Blogroll Category: Current Affairs
I read blogs, as well as write one. The 'blogroll' on this site reproduces some posts from some of the people I enjoy reading. There are currently 514 posts from the category 'Current Affairs.'
Disclaimer: Reproducing an article here need not necessarily imply agreement or endorsement!
Will Hutton is indulging in his usual blizzard of assertions to insist that really, we should all just get on with doing what he says and tug that forelock as we do so. As is also usual the assertions don't seem to have much behind them - they're rather wrong in fact.
We most certainly agree that the UK tax system isn't perfect and we make a number of suggestions about how it could or should be better. But we do at least know the basics about the current system. Unlike Willy:
The ideological right’s propositions – that tax in principle is immoral, coercive, anti-enterprise, anti-aspiration and always economically destructive – now set the terms of discussion, policed by our rightwing media. The consequence is that the tax system is now so gravely distorted that it threatens the social fabric.
We're definitely part of that group being sneered at there. But the proposition that tax is a bad thing is clearly and obviously true. It's the price we pay for government and like all prices are it's a cost. Sure, why not aspire to government of Aston Martin levels of luxury? Why not aspire to an Aston in fact? The point being that the price is that cost and we'd all very much prefer to be getting the Aston at the Ford Fiesta price. Because that price is the cost, the bad thing. And that's also why the Fiesta outsold the Aston by some considerable margin.
But crucial in this story is that property is effectively only taxed when it is bought and sold. There has not been a revaluation of residential property prices, on which the ineffective council tax is based, since 1991. As a result, the property market is, because of generous inheritance tax thresholds, tax exemption of capital gains on homes and trivial council tax receipts, the world’s biggest onshore tax haven creating the world’s highest real house prices.
But Britain does not tax property lightly. As the OECD points out, the portion of GDP that is taken in property taxes is both the highest among OECD members and over twice the average at 4% or so. Vastly more tax than anyone else is an odd description of a tax haven.
Britain must create a tax system that raises revenue across a broad base as fairly and with as little economic distortion as possible and it must accept that if it wants health and education to remain public goods financed by general taxation,
Education and health care are not public goods. They are both rivalrous and excludable - as NICE shows every time it refuses to pay for a certain treatment or an Oxbridge college refuses to enroll a student. At least that second Willy should understand given that he runs a college.
It's entirely true that Adam Smith suggested that being part of a generally literate and numerate society was a public good and thus primary schooling might be encouraged usefully by the government. But it's that which is the public good, not the education itself.
then taxation will have at the very least to remain around 35% of GDP and may even have to rise a little.
It is around 35% of GDP. And if we keep the current tax rates then as GDP rises then the percentage of GDP in tax will rise. Because the tax system is leveraged to growth. Because there are tax free allowances on all sorts of things, incomes and so on, then the government's take of a marginal 1% of GDP is very much higher than their average take across all GDP.
As we say, the assertions which Willy brings into play turn out not to be correct. Thus the conclusion he reaches must be suspect too, no?
McDonnell tells us that above some £70,000 a year people should be defined as rich - or more accurately, as high income. There are problems with this, that sum in Central London isn't a fortune while in Middlesbrough it will finance a very much grander lifestyle. But then that problem is always going to happen in a national tax system. But McDonnell's point was that we should be expecting those more fortunate to be contributing more as a percentage of their income to the public coffers. And we've not got a problem with the idea that the top 5% should be identified as those who should be contributing more.
Adam Smith did after all talk about more than in proportion to income. Our own desired taxation system is rather different of course, with a substantial tax free allowance and then a flat rate but that still allows progressivity. But that essential underlying logic McDonnell is using seems fine to us.
But there is a problem here. As the Diamond and Saez paper points out the peak of the Laffer Curve in a tax system with allowances - and yes, being able to leave the country and thus the tax system is an allowance - is 54%. And this is taxes upon income, not the income tax alone. So, employers' NI must be included. Meaning that we are above the peak of the curve already. There is therefore no room for another higher rate on those over £70,000.
Yet that moral intuition that the richer should pay more still exists and is still correct. The only possible answer therefore is tax cuts for those on less than £70k. Which is entirely fine with us we shouldn't need to have to point out.
Tax day came and went this week, ironically moved to the 17th due to Washington DC celebrating "emancipation day." Washington's addiction to spending keeps tax rates high, while the labyrinthine enriches lobbyists while causing headaches for Americans across the country. As Ludwig von Mises write in Human Action, "The metamorphosis of taxes into weapons of destruction is the mark of present-day public finance."
The cost of taxation isn't limited to what government takes out of taxpayer wallets.
The distortive impact of taxes on US and multinational businesses is also extraordinary, albeit not as much discussed. While monetary policy causes malinvestment through artificially low interest rates, high tax rates and burdensome complexity similarly cause firms to radically alter their business decisions. And just as interest rates affect the length of production, tax rates (and rules) dramatically affect decisions about the capital structure of companies.
Rather than being "the price we pay for civilization," taxes are an unnecessary burden on the prosperity of society.
On Mises Weekends this week, Jeff is joined by Tho Bishop to discuss Richard Spencer's appearance in Auburn, Alabama, this week. The event was a win for free speech, but also revealed Spencer's affinity for socialism and the state. Instead of being a dangerous "thought criminal," Richard Spencer is really just a naïve statist? Of course, the best way to win in the battle of ideas is not to simply ignore or censor those you disagree with, and there is no need for libertarians to run from topics such as nation and culture. As demonstrated by scholars such as Mises, Rothbard, and Hoppe, these ideas are in no way at odds with liberty and individualism, and are best preserved by decentralizing power and grounding society in a respect for private property rights.
And in case you missed them, here are this weeks Mises Wire articles, covering a wide array of topics including taxes, trade, spending, and the Fed.
- Is Marine Le Pen the French Donald Trump? by Louis Rouanet
- Danger: Federal Tax Revenue Growth Falls to 80-Month Low by Ryan McMaken
- We're All Dictators Now by Roger McKinney
- How Government Meddles in Your Easter Chocolate by Ryan McMaken
- Glorious Tax Season by Per Bylund
- Frédéric Bastiat Is Right (Again) by Jeff Thomas
- Tax Day by Murray N. Rothbard
- The Racist History of Minimum Wage Laws by Chris Calton
- The Federal Reserve Is, and Always Has Been, Politicized by Ron Paul
- Luddy: The Fed's Ricky Unchartered Course by Robert L. Luddy
- Why Bill Greene Voted for Ron Paul in the Electoral College by William Greene
- Busting the "Free College" Myth by Jonathan Newman
- How Taxes Distort Business by Jeff Deist
- Stanley Fischer on the Balance Sheet: There will Be No Tantrum on Wall Street by C.Jay Engel
- Auto Loans: The Next Debt Bubble? by Shaun Bradley
- When Low-Wage Workers Are Better than Robots by Justin Murray
- Jeffrey Sachs's Blind Spot by David Gordon
- Fannie and Freddie Finally Wake Up by Doug French
- What Is the "Correct" Growth Rate of the Money Supply? by Frank Shostak
- New Japanese Translations of The Case Against the Fed and The Essential Rothbard
- Alan Greenspan, Sellout by David Gordon
- Florida Voted for Medical Marijuana, State Legislators Don't Care by Tho Bishop
Renowned surreal fiction writer Franz Kafka would have had trouble conceiving of a more absurd plot than last week's dropping of a 30-foot, 22,000-pound conventional bomb on poverty-stricken, war-ravaged Afghanistan right before Good Friday which commemorates the Prince of Peace.
The $170,000 GBU-43/B massive ordnance air blast bomb (MOAB, a.k.a., "mother of all bombs") was dropped on a network of caves where it annihilated everything within 1,000 yards including allegedly 36 ISIS fighters. This means that at least $4,722 was spent to kill each militant.
Based on more than a decade of suspect figures from the US-controlled Afghan government, where dead hunters, farmers, and goat herders have been fudged as Taliban, al Qaeda, or ISIS fighters, the 36-casualities figure comes with major caveats, as a subsequent figure of 94 casualties warrants even more skepticism. No civilian casualties have been admitted so far, which seems unlikely given Afghanistan's hunter-gatherer-agrarian economy where even in the remotest areas, civilians are seldom far from clusters of militants.
But this latest adventure in military central planning goes well beyond the usual brazen government waste and fudged numbers. Afghanistan's chapter of ISIS is a bizarre invented threat to the US. It consists of only about 700 members who are mostly former Taliban. Even more ironic, the cave complex that was bombed is situated in Nangarhar province, where the US CIA spent almost a decade and more than $3 billion (almost $6 billion in today's dollars) on arms, training, and fortifying/enlarging mountain cave and tunnel systems (the most famous being Tora Bora) for Osama bin Laden and his mujahedeen's use in its proxy war against the Soviets from 1979–1989.Did the Big Bomb Send a Message to the US's Enemies?
Regnant speculation is that Donald Trump and the Pentagon were sending an intimidating message to North Korea, Iran, China, and Russia that the US is not to be tangled with. Skeptical military analysts dismiss this as nonsense. The unwieldy MOAB has to be delivered from a massive and slow aircraft such as a Lockeed MC-130 that would never survive significant penetration of the airspace of any nation with an adequate air force or air-defense system.
"Afghanistan is a US military property not all that different from White Sands [New Mexico]. The whole operation was a massive public-relations fraud. They would have done taxpayers a huge favor burning $170,000 in a bonfire at White Sands," one analyst told me. "At least that would have assured no blowback," he added.How Military Central Planning Unwittingly Created ISIS
The final irony of the MOAB bombing? ISIS. Its story begins with Abu Musab al-Zarqawi, who literally followed US troops into Iraq after their invasion in March of 2003. Taking full advantage of the US invasion's destruction of Iraq's social order, by August Zarqawi had not only set up Jama'at al-Tawhid wal-Jihad (JTJ) in Iraq but bombed the Jordanian embassy, Canal Hotel, and Shi'ite Imam Ali Mosque, killing a combined 125 people and maiming/injuring countless others.
In October of the following year, JTJ changed its name to Al Qaeda in Iraq (AQI). This made sense since Zarqawi was a protégé/frenemy of former US ally and al Qaeda founder Osama bin Laden. Two years later, in October of 2006, AQI became the Islamic State of Iraq (ISI). In August of 2011, ISI helped form the al-Nusra Front in Syria. Finally, in April of 2013, al-Nusra and ISI combined into the Islamic State in Iraq and Syria (ISIS). Thus ISIS was born, and scooping up US weapons, vehicles, and millions of dollars in CIA cash in attacks, robberies, and burglaries around Iraq, it became one of the most well-armed and financed terrorist organizations in the world.
So here's the gist of MOAB: the US government dropped a $170,000 big bomb on dirt poor, destitute Afghanistan on militants living in a cave complex that it had originally helped construct to kill a tiny portion of a small, non-indigenous terrorist group that it had helped create 3,000 miles away in perhaps its greatest military blunder 14 years ago. And to top it all off, this pointless bombing was, according to US President Donald Trump, a rousing "successful job."
Kafka would be proud.
The Mises Institute's hometown of Auburn, Alabama made national news this week as Richard Spencer was allowed to speak on the university's campus following a court ruling. The event was a win for free speech, but also revealed Spencer's affinity for socialism and the state. Instead of being a dangerous "thought criminal", is Richard Spencer really just a naïve statist? Of course, the best way to win in the battle of ideas is not to simply ignore or censor those you disagree with, and there is no need for libertarians to run from topics such as nation and culture. As demonstrated by scholars such as Mises, Rothbard, and Hoppe, these ideas are in no way at odds with liberty and individualism, and are best preserved by decentralizing power and grounding society in a respect for private property rights.
It seems fashionable nowadays to compare Donald Trump to Marine Le Pen or the Trump movement to the French National Front. The idea behind this comparison is to suggest that the French far right might very well win the coming presidential elections in May 2017 and create a French “Trump surprise.” But, as when it came to comparisons between Brexit and Trump, comparisons between Trump and Le Pen tend to be hyped.
There are some evident similarities between Le Pen and Trump, but there are also crucial differences. It is true that both tend to reject mass immigration and globalism, that their discourse is deeply anti-elitist, and that the establishment, at least during election time, frenetically smears them. Their current successes flow from global skepticism of politics and the establishment media and the intelligentsia. Furthermore, France, maybe more than any other western country, experiences a deep identity crisis which was recently revived by the migrant crisis. This has been fertile ground for the National Front’s wins.
Marine Le Pen has, however, some fundamental differences with Trump. First, she is not a billionaire. Although this could seem irrelevant, one reason Trump appealed to so many electors is that he was not beholden to special interests, did not need to be president, and proved himself to be an efficient businessman, making projects happen ahead of schedule and under budget. For Trump’s supporters, their candidate was running in this election out of genuine love for his country, not out of material interest. Marine Le Pen, on the other hand, is a career politician. As with every career politician, her job is to be elected and reelected. Whereas Trump was a part of the private sector, Marine Le Pen made politics her career and is therefore not viewed as an outsider as much as Trump is.
On this note, Trump’s profile might be closer to another presidential candidate: Emmanuel Macron. Macron was a French government senior official and an investment banker at Rothschild before he engaged in politics. In 2014, he became minister of the economy in the socialist government until he resigned in 2016. Unlike Trump, Macron is no billionaire, but he nonetheless appears as a non-career politician who does not need to be elected (i.e., whose motives are supposedly selfless). Thus, Trump’s ability to identify topics of interest to the electorate is sometimes closer to Macron’s skills than to Le Pen’s.
After three decades of rising inequality in the US, Trump indeed identified that the game is rigged. His election was the revenge of the outsiders. Similarly, Macron’s ability to identify implications is based on the division between insiders and outsiders. Obviously, Trump’s and Macron’s policy conclusions differ. Macron is sensibly more pro-market, or, at least, pro free trade.
Marine Le Pen’s platform, on the other hand, is much closer to what could be called national-collectivism. Social justice and the condemnation of “ultra-liberalism” are strong themes in all her campaigns and her economic inspirations are much closer to the far-left than anything else. For instance, in their program, the National Front plans to make the tax structure more progressive. Whereas there are some pro-business or pro-market hints in Trump’s suggested priorities, there are none in Marine Le Pen’s.
When it comes to personality and style, it is probably the National Front's founder Jean Marie Le Pen — Marine's father — who is most like Donald Trump. The elder Le Pen started his political career in the Poujadist movement. In the 1950s, Pierre Poujade led a resistance by convincing the merchants from a little southern French town, St. Céré, to refuse tax payment. Poujade’s grassroots movement quickly grew and won 41 seats at the national assembly in 1956. Rothbard writes brilliantly on Poujadisme as follows:
Poujadisme is, indeed, a “people’s movement,” in the fullest sense of that overworked term. Paris was astonished to see the Poujadist delegates come to town: a parade of butchers, bakers, grocers, students, booksellers — the first real grassroots delegation in decades.
But, whereas Jean Marie Le Pen started politics in a grassroots anti-tax movement, the National Front is by now a 44-year-old party well established on the political scene. The Trump movement is little more than one year old. Marine Le Pen is now a constant in the French political landscape, not the novelty Trump is.
Other fundamental differences between these two blond headed political animals are apparent. Trump, on the one hand, never really tried to appeal to mainstream media and intellectuals. Marine Le Pen, on the other hand, after her father left political life in 2011, tried, until now quite successfully, to “de-demonize” the National Front. She opened the party to intellectuals, technocrats, and to the more moderate young generation.
Jean Marie Le Pen, who still is the honorary president of the National Front, immediately pinpointed the critical differences between Trump’s strategy and Marine’s. On twitter, while he praised the “tremendous kick in the ass to the mondialists and French political and mediatic systems” implied by Trump’s election. He also wrote:
Long live Trump! The de-demonization is crap and a dead-end. The peoples need truth and courage. Congratulation America!
This tweet appears to be aimed directly at his daughter’s strategy.
For all these reasons, we need to be careful when comparing Le Pen and Trump. In many respects, Trump is strictly an American phenomenon and it is doubtful that the French could ever elect a billionaire. But if Le Pen is more socialist, it is only because the French electorate tends to be more anti-market and pro-State. As within America’s Beltway, political power in France lies mostly inside Paris and draws an unchallenged line between Parisians and the subservient folks in the “province.” But, unlike populism in the US, the National Front constantly asks for more centralization in an already over-centralized country.
The differences between Trumpism and the French far right are not in themselves handicaps for the French but rather adaptations to different environments. The only thing that could be a prejudice for the National Front is that it might already be too mainstream. Nonetheless, although it is not to be wished from a libertarian viewpoint, a Le Pen surprise is possible in the 2017 presidential elections. Probably, Le Pen will make her way to the second round of the presidential election but will not win. This would already be in itself a shock for the two party system. If Marine were to be elected, she would have to change the electoral rules if she wants to have a majority in parliament.
The future is uncertain. Marine Le Pen has a long way to go before she can become the French Donald Trump.
Originally published November 20, 2016, on the Mises Wire.
Louis Rouanet is currently a student at the Paris Institute for Political Studies.
Last year Florida became the 28th state to legalize medical marijuana when Amendment 2 passed with over 70% of the vote. Unfortunately, instead of abiding by the overwhelming voter mandate, the state Legislature is looking to impose severe restrictions on the industry. The move will hurt patients, while enriching a handful of licensed growers.
Even before the state Legislature began writing rules, Florida’s Amendment 2 already had a far more limited scope than most medical marijuana legislation. Unlike the 2014 bill, which received a majority of votes but fell short of the 60% threshold, Amendment 2 listed ten specified conditions that qualified for medical cannabis. The legislation, however, left it to Tallahassee to figure out which products would be legal and how cultivation licenses would be handled. Time is proving this to be a grave mistake
The Florida House has drafted rules that would keep it illegal for patients to smoke, vape, or consume marijuana edibles. Products such as CBD oil would be legal, but patients would need a prescription from a doctor if they’ve been using for over 90 days. Should this bill come to law, a patient diagnosed with cancer would not be able to receive a prescription from their oncologist for three months. The bill also restricts the number of licensed growers to the seven that are currently recognized by the state, with more being approved once patient numbers grow.
The Senate bill is a bit more liberal. Smoking would still be banned, but vaping and edibles would be allowed. It would also grant five additional grower licenses, though it would restrict the number of dispensaries they could have to three. That would mean a total of 66 dispensaries, averaging out to almost one for each of Florida’s 67 counties. Considering population hubs such as Miami, Tampa, and Orlando will have multiple dispensaries, it means many Florida patients will be hours away from a legal dispensary.
It’s quite telling that the state Legislature’s actions have been praised by Drug Free America, a group that was dedicated to defeating Amendment 2 last year, the restrictions being considered are “violative of both the spirit and the letter of the Florida Constitution.” Few areas in society reward losers quite like politics.
While these restrictions will make things unnecessarily difficult for patients, it is great for the licensed growers and the lobbyists they have hired to represent their interests.
Ever since Florida first opened the door to licensed marijuana cultivation with a 2014 bill legalizing a low-THC strain dubbed “Charlotte’s Web,” cronyism and connections have been prioritized over patients. The initial marijuana licenses were limited to big agricultural companies that had done business in Florida for over 30 years and grew over 400,000 plants.
Similar to Iowa, Florida’s agricultural industry is an extremely powerful political player. Protection for the sugar industry is as sacred to Sunshine State politicians as corn subsidies are for Hawkeyes. Meanwhile the state not only has its own Department of Citrus, but the office of Agricultural Commissioner is considered a strong stepping stone to the governor’s mansion.
Given this political reality, it is not surprising to see lobbyist pressure pre-empt patient care. It doesn’t make it any less sickening.
The state is already facing its own heroin crisis following the state’s crackdown on medical professional’s ability to prescribe painkillers. The hostility the Florida Legislature has shown to something as simple as restricted medical marijuana is a sign sensible drug policy won’t come out of Tallahassee for some time.
Tim Dieppe writes about the attack in Paris on Thursday. As many as 238 people have been killed in Jihadist attacks in France since 2015, and French police are under pressure and have staged protests about the lack of support they get for tackling terrorism.
Dr Joe Boot continues to reflect on the Easter season, this time focusing on how Christ's resurrection fulfils His Word - and how belief in the resurrection is the very crux of the Christian faith.
Text: Mark 16: 1-20
To argue that we must decide who to tax more assumes first that we must in fact be taxing more. And that's the question that is being begged here:
The paradox is that raising taxes may scream “politics of yesterday” to voters Labour needs to win over, when in many ways the idea has never been so contemporary. Crumbling public services, a mountain of debt to repay, and an ageing nation of pensioners with a post-Brexit aversion to letting young, taxpaying foreigners move here all adds up to one logical conclusion: tax rises loom almost regardless of who wins in June.
For the aim, the current plan, is to deal with all of this by shrinking the size of the state itself. The declared targets - yes, stop sniggering at the back there - are that public spending should decline to some 35% of GDP, back where it was in the late 90s and also where it was for some goodly part of the post-war era.
The current tax system can finance that without tax rises.
We do indeed agree that if you insist that tax revenues must rise then it is necessary to work out who should pay those higher taxes. But that first question must be answered first, do we actually need more tax revenue?
The answer to that being, currently at least, no, so therefore we've not got to fret over whose wallet to plunder, do we?
Sebastian Mallaby is the Paul A. Volcker Senior Fellow for International Economic Relations at the Council on Foreign Relations. One can be sure, then, that his new comprehensive book, The Man Who Knew: The Life and Times of Alan Greenspan, reflects an Establishment point of view. As if this were not enough to tell us where the book is coming from, Mallaby informs us that he had Greenspan’s full cooperation in writing it. “This book is based on almost unlimited access to Alan Greenspan, his papers, and his colleagues and friends, all of whom were generous in their collaboration.
Though the book is hardly a panegyric to Greenspan, Mallaby views his subject with considerable favor. Nevertheless, the book contains ample material for a more severe verdict: Greenspan abandoned the free market convictions he effectively defended early in his career as an economist. To uphold economic truth was not the path to the power and influence Greenspan sought; and he readily adjusted his beliefs to fit with his ambitions.
Greenspan attached himself to Ayn Rand’s inner band of disciples; but his adherence to free-market economics did not stem from his alliance with Objectivism. Greenspan learned economic theory from Arthur Burns at Columbia University. For Greenspan, like his mentor Burns, statistics had primary importance: economic theory emerged from discerning patterns in the data and was strictly subordinate to its empirical sources. “Burns was the chief heir to Wesley Mitchell’s empiricist tradition, and his influence restrained any enthusiasm that Greenspan might have felt for the new trends that had begun to stir in economics. ... Even the cleverest econometric calculation was limited because yesterday’s statistical relationships might break down tomorrow; by contrast, finer measures of what the economy is doing are more than just estimates — they are facts.”
From his studies of the data, Greenspan arrived at an important conclusion. Financial markets played a crucial role in the genesis of the business cycle: “Squarely confronting the notion that financial markets are merely a casino of meaningless side bets, he laid out an insight for which Nobel laureate James Tobin would later capture the credit. Stock prices drive corporate investments in fixed assets. ... In turn, these investments drive many of the booms and busts in a capitalist economy.”
Greenspan applied his insight to Fed policy in a way that resembles the Austrian theory of the business cycle. During the 1920s, “the Fed’s key error was to underestimate its own contribution to the stock bubble. The rise in the market had set off a rise in investment and consumer spending, which in turn had boosted profits and stoked animal spirits, triggering a further rise in the stock market. The 1920s Fed had been the enabler of this feedback loop — in order for investment and consumer spending to take off, companies and consumers needed access to credit. Faced with a jump in the appetite to borrow, the Fed had [wrongly] decided ‘to meet the legitimate demands of business,’ as Greenspan put it.”
Greenspan drew from his analysis “a radical position: the United States should return to the gold standard of the nineteenth century. By tying money and credit to a fixed supply of gold, the nation could prevent toxic surges in purchasing power.” ... “‘The pre-World War I gold standard prevented speculative “flights from reality” — with their disastrous consequences,’ “Greenspan insisted.”
Nor was this the only area where Greenspan adopted a radically free-market stance. Defying the mainstream, “Greenspan followed up with an attack on government efforts to rein in monopolies with antitrust laws. ... He pointed out that it was not just corporate managers who would want to challenge monopolists; the financial system would demand that they do so. If a monopoly extracted fat rents from its customers, its share prices would soar; that would give entrepreneurs an incentive to create rivals to the monopoly, and it would give financiers an incentive to ply those rivals with abundant capital.” Mallaby views this “crude” view with evident distaste, noting that both Friedrich Hayek and Milton Friedman adopted a more “nuanced” position.
What then became of this free-market radical? Unfortunately, his desire for “power and pelf,” in Murray Rothbard’s phrase, led him to alter his views. A firm commitment to freedom would never gain him entry to the inner sanctum of government, and Greenspan soon learned to temper his views.
In his radical days, Greenspan had opposed government bailouts to failing firms: the discipline of failure was essential to the operation of the free market. In 1971, he defied his teacher Arthur Burns, who favored bailing out Lockheed. “Testifying before the Senate, Greenspan refused to back his mentor. ‘I am in fundamental disagreement with this type of loan guarantee,’ he began. Government-directed lending ‘must inevitably lead to subsidization of the least efficient firms,’ damaging productivity and therefore living standards. ... What the economy really needed was for weak companies to go bust, so that capital and workers would move to better-run establishments.”
Once close to the levers of power, matters were different. He wished to become Paul Volcker’s successor as Fed chairman, and he knew that firm opposition to Fed policy would hurt his chances for the job. Going against his earlier analysis, he supported the “largest bank bailout in U.S. history,” the rescue in 1984 of the Continental Illinois National Bank. He admitted the dangers of the bailout, but it was, as Mallaby summarizes his position, “necessary and appalling.” Appalling, one suspects, because of its effects on the free market; but necessary to advance Greenspan’s career. By the time he became Fed Chairman, the transformation was complete. By 1989, his “libertarian rejection of bailouts was long gone; what he wanted above all was the space to fight inflation.”
Greenspan wanted to fight inflation; but the best way to do it was no longer acceptable. A gold standard, he had long ago recognized, would bring with it monetary stability; but to replace the Fed with a commodity standard not subject to control by the government would erode his power. Accordingly the gold standard had to go.
He cast aside the gold standard with a transparent sophism: “A necessary condition of returning to a gold standard is the financial environment which the gold standard itself is presumed to create. ... But, if we restore financial stability, what purpose is then served by a return to a gold standard?” (quoting Greenspan). Why a gold standard cannot help create a stable financial environment, but instead presupposes it, Greenspan left unclear. Even less clear was how the Fed was supposed to preserve stability in the absence of the gold standard. Evidently we were to rely on his supreme powers of judgment in steering the economy.
Greenspan in his long career as Fed chairman gained the power and acclaim he coveted; but the crash of 2008, two years after the end of his tenure in office, led to a sharp decline in his reputation.
In their attitude toward compromise, Greenspan is the polar opposite to Murray Rothbard. Rothbard could have tailored his views to win the favor of Arthur Burns, who was a family friend, but he refused to do so. He never abandoned his principles, and he took the measure of Greenspan. Writing about him in 1987, Rothbard observed: “Greenspan’s real qualification is that he can be trusted never to rock the establishment’s boat. He has long positioned himself in the very middle of the economic spectrum. He is, like most other long-time Republican economists, a conservative Keynesian, which in these days is almost indistinguishable from the liberal Keynesians in the Democratic camp.”
In looking over Greenspan’s fall from free-market grace, the melancholy first lines of Browning’s The Lost Leader, addressed to Wordsworth, come to mind: “Just for a handful of silver he left us,/Just for a ribbon to stick in his coat. ...”
Gunmen opened fire on an Egyptian police checkpoint near Saint Catherine's Monastery in Sinai late on Tuesday killing one policeman and wounding four officials.
Next week, the Gafcon Primates arrive in Lagos, Nigeria, for the annual Primates Council meeting, between 25th - 27th April.
For the three weeks of the 1979 election campaign, I was one of the team of journalists on the Thatcher campaign bus. To be strictly accurate, I was on one of the two campaign buses, because we drove round the country in convoy: the candidate and her team in one bus, with the ‘reptiles’, as her husband Denis referred to us, following close behind. We got so few chances to interact with her directly that, after a week of steadily mounting frustration, the travelling press wrote her a letter, signed by all of us, begging for a chance to actually talk to her.
The first week of Thatcher’s campaign trail has been a success. Or rather it has achieved what it set out to achieve – plenty of pictures in the papers. So far, Mrs T has refused only two photographers’ requests: she does not enjoy kissing babies, and she very sensibly refused to hold a giant pair of scissors near her face. Smiling at cameras is one thing, talking to reporters is quite another. So far, we scribblers have had scarcely a ‘Good morning’ to call our own … (The Observer, 22 April 1979)
One evening, close to midnight, our wish was finally granted, and we were ushered into her hotel suite for an impromptu press conference. The main issue of the day was her party’s taxation proposals, a subject on which the Financial Times’s political correspondent Elinor Goodman, later of Channel 4 News, was both impressively knowledgeable and commendably insistent. Eventually, proceedings were brought to a close after Denis, in an audible whisper, had muttered to an aide: ‘Who is that dreadful woman?’ ...
The 1979 Conservative Party campaign was a watershed: adopting techniques imported from the US, Thatcher’s handlers understood that what mattered above all was imagery. For the first time in British politics, the interests of the TV cameras were paramount. Hence, Thatcher cuddling a calf, Thatcher in a chocolate factory, Thatcher chatting to shoppers. We take it for granted now, but in 1979, it was a novelty.
It has been revealed in the past week that a £500,000 government grant was given to a Professor Sally Sheldon, to 'fundamentally re-evaluate' the 1967 Abortion Act . As a result, Sheldon has claimed that nurses and midwives should be allowed to perform surgical abortions - action previously limited to doctors. The government grant and Sheldon's subsequent comments have come despite observable shifts in the public opinion on abortion and its morality.
The National Union of Teachers (NUT) has passed a motion calling on its members to teach nursery children about same-sex relationships and transsexualism.
The motion was passed by delegates at the NUT's annual conference in Cardiff, which took place over the Easter weekend.
A law professor who was granted £500,000 of taxpayers' money to write a biographical study on the 1967 Abortion Act, has suggested that midwives should carry out abortions.
Sally Sheldon, a law professor at the University of Kent, claims that the Act has been misinterpreted, in saying that only doctors could perform surgical abortions.
She says that allowing nurses and midwives to perform abortions would save the NHS money and speed up services.