Categories
video

Video: A Simple Explanation

Though simplicity is a good thing, Occam’s Razor and all, not all simple explanations are correct. As discussed on Thursday and Friday, Matt Yglesias has simply laid out the “liberal” (or is that “progressive”?) case for the federal debt’s non-problem status. Here’s the video you may not have bothered to watch:

And we’re not over. Tomorrow, at Townhall, the Common Sense column by Yours Truly will be an expansion of what was presented on Thursday and Friday, here.

Why?

Because the dismissal of the public debt’s grave danger reveals, in simple splendor, the assumptions of the dominant liberal-progressive paradigm. The video is placed here not merely for the convenience of tomorrow’s Townhall readers, but also to challenge all readers to give the video a thorough debunking of their own.

We should thank Matt Yglesias. He has provided such a convenient target.

Categories
Today

March 29 McCarthy

On March 29, 1916, Eugene McCarthy, American political maverick, was born.

Categories
Thought

Mario Vargas Llosa

Prosperity or egalitarianism — you have to choose. I favor freedom — you never achieve real equality anyway: you simply sacrifice prosperity for an illusion.

Categories
free trade & free markets ideological culture too much government

Their Solution Is Our Problem

J.D. Tuccille at Reason took on journalist Matthew Yglesias’s vox.com video that I wrote about yesterday, focusing on Yglesias’s pooh-poohing of the sheer size of the national debt. Tuccille noted that Yglesias under-reported its humungosity, and that the Congressional Budget Office finds, counter to Pollyanna-liberals, no small reason to worry about the ballooning debt.

But I’m still shaking my head that Yglesias really did argue the federal debt is no problem, because — get this! —  the Fed can always just print more money. 

We know! What he sees as a solution we see as a problem.

The modish government-as-savior view of society seems pure simplicity: major inputs and outputs — money supply, fiscal spending, debt, inflation — all of which liberal-progressives will “expertly” adjust.

Fed this, no wonder people ask questions like “why haven’t we seen inflation, following the huge influxes of quantitative easing?” Well, it is not just about consumer prices, but investment prices, too, which we have long known to be more volatile than consumer goods; investments can easily suck up new money to create an unstable boom, which bursts.

The biggest problem for today’s market recovery — aside from subsidies and wage controls and all the folderol that directly discourage new jobs — is federal government irresponsibility itself (symbolized neatly by the federal debt) which signals to investors and other market participants that they cannot make viable long-term plans.

Economist Robert Higgs called this effect “regime uncertainty.” It’s the uncertainty bred by bad policy.

Just the kind Yglesias and his comrades adore.

Fiddle with the economy’s dials, oh wise ones, and uncertainty seems a certain result.

This is Common Sense. I’m Paul Jacob.

Categories
Today

Vargas Llosa March 28

On March 28, 1936, Mario Vargas Llosa was born. Vargas Llosa became a leading Peruvian author with an international reputation, a politician and winner of the 2010 Nobel Prize for Literature.

Categories
free trade & free markets ideological culture too much government

Not a Problem?

Increasing public debt is bad for a number of reasons. Journalist Matthew Yglesias, speaking on vox.com, gives voice to a very different, very Pollyannish perspective: “Debt is just not a problem right now,” he says.

Why?

“The U.S. can never run out of dollars.” After all, the Fed can just print more.

That’s not an uncommon view where I live, near the center of privilege, Washington, D.C.

The video starts with an instruction: “Stop freaking out about the debt.” It sports nifty, simple graphics and comforting music. Matt Yglesias sounds convinced himself.

Nothing he says convinces me. But I’ll concentrate just on the frank inflationism.

Yglesias mentions inflation. But it’s obvious he means CPI numbers, even though he offers the short-hand “too much money chasing a fixed amount of stuff” definition to stand in for the “supply of money increasing faster than the demand for money” definition that I hear from competent economists.

But while he admits that price inflation can be a problem, what he is promoting is inflationism. That’s the doctrine that central bank fiddling with increases in the rate of money growth is the way to control the economy. And that it’s costless.

Like money cranks of the old days, he only sees the costs of not inflating the credit system.

It never enters into his ideologically-driven thoughts that maybe artificially lowering interest rates fakes out investors and consumers, getting them to make bad investments that destabilize relative prices that, when they unravel, wreak havoc.

Inflationists are folks who are always trapped by the cure they prescribe. We’re left with boom-bust forever and ever.

This is Common Sense. I’m Paul Jacob.

Categories
Thought

Ludwig von Mises

The terms inflationism and deflationism, inflationist and deflationist, signify the political programs aiming at inflation and deflation in the sense of big cash-induced changes in purchasing power.

The semantic revolution which is one of the characteristic features of our day has also changed the traditional connotation of the terms inflation and deflation. What many people today call inflation or deflation is no longer the great increase or decrease in the supply of money, but its inexorable consequences, the general tendency toward a rise or a fall in commodity prices and wage rates. This innovation is by no means harmless. It plays an “important role in fomenting the popular tendencies toward inflationism.

Categories
Today

Solidarity, March 27

On March 27, 1981, Poland’s Solidarity movement staged a warning strike, in which at least 12 million Poles walked off their jobs for four hours. This began the decade-long process of overcoming Soviet communist rule in the satellite countries, leading eventually to the fall of the USSR as well.

Categories
insider corruption

IRS No Friend of Friends of Abe

In the better-late-than-never department, the Internal Revenue Service has granted tax-exempt status to Friends of Abe. Variety magazine calls the group “Hollywood’s largest fellowship of conservative and right-of-center independents” in an industry known for tilting 320 degrees or so to the left.

The status comes three years after the Friends filed its application. But the belated approval does not mean that IRS’s politically motivated targeting has stopped and that all legitimate applications filed by conservative groups are now being granted with only standard quotients of bureaucratic lethargy.

The American Center for Law and Justice — representing 41 plaintiffs who say IRS violated their constitutional rights to freedom of speech and assembly — attests that 13 of them have still not received tax-exempt status, with the oldest application having gathered dust since 2009. Meanwhile, the IRS officer until recently overseeing these applications, Lois Lerner, continues to plead the Fifth when asked to testify about the agency’s conduct.

We may never fully know what happened and is still happening here, given the stonewalling being done not only by Lerner but others in IRS and elsewhere in the government (like the Justice Department). But it is clear that IRS has abetted the freedom of speech and assembly of ideologically favored groups at the expense of others, and to the benefit of President Obama’s 2012 reelection campaign; and that IRS wants even more power to thus discriminate. The policies being covered up are wrong, dangerous . . . and ongoing.

This is Common Sense. I’m Paul Jacob.

Categories
Thought

Ludwig von Mises

Whoever wants peace among nations must seek to limit the state and its influence most strictly.