Friday, August 19, 2011

Political Hyperbole!

Tibor R. Machan

I am baffled by how critics of some Tea Party stars engage in rank hypocrisy. For example, they--such as many commentators on CNN-TV--have been claiming to be utterly shocked with former Texas Governor Perry’s polemical answers to interviewers. He said, at one point, that it would be “‘almost treacherous or treasonous,’ if the Fed under Bernanke increased the money supply before next year’s election.” He added something about how such untoward policies might be dealt with in Texas, namely, harshly!

This is supposed to be some kind of intolerable, uncivilized outburst, not to be expected from any serious political candidate in the heat of election campaigning. Never mind that the Vice President of the United States just a week prior to Perry’s hyperbole, said something more indiscreet about the Tea Party. Biden was reported to have agreed with Rep. Mike Doyle (D-Pa) who said about some hard line Tea Party Republicans at a two-hour, closed-door Democratic Caucus meeting: “‘We have negotiated with terrorists,’ an angry Doyle said, according to sources in the room. ‘This small group of terrorists have made it impossible to spend any money.’ Biden, driven by his Democratic allies’ misgivings about the debt-limit deal, backed Doyle’s comment” with his own ultra-hyperbolic statement: “They have acted like terrorists.”*

Notice that unlike in Perry’s remark, there was no qualification in what Doyle and Biden said, nothing about “almost treacherous or treasonous.” Instead the words were, “They have acted like terrorists.” Both of these are, of course, polemical remarks but the formers is more cautious and thus more civilized than the latter. And the analogy with terrorism offered by Perry is also more accurate since what he was talking about is Bernanke’s plan to increase the money supply to such an enormous extent that it will most probably severely lower the value of millions of people’s income, retirement, savings, etc., etc., and breed inflation to boot. That kind of destructiveness is indeed reminiscent of what terrorists do, namely wreak havoc with whatever their targets value, including their lives all in the name of some supposedly higher goal.

All of this needs to be appreciated in the light of numerous complaints offered over the last few years about how Republicans and Tea Party folks especially are engaging in irresponsible rhetoric, how they have been uncivilized as they have engage in their political exclamations, outbursts, etc. President Obama himself chimed in about this, I recall, and so has, of course, his buddy Professor and pundit Paul Krugmann. Yet if one considered the two different hyperbolic statements, those made by Perry and those by Doyle and Biden, it is crystal clear that the latter have been far more indiscreet in how they have characterized--let’s call it what it is, besmirched--their adversaries.

Maybe one could say that all this is simply par for the course when it comes to campaign rhetoric. As many have noted, the same has been going on for a couple of centuries. Thomas Jefferson, Sam Adams, Alexander Hamilton, et al have done nothing less when they sparred verbally in their political encounters. (As someone who writes columns and receives letters about them galore, I can testify that exaggerated charges having little to do with substance and a whole to with character assassination are routine.)

So yes, there is nothing peculiar with all the heat (and little light) in what the different parties to the various current political exchanges say. What is remarkable, however, is that news anchors and reporters at places like CNN, CNBC, MSNBC, and Fox join in. That is blatant lack of professionalism. And if one is permitted to point this out in how Wall Street traders, politicians, physicians, educators, and other professionals conduct themselves, it is certainly appropriate to point it out in the case of journalists. Especially when these folks intone with such righteous indignation about the missteps others take as they express themselves, as they chime in on various topics. After all, journalists are supposed to be professionals at expressing themselves and when they do this badly, that should be pointed out by those who watch them since it amounts to out and out malpractice.


Monday, August 15, 2011

The Keynesian Non-Answer

Tibor R. Machan

The New Republic editorialized recently about the current economic mess and it is worth quoting it because the central passage is largely non-hyperbolic, non-polemical: “The classic response to [our current economic] situation, put forth by John Maynard Keynes in the 1930s, is for the government to spend money. During the Great Depression and then World War II, the Roosevelt administration and its allies did this in part by employing people directly, an idea that still makes sense even if it’s utterly unfashionable. But there are other ways to prime the pump. Government can invest in public works, whether it’s building roads or fixing up schools. It can put money in the hands of those who will spend it, by increasing public assistance or by targeting temporary tax relief to the poor and middle class. It can also supply money to state and local governments, which because of balanced-budget requirements are busy laying off first-responders, teachers, and other employees—making the unemployment problem worse.”

Notice that of course, the editors simply take it for granted that governments are authorized to engage in this kind of economic regimentation. Never mind that when citizens decide not to spend money they are doing it with what belongs to them and may indeed know what they are doing. But this doesn’t matter to the advisers of master planners. Such moral issues are to them trivial. They think like statists have always thought--what matters for them is only what the king, czar, or some other government aims for.

The history in the passage is wrong. Roosevelt’s Keynesian schemes didn’t work, as it has been shown by numerous economists. (See The Critics of Keynesian Economics [1960] edited by Henry Hazlitt, and Hunger Lewis’s Where Keynes Went Wrong [2009], among many works that critically and mostly dispassionately address Keynesian economics.)

Investing in public works is a complete illusion--most of such spending by government is directed politically; it’s nearly always graft, and what else could it be since government officials haven’t the faintest clue as to what the money they have extorted from the citizenry should be spent on. So the spending will be a response to the pleas of lobbyists and others who can be of help in reelecting the politicians.

Of course, balanced budgets are very rarely implemented. Politicians do not want their hands tied.

The citizens who taxes are extorted could, of course, spend their own funds or invest them or place them in banks that can lend them out all of which would end up employing people for purposes that actually fulfilled what the public wants. Indeed, it is only such spending that amounts to support for public works since the so called public works are nothing but made up projects that serve the agendas of the politicians and bureaucrats. (The editors are evidently unfamiliar with public choice theory for which Professor James Buchanan received his Nobel Prize. The idea is, simply put, that politicians and bureaucrats do not spend on public projects but on what they regard is important. It should also be considered that even those who would try to serve the public interest stumble upon the difficulty of knowing what that might be, seeing that the public is made up of millions of people who have hardly any common interests or objectives.)

I have never managed to appreciate why these people keep assuming that the judgments and actions of government officials are superior to those of the citizenry throughout the world where these Keynesian proposals are being made and followed routinely. I keep asking, “Who are these people whom we can trust with such tasks as running a country’s economic affairs?” Somehow thousands of intellectuals who would never entrust government with tasks such as censoring literature and newspapers nevertheless have no compunction about entrusting them with the very delicate and idiosyncratic tasks of directing people’s economic affairs. (I tend to think it is the ancient governmental habit, left over from feudal times.)

Sunday, August 14, 2011

Anatomy of the bona fide Compromise

Tibor R. Machan

On the current political front there is a lot of talk about whether to compromise on various issues, such as continuing or increasing the Keynesian economic stimulus, abortion, gay marriage, extending the debt ceiling, continuing the two--or is it three--wars America is involved in abroad, getting tough on illegal immigration, how to treat radical Muslims in the courts, etc., etc. The president’s stance, peculiarly, is urging compromise on all fronts and not sticking to any firm position based on principle but entering the discussion with a middle-of-the-road outlook.

Yet there is something basically amiss with Mr. Obama’s position and indeed with that of all those who insist that there is great virtue in compromise. The main problem is that a compromise is the outcome of discussions between those with basically different positions. So, for example, if you hold that injecting more stimulus into the American economy is a good idea and I believe that it is not, we might compromise by agreeing in the end that a bit of stimulus will be injected but not as much as promoters of the idea hope for. Thus, to take a concrete case, if Paul Krugmann of Princeton University and The New York Times believes that the government should inject massive amounts of fiat money into the economy, via public works and subsidies, and various make-work projects--one’s the free market would not fund but government officials believe might generate employment--and another economist, say Don Boudreaux of George Mason University and The Pittsburgh Tribune Review, argues for avoiding any policy of printing and spending any kind of fiat money to stimulate employment, the result of spending a modest amount of such fiat money might be a compromise.

Notice that in such a case the two sides did not enter the discussion with what the result turned out to be. Compromises, in short, are what come out of debates between people discussing what kind of public policy should be adopted. Just as the middle between two points is something that cannot be established without knowing where the beginning and the end lie, so a compromise is dependent on positions that aren’t themselves the results of compromises.

Anyone who argues like President Obama--and his cheerleaders such as CNN commentator Fareed Zakaria--that what is needed on all sides is more willingness to compromise haven’t a clear idea what a compromise is. If they did, they would start by laying out the two sides that they urge to reach a compromise and indicating what would it be given the base positions of the two sides. What is it, for example, that Krugmann and Boudreaux really want and then why should they give up their commitment to that position and go along with something else, namely, the proposed compromise the likes of Zakaria propose?

The bottom line is that in any important debate one rationally demand of the debaters that they compromise prior to the process that must preceded it, namely, the debate. Maybe in the debate one side will manage to demonstrate to the other that it’s position is better that the opposition’s. In principle this has to be a possibility. But if one starts with demanding that people who enter such debates start with compromises, one is asking for the impossible. After all, the reason people tend to have firm positions is that they believe them to be sound, to be the right solutions to problems. But because the problem faces groups of people who must come to some kind of common resolution, it is likely that they will not be able to succeed with having their firm positions accepted by all parties to the debate. So what is sensible to ask for is that everyone involved in the discussions will go slow and only accept changes if they see no other way to proceed. To put it differently, the result of a compromise is never desired by those debating issues. These results are grudgingly accepted at best and imply that neither side was successful in convincing the other of the soundness of its stance.

Bottom line is: Don’t urge people to compromise; urge them to debate seriously and intelligently. The resulting compromise will then be the best and only one that could be achieved among these people who have to make collective decisions.