to know a person’s motives.”
-Charles Anthony.
You guys make me proud. It warms my heart to see that I am leading all of you readers out of the doldrums of socialist chaos and into the clarity of worthy economic thought.
” It warms my heart to see that I am leading all of you readers… into the clarity of worthy economic thought.”
-Charles Anthony
“You can not get passed your prejudice.”
-Charles Anthony
I’m surprised at your incivility, Charles. You were up to this point one of the two writers here actually worth debating.
I am surprized by the prejudice upon which your argument hinges, Mr. Dalton. You were up to this point a presenter of worthy debate.
How does that sound, Mr. C?
Mr. C,
Despite the fact that it is impossible to prove motives, human beings make assumptions on personal motives all of the time. There is nothing wrong with that. It is part of what makes human life interesting. However, basing an economic theory upon the motives of a person is unsound science — despite the fact that the vast majority of economic, social and legal studies do so all of the time.
Go back through the archives and here is your next homework assignment: find a quotation of mine where I make a normative and coercive policy prescription that hinges on assuming a person’s motives as its defense.
So, to put it bluntly: I have every right to smugly make assumptions of people’s motives because I am not expecting to get away with coercing anybody. Go back to that quote and re-read it.
Charles,
I went back to the link you gave me. It says:
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You were saying something about clarity.
You need me to hyperlink the passage that you quoted yourself?
Oh, well. Your are right. I made a typo.
Since, you brought up that quote, presumably, you do not need me to reference it for you despite the fact that I tried. Apparently, you do. What? Do you save my quotes on a notepad or something?
Anyway, here is the quote for which you never provided a hyperlink:
Dearest Charles, I have been back to that quote and re-read it as you requested.
It still says:
“It is impossible to know a person’s motives.”
Regards,
C.
to dalton, c on and anonymous,
austrian economics is the only economic model that has the ability to sum up and explain not just this depression but all of them including the mystery of stagflation (which i will not get into detail here).
as explained by classical economics, the rapid inflation of cheap and overly available liquidity in the banks through fed reserve manipulated low interest rates gave rise to the banks lending out money that was overflowing their accounts. and since lending is how banks make money (and they had lots) they lent it to whomever would take it (including yours truly). wall street soon after the dot.com bubble bursting, learned rather quickly that the fed and/or the government had their back and so they began taking risks that they normally would have shyed away from if there was no insurance policy against stupidity (that would be the government insurance policy). this became known as the “greenspan put”. couple this with interventionist legislation back in the 70′s with the Community Reinvestment Act right on through to clinton’s forcing of the banks to accept even more riskier mortgages in the name of equality and housing for every american.
classical economics shows that this manipulated low interest rate coupled with vast pools of liquidity not only created the housing bubble but never even let the dot.com bubble burst fully. (check out fxstreet.com for the last ten years of the us dollar index. this shows the disaster in the making).this is one of many episodes that shows central banking to be the cause of bubbles and keynesian spending, the poorest way to rid a depression at the same time.
the state run stimulus package that DALTON refers to is exactly the kind of action that brought us to this point. after all one does not profess to help a poisoned man by giving him more of the same and then expect to see a recovery. government spending redirects resources to areas of the economy which are not in demand because consumers have not “told” the market through their purchases that this is the place to concentrate. instead now the government risks creating either another bubble or more surely it is inflating prices for materials that otherwise would have been depressed that end up hurting private companies that may have decided to take advantage of the lower prices and thus been more competitive to emerge from this downturn.
great post charles. nice to see that there are others out there reading the fine work that is mises.org
Golly, Brad, thanks for the compliment and I think your comment is better than my post! YOU should be writing posts here on the blog instead of me!
Mr. C,
I guess your problem* is more profound that the ability to read. It seems like reading comprehension is where you fail. I will repeat: Basing an economic theory upon the motives of a person is unsound science.
Now, go back and re-read the post where you repeatedly quote me as saying “It is impossible to know a person’s motives.” and understand to which previous argument I was objecting.
I am going to give you a hint: I was objecting to a description which included assumptions of motive of a policy maker.
So, to put it in simple terms:
Assumptions of motives to defend policy prescription is stupid and bad science.
Assumptions of motives to defend or explain non-coercive actions is fine because non-coercive actions do not need to be justified.
* I genuinely do not believe you have a problem reading nor with comprehension. I believe your motives are simply to have fun trolling. I look forward to more of your trollish objections. Hopefully, you will put up a challenge in the future.