The Free Market vs. Obama

[PoliticalChic]

Arthur C. Brooks, “The Road to Freedom”

1. How do we leave what Hayek called ‘the road to serfdom”? What he meant was the low-grade, virtual servitude to ever-expanding, unaccountable government that, searching for tax revenues, has appropriated funds that entrepreneurs could have used to grow the economy. A government that has created a protected class of government workers and crony corporations that play by a different set of rules than the rest of us, and has left the nation in hock for generations to come.



2. Then there is ‘Free Enterprise.’ It’s a system of values and laws hat respects private property and limits government, encourages competition and industry, celebrates achievement based on merit, and creates individual opportunity. Under such a system, people can pursue their own ends, and they reap the rewards and consequences, both the positive and the negative, of their own actions. This requires trust in markets to produce the most desirable outcomes for society.

a. No society can advance nor improve without trade, and the excess of disposable income. And this excess is amassed through the production of goods and services necessary or attractive to the masses. A financial system that allows this leads to inequality…one that does not, leads to mass starvation.

b. Money is merely the most efficient way of keeping track of the production of individuals, of their work, and the capacity of that work to benefit their fellows. Government, which doesn’t produce this product, can do little with it but waste it: it cannot allocate it with greater justice than the Free Market. It should provide only those services that the Free Market was incapable of providing, such as the roads, the judiciary, streetlights, Legislature, and the common defense.



3. The alternate view is called ‘statism,’ by which we mean a belief that government is generally the best, fairest, and most trustworthy entity to distribute resources and coordinate our economic lives.

a. To believe this, one must accept that there exists some equation by which the state can fairly and honestly control human exchange. Here we go: increasing taxes to increase programs to increase happiness to allow equality…all of which ends up in dictatorship.

4. David Mamet claims that is the free market that is simply better than state control. It is the one that has to respond quickly and effectively to dissatisfaction and to demand. In the free market, if a product or service does not please, it is discontinued. Compare that to government persistence and expansion of programs that proven to have failed decades ago: farm subsidies, aid to Africa, busing, etc. In the free market, every man, woman and child is scheming to find a better way to make a product or service that will make a fortune! All of these minds performing in a manner that, ultimately, benefits society.



5. But what about the abuses of the free market?

a. Some will be corrected by the law, and if there is no current law, the citizenry will demand such. Some abuse run afoul of custom….these will be corrected by censure, withdrawal of custom, or may be criminalized. Alas, some must be endured, as they would be under any system of government, business or administration.



6. In the light of Brooks' thesis....what would propel anyone to vote for an administration that endorses the confiscation of economy-growing capital, by government, in order to "spread the wealth"?

 

[Bfgrn]

Hey PC, where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008? Nowhere to be found...

Looks like Arthur C. Brooks has been exposed. His so called study about charity was portrayed as 'a study done by a liberal'...now, he uses Hayek after reading a comic book.


Hayek on Social Insurance

By Dylan Matthews

Jennifer Schuessler has a great short essay in the New York Times Book Review looking at the reception of Friedrich Hayek's "The Road to Serfdom" over the years, including this can't-be-made-enough point:

But unlike some of his champions in 2010, Hayek didn’t oppose all forms of government intervention. “The preservation of competition,” he wrote, is not “incompatible with an extensive system of social services — so long as the organization of these services is not designed in such a way as to make competition ineffective over wide fields.” This qualification, however, was left out of a comic-book version of “The Road to Serfdom” printed in Look magazine in 1945 (and distributed as a pamphlet by General Motors), which showed well-intentioned regulation giving way to more sinister forms of control.

As a side note, that Look magazine comic adaptation is hilarious, and includes great lines such as, "If you're fired from your job, it's apt to be by a firing squad," and imagery like an agent of the socialist state oppressing citizens by snapping their golf clubs in half.

Going further than Schuessler, it's worth noting that Hayek does not only accept a limited welfare state, but specifically singles out health care as an area where the state should provide a safety net:

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

Emphasis mine. Now, Hayek obviously isn't an idol of liberal economic policy folks for a whole batch of reasons, not least the central premise of Road to Serfdom that the sorts of social democratic policies being pursued in the United Kingdom and elsewhere in Europe during and after World War II would open the door to totalitarianism. But it's more than a little jarring to hear him invoked in opposition to a health care bill that's, if anything, less ambitious than the sort of thing he's talking about here.

 

[C_Clayton_Jones]

Going further than Schuessler, it's worth noting that Hayek does not only accept a limited welfare state, but specifically singles out health care as an area where the state should provide a safety net:

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

No reason whatsoever.

A free market economy and pragmatic, responsible social policy can easily co-exist; indeed, it’s the hallmark of a civilized society.

 

[Dont Taz Me Bro]

Going further than Schuessler, it's worth noting that Hayek does not only accept a limited welfare state, but specifically singles out health care as an area where the state should provide a safety net:

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

No reason whatsoever.

A free market economy and pragmatic, responsible social policy can easily co-exist; indeed, it’s the hallmark of a civilized society.

We're running trillion dollar budget deficits each year as it is and now you want the government to start picking up the tab for people's medical bills too? How has that been working out in Europe lately?

 

[Bfgrn]

Going further than Schuessler, it's worth noting that Hayek does not only accept a limited welfare state, but specifically singles out health care as an area where the state should provide a safety net:

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

No reason whatsoever.

A free market economy and pragmatic, responsible social policy can easily co-exist; indeed, it’s the hallmark of a civilized society.

We're running trillion dollar budget deficits each year as it is and now you want the government to start picking up the tab for people's medical bills too? How has that been working out in Europe lately?

That is because we have a REVENUE problem. We have a right wing party in this country that likes to start 3 trillion dollar wars, be the globe's policeman and spend without any constraint when they are in power. Yet they absolutely refuse to raise revenues.

It is called TOTAL irresponsibility.

 

[PoliticalChic]

Hey PC, where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008? Nowhere to be found...

Looks like Arthur C. Brooks has been exposed. His so called study about charity was portrayed as 'a study done by a liberal'...now, he uses Hayek after reading a comic book.


Hayek on Social Insurance

By Dylan Matthews

Jennifer Schuessler has a great short essay in the New York Times Book Review looking at the reception of Friedrich Hayek's "The Road to Serfdom" over the years, including this can't-be-made-enough point:

But unlike some of his champions in 2010, Hayek didn’t oppose all forms of government intervention. “The preservation of competition,” he wrote, is not “incompatible with an extensive system of social services — so long as the organization of these services is not designed in such a way as to make competition ineffective over wide fields.” This qualification, however, was left out of a comic-book version of “The Road to Serfdom” printed in Look magazine in 1945 (and distributed as a pamphlet by General Motors), which showed well-intentioned regulation giving way to more sinister forms of control.

As a side note, that Look magazine comic adaptation is hilarious, and includes great lines such as, "If you're fired from your job, it's apt to be by a firing squad," and imagery like an agent of the socialist state oppressing citizens by snapping their golf clubs in half.

Going further than Schuessler, it's worth noting that Hayek does not only accept a limited welfare state, but specifically singles out health care as an area where the state should provide a safety net:

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

Emphasis mine. Now, Hayek obviously isn't an idol of liberal economic policy folks for a whole batch of reasons, not least the central premise of Road to Serfdom that the sorts of social democratic policies being pursued in the United Kingdom and elsewhere in Europe during and after World War II would open the door to totalitarianism. But it's more than a little jarring to hear him invoked in opposition to a health care bill that's, if anything, less ambitious than the sort of thing he's talking about here.

"...where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008?"

Friedrich Hayek criticized Keynesian economic policies for what he called their fundamentally "collectivist" approach, arguing that such theories encourage centralized planning, which leads to malinvestment of capital, which is the cause of business cycles.
Hayek also argued that Keynes's study of the aggregate relations in an economy is fallacious, as recessions are caused by micro-economic factors. Hayek claimed that what starts as temporary governmental fixes usually become permanent and expanding government programs, which stifle the private sector and civil society.
Hayek, Friedrich (1989). The Collected Works of F.A. Hayek. University of Chicago Press. p. 202.

 

[PoliticalChic]

1. Government as the arbiter of success and failure?
Really?

"The days when President Obama and others boasted that green energy investments would produce 5 million jobs are seemingly past….Jonathan Rothwell, a senior research analyst at the Brookings Institution, told Capital Hill that at the time the administration made many of its promises regarding a green energy future, “there just wasn’t much known about the size of the green economy. It was hard to come up with precise numbers.”
Van Jones, Other Liberals Defend Green Jobs Programs, Shift Focus From Jobs


2. “The 2012 Rivals Can Be Named: Hayek v. Keynes….Obama and his Republican challengers have firmly established the economic policy combat lines …Obama forcefully reconfirmed his view that more government spending and tax cuts can effectively attack unemployment.

The White House continues to lean heavily on the playbook of economist John Maynard Keynes – without uttering his name. As huge deficits have failed to lift the economy, “Keynes” has almost become a vulgarity in US discourse, in part because a very Keynesian Obama initiative – the 2009 $825bn stimulus (another banished word) – has been widely derided as ineffective.
The 2012 rivals can be named: Hayek v Keynes - FT.com

 

[Bfgrn]

Hey PC, where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008? Nowhere to be found...

Looks like Arthur C. Brooks has been exposed. His so called study about charity was portrayed as 'a study done by a liberal'...now, he uses Hayek after reading a comic book.


Hayek on Social Insurance

By Dylan Matthews

Jennifer Schuessler has a great short essay in the New York Times Book Review looking at the reception of Friedrich Hayek's "The Road to Serfdom" over the years, including this can't-be-made-enough point:

But unlike some of his champions in 2010, Hayek didn’t oppose all forms of government intervention. “The preservation of competition,” he wrote, is not “incompatible with an extensive system of social services — so long as the organization of these services is not designed in such a way as to make competition ineffective over wide fields.” This qualification, however, was left out of a comic-book version of “The Road to Serfdom” printed in Look magazine in 1945 (and distributed as a pamphlet by General Motors), which showed well-intentioned regulation giving way to more sinister forms of control.

As a side note, that Look magazine comic adaptation is hilarious, and includes great lines such as, "If you're fired from your job, it's apt to be by a firing squad," and imagery like an agent of the socialist state oppressing citizens by snapping their golf clubs in half.

Going further than Schuessler, it's worth noting that Hayek does not only accept a limited welfare state, but specifically singles out health care as an area where the state should provide a safety net:

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

Emphasis mine. Now, Hayek obviously isn't an idol of liberal economic policy folks for a whole batch of reasons, not least the central premise of Road to Serfdom that the sorts of social democratic policies being pursued in the United Kingdom and elsewhere in Europe during and after World War II would open the door to totalitarianism. But it's more than a little jarring to hear him invoked in opposition to a health care bill that's, if anything, less ambitious than the sort of thing he's talking about here.

"...where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008?"

Friedrich Hayek criticized Keynesian economic policies for what he called their fundamentally "collectivist" approach, arguing that such theories encourage centralized planning, which leads to malinvestment of capital, which is the cause of business cycles.
Hayek also argued that Keynes's study of the aggregate relations in an economy is fallacious, as recessions are caused by micro-economic factors. Hayek claimed that what starts as temporary governmental fixes usually become permanent and expanding government programs, which stifle the private sector and civil society.
Hayek, Friedrich (1989). The Collected Works of F.A. Hayek. University of Chicago Press. p. 202.

Please provide a list of countries with economies that are Austrian School based? Take your time PC...

We took Hayek's advice in the early 1930's. As a matter of fact, the very same 'non-interventionist' advice...it turned a deep recession into a depression...the Great Depression.


Economic Policy Under Hoover

Throughout this decline—which carried real GNP per worker down to a level 40 percent below that which it had attained in 1929, and which saw the unemployment rise to take in more than a quarter of the labor force—the government did not try to prop up aggregate demand. The only expansionary fiscal policy action undertaken was the Veterans’ Bonus, passed over President Hoover’s veto. That aside, the full employment budget surplus did not fall over 1929–33.

The Federal Reserve did not use open market operations to keep the nominal money supply from falling. Instead, its only significant systematic use of open market operations was in the other direction: to raise interest rates and discourage gold outflows after the United Kingdom abandoned the gold standard in the fall of 1931.

This inaction did not come about because they did not understand the tools of monetary policy. This inaction did not come about because the Federal Reserve was constrained by the necessity of defending the gold standard. The Federal Reserve knew what it was doing: it was letting the private sector handle the Depression in its own fashion. It saw the private sector’s task as the “liquidation” of the American economy. It feared that expansionary monetary policy would impede the necessary private-sector process of readjustment.

Contemplating in retrospect the wreck of his country’s economy and his own presidency, Herbert Hoover wrote bitterly in his memoirs about those who had advised inaction during the downslide:

The ‘leave-it-alone liquidationists’ headed by Secretary of the Treasury Mellon…felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate’.…He held that even panic was not altogether a bad thing. He said: ‘It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people’.


The Federal Reserve took almost no steps to halt the slide into the Great Depression over 1929–33. Instead, the Federal Reserve acted as if appropriate policy was not to try to avoid the oncoming Great Depression, but to allow it to run its course and “liquidate” the unprofitable portions of the private economy.

In adopting such “liquidationist” policies, the Federal Reserve was merely following the recommendations provided by an economic theory of depressions that was in fact common before the Keynesian Revolution and was held by economists like Friedrich Hayek, Lionel Robbins, and Joseph Schumpeter.

 

[PoliticalChic]

Hey PC, where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008? Nowhere to be found...

Looks like Arthur C. Brooks has been exposed. His so called study about charity was portrayed as 'a study done by a liberal'...now, he uses Hayek after reading a comic book.


Hayek on Social Insurance

By Dylan Matthews

Jennifer Schuessler has a great short essay in the New York Times Book Review looking at the reception of Friedrich Hayek's "The Road to Serfdom" over the years, including this can't-be-made-enough point:

But unlike some of his champions in 2010, Hayek didn’t oppose all forms of government intervention. “The preservation of competition,” he wrote, is not “incompatible with an extensive system of social services — so long as the organization of these services is not designed in such a way as to make competition ineffective over wide fields.” This qualification, however, was left out of a comic-book version of “The Road to Serfdom” printed in Look magazine in 1945 (and distributed as a pamphlet by General Motors), which showed well-intentioned regulation giving way to more sinister forms of control.

As a side note, that Look magazine comic adaptation is hilarious, and includes great lines such as, "If you're fired from your job, it's apt to be by a firing squad," and imagery like an agent of the socialist state oppressing citizens by snapping their golf clubs in half.

Going further than Schuessler, it's worth noting that Hayek does not only accept a limited welfare state, but specifically singles out health care as an area where the state should provide a safety net:

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

Emphasis mine. Now, Hayek obviously isn't an idol of liberal economic policy folks for a whole batch of reasons, not least the central premise of Road to Serfdom that the sorts of social democratic policies being pursued in the United Kingdom and elsewhere in Europe during and after World War II would open the door to totalitarianism. But it's more than a little jarring to hear him invoked in opposition to a health care bill that's, if anything, less ambitious than the sort of thing he's talking about here.

"...where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008?"

Friedrich Hayek criticized Keynesian economic policies for what he called their fundamentally "collectivist" approach, arguing that such theories encourage centralized planning, which leads to malinvestment of capital, which is the cause of business cycles.
Hayek also argued that Keynes's study of the aggregate relations in an economy is fallacious, as recessions are caused by micro-economic factors. Hayek claimed that what starts as temporary governmental fixes usually become permanent and expanding government programs, which stifle the private sector and civil society.
Hayek, Friedrich (1989). The Collected Works of F.A. Hayek. University of Chicago Press. p. 202.

Please provide a list of countries with economies that are Austrian School based? Take your time PC...

We took Hayek's advice in the early 1930's. As a matter of fact, the very same 'non-interventionist' advice...it turned a deep recession into a depression...the Great Depression.


Economic Policy Under Hoover

Throughout this decline—which carried real GNP per worker down to a level 40 percent below that which it had attained in 1929, and which saw the unemployment rise to take in more than a quarter of the labor force—the government did not try to prop up aggregate demand. The only expansionary fiscal policy action undertaken was the Veterans’ Bonus, passed over President Hoover’s veto. That aside, the full employment budget surplus did not fall over 1929–33.

The Federal Reserve did not use open market operations to keep the nominal money supply from falling. Instead, its only significant systematic use of open market operations was in the other direction: to raise interest rates and discourage gold outflows after the United Kingdom abandoned the gold standard in the fall of 1931.

This inaction did not come about because they did not understand the tools of monetary policy. This inaction did not come about because the Federal Reserve was constrained by the necessity of defending the gold standard. The Federal Reserve knew what it was doing: it was letting the private sector handle the Depression in its own fashion. It saw the private sector’s task as the “liquidation” of the American economy. It feared that expansionary monetary policy would impede the necessary private-sector process of readjustment.

Contemplating in retrospect the wreck of his country’s economy and his own presidency, Herbert Hoover wrote bitterly in his memoirs about those who had advised inaction during the downslide:

The ‘leave-it-alone liquidationists’ headed by Secretary of the Treasury Mellon…felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate’.…He held that even panic was not altogether a bad thing. He said: ‘It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people’.


The Federal Reserve took almost no steps to halt the slide into the Great Depression over 1929–33. Instead, the Federal Reserve acted as if appropriate policy was not to try to avoid the oncoming Great Depression, but to allow it to run its course and “liquidate” the unprofitable portions of the private economy.

In adopting such “liquidationist” policies, the Federal Reserve was merely following the recommendations provided by an economic theory of depressions that was in fact common before the Keynesian Revolution and was held by economists like Friedrich Hayek, Lionel Robbins, and Joseph Schumpeter.

"Please provide a list of countries with economies that are Austrian School based?"

To which one were you planning to move?

 

[uscitizen]

Arthur C. Brooks, “The Road to Freedom”

1. How do we leave what Hayek called ‘the road to serfdom”? What he meant was the low-grade, virtual servitude to ever-expanding, unaccountable government that, searching for tax revenues, has appropriated funds that entrepreneurs could have used to grow the economy. A government that has created a protected class of government workers and crony corporations that play by a different set of rules than the rest of us, and has left the nation in hock for generations to come.



2. Then there is ‘Free Enterprise.’ It’s a system of values and laws hat respects private property and limits government, encourages competition and industry, celebrates achievement based on merit, and creates individual opportunity. Under such a system, people can pursue their own ends, and they reap the rewards and consequences, both the positive and the negative, of their own actions. This requires trust in markets to produce the most desirable outcomes for society.

a. No society can advance nor improve without trade, and the excess of disposable income. And this excess is amassed through the production of goods and services necessary or attractive to the masses. A financial system that allows this leads to inequality…one that does not, leads to mass starvation.

b. Money is merely the most efficient way of keeping track of the production of individuals, of their work, and the capacity of that work to benefit their fellows. Government, which doesn’t produce this product, can do little with it but waste it: it cannot allocate it with greater justice than the Free Market. It should provide only those services that the Free Market was incapable of providing, such as the roads, the judiciary, streetlights, Legislature, and the common defense.



3. The alternate view is called ‘statism,’ by which we mean a belief that government is generally the best, fairest, and most trustworthy entity to distribute resources and coordinate our economic lives.

a. To believe this, one must accept that there exists some equation by which the state can fairly and honestly control human exchange. Here we go: increasing taxes to increase programs to increase happiness to allow equality…all of which ends up in dictatorship.

4. David Mamet claims that is the free market that is simply better than state control. It is the one that has to respond quickly and effectively to dissatisfaction and to demand. In the free market, if a product or service does not please, it is discontinued. Compare that to government persistence and expansion of programs that proven to have failed decades ago: farm subsidies, aid to Africa, busing, etc. In the free market, every man, woman and child is scheming to find a better way to make a product or service that will make a fortune! All of these minds performing in a manner that, ultimately, benefits society.



5. But what about the abuses of the free market?

a. Some will be corrected by the law, and if there is no current law, the citizenry will demand such. Some abuse run afoul of custom….these will be corrected by censure, withdrawal of custom, or may be criminalized. Alas, some must be endured, as they would be under any system of government, business or administration.



6. In the light of Brooks' thesis....what would propel anyone to vote for an administration that endorses the confiscation of economy-growing capital, by government, in order to "spread the wealth"?

Yep free enterprise moves jobs to China.
So The enterprise and Chinese workers can prosper.

 

[Bfgrn]

"...where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008?"

Friedrich Hayek criticized Keynesian economic policies for what he called their fundamentally "collectivist" approach, arguing that such theories encourage centralized planning, which leads to malinvestment of capital, which is the cause of business cycles.
Hayek also argued that Keynes's study of the aggregate relations in an economy is fallacious, as recessions are caused by micro-economic factors. Hayek claimed that what starts as temporary governmental fixes usually become permanent and expanding government programs, which stifle the private sector and civil society.
Hayek, Friedrich (1989). The Collected Works of F.A. Hayek. University of Chicago Press. p. 202.

Please provide a list of countries with economies that are Austrian School based? Take your time PC...

We took Hayek's advice in the early 1930's. As a matter of fact, the very same 'non-interventionist' advice...it turned a deep recession into a depression...the Great Depression.


Economic Policy Under Hoover

Throughout this decline—which carried real GNP per worker down to a level 40 percent below that which it had attained in 1929, and which saw the unemployment rise to take in more than a quarter of the labor force—the government did not try to prop up aggregate demand. The only expansionary fiscal policy action undertaken was the Veterans’ Bonus, passed over President Hoover’s veto. That aside, the full employment budget surplus did not fall over 1929–33.

The Federal Reserve did not use open market operations to keep the nominal money supply from falling. Instead, its only significant systematic use of open market operations was in the other direction: to raise interest rates and discourage gold outflows after the United Kingdom abandoned the gold standard in the fall of 1931.

This inaction did not come about because they did not understand the tools of monetary policy. This inaction did not come about because the Federal Reserve was constrained by the necessity of defending the gold standard. The Federal Reserve knew what it was doing: it was letting the private sector handle the Depression in its own fashion. It saw the private sector’s task as the “liquidation” of the American economy. It feared that expansionary monetary policy would impede the necessary private-sector process of readjustment.

Contemplating in retrospect the wreck of his country’s economy and his own presidency, Herbert Hoover wrote bitterly in his memoirs about those who had advised inaction during the downslide:

The ‘leave-it-alone liquidationists’ headed by Secretary of the Treasury Mellon…felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate’.…He held that even panic was not altogether a bad thing. He said: ‘It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people’.


The Federal Reserve took almost no steps to halt the slide into the Great Depression over 1929–33. Instead, the Federal Reserve acted as if appropriate policy was not to try to avoid the oncoming Great Depression, but to allow it to run its course and “liquidate” the unprofitable portions of the private economy.

In adopting such “liquidationist” policies, the Federal Reserve was merely following the recommendations provided by an economic theory of depressions that was in fact common before the Keynesian Revolution and was held by economists like Friedrich Hayek, Lionel Robbins, and Joseph Schumpeter.

"Please provide a list of countries with economies that are Austrian School based?"

To which one were you planning to move?

If I have to choose one whose economy is Austrian School based, I'm SOL...

 

[Quantum Windbag]

Hey PC, where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008? Nowhere to be found...

Hey shithead, we did not have a free market in 2008. Blaming something that does not exist for your problems is a sign of paranoia.

Looks like Arthur C. Brooks has been exposed. His so called study about charity was portrayed as 'a study done by a liberal'...now, he uses Hayek after reading a comic book.

Your posts have been described as 'the ravings of a lunatic,' what's your point?

Ezra Klein - Hayek on Social Insurance

By Dylan Matthews

Jennifer Schuessler has a great short essay in the New York Times Book Review looking at the reception of Friedrich Hayek's "The Road to Serfdom" over the years, including this can't-be-made-enough point:

But unlike some of his champions in 2010, Hayek didn’t oppose all forms of government intervention. “The preservation of competition,” he wrote, is not “incompatible with an extensive system of social services — so long as the organization of these services is not designed in such a way as to make competition ineffective over wide fields.” This qualification, however, was left out of a comic-book version of “The Road to Serfdom” printed in Look magazine in 1945 (and distributed as a pamphlet by General Motors), which showed well-intentioned regulation giving way to more sinister forms of control.

As a side note, that Look magazine comic adaptation is hilarious, and includes great lines such as, "If you're fired from your job, it's apt to be by a firing squad," and imagery like an agent of the socialist state oppressing citizens by snapping their golf clubs in half.

Going further than Schuessler, it's worth noting that Hayek does not only accept a limited welfare state, but specifically singles out health care as an area where the state should provide a safety net:

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

Emphasis mine. Now, Hayek obviously isn't an idol of liberal economic policy folks for a whole batch of reasons, not least the central premise of Road to Serfdom that the sorts of social democratic policies being pursued in the United Kingdom and elsewhere in Europe during and after World War II would open the door to totalitarianism. But it's more than a little jarring to hear him invoked in opposition to a health care bill that's, if anything, less ambitious than the sort of thing he's talking about here.

Could that be because you are not intelligent enough to understand that there is more to a camel than his nose?

 

[Quantum Windbag]

No reason whatsoever.

A free market economy and pragmatic, responsible social policy can easily co-exist; indeed, it’s the hallmark of a civilized society.

We're running trillion dollar budget deficits each year as it is and now you want the government to start picking up the tab for people's medical bills too? How has that been working out in Europe lately?

That is because we have a REVENUE problem. We have a right wing party in this country that likes to start 3 trillion dollar wars, be the globe's policeman and spend without any constraint when they are in power. Yet they absolutely refuse to raise revenues.

It is called TOTAL irresponsibility.

We have a revenue problem because the government is spending a larger percentage of GDP than anytime since WWII?

 

[PoliticalChic]

Arthur C. Brooks, “The Road to Freedom”

1. How do we leave what Hayek called ‘the road to serfdom”? What he meant was the low-grade, virtual servitude to ever-expanding, unaccountable government that, searching for tax revenues, has appropriated funds that entrepreneurs could have used to grow the economy. A government that has created a protected class of government workers and crony corporations that play by a different set of rules than the rest of us, and has left the nation in hock for generations to come.



2. Then there is ‘Free Enterprise.’ It’s a system of values and laws hat respects private property and limits government, encourages competition and industry, celebrates achievement based on merit, and creates individual opportunity. Under such a system, people can pursue their own ends, and they reap the rewards and consequences, both the positive and the negative, of their own actions. This requires trust in markets to produce the most desirable outcomes for society.

a. No society can advance nor improve without trade, and the excess of disposable income. And this excess is amassed through the production of goods and services necessary or attractive to the masses. A financial system that allows this leads to inequality…one that does not, leads to mass starvation.

b. Money is merely the most efficient way of keeping track of the production of individuals, of their work, and the capacity of that work to benefit their fellows. Government, which doesn’t produce this product, can do little with it but waste it: it cannot allocate it with greater justice than the Free Market. It should provide only those services that the Free Market was incapable of providing, such as the roads, the judiciary, streetlights, Legislature, and the common defense.



3. The alternate view is called ‘statism,’ by which we mean a belief that government is generally the best, fairest, and most trustworthy entity to distribute resources and coordinate our economic lives.

a. To believe this, one must accept that there exists some equation by which the state can fairly and honestly control human exchange. Here we go: increasing taxes to increase programs to increase happiness to allow equality…all of which ends up in dictatorship.

4. David Mamet claims that is the free market that is simply better than state control. It is the one that has to respond quickly and effectively to dissatisfaction and to demand. In the free market, if a product or service does not please, it is discontinued. Compare that to government persistence and expansion of programs that proven to have failed decades ago: farm subsidies, aid to Africa, busing, etc. In the free market, every man, woman and child is scheming to find a better way to make a product or service that will make a fortune! All of these minds performing in a manner that, ultimately, benefits society.



5. But what about the abuses of the free market?

a. Some will be corrected by the law, and if there is no current law, the citizenry will demand such. Some abuse run afoul of custom….these will be corrected by censure, withdrawal of custom, or may be criminalized. Alas, some must be endured, as they would be under any system of government, business or administration.



6. In the light of Brooks' thesis....what would propel anyone to vote for an administration that endorses the confiscation of economy-growing capital, by government, in order to "spread the wealth"?

Yep free enterprise moves jobs to China.
So The enterprise and Chinese workers can prosper.

Any truth to the rumor that you have a rickshaw job lined up in Beijing?

Send a postcard?



BTW...

The United States and the World
1. The US is the 3rd largest exporter of goods (8.3%) , after Germany ( 9.5) and China (8.7)
2. The US is the largest exporter of services (13.9 %) followed by UK (8.3) and Germany ( 6.6)
3. Taken as a total of goods and services, the US is more than twice as prolific as the next nearest nation.
About the International Trade Administration



The World Trade Organization (WTO) today issued its World Trade Report 2010, an annual publication that offers definitive statistics on international trade. In recent months, media reports have widely described China as the world’s largest exporter, but today’s report indicates that the United States remained the world’s largest exporter of goods and services through 2009. China has indeed overtaken the United States and Germany to become the world’s largest exporter of merchandise.
Exports in 2009, billions of U.S. dollars
Merchandise Commercial
Services Total
U.S. 1,057 470 1,527
Germany 1,121 215 1,336
China 1,202 129 1,331

Source: WTO, World Trade Report 2010, pp 28-29.
Who

 

[Bfgrn]

Hey PC, where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008? Nowhere to be found...

Hey shithead, we did not have a free market in 2008. Blaming something that does not exist for your problems is a sign of paranoia.

Looks like Arthur C. Brooks has been exposed. His so called study about charity was portrayed as 'a study done by a liberal'...now, he uses Hayek after reading a comic book.

Your posts have been described as 'the ravings of a lunatic,' what's your point?

Ezra Klein - Hayek on Social Insurance

By Dylan Matthews

Jennifer Schuessler has a great short essay in the New York Times Book Review looking at the reception of Friedrich Hayek's "The Road to Serfdom" over the years, including this can't-be-made-enough point:

But unlike some of his champions in 2010, Hayek didn’t oppose all forms of government intervention. “The preservation of competition,” he wrote, is not “incompatible with an extensive system of social services — so long as the organization of these services is not designed in such a way as to make competition ineffective over wide fields.” This qualification, however, was left out of a comic-book version of “The Road to Serfdom” printed in Look magazine in 1945 (and distributed as a pamphlet by General Motors), which showed well-intentioned regulation giving way to more sinister forms of control.

As a side note, that Look magazine comic adaptation is hilarious, and includes great lines such as, "If you're fired from your job, it's apt to be by a firing squad," and imagery like an agent of the socialist state oppressing citizens by snapping their golf clubs in half.

Going further than Schuessler, it's worth noting that Hayek does not only accept a limited welfare state, but specifically singles out health care as an area where the state should provide a safety net:

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

Emphasis mine. Now, Hayek obviously isn't an idol of liberal economic policy folks for a whole batch of reasons, not least the central premise of Road to Serfdom that the sorts of social democratic policies being pursued in the United Kingdom and elsewhere in Europe during and after World War II would open the door to totalitarianism. But it's more than a little jarring to hear him invoked in opposition to a health care bill that's, if anything, less ambitious than the sort of thing he's talking about here.

Could that be because you are not intelligent enough to understand that there is more to a camel than his nose?

Obfuscation, and literary ignorance there quantum ass wind...the OP used the term free market, and I put that term in 'scare quotes' (also called sneer quotes) to indicate irony or disdain.

You folks on the right, the worshipers of the 'free market' (see above for grammatical explanation), the ass lickers of the opulent and believers in the religion of 'only the private sector creates ____ (fill in the blank) have never answer the question...so I will ask it again:

Where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008?

 

[Quantum Windbag]

Hey PC, where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008? Nowhere to be found...

Hey shithead, we did not have a free market in 2008. Blaming something that does not exist for your problems is a sign of paranoia.



Your posts have been described as 'the ravings of a lunatic,' what's your point?

Ezra Klein - Hayek on Social Insurance

By Dylan Matthews

Jennifer Schuessler has a great short essay in the New York Times Book Review looking at the reception of Friedrich Hayek's "The Road to Serfdom" over the years, including this can't-be-made-enough point:

But unlike some of his champions in 2010, Hayek didn’t oppose all forms of government intervention. “The preservation of competition,” he wrote, is not “incompatible with an extensive system of social services — so long as the organization of these services is not designed in such a way as to make competition ineffective over wide fields.” This qualification, however, was left out of a comic-book version of “The Road to Serfdom” printed in Look magazine in 1945 (and distributed as a pamphlet by General Motors), which showed well-intentioned regulation giving way to more sinister forms of control.

As a side note, that Look magazine comic adaptation is hilarious, and includes great lines such as, "If you're fired from your job, it's apt to be by a firing squad," and imagery like an agent of the socialist state oppressing citizens by snapping their golf clubs in half.

Going further than Schuessler, it's worth noting that Hayek does not only accept a limited welfare state, but specifically singles out health care as an area where the state should provide a safety net:

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

Emphasis mine. Now, Hayek obviously isn't an idol of liberal economic policy folks for a whole batch of reasons, not least the central premise of Road to Serfdom that the sorts of social democratic policies being pursued in the United Kingdom and elsewhere in Europe during and after World War II would open the door to totalitarianism. But it's more than a little jarring to hear him invoked in opposition to a health care bill that's, if anything, less ambitious than the sort of thing he's talking about here.

Could that be because you are not intelligent enough to understand that there is more to a camel than his nose?

Obfuscation, and literary ignorance there quantum ass wind...the OP used the term free market, and I put that term in 'scare quotes' (also called sneer quotes) to indicate irony or disdain.

You folks on the right, the worshipers of the 'free market' (see above for grammatical explanation), the ass lickers of the opulent and believers in the religion of 'only the private sector creates ____ (fill in the blank) have never answer the question...so I will ask it again:

Where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008?

Yes, the OP did use the term, but the OP used it properly, and you went on to blame the free market, which doesn't actually exist, for not fixing the collapse in 2008. I pointed out how absurd that is, and you accuse me of obfuscating.

I still want to know how something that doesn't exist is responsible for the problems we face and also responsible for not responding to a government created problem.

 

[Saigon]

BTW...

The United States and the World
1. The US is the 3rd largest exporter of goods (8.3%) , after Germany ( 9.5) and China (8.7)
2. The US is the largest exporter of services (13.9 %) followed by UK (8.3) and Germany ( 6.6)
3. Taken as a total of goods and services, the US is more than twice as prolific as the next nearest nation.
About the International Trade Administration

Not per capita. Th US is a masive economy - that does not make it especially competitive.

This year’s report findings show that Switzerland tops the overall rankings in The Global Competitiveness Report for the fourth consecutive year. Singapore remains in second position with Finland, in third position, overtaking Sweden 4th). These and other Northern and Western European countries dominate the top 10 with the Netherlands, Germany and United Kingdom respectively ranked 5th, 6th and 8th. The United States (7th), Hong Kong (9th) and Japan (10th) complete the top 10.

Global Competitiveness | World Economic Forum - Global Competitiveness

Now 7th is not bad - but it is not amazing.

 

[Saigon]

Yes, the OP did use the term, but the OP used it properly, and you went on to blame the free market, which doesn't actually exist, for not fixing the collapse in 2008. I pointed out how absurd that is, and you accuse me of obfuscating.

I still want to know how something that doesn't exist is responsible for the problems we face and also responsible for not responding to a government created problem.

And he was correct - the forces which cause the global meltdown were free market forces - a lack of regulation and oversight in banking, in particular.

The 'free market' is not an either/or tangible concept - all capitalist economies oprate a blend of free market and regulatory forces, which are marignally different from country to country and time to time. It's about shades of grey - and under Bush the system had edged as far away from regulation and as far as possible toward a free market for greed to spark a total collapse. Had the banks been better regulated, the crash would not have occured.

I have to say, the denial of right wing posters and politicians over the collapse of the global markets shows how little has been learned.

 

[Bfgrn]

Hey shithead, we did not have a free market in 2008. Blaming something that does not exist for your problems is a sign of paranoia.



Your posts have been described as 'the ravings of a lunatic,' what's your point?



Could that be because you are not intelligent enough to understand that there is more to a camel than his nose?

Obfuscation, and literary ignorance there quantum ass wind...the OP used the term free market, and I put that term in 'scare quotes' (also called sneer quotes) to indicate irony or disdain.

You folks on the right, the worshipers of the 'free market' (see above for grammatical explanation), the ass lickers of the opulent and believers in the religion of 'only the private sector creates ____ (fill in the blank) have never answer the question...so I will ask it again:

Where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008?

Yes, the OP did use the term, but the OP used it properly, and you went on to blame the free market, which doesn't actually exist, for not fixing the collapse in 2008. I pointed out how absurd that is, and you accuse me of obfuscating.

I still want to know how something that doesn't exist is responsible for the problems we face and also responsible for not responding to a government created problem.

AGAIN...obfuscation. I guess I have to be more specific for someone who is this obtuse:

Where was the private investors when the economy and job loss was in free-fall in 2008?

How can you use a term 'properly', if it doesn't exist? You are correct ONLY in the fact there is no 'free market'...it never existed and it never WILL exist. It is a TOTAL misnomer and a right wing framing tool. The "free market" doesn't exist. There is no such thing. All markets are constructed. Think of the stock exchange. It has rules. The World Trade Organization has 900 pages of regulations. The bond market has all kinds of regulations and commissions to make sure those regulations carried out. Every market has rules.

What happened in this country was a failure of the PRIVATE sector. The government's failure was a lack of regulations, lack of proper oversight and unwillingness to arrest, prosecute and incarcerate the criminals on Wall Street and PRIVATE lending institutions.

 

[Quantum Windbag]

Obfuscation, and literary ignorance there quantum ass wind...the OP used the term free market, and I put that term in 'scare quotes' (also called sneer quotes) to indicate irony or disdain.

You folks on the right, the worshipers of the 'free market' (see above for grammatical explanation), the ass lickers of the opulent and believers in the religion of 'only the private sector creates ____ (fill in the blank) have never answer the question...so I will ask it again:

Where was the 'free market' and private investors when the economy and job loss was in free-fall in 2008?

Yes, the OP did use the term, but the OP used it properly, and you went on to blame the free market, which doesn't actually exist, for not fixing the collapse in 2008. I pointed out how absurd that is, and you accuse me of obfuscating.

I still want to know how something that doesn't exist is responsible for the problems we face and also responsible for not responding to a government created problem.

AGAIN...obfuscation. I guess I have to be more specific for someone who is this obtuse:

Where was the private investors when the economy and job loss was in free-fall in 2008?

How can you use a term 'properly', if it doesn't exist? You are correct ONLY in the fact there is no 'free market'...it never existed and it never WILL exist. It is a TOTAL misnomer and a right wing framing tool. The "free market" doesn't exist. There is no such thing. All markets are constructed. Think of the stock exchange. It has rules. The World Trade Organization has 900 pages of regulations. The bond market has all kinds of regulations and commissions to make sure those regulations carried out. Every market has rules.

What happened in this country was a failure of the PRIVATE sector. The government's failure was a lack of regulations, lack of proper oversight and unwillingness to arrest, prosecute and incarcerate the criminals on Wall Street and PRIVATE lending institutions.

The private investors were where they always are, investing. The problem was that the artificially inflated housing bubble, which was created by the government to artificially prop up the economy, burst. That was not caused by private investors, and cannot be fixed by them, especially when they do not have a free market to work in.