In support of the Austrian School of economics

Nicole Gelinas, author of After the Fall, has explained how various leaders have dug an even deeper hole for western democracies to climb out of since the financial meltdown of '07-''08.  The author does not talk about why they have (are) repeated the same mistakes that propelled us into the hole in the first place.  The simplest explanation of all is that they are all Keynesians  who  believe that deficit spending by the government is the answer.  But we tried this in the 30's and many times since and  it doesn't work.  The only way to get out of this mess is to rid the economy of all the malinvestments brought on by the inflationary policies of the Fed and government for many, many years.  no one is willing to bite the bullet and proscribe the bitter medicine necessary  to right the ship.  Good luck all of us.

Interview with Jonah Goldberg

One of the clearest thinking, young conservative pundits out there today is Jonah Goldberg who writes for the National Review Online, LATimes, and numerous other outlets.  A particularly good read is his book, now several years old, Liberal Fascism, in which he makes the case that there are close intellectual ties between various forms of totalitarianism and the liberal ideology.  He makes a good case in this argument.  In this Hoover Institute interview, BTW about the only forum in which one can hear and see conservative authors, historians and the like, Goldberg weighs in on a wide range of issues dealing with the current times and the upcoming election.

Failed leadership

Jeff Sessions is a common sense senator from Alabama who speaks with reason and caution about most subjects.  Here he makes an opening statement at a Senate hearing on financial matters, and he speaks without a forked tongue:

Ben Bernanke testified before the Senate Budget Committee today. As is the usual practice, ranking Republican Jeff Sessions delivered an opening statement. It provided an excellent summary of the history that has brought us to the current budgetary crisis. It was a challenge to Barack Obama and the Democrats to come up with a credible budget plan, which for three years they have refused to do. And it was about as eloquent as you can be, talking about the federal budget. Here is Sessions’ statement, in its entirety:

Good morning, Chairman Bernanke, and thank you for joining us today. I am eager to hear your thoughts on our financial situation.

The Congressional Budget Office’s new outlook confirms that our deficit will top $1 trillion for the fourth straight year. And the deficits we face in the outyears, the next decade, are even more relentless and systemic.

In just three years, we have accumulated almost $5 trillion in new gross debt – during which time the total number of Americans working has decreased by 1.2 million. We have even fewer Americans working today than more than 11 years ago.

Federal spending, in real dollars, has increased 53 percent in ten years, while real wages for the average American have declined 7 percent.

The government is getting bigger and the middle class is getting smaller.

Yet some in Washington and Wall Street tell us we should delay needed reforms. So the problem I have, the concern I am wrestling with, is that even our financial experts are often very wrong as to the danger facing the American people and our economy.

For example, Secretary of the Treasury Geithner’s comments at Federal Reserve meetings in 2006 indicate that we cannot always be sure that those in positions of leadership see the problem clearly. As America verged on a massive housing meltdown Geithner, then President of the New York Federal Reserve, told his colleagues that “we just don’t see troubling signs yet of collateral damage, and we are not expecting much.” Two months later, he was announcing that “the fundamentals of the expansion going forward still look good.”

Janet Yellin, President of the San Francisco Reserve Bank was perhaps even more enthusiastic. When Chairman Greenspan left, she beamed: “It’s fitting for Chairman Greenspan to leave office with the economy in such solid shape. The situation you’re handing off to your successor is a lot like a tennis racquet with a gigantic sweet spot.”

In 2001, Chairman Greenspan testifying before this committee said that we were looking at more than a decade of surpluses and he wrestled with the question of what we would do after we have paid down our debt.

They were wrong. The minutes show you were also wrong during key periods.

Common sense tells us that more spending, more borrowing, and more debt make us weaker – not stronger. As the last financial crisis proves, the future is hard to predict. But while we can’t predict the day a debt crisis will erupt – or what unknown event might set it off – we do know we are on a collision course. The longer we wait to change that course, to develop a plan for a sensible financial future, the graver the danger becomes.

Yet Majority Leader Reid has closed the ship’s bridge and locked the wheel. He says the Democrat Senate will decline to offer a budget resolution for the third straight year. Not once has this occurred since the Congressional Budget Act was passed in 1974.

I am glad Chairman Conrad will be marking-up a budget in committee. But the mark-up will be a doomed exercise if your own majority leader decrees that the budget process will be shut down. Majority Leader Reid has effectively declared both a Senate Democrat budget – and the President’s budget – dead on arrival.

If they do not take on a different approach then the majority party is failing in the fundamental requirement of leadership. They have basically asked that their Senate leadership be taken away.

The President’s budget submission on Monday will also be a defining test. Either the President will rise to the occasion or he will again shirk his duties and accelerate our dangerous course. The choice is his.

I find it beyond imagining that the President, at this critical time in our nation’s economic life, will not lay out a serious budget plan for our future that will get us off this unsustainable debt path – a path to decline. But he did not even mention in his third State of the Union address the danger of our debt – what his Chairman of the Joint Chiefs, Admiral Mullen – called the greatest threat to our national security. Alice Rivlin, in Kiplingers magazine, was recently very critical of the President’s lack of leadership. Real change will not occur without the leadership of the President and he has not only not led, but has attacked those like the brilliant Congressman Paul Ryan, who has. We must hope the President’s official proposed budget will, at this late date, change our unsustainable debt course. Based on history, I am not optimistic.

Loss of competitiveness

It should not surprise anyone that the erosion of the manufacturing base in the US has been caused by all the reasons mentioned in this piece:  regulations, labor costs, taxation, to mention the most obvious.  For years, over 50, the two parties have been constructing the grand administrative state in which corporations, and the banking system have been subjected to a tsunami of regulations and controls in keeping with the liberal governing philosophy that seeks to put more and more control of society in the hands of the state.  The next election will determine if the erosion in manufacturing continues or if we begin to roll back the administrative state and see a competitive and vibrant U.S. once again.  This chart shows how weak and impotent this recovery has been.  Failure to snap out of this recession soon means a further loss of competitiveness.

Is he a natural born citizen or not?

The controversy over Obama's eligibility status to run for POTUS just will not go away.The latest flare up is the lawsuit in the state of Georgia which is described and explained in this this article.  Most of the charges brought in this suit have been made in other non legal venues but his is the first time they have been brought before a judge in a bonafide legal proceeding.  It's unimaginable where3 this all ends up since all the information is now in an official record available to any and everyone to read.  Since Obama played coy about his birth certificate for several years before producing an extract (not the original) and in the meantime experts have weighed in on the authenticity of the document, the DNC or some official source that can plausibly speak for the DNC will have to comment in some manner or the other.  There does exist the possibility that the judge will throw the case out on some grounds, however based on this article its hard to imagine on what grounds he could take that action.  This will surface during the general campaign in one form or another and will likely bedevil the Obama reelection effort.

ADDED:  Since this post another "challenge" to Obama's birth certificate has surfaced.  This time it's Sheriff Arapao from Arizona.  The sheriff, a hardliner on illegals whom he first locks up and then promptly returns to Mexico, has been under fire from the open borders crowd (all Obama supporters) who g the Justice Department to harass the good sheriff into backing off his stand.  Obviously the sheriff has decided to take the offense against the Obama forces by starting an investigation into the authenticity of his birth certificate.  And who could name him.  He's up against the most corrupt administration in the last 100 years, more corrupt even than FDR and Nixon.  Wish him well.

MSM goes after Newt

Reading this article on the Gingrich marriage imbroglio proves a bird's eye view on how the MSM tries to control the  nominee selection process. Of particular interest in this example are the comments which follow the article.

Ron Paul has an important message

Paul Jacob's mea culpa here speaks for many people these days about the candidacy of Ron Paul.  Paul is a follower of the Austrian school of economics.  This school proclaims the Federal Reserve and fractional banking to be the twin causes of the recurring booms and busts in western economies, and any other economies that deviate from free market  principles, what used to be called "laissez faire" capitalism.  Such economists as Von Mises, Rothbard, Hazlet, and others provide a coherent explanation of the so-called failures of capitalism that   has been accurate over and over since they began to have ibnfluence in the middle of the 20th century.  Call their philosophy anti-Keynsianism, and you'd about have it.  A return to the gold standard is included in their prescriptions for a cure, as well as reducing government intervention in the markets to an absolute minimum.

ADDED:  Paul and the Austrian school are appropriately appalled by the welfare state and what it does to any society.  This brief piece from Forbes speaks to this issue.