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When LBJ Assaulted a Fed Chairman
When LBJ Assaulted a Fed Chairman
In his column today, Ron Paul mentions that those who insist the Fed functions with “independence” tend to forget — or at least not bring up — the numerous historical episodes in which the Fed did not exercise any such independence.
As an example, Paul mentions the time President Lyndon Johnson
summoned then-Fed Chairman William McChesney Martin to Johnson’s Texas ranch where Johnson shoved him against the wall. Physically assaulting the Fed chairman is probably a greater threat to Federal Reserve independence than questioning the Fed’s policies on Twitter.
For those unfamiliar with the episode, I thought it might be helpful to look at some of the historical context surrounding the situation. In his book The Man Who Knew: The Life and Times of Alan Greenspan, Sebastian Mallaby writes:
Johnson had pushed Kennedy’s economic policies to their logical extreme. In 1964, he had delivered a powerful fiscal stimulus by signing tax cuts into laws, and he had proceeded to bully the Federal Reserve to keep interest rates as low as possible. When the Fed made a show of resistance [in 1965], Johnson summoned William McChesney Martin, the Fed chairman, to his Texas ranch and physically showed him around his living room, yelling in his face, “Boys are dying in Vietnam, and Bill Martin doesn’t care.”
This was the 1960s version of “you’re either with me or you’re with the terrorists.”
Of course, Johnson didn’t stop at pushing around a central banker. Mallaby continues:
If the tax cuts and low interest rates caused inflationary pressure, Johnson believed he could deal with it with more bullying and manipulation. When aluminum makers raised prices in 1965, Johnson ordered up sales from the government’s strategic stockpile to push prices back down again. When copper companies raised prices, he fought by restricting exports of the metal and scrapping tariffs so as to usher in more imports.
…click on the above link to read the rest of the article…
Three Economics Lessons I Learned from My Dad
Three Economics Lessons I Learned from My Dad
As long as I’ve known him, my father has always been the entrepreneurial type. Even now, in his seventies, he picks up side jobs both to keep busy and to have a little extra spending money.
Throughout my childhood and youth, he had always been an independent insurance broker and salesman. He often employed one or two people to help with the phones and the paperwork. But also often just worked alone.
Growing up, the idea of going to work for a big company for 30 or 40 years, and then retiring to a golf course or rocking chair somewhere, was something completely alien to me. People my age nowadays mostly expect to work full time until age 75 or more. We can forget about pensions and Social Security. But even when a multi-decade retirement seemed like a viable option in the old days, that wasn’t something to aspire to in my house.
In short, Dad has always been part of a small minority group in America: people who make their living from running their own business. It is estimated that only about 10 percent of Americans actually make their living from businesses they own. The numbers are higher if we look at people who have some small-business income on the side. But when we’re talking about people whose main source of income is their own business, the numbers are smaller.
Not surprisingly, people who are in this minority group have a different way of looking at the world.
For them, there’s no boss or manager to complain about when your income isn’t as high as you like. If there’s not enough money to make payroll at the end of the month, business owners stare failure in the face, and they know they may even be taking some other families down with them.
…click on the above link to read the rest of the article…
In a Stateless World, Can You Grow Veggies In Your Front Yard?
In a Stateless World, Can You Grow Veggies In Your Front Yard?
The Miami Herald reports that a local couple is going all the way to the state supreme court to fight a local ordinance banning front-yard vegetable gardens:
Hermine Ricketts and her husband Tom Carroll may grow fruit trees and flowers in the front yard of their Miami Shores house…
Vegetables, however, are not allowed.
Ricketts and Carroll thought they were gardeners when they grew tomatoes, beets, scallions, spinach, kale and multiple varieties of Asian cabbage. But according to a village ordinance that restricts edible plants to backyards only, they were actually criminals.
“That’s what government does – interferes in people’s lives,” Ricketts said. “We had that garden for 17 years. We ate fresh meals every day from that garden. Since the village stepped its big foot in it, they have ruined our garden and my health.”
These sorts of stories pop up several times a year. They are often discussed at free-market oriented and libertarian sites to illustrate just the myriad of ways that the state interferes in our daily lives. Many times, they intervene to prohibit totally innocuous activities like growing a front-yard garden.
What articles like these often fail to point out of course, is that these laws didn’t appear out of nowhere. They are often passed because some voters demanded the city council or the county commission pass laws prohibiting front-yard gardens, or backyard chicken coops, or other non-violent activities deemed by some to be a nuisance to the neighborhood. These laws then persist over time because the majority of voters either agree with the laws, or don’t feel strongly enough about the matter to demand a change.
In Miami Shores, the law against front-yard gardens was likely passed because at least a few people felt that front yard gardens were not so innocuous after all.
…click on the above link to read the rest of the article…
Europe’s Secession Problems Aren’t Going Away
Europe’s Secession Problems Aren’t Going Away
Earlier this week, The New York Times noted that movements for greater local autonomy appear to be spreading throughout Europe. In some ways, the conflict in Catalonia is just the tip of the iceberg. The Times reports:
Coming on the heels of the Catalan vote, the Lombardy and Veneto referendums are yet another signal of the homegrown conflicts that persist in many of the European Union’s member states. Separatist movements are also simmering in Britain — where voters in Scotland rejected independence in a 2014 referendum but continue to debate the issue — as well as France, Germany, Belgium and Romania.
Like Catalonia — and unlike Scotland — the Lombardy and Veneto regions of Italy are among the wealthiest regions, and send enormous amounts of tax revenue to Rome. Italy’s southern regions, which are significantly poorer than northern Italy, have benefited from Northern wealth ever since Italians were all forced into a single nation-state in the late nineteenth century.
This has never been forgotten by Italians from Veneto, many of whom participated in a referendum in 2014 to declare Independence. Naturally, the Italian government in Rome declared the vote invalid. At the time, however, I interviewed one of the organizers Paolo Bernardini about the referendum. (See “Inside Venice’s Secession Movement.”) At the time, secessionists liek Bernardini appeared to be pursuing immediate and total independence from Rome, while remaining inside the EU:
A tiny majority of Veneto people are in favor both of the EU and of the Euro as a currency. So I envisage a little, rich state, playing a major economic and political role in the EU, a stabilizing role. It will interact naturally with other rich and similar states, Bavaria (still part of Germany), Austria, and the Netherlands. It will be a Finland in the Adriatic.
…click on the above link to read the rest of the article…
In a Cashless World, You’d Better Pray the Power Never Goes Out
In a Cashless World, You’d Better Pray the Power Never Goes Out
…click on the above link to read the rest of the article…
The Neoconservatives Have Declared War on the Realists
The Neoconservatives Have Declared War on the Realists
These suspicions were confirmed earlier this year when after the election of Donald Trump, John Mearsheimer, one of modern realism’s current standard bearers, wrote in The National Interest that Trump should “adopt a realist foreign policy” and outlines a far better foreign policy agenda that what we’ve seen coming from Washington.
And what is this realist foreign policy? For Mearsheimer, some main tenets include:
- Accepting that the US attempt at nation building in Afghanistan, Egypt, Iraq, Libya, Syria and Yemen “has been an abject failure.”
- “Washington [should] respect the sovereignty of other states even when it disagrees with their internal policies.”
- “Spreading democracy, especially by force, almost always fails.”
- Understanding that “America’s terrorism problem … is fueled in part by the U.S. military presence on Arab territory as well as the endless wars the United States has waged in the greater Middle East.”
- “The Trump administration should let local powers deal with ISIS.”
- Recognizing that Russia poses no real threat to the United States: “Even if Russia modernizes its economy and its population grows in the years ahead — big ifs — it will still be unable to project significant military power beyond eastern Europe.”
- “A Syria run by Assad poses no threat to the United States”
- “The new president should also work to improve relations with Iran. “
- “Encourage the Europeans to take responsibility for their own security, while gradually reducing the remaining U.S. troops there.”
Against Liberal Hegemony
There are some specific recommendations, but in a larger context, Mearsheimer is reflecting what has been building for years among realists led by Barry Posen, Mearsheimer, Stephen Walt, and Harvey Sapolsky, among others: an opposition to so-called “liberal hegemony”
…click on the above link to read the rest of the article…
Before “Fake News,” America Invented “Pseudo Events”
Before “Fake News,” America Invented “Pseudo Events”
In the wake of the Chalottesville riot, it’s been interesting how quickly the focus has shifted away from the actual events in Charlottesville and toward the public pundits and intellectuals are expressing opinions about the events.
Already, the media has lost interest in analyzing the details of the event itself, and are instead primarily reporting on what Donald Trump, his allies, and his enemies have to say about it.
This is an important distinction in coverage. Rather than attempt to supply a detailed look at who was at the event, what was done, and what the participants — from both sides — have to say about it, we are instead exposed primarily to what people in Washington, DC, and the political class in general, think about the events in which they were not directly involved.
This focus illustrates what has long been a bias among the reporters and pundits in the national media: a bias toward focus on the national intellectual class rather than on events that take place outside the halls of official power.
Note, however, that those quoted rarely have any special knowledge about the events themselves. Their opinions are covered not because they are knowledgeable, but because their quotations fit easily into a narrative that the media wishes to perpetuate.
In a March 2017 column, Peter Klein noted this bias and what economist F.A. Hayek had to say about it:
The intellectual, according to Hayek, is not an expert or deep thinker; “he need not possess special knowledge of anything in particular, nor need he even be particularly intelligent, to perform his role as intermediary in the spreading of ideas. What qualifies him for his job is the wide range of subjects on which he can readily talk and write
…click on the above link to read the rest of the article…
