The Old-School Liberal

“Freedom granted only when it is known beforehand that its effects will be beneficial is not freedom” — Friedrich Hayek

Archive for February, 2008

Cato on the Gold Standard

Posted by Poorsummary on February 20, 2008


50267026.jpgLawrence H. White, Professor of Economic History at the University of Missouri-St. Louis debunks several myths about the gold standard and concludes the following:

“A gold standard does not guarantee perfect steadiness in the growth of the money supply, but historical comparison shows that it has provided more moderate and steadier money growth in practice than the present-day alternative, politically empowering a central banking committee to determine growth in the stock of fiat money. From the perspective of limiting money growth appropriately, the gold standard is far from a crazy idea.”

Read more about the seemingly antiquated monetary regime that our constitution prescribes and politicians ignore here.

Posted in 2008 Presidential Race, Constitution, Politics, Ron Paul | Tagged: , , , , | 2 Comments »

McCain on The US as World Policeman

Posted by Poorsummary on February 18, 2008


080225_r17114_p233.jpgYou thought the Bush Administration was hawkish on policing the world? You ain’t seen nothing yet. (from Foreign Affairs; Quoted here by Reason Magazine):

America needs not simply more soldiers but more soldiers with the skills necessary to help friendly governments and their security forces resist common foes. I will create an Army Advisory Corps with 20,000 soldiers to partner with militaries abroad, and I will increase the number of U.S. personnel available to engage in Special Forces operations, civil affairs activities, military policing, and military intelligence. We also need a nonmilitary deployable police force to train foreign forces and help maintain law and order in places threatened by state collapse.

It is ideas such as these that spawn such seemingly oxymoronic groups such as Libertarians for Obama. Apparently, socialism appeals to some libertarians more than empire building. It is truly a tragedy that the politics of the day demand that such a choice be made.

Posted in 2008 Presidential Race, Politics | Tagged: , , , | 2 Comments »

Why not ask the Iraqis?

Posted by Poorsummary on February 12, 2008

LennieWhile politicians debate about how many decades we should leave troops in Iraq, more evidence surfaces to indicate that the US is less like the penitent shopper who broke an item, and more like Lennie Small from Of Mice and Men who just can’t leave well enough alone:

THE US occupying army in Iraq (euphemistically called the Multi-National Force-Iraq) carries out extensive studies of popular attitudes. Its December 2007 report of a study of focus groups was uncharacteristically upbeat.

The report concluded that the survey “provides very strong evidence” to refute the common view that “national reconciliation is neither anticipated nor possible”. On the contrary, the survey found that a sense of “optimistic possibility permeated all focus groups … and far more commonalities than differences are found among these seemingly diverse groups of Iraqis.”

This discovery of “shared beliefs” among Iraqis throughout the country is “good news, according to a military analysis of the results”, Karen deYoung reports in The Washington Post.

The “shared beliefs” were identified in the report. To quote deYoung, “Iraqis of all sectarian and ethnic groups believe that the U.S. military invasion is the primary root of the violent differences among them, and see the departure of ‘occupying forces’ as the key to national reconciliation.”

So, according to Iraqis, there is hope of national reconciliation if the invaders, responsible for the internal violence, withdraw and leave Iraq to Iraqis.” (link)

The Iraq situation is a complicated one. Those who respect the constitution (though few they may be) say we had no right to go in, but there may be something to be said for fixing what we’ve broken. Perhaps the issue would be a bit clearer if we included the voice of the Iraqis in our decision making. After all, it’s their lives on the line.

Posted in Constitution, Government Gaffes, Politics | Tagged: , , , , , , , , | 3 Comments »

Romney Ignores Economic Adviser, Supports Fiscal “Stimulus”

Posted by Poorsummary on February 3, 2008

MankiwAs even the casual observer would know, virtually all of the Republican candidates are in favor of Bush’s fiscal stimulus package (with one notable exception). After all, what politician in his right mind would vote against sending $1,000 to every voter? Given the political faux paus of such a move, it’s no surprise that focus-group-fueled political machine Mitt Romney has joined the ranks of the neoconservative yes-men in supporting such a measure, in spite of the advice of one of his own economic advisers. As you read Mankiw’s analysis, ask yourself whether Romney thinks he knows better than the Harvard PhD economist who literally wrote the book on macroeconomics, or if he’s simply saying what the focus groups want to hear (here’s the link):

When designing a tax system and evaluating tax proposals, policy analysts have at least four goals in mind:

  1. Efficiency: The tax system should distort incentives as little as possible (and, in the case of externalities and Pigovian taxes, correct incentives when necessary).
  2. Intergenerational equity: The tax system should raise enough revenue so current generations do not unduly burden future generations.
  3. Egalitarianism: The tax system should try to achieve a more equal distribution of after-tax incomes.
  4. Stabilization: The tax system should help maintain the economy at full employment.

The current debate over fiscal stimulus involves trading off these goals. The stimulus package being discussed is mainly aimed at achieving goal 4, but it does so at the cost of sacrificing goals 1 and 2 to some degree. Efficiency is sacrificed because the phase out raises effective marginal tax rates and because the higher future taxes that result from the extra government debt will likely be distortionary. Of course, the phase out is there in order to achieve goal 3: This is the classic tradeoff between efficiency and equality.

Differences of opinion arise when policy analysts weight these goals differently. Advocates of fiscal stimulus put a large weight on goal 4. Critics of fiscal stimulus come in two varieties. One type of critic discounts goal 4 entirely because they are skeptical of Keynesian theories that underlie this goal. A second type of critic admits that goal 4 is legitimate in principle but believes that in the current environment macroeconomic stabilization is best left to monetary policy so fiscal policy can focus on goals 1 and 2. I am in this latter category.

Romney supporters, add this to your list of Romney’s conveniently adopted views (hint: abortion, gay rights, and federal education policy should already be there). Of course, he could really believe all the things he claims to– the political convenience of his changes in position could just be a coincidence…

Posted in Uncategorized | 1 Comment »