Issue CCLXX

December 14-15, 2010

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Economics
Putting Austrian Business-Cycle Theory to the Test:
Robert P. Murphy

December 14, 2010
Paul Krugman is despairing of late, because a growing number of mainstream economists are adopting (versions of) Austrian business-cycle theory. The most recent convert is Minneapolis Fed president Narayana Kocherlakota. Krugman uses the occasion to criticize what he derides as "the hangover theory" of economic slumps, in which high unemployment is necessary after an artificial boom. As happened with his earlier criticism of "the hangover theory," here, too, Krugman buttresses his Keynesian logic with a misguided appeal to the data. As Dr. Robert Murphy demonstrates, once we look at more relevant statistics the evidence comes down squarely in favor of the Austrian view, not the Keynesian.

The Tax Deal and Michigan:
Gary Wolfram

December 15, 2010
The announcement that an agreement has been reached between President Obama and congressional Republicans is a good sign for the national economy as well as the Michigan economy. The agreement is to extend the Bush tax cuts through 2012, extend for 13 months (until the beginning of 2012) the federal extended unemployment benefits, allow some short-term business tax cuts, and reduce for one year the employee portion of the Social Security Tax from 6.2 percent to 4.2 percent. Dr. Gary Wolfram writes that the agreement will reduce unemployment, but probably not for the reason that people may expect.

The Fed: The Chicago School's Achilles' Heel:
Robert P. Murphy

December 15, 2010
In a recent post "Triumph of the Austrian Economists," David Frum laments the displacement of the respectable Chicago School as the economists of choice among the political Right. In Dr. Robert Murphy's mind, Frum fails to see that conservative Republicans are justified in switching their allegiance to the Austrian economists, because supply-side monetarists have a glaring blind spot when it comes to the Federal Reserve.

History
Lord Townshend on Trade and Morality (1995):
Murray N. Rothbard

December 15, 2010
Charles, the third Viscount Townshend (1700–1764), has been shamefully neglected by virtually all historians of economic thought. He is virtually unknown and is often confused with his son of the same name, who was infamously responsible for the fateful Townshend taxes on tea and other imports into the American colonies. Murray Rothbard writes that the third Viscount Townshend was a great champion of free markets and trade liberalization.

Politics
The Cancun Wealth Redistribution Conference:
Paul Driessen

December 14, 2010
The latest climate gabfest is in full swing, and already it’s apparent that its primary purpose – other than providing all-expenses-paid trips to sun, fun, and 4-star hotels and restaurants – is to determine how to:

* redistribute vast sums of wealth to scientists, other “experts,” activists, bureaucrats and poor countries “impacted by global warming” and

* control people’s lives and living standards at “appropriate,” “acceptable” and “sustainable” level, according to these experts.

Paul Driessen, in this informative and provocative essay, offers new insights into how our friendly UN, EPA, and White House are taking care of us.

Fear and Control: The TSA Case:
Chris Waidele

December 15, 2010
The constant exaggeration of the dangers is like having a hypnotist converting a mild fear in someone into a full-blown phobia. The federal government and the media bombard us with examples of real or often just imagined threats and expand them so that they become as big as our worst nightmares. Hyperbole and imminent, lurking threats are such effective tools to get people to do what you want that we are all hard-pressed not to use them. As more of us buy into an overblown story, it takes on a life of its own and often becomes the accepted truth. This is why, writes Chris Waidele, so many of us obediently put up with actions that are patently ridiculous, like subjecting ourselves to fondling by the TSA.

Abolish the TSA:
Charles N. Steele

December 15, 2010
While Dr. Charles Steele would prefer to discuss pure economic theory, America's current approach to policy is so noxious and "in your face" that it's hard to write on anything else.  Federal government power has greatly expanded of late, particularly under the Bush and Obama regimes; both have greatly expanded the federal government's ability to intervene in the economy, and both have waged war on our civil liberties.  The invention of the airport Gestapo (a.k.a. TSA) is a case in point.

Audit the Fed in 2011:
Ron Paul

December 15, 2010
Since the announcement last week that Rep. Ron Paul will chair the congressional subcommittee that oversees the Federal Reserve, the media response has been overwhelming.  The groundswell of opposition to Fed actions among ordinary citizens is reflected not only in the rhetoric coming out of Capitol Hill, but also in the tremendous interest shown by the financial press.  The demand for transparency is growing, whether the political and financial establishment likes it or not.  The Fed is losing its vaunted status as an institution that somehow is above politics and public scrutiny.  Fed transparency will be the cornerstone of Rep. Paul's efforts as subcommittee chairman.

The Conservative Blind Spot:
Tom DeWeese

December 15, 2010
Tom DeWeese believes that there is a blind spot in the mainstream Conservative movement that threatens everything the movement says it stands for. The blind spot is refusal to acknowledge the threat of Sustainable Development, the policy of the UN’s Agenda 21 that now permeates into every American city. Somehow, the Conservative leaders who have always been there to fight off such utopian, socialist nightmares now seem to slumber blissfully in their ignorance at the very moment when vigilance is most urgently needed.

Do You Believe in Magic... Climate Numbers?:
Paul Driessen

December 15, 2010
The Cancun gabfest has concluded, but some US Senators continue to toy with the idea of ramming cap-tax-and-trade or some unreasonable facsimile (like mandatory renewable-energy standards) through Congress. Meanwhile, some individual states and coalitions of states are promoting their own cap-tax-and-trade, renewable energy, and other legislation. It might therefore be useful to lay out specifically how much “global warming” we are talking about … whether any of these “consensus” numbers are credible … and what’s really behind claims that 2010 will be “the hottest year on record.” Paul Driessen's column tries to do just that.

"It requires twenty years for a man to rise from the vegetable state in which he is within his mother's womb, and from the pure animal state which is the lot of his early childhood, to the state when the maturity of reason begins to appear. It has required thirty centuries to learn a little about his structure. It would need eternity to learn something about his soul. It takes an instant to kill him." 
~ François-Marie Arouet de Voltaire