Columbia University Libertarians

Feb 6th! YAL Civil Liberties Tour comes to Columbia!

2012-01-27T21:03:00.003-05:00

Clear your calendars for the evening of Monday, February 6 !

Young Americans for Liberty are hosting their Civil Liberties College Tour, and Columbia University is the first of four college campuses participating. The panel will consist of Bruce Fein, Glenn Greenwald, and Jacob Hornberger and will be moderated by Jack Hunter.

More details can be found, including speakers' bios, at this page.

One more thing!
If everyone could download the fliers (for Columbia University, of course) from the above linked page, and post a few around campus, that'd be great! We want a good turnout in order to assist YAL in starting the tour off right!

There is a distinction

2012-01-23T01:38:00.000-05:00

With all the talk and coverage of the Republican primaries, it is important to understand that Republicans aren't libertarians, despite the rhetoric they use. Even that sacred icon, Ronald Reagan, was a big-government spender.

Read Jeff Riggenbach's article for more details.

2011 New York Students for Liberty Conference

2011-10-26T00:24:00.002-04:00

Saturday Columbia Libertarians had the honor of hosting the fourth annual SFL New York regional conference. This year we had over 180 attendees, the largest SFL regional conference so far. CUL would like to thank Syed Hossain and SFL, as well as every one who took the time to attend Saturday, for making the conference a success.

For those of you who did not join us, you missed a great conference, featuring talks by Dr. Tom Palmer, Nick Gillespie, Matt Welch, Isaac Morehouse, and many others. Now that the regional conference is behind us, its time to start getting excited for the 2012 SFL International conference in Washington, D.C.

Drug Bust Statement

2010-12-08T01:04:00.001-05:00

The Columbia University Libertarians would like to express their solidarity for the students who are the latest casualties in the failed American War on Drugs. Chris Coles, Stephan Vincenzo, Harrison David, Michael Wymbs, and Adam Klein are all victims of an unjust system put in place by a government that supposedly preaches freedom and justice. It is not the actions of these individuals that may or may not make them criminals, but the laws that are thrust upon the population. Had these unjust laws not been in place, these individuals would be free to conduct business, legally, and they would have been hailed as business entrepreneurs. The laws in place is what is creating the black market that these individuals may have had to deal with in order to provide a service to a clientele that clearly knew what they were getting themselves into. We believe, no, we know that as long as there is a demand, there will be a supply, regardless of who may provide the supply. This system only serves to empower the most ruthless individuals, like the ones that these five Columbians may have had to deal with, as opposed to the most industrious. The net result is a peripheral crime that does not need to be associated with peaceful business transactions. The actions of one or possibly a few individuals does not constitute the direct involvement with another group of individuals. It is sad that the NYPD would resort to methods of entrapment and impose guilt through association upon these individuals to try to convict these individuals. And may we stress the utmost importance of the old principle of being "innocent until proven guilty".

Good news!

2010-11-18T18:28:00.000-05:00

... if you are as upset about the TSA as I am.

Ron Paul has introduced HR 6416: The American Traveler Dignity Act, which will hold TSA officers to that same laws that apply to us. That means no nude photos and no groping! Watch Paul's speech and read the text of the bill at Campaign For Liberty.

It seems as though the movement against the new procedures is really gaining momentum. I hope it won't be too long before we can say goodbye to these pornoscanners and enhanced patdowns.

Let me explain...

2010-11-05T11:40:00.000-04:00

Many of you may have noticed that we never updated the info for the promised Gary Johnson event that was supposed to have taken place yesterday. Unfortunately, we were unable to resolve scheduling conflicts and we just could not get an event space at the time Gary Johnson was available. We worked on this until the last minute, which is why we didn't keep you updated. I'm sorry that it didn't work out, but we are going to try to bring him back at another time when we can get the space we need.

To distract from the disappointment, I would like to point out that there are some other exciting events coming up including a trip to the FEE house and the SFL International Conference in D.C.!

Success!

2010-10-25T17:24:00.001-04:00

Thank you so much to everyone for attending this weekend's conference! It was a success (to say the least) and I hope you all had as much fun as we did! The Columbia Libertarians would like to thank Students for Liberty for securing speakers, helping out with the meals and sponsoring the event.

In the next few days we will be posting official pictures and video but for now, we need to recover...

Just a Reminder...

2010-10-15T22:54:00.001-04:00

Next weekend (Oct. 23rd) is the conference! We are working out the final details and it is going to be an amazing day. We'll be hearing speeches from David Boaz, Richard Epstein, Michael Strong, Bob Bowdon and more!
All you have to do to participate is complete the free Registration! That gets you all the speakers, three free meals, and a social after the conference.
It's going to be so much fun! Hope to see you there!

Topic for this week's meeting!

2010-09-26T15:59:00.000-04:00

  First, let me just thank everyone who came last week. We had a great turn out and I'm really looking forward to getting to know everyone better.

  At least a few of us attended the SSDP event with Peter Moskos who spoke against drug prohibition. It was an interesting talk, so I thought we could have a discussion along the same lines. There was a recording made, but I don't know where to find it. If you can find it, I would recommend watching. Also, this November, CA will have a marijuana legalization measure on the ballot. There are a few of us in the club who will be voting, so that makes it all the more relevant.
   Drug legalization usually makes for a great discussion. I have found that libertarians disagree on this issue more than you might expect. So, come to the meeting ready to debate!

Welcome Back!

2010-09-12T15:42:00.000-04:00

Hey everyone! It's been a hectic first week of classes, but we're excited about Activities Day on Monday afternoon. Make sure you stop by the Libertarians' table to sign up for the mailing list and pick up some great libertarian swag. We'll be giving away awesome Bastiat books published by SFL and the Atlas society!

See you there!

Topic of the Week

2010-08-02T16:06:00.003-04:00

Hey everyone! I hope your summer is going well! Mine has been pretty busy and I don't even know what time zone I'm in most days.

I want to try out a "Topic of the Week." The idea is to explore a topic more in depth and share our opinions and what we have learned. Please post thoughtful comments or just share some good sources on the topic.
I'm in AZ right now so all I'm hearing about is the SB 1070 (the immigration bill). Does it infringe on civil liberties? Is it all bad, or are some parts acceptable? What kinds of laws could AZ pass to solve their problems? What role should the Feds play in AZ's immigration?

Since this is the first topic and it's summer and most people are probaly not reading the blog everyday, this will probably be up for more than a week. Thanks for participating and I hope we can get a good discussion going!

Just because it's summer that doesn't mean we are taking a break from the pursuit of liberty!

2010-06-08T15:16:00.006-04:00

Just wanted to let everyone know about about Students for Liberty's Bastiat Project. There is an essay contest and now is the best time to work on it!

Next semester is going to be awesome! We are already working on some great plans including the Students for Liberty conference in October.

See you in the fall!

JD, you will be missed!

2010-01-17T21:55:00.002-05:00

Liberty has lost one of its most passionate defenders, John David Fernandez. Always enthusiastic and outspoken, he left an impression on everyone he met. I can think of no better tribute than the comments left on this post by the people he respected so much. The CU Libertarians will not be the same without him.

Please keep his family in your thoughts and prayers.

CUL's President on American Morning

2009-11-17T19:38:00.003-05:00

Well here's a link to CNN's American Morning, discussing the release of Sarah Palin's new book, Going Rogue. In it, Columbia University Libertarian's own Jamie Maarten speaks about the lack of substance that plagues Sarah Palin's book, as well as her interview with Oprah.

http://amfix.blogs.cnn.com/2009/11/17/palin-vs-oprah-women-score-show-on-substance-style/

Yes, we are finally on the television set (imagine an old Indian man saying that because I did)! And I think I heard "libertarian" at least twice, so we're inching our way towards the mainstream! Honestly, I feel like there should be an SNL skit "Really, Palin?" on the Weekend Update, ha ha.

Compassionate Liberalism

2009-08-31T16:59:00.002-04:00

At Cafe Hayek, Don Boudreaux shares a letter he wrote to the Los Angeles Times:

You join legions of others in describing Ted Kennedy as having been compassionate (”Ted Kennedy, America’s conscience,” August 30). Aware that I’ll come across as low-brow – as unable to appreciate the transformative magic of politics – I must ask: What’s compassionate about spending other people’s money and minding other people’s business?
Suppose Mr. Kennedy were my neighbor. One day he arrives at my door with a handful of other neighbors (all carrying concealed weapons) and demands some of my money and tells me that he’ll regulate what I eat, drink, and smoke. “And I’ll stop your teenage son from being employed if no employer offers him a wage at least as high as one that my friends here and I determine is appropriate.”
I gaze at him aghast. “Oh, don’t worry,” he assures me. “Because my undying dream is to help others, I’ll spend the money that I take from you in ways that will help you. But I’ll also spend much of it helping people on the other side of the tracks. And any restrictions that I impose on your behavior are ones that, you can be sure, spring only from my compassion for you and others.”
Should I regard neighbor Kennedy as great and compassionate – as a gallant champion of the interests of others? Or should I regard him as an arrogant bully, as fraudulent as he is dangerous?

A New Hope

2009-08-27T16:40:00.003-04:00

In the Washington Post, George Will profiles 2010 CA gubernatorial candidate Tom Campbell.

Because California’s calamitous present — creative accounting as a rickety bridge to the next budget crisis, coming soon — might prefigure the nation’s future, next year’s gubernatorial election is portentous. An especially intriguing candidate in a colorful field is Tom Campbell. Colorful he is not. “Talk softly and carry a small calculator” could be his motto. What glitter, however, are his resume and agenda.

He has a Harvard law degree and a doctorate in economics from the University of Chicago, where his faculty adviser was Milton Friedman. He clerked for Supreme Court Justice Byron White. Working in the Reagan administration in 1983, in the wake of a severe recession, he assumed Reagan would lose in 1984 (“proof of my political acumen,” he says; Reagan carried 49 states) and accepted a professorship at Stanford’s law school. He represented Silicon Valley in Congress for five terms. He unsuccessfully sought the Republican nomination for Senate in 1992. He won the nomination in 2000 but lost the election. His third statewide run might work because, after Arnold Schwarzenegger’s childlike faith in personality as the conqueror of problems, blandness may be charismatic.

I remain skeptical of all politicians, this one included, but Campbell does for now seem to be better than the rest. A Chicago economist seems like the ideal (viable) candidate for understanding what the government should and should not do to ensure a healthy economy (answers: less and more, respectively). His stances on social issues aren't perfect, but he seems as libertarian as one can hope for from a major-party candidate for Governor of California.

George Will says that Campbell's two biggest rivals for the Republican nomination will likely be former eBay CEO Meg Whitman and tech entrepreneur Steve Poizner. In general, I trust entrepreneurs and business leaders much more than politicians to solve the world's problems. But I'm not so sure that great entrepreneurs make great politicians...it seems like their confidence in their past successes might lead to an overoptimistic idea of what they can solve as government officials. I don't want politicians trying to think of new, innovative ways to give away healthcare and subsidize farmers; I want them to realize the limits of government and leave the innovation to the private sector. A Chicago economist (I hope) would know enough to let the government do what it's best suited for: staying out of the way. It's just a thought and I have nothing to back it up with, but if you can think of an example supporting or undermining it, let me know in the comments.

Who knows...if Campbell impresses me enough, I might actually vote this time around!

"What is Real Freedom?"

2009-08-17T17:14:00.003-04:00

Arnold Kling has an answer at EconLog:

Consider the following definition of freedom: the absence of monopoly.

The absence of monopoly means that you can exercise exit, even if you cannot exercise voice. The presence of monopoly means that, at most, you can exercise voice.
Neither my local supermarket nor any of its suppliers has a way for me to exercise voice. They don't hold elections. They don't have town-hall meetings where they explain their plans for what will be in the store. By democratic standards, I am powerless in the supermarket.
And yet, I feel much freer in the supermarket than I do with respect to my county, state, or federal government. For each item in the supermarket, I can choose whether to put it into my cart and pay for it or leave it on the shelf. I can walk out of the supermarket at any time and go to a competing grocery...
If you lived in North Korea, which would you rather have--the right to vote or the right to leave?

In fact, if we had real competitive government, then we would be no more interested in elections and speaking out to government officials than we are in holding elections and town-hall meetings at the supermarket. I repeat: real freedom is the absence of monopoly.

What school would be like...

2009-05-04T11:24:00.003-04:00

... if the government didn't step in with easy-to-get-no-qualification loans.

The exorbitant cost of higher education has been, arguably, increased by the intervention of the federal government. While the idea of a student loan backed co-signed by the government, as a way to allow "under-privileged" kids to attend universities, seems good in theory the unfortunate reality is that it has diminished competition and caused the price of tuition to rise exponentially faster than the rate of inflation... essentially it has done what most government intervention does -- created a cartel. (Read this CATO article here if you're interested)

Well local community colleges are, perhaps, offering that competition in the face of an economic down turn. The New York Times ran an article this morning about associate-degree institutions beginning to offer 4-year course and actually grant a bachelors degree in fields like nursing, public safety and education (to name a few). These programs are drawing students who, for financial reasons (including not wanting to incur enormous debt for the next 15-29 years), were turned off by the idea of going to a traditional 4-year institution. Personally, I believe this is a great catalyst to get students, parents, teacher and maybe even university administrators to consider the cost of universities again. While "elite" schools like Columbia probably won't take this too seriously, hopefully other universities will and competition can do what it always does: lower prices and increase quality.

Remember Iraq?

2009-05-02T16:35:00.003-04:00

Unfortunately, April was the deadliest month in over a year, largely attributed to public violence and bombings. This should remind us all that a 1-2 year withdrawal plan was proposed five years ago and, instead, we have increased the number of troops...

I wonder what more it will take for Obama to make good on his promise of ending the war?

We marched in, we can march right back out -- Ron Paul

Capitalism is good for the environment?

2009-04-24T21:53:00.002-04:00

Well, sort of... A recent New York Time article finds that as a country's per capita income goes up their carbon emissions go down. Furthermore, increased regulations on poor countries emissions will hurt the cause in the long run as it will take longer for their economic situation to improve. This new "Kuznets Curve" is leading researchers to believe that wealthy countries naturally cut carbon emissions according to the curve... What do you think?

wow...

2009-04-22T12:09:00.001-04:00

does anyone else think this cop is about to lose his job?

Supreme Court to hear strip-search case

2009-04-19T22:57:00.005-04:00

The now 19 year old victim is testifying regarding an incident where she was strip searched... in the 8th grade!

Savana Redding recalls being searched in the nurses office because her principal suspected she was hiding ibuprofen in her underwear. This Tuesday the Supreme Court will hear the case with little precedent; the closest case going being a 1980 incident in New Jersey when a girl's purse was searched after she was caught smoking in the bathroom.

The state of California, along with 6 other states, currently prohibit strip searches on campus.

Judge Kim McLane Wardlaw said the vice principal's action defied common sense as well the Constitution.

"A reasonable school official, seeking to protect the students in his charge, does not subject a 13-year-old girl to a traumatic search to 'protect' her from the danger of Advil," she wrote.

"A school is not a prison. The students are not inmates," she added, noting that juvenile prisoners are given more rights than were given Savana.

To read the full story in the LA times click here

If this blog isn't enough..

2009-04-16T11:02:00.004-04:00

Here is a list of other libertarian blogs that might be interesting:

http://blog.mises.org/archives/009786.asp

Happy Tax Day

2009-04-15T11:20:00.001-04:00

Cato institute production dissecting the administration complications and privacy infringement of the tax code.... enjoy!

"Harrison Bergeron"

2009-04-12T23:16:00.002-04:00

A friend just showed me this great Kurt Vonnegut story. The story begins,

THE YEAR WAS 2081, and everybody was finally equal. They weren’t only equal before God and the law. They were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else. All this equality was due to the 211th, 212th, and 213th Amendments to the Constitution, and to the unceasing vigilance of agents of the United States Handicapper General.

It's a great read, and takes literally 5 minutes. For the full experience, try listening to it with Rush's "The Trees" blasting in the background.

THANK GOODNESS!!

2009-04-12T02:58:00.000-04:00

I feel safer now...

What exactly are we diving into?

2009-04-09T17:54:00.005-04:00

The good folks at reason.tv have neatly summarized what the extraordinary levels of spending in the bailouts and stimulus packages are really committing us too.

Watch, and be very afraid.

"This upsets me."

2009-04-04T20:54:00.001-04:00

It's comments like the following that upset me with some alleged libertarians?

Brink Lindsey, of the Cato Institute, supposedly a respected libertarian think tank, wrote in an online article for the New Republic that also appeared on the Cato website:

Tax reform also offers the possibility of win-win bargains. The basic idea is simple: Shift taxes away from things we want more of and onto things we want less of. Specifically, cut taxes on savings and investment, cut payroll taxes on labor, and make up the shortfall with increased taxation of consumption. Go ahead, tax the rich, but don't do it when they're being productive. Tax them instead when they're splurging — by capping the deductibility of home-mortgage interest and tax incentives for purchasing health insurance. And tax everybody's energy consumption. All taxes impose costs on the economy, but at least energy taxes carry the silver lining of encouraging conservation — plus, because such taxes exert downward pressure on world oil prices, foreign oil monopolies would wind up getting stuck with part of the bill.

Shift taxes? Increase taxes? Tax the rich? Impose new taxes? Use the tax code to influence public policy? What kind of libertarian tax reform plan is this? How about reduce, cut, eliminate, and abolish taxes? Not deductions, not exemptions, not credits, not shelters, not loopholes — taxes.

MADNESS.

Meet Daniel Hannan

2009-04-01T23:40:00.002-04:00

During last week's session of the European parliament, one man rose to challenge (with great eloquence) the Keynesian spend-spend-spend policies that have left Britain in even worse shape than us.

Meet Daniel Hannan. A representative to the European Parliament since 1999, Hannan is a rising name in Britain's Conservative Party. Two years ago, he was involved in the attempt to block passage of the Lisbon Treaty by the European Parliament, and advocated a referendum on it instead. And this week, he appeared on American television and expressed support for non-interventionist and general limited government policies. We wish him all the best in the not-so- hospitable socialist European environment- and gladly take him over here, if things don't work out across the pond.

"Mexico's war must be our war"

2009-03-30T11:09:00.003-04:00

In an interesting, but not at all surprising, piece in the LA times this morning Sen. John Kerry used nothing short of counterintuitive logic to justify fighting drug lords in mexico "so we don't have to fight them over here!"

Kerry sites the large demand for illegal drugs, lack of resources committed to inspecting outbound citizens headed to Mexico and the inability of the US narcotics and firearms control to inspect all contraband seized in Mexico for the surge in violence south of the border.

Finally, his solution is the ratification of the Inter-American Convention Against the Illicit Manufacturing of and Trafficking in Weapons and Explosives which will help Mexicans keep their streets safer keeping "our streets safer"...

Read it for yourself here.

http://hosted.ap.org/dynamic/stories/B/BOOTLEG_DETERGENT?SITE=FLTAM&SECTION=US

2009-03-29T12:14:00.000-04:00

you'll be amazed... just click it

The Drug War vs American Civilization

2009-03-16T09:22:00.001-04:00

http://www.lewrockwell.com/gregory/gregory180.html

interesting article everyone should definitely read.... enjoy!

National Pi Day

2009-03-14T13:22:00.006-04:00

The mathematical constant beginning with 3.14159 and signifying the ratio of a circle's circumference to it's diameter, also known as "Pi", is celebrated today by legions of mathematicians and scientists.

Curiously, the Federal government is also interested. On Wednesday, the House of Representatives approved a resolution designating today "National Pi Day." Thankful technology and engineering groups promptly wrote this to Congress:

"Thank you for recognizing the importance of math and science education to a knowledge-based economy."

I'm simply outraged that numbers just as special like Euler's number e and the golden ration phi have been left in the dark. Hasn't it occurred to our lawmakers that setting aside some national recognition for these other numbers would boost math education even more?

Seriously though, if the quality of our math education is linked to Congressional resolutions celebrating numbers, then we are in more trouble than we've realized.

Meet Nationalized Citibank

2009-03-14T03:20:00.002-04:00

Have you caught Citibank's latest TV commercial? The government now owns over a third of one of the biggest banks in the country, and Citibank executives have decided to advertise some of the many accompanying beneficial changes...

The New F***ing Citibank - watch more funny videos

The Rebirth of Atlas

2009-03-10T14:03:00.016-04:00

Seems like Ayn Rand's 1957 classic, Atlas Shrugged, is making a timely comeback. In the past six months, sales have skyrocketed every time the Federal government has announced a new 'corrective' measure for the economy. At the rate the government is spewing out ideas, it should stay high on the charts for many more months.

This probably reflects an attempt by many people to prepare themselves for what's coming next. In Atlas Shrugged, Rand tells the tale of a ghastly society where burdensome taxes and regulations suck the will to achieve from inventors, entrepreneurs and industrialists. Then, 'economic Armageddon' follows. The next decade could prove her story to be very prescient...

Bernake says the Fed is too weak... really?

2009-03-10T13:22:00.003-04:00

Just this morning in the New York Times.. of course.

http://www.nytimes.com/2009/3/11/business/economy/11fed.html?_r=1&hp

Libertarianism != Selfishness

2009-03-09T22:03:00.002-04:00

A common insult hurled at libertarians is that, because they do not support government-sponsored welfare, they are selfish. In today's reading for CC, J. S. Mill's On Liberty, I encountered a great response:

In all such cases there should be perfect freedom, legal and social, to do the action and stand the consequences.

It would be a great misunderstanding of this doctrine to suppose that it is one of selfish indifference, which pretends that human beings have no business with each other's conduct in life, and that they should not concern themselves about the well-doing or well-being of one another, unless their own interest is involved. Instead of any diminution, there is need of a great increase of disinterested exertion to promote the good of others. But disinterested benevolence can find other instruments to persuade people to their good, than whips and scourges, either of the literal or the metaphorical sort.

Hide Your Barbie Dolls

2009-03-05T09:36:00.002-05:00

Just when you thought government couldn't get any sillier, a West Virginia lawmaker takes his wrath out on Barbie by offering this gem. Between this and the chimp legislation in Congress, elected representatives across the country are quite busy.

Inflation to Inflate Your Stomach!

2009-03-04T04:16:00.003-05:00

Ah inflation, the best medicine for the economy - according to this 1933 propaganda film. I wonder if they just sit around at the Fed all day and watch videos like this:

Obama = McCain

2009-03-01T00:41:00.005-05:00

Remember way back in September and October, when Obama and McCain supposedly had completely divergent views on Iraq? McCain wanted to stay there for a 100 years, while Obama wanted to bring the troops home in 16 months? Well, the two agree now. Seems like 50,000 troops is just the right number to placate the neocons while at the same time convincing everybody else that this administration represents a clean break with the past.

Ron Paul on Realtime

2009-02-22T04:44:00.002-05:00

Ron Paul appeared as a guest on Bill Maher's HBO show Realtime this past Friday. He is absolutely right to point out that the time to end the "War on Drugs" is now. Even if you somehow believed in this fictitious war, spending hundreds of millions of dollars on this in the midst of what's going to be a protracted economic downturn is simply foolish. Check it out:

Oh, Canada...

2009-02-19T21:27:00.005-05:00

Interesting bit of news from our northern neighbors. Seems like a Canadian transit committee is preparing to ban a Humanist Association ad from running on the public buses. The ad goes:

"There's probably no god, now stop worrying and enjoy your life."

On what grounds? Apparently they committee felt that:

"...the language of the ads was specific enough to attract religious debate and polarize members of the community."

Let's simply ignore the cultural debate about the merits of religion in public life. Politically, this just reveals the arbitrary nature of what is allowed and disallowed whenever we have "public" institutions and boards claiming to represent all of "society". Inevitably, they end up discriminating against certain minority points of view, views which may not be able to otherwise be heard due to the monopolistic nature of many of these public services. If it were easier for private companies and institutions to emerge, I'd venture to say that there would be ample opportunities for nearly all viewpoints to be heard - without having to ban certain others.

"Pro-freedom Coalition on Fox"

2009-02-19T21:01:00.007-05:00

The Judge, Andrew Napolitano, has launched a weekly show on Fox News titled "Freedom Watch". I wrote him an e-mail and said we might as well call it "Tyranny Today" or "Socialist Watch", since all we've been observing is tyranny and socialism nowadays. Who's watching freedom? I'm watching freedom fall.

Judge Andrew Napolitano is a staunch Constitutionalist, free marketeer of the Austrian tradition (I recall him expressing his views, meeting him briefly at the Ludwig von Mises Institute's Gold Supporter's Summit this past October) and a talented lawyer in every sense. A few free-market advocates from Wall Street, Peter Schiff, Lew Rockwell and Congressman Ron Paul are also featured.

TUESDAY @ 8 PM: Dr. Nigel Ashford of IHS to speak on "Changing the World for Liberty"

2009-02-16T04:10:00.005-05:00

*******************************************************
"Changing the World for Liberty"
Dr. Nigel Ashford of the Institute for Humane Studies
Tuesday (2/17), 8 PM, 303 Hamilton
*******************************************************

Join us for a special meeting this Tuesday with Dr. Nigel Ashford of the Institute for Humane Studies. Dr. Ashford will speak for about 30 minutes on "Changing the World for Liberty," and will then open up for questions and discussion.

A professor of politics, Dr. Ashford has written widely on the subject of liberty, and has worked for a number of libertarian and free-market think tanks. This is an excellent opportunity to learn from a respected political expert within the libertarian movement. A more detailed biography can be found here.

This week's meeting will be earlier than usual, at 8 PM in 303 Hamilton. Please come on time so as to not interrupt Dr. Ashford's talk, and bring your liberty-minded friends!

If you would be interested in joining us for dinner with Dr. Ashford before the event, let me know; we have room for a few more people. Shoot us an email at libertarians@columbia.edu

See you Tuesday!

Smoot-Hawley 2.0

2009-02-10T20:16:00.002-05:00

On his blog, Greg Mankiw quotes a Canadian news source:

Two of Canada's largest unions are urging the federal government to adopt a Buy Canadian policy similar to the proposal that has been criticized in the United States.
At a joint press conference on Tuesday morning, the Canadian Auto Workers and the United Steelworkers said Ottawa should adopt a procurement policy that ensures the majority of public funds are spent on goods and services made in Canada.

Thank you, Steve Wozniak

2009-02-09T14:18:00.002-05:00

I'm currently reading Apple co-founder Steve Wozniak's autobiography, iWoz. I expected to find stories of entrepreneurial genius. I did not expect to find libertarian undertones.

Describing a scheme the government used to try to get him drafted for the Vietnam War, Woz writes,

From that point on, I saw that the government would do whatever it could to beat a citizen, that it was just a game. And this was the exact opposite of the way I had thought of government my whole life. That episode taught me an important lesson about government, authority, even the police. You couldn't trust them to do the right thing...I can't even describe to you the shock and disgust I felt at our government: that they would play this kind of game with my life, that they didn't care about people the way that my dad had taught me. I'd thought the government was here to protect us, but that turned out to be wrong. I now believed the government was just out to do what was good for the government and would lie about anything they could get away with. They were not there to do sensible things, and they played with my life in the worst possible way. (79, 80)

"Democrats Piss Me Off"

2009-02-08T23:09:00.002-05:00

I find myself in rare agreement with Eric Cartman. On his blog, Greg Mankiw posted a list of Senators who voted against the "Buy American" provision of the stimulus bill. The closest thing to a Democrat on the list was Joe Lieberman.

I'm no fan of Republicans, but it always seems like whichever party is out of power at the moment seems more principled. I was happy to see many Republicans from protectionist states on the list.

Democrats, please start thinking about what you are doing. I'm not talking to the politicians...they know exactly what they are doing: exchanging votes for campaign contributions from powerful American manufacturing interests. I'm talking to the people who support these corrupt politicians. "Buying American" is a stupid, reckless concept. You might think you are helping out the struggling American factory worker. What you are really doing is telling American citizens, "you are not allowed to buy products overseas." Blocking the beneficial forces of competition and comparative advantage, you are raising prices for manufactured goods across the board. So maybe your factory worker will keep his job for another few years, but every American will have to pay much higher prices for manufactured goods, which means they won't have as much money to spend on food, health care, hybrid cars, and all those other things liberals pretend to love.

Stop destroying America! No one cares about your intentions! Start thinking about the damage you are actually causing.

And please, read this interview with Steven Landsburg entitled "Is Buying American Racist?" (Don't let it's connection with Fox News dissuade you...it's just an interview, and a very good one.)

Libertarian wisdom from Jeffrey Miron

2009-02-08T22:56:00.003-05:00

can be found here. He mentions many policy changes the government can make to help fix the current situation (or at least stop causing more problems), involving taxes, trade policy, and immigration. Here's his conclusion:

It is tempting to believe that every problem has a solution, but the reality is not so nice. It is possible, even likely, that the best we can do is fix things we know how to fix, and then get out of the way. This may not ameliorate the current situation, but it avoids making things worse. In economics as in medicine -- first, do no harm.

CNN added a nice little addendum to the article.
The opinions expressed in this commentary are solely those of Jeffrey Miron.
Not true, CNN!

Meltdown.

2009-02-08T22:13:00.001-05:00

Buy this.

Stossel Floss

2009-02-04T19:10:00.001-05:00

Reforming the Rockefeller Drug Laws

2009-02-03T15:05:00.003-05:00

Tuesday, March 10 has been designated as Rockefeller Drug Laws Advocacy Day 2009. For those of you non-native New York state residents or for those of you living under a rock, the Rockefeller Drug Laws were a set of laws established under Governor Nelson Rockefeller in 1973. These laws gave New York the harshest drug laws code in the nation. Despite the reforms made in 2004 and 2005, the Rockefeller Drug Laws are still absolutely ridiculous laws that are often enforced under extreme racial bias while putting away the least violent of criminals for carrying extremely small quantities of narcotics. The Laws cost the state huge sums of money and divert police attention from real crimes, i.e. crimes that actually negatively effect others. The state's money would be much better spent in apprehending murderers and rapists than sending small-time drug offenders to the clink for life.

There are lots of interesting occurrences, all thanks to the Rockefeller Drug Laws. For example, though all studies show the vast majority of people selling and using drugs in the U.S. to be white, somehow 90% of all drug offenders being held in New York prisons are African-American or Latino. Another fun fact is that, in the prisons that cost $1.5 billion to construct and $500 million to run annually, 40% of the drug offenders being held are in jail for non-violent drug possession charges. So we're spending literally billions of dollars as a state to keep first-time "criminals," found guilty of having small quantities of drugs for personal use with no intent of selling, off the streets. God knows doing a line of coke is equal in prison sentence to violent assault and battery. Sending these same people to mandatory drug rehab, or making them do community service and attend Narcotics Anonymous meetings would be infinitely more responsible and more economically viable. Oh, also, there's no difference if you are a first-time offender or a multiple-time convicted offender with a record as long as the the bill for locking up these so-called criminals – your sentence is going to be exactly the same. Judges have no say; the Rockefeller Drug Laws effectively abolish any semblance of a case-by-case trial.

Our fine Governor Patterson has said, "...I think the Rockefeller Drug Laws have unfairly put people behind bars and destroyed their lives over, sometimes, one evening's mistake in which no one else got hurt." Keeping that in mind, there is a protest for a reform, perhaps even a repeal, of these bogus laws. Buses are leaving from all over the New York City area to go protest in Albany on March 10; if you aren't able to make it up, sign a petition against the Laws on http://www.DroptheRock.org, an initiative of the Correctional Association of New York. They have some great facts and alternative proposals listed on the site. Let's stop wasting our state's money and our law enforcers' time, not to mention stop wasting lives with these insane laws.

Highlights from Reason

2009-02-03T14:22:00.004-05:00

February's edition of Reason magazine had a lot of interesting stuff in it.

From Ronald Bailey,

Marcia Angell, former editor of The New England Journal of Medicine, has argued that Americans spend so much money on pharmaceuticals partly because many of the drugs people now take “are more likely to be expensive new ones instead of older, cheaper ones.” But a new study from the Manhattan Institute suggests the extra money is well spent.

Columbia University economist Frank Lichtenberg analyzed patterns in the dispensing of prescription drugs in 49 states between 1995 and 2004...States that adopted new drugs more rapidly, Lichtenberg found, had the smallest increases in disability rates. And those newer drugs kept 418,000 additional people off the disability rolls in 2004, saving Social Security $4.5 billion.

People blame all sorts of things for rising medical costs--from government regulations to HMOs to a lack of socialism. But couldn't part of it just be that we are paying for better products? If medicines work better, and don't kill as many people as they used to, why shouldn't they cost more?

The "Citings" feature has many more interesting snippets, on topics including drugs, immigration, surveillance, and intellectual property rights. I found Nick Gillespie's response to calls for a "Newer Deal" most interesting.

A 2004 study[*] by two UCLA economists, Harold L. Cole and Lee E. Ohanian, argues that far from speeding along recovery, such interventions actually prolonged the Great Depression by about seven years.
Using data from the Bureau of Labor Statistics and other sources, Cole and Ohanian zero in on the effects of the 1933 National Industrial Recovery Act (NIRA), which exempted industrial sectors from antitrust prosecution if they agreed to collective bargaining agreements that raised workers’ wages. Roosevelt believed that “excessive competition” was responsible for economic volatility and that by stabilizing labor costs he could stabilize the economy. At the act’s peak, about 80 percent of nonagricultural industry was covered by NIRA, resulting in higher than market wages and prices and, ultimately, lower demand. NIRA eventually was declared unconstitutional, but not before the country felt its impact.
Without NIRA-style interventions rigidifying the economy, Cole and Ohanian believe, the Depression would have been a recession ending in 1936, rather than a prolonged slump that technically ended only in 1943. Roosevelt “came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces,” Cole said when the study was released. “The economy was poised for a beautiful recovery, but that recovery was stalled by…misguided policies.”

I guess it's the thought that counts.

Reason's first article is a scathing criticism of the governator. Given his messianic status as some sort of savior of the Republican party, it should be of interest to more than just fellow Californians.

Schwarzenegger blew into office decrying California’s bloated budget, vowing to “blow up the boxes” of Sacramento’s bureaucracy, and promising to never again let the Golden State go near Gray Davis’ record-setting $38 billion deficit. Five years into the Schwarzenegger era, the budget has ballooned from $100 billion to $145 billion, and the state’s legislative analyst announced in November that California was facing a deficit of $28 billion. Bond market ratings assess the state as a bigger lending risk than Slovakia. And those bureaucratic boxes have remained largely intact...
What are some of these “necessary programs”? How about a $9.9 billion bond for a long-dreamed-of high-speed rail project between Los Angeles and San Francisco that is expected to cost at least $45 billion, which even supporters such as the Los Angeles Times editorial board think will require “many billions more” in subsidies? Then there’s the $3 billion bond from 2004 to put California bureaucrats in the stem cell research business, mostly as a poke in the eye of George W. Bush.
How to pay for all this during what the governor has declared a “financial emergency”? Partly by rattling the tin cup outside the White House. Schwarzenegger was one of the first governors to hit up Washington for some of that fat bailout money gushing from the Oval Office.
But the spending splurge also requires new taxes, according to the governor: a “temporary” 1.5-percentage-point increase in the 7.25 percent sales tax, an increase in the number of services covered by the sales tax, higher taxes for alcohol and oil production, and so on...

Even on social issues, where Schwarzenegger’s more libertarian approach was supposed to avoid the Republican trap of freedom constricting politics, the governor instead has embraced the freedom-constricting policies of the left. To cite one particularly ironic example, in 2004 he signed a law requiring every California employer with more than 50 workers to force upon its managers state-approved sexual harassment training...

Back when he was taping testimonials for Milton Friedman’s Free to Choose, Arnold Schwarzenegger looked like the kind of person who would indeed choose freedom if given a chance to govern. Instead, he punted on the radical, government-reducing reforms offered to him by his own box-exploding California Performance Review and learned to love—or at least perpetuate—the very bureaucracy he was elected to confront. That’s not a blueprint for 21st-century Republicanism. It’s just George W. Bush’s big-government conservatism with a Hollywood face.

If there's anything to be learned from Schwarzenegger, it's that politicians ALWAYS abandon their principles and succumb to pressure when elected to office. Look at the Republicans after 1994. Look at the Democrats now! It's been two years since they took over Congress, and now they have control of the White House too, and as far as I can tell, earmark spending is at record levels, and our soldiers are still fighting in Iraq.

I don't put the blame on the politicians...I'm guessing they run for office with their ideals intact, hoping to create real change. But they're only human, and once they get to Washington, Sacramento, or wherever, they realize that their change isn't wanted. So they can either play the game and help the ruling corporations and interest groups, or they can hang on to their ideals and start collecting unemployment benefits. Our government should not put people in this position to begin with.

Until then, I'll be reading Reason. We'll have free copies at future meetings...come get one!

For those of you who are fans of Sealand and the Freedom Ship...

2009-01-29T02:03:00.001-05:00

this Wired article should be right up your alley.

Name that economist!

2009-01-27T23:36:00.003-05:00

Who said this?

"Organized public works, at home and abroad, may be the right cure for a chronic tendency to a deficiency of effective demand. But they are not capable of sufficiently rapid organisation (and above all cannot be reversed or undone at a later date), to be the most serviceable instrument for the prevention of the trade cycle."

Find out the answer at Greg Mankiw's Blog.

"Everyone should read this."http://mises.org/story/3305

2009-01-26T19:24:00.003-05:00

Read this.

Disgusting!

2009-01-18T18:02:00.002-05:00

Radley Balko writes for Reason,

After the 2000 Census, the richest county in America was Douglas County, Colorado. By 2007, Douglas County had fallen to sixth. The new top three are now Loudon County, Virginia; Fairfax County, Virginia; and Howard County, Maryland. All three are suburbs or exurbs of Washington, D.C. In 2000, 14 of the 100 richest counties were in the Washington, D.C., area. In 2007, it was nine of the richest 20.
All of this is fine if you happen to live in the D.C. area. It's not so great for the country as a whole...
The problem is that, save for the tech corridor in D.C.'s Virginia exurbs, the Washington Metro area doesn't actually produce anything. Washington doesn't create wealth, it just moves it around—redistributes it. As government grows and takes control of more and more of the private economy—either through spending, regulation, or taxes—more and more wealth that's created elsewhere comes to Washington to be devoured.

The Washington wealth boom is the result of the massive expansion in government over the last 10 years, which has populated the region with an increase in well-paid federal employees, and wealthy federal contractors and lobbyists...
America's wealthiest counties ring a city where the chief industry is government - and the entire region's only getting richer. That doesn't seem like a trend that bodes well for the health of a market-based economy.

Arnold Kling reacts at EconLog,

My guess is that there is a pretty strong relationship between the share of government spending in GDP and the share of incomes in the DC area. Since the former is going to rise dramatically in the coming years, the latter will, too.
If you thought it was unproductive for the best and brightest to go to Wall Street to become investment bankers to decide to use other people's money, watch what happens when the best and brightest come to Washington to decide how to use other people's money.

Robert A. Levy to speak at Students for Liberty Conference

2009-01-16T10:21:00.003-05:00

Don Boudreaux writes at Cafe Hayek:

2008 was a very bad year. But it was not without its bright spots. One of these bright spots was the U.S. Supreme Court ruling in District of Columbia v. Heller, in which the Court held that the Second Amendment guarantees to the right to own guns to the individual.

Students for Liberty recently announced that Robert A. Levy, Chairman of the Cato Institute and organizer of the D.C. v. Heller case, will be speaking at the 2009 International Students for Liberty Conference.

REGISTER TODAY and meet the man himself!

The Politics of Sweatshops

2009-01-16T09:36:00.005-05:00

Greg Mankiw's blog links to an op-ed by Nicholas Kristof in the New York Times defending sweatshops.

Mr. Obama and the Democrats who favor labor standards in trade agreements mean well, for they intend to fight back at oppressive sweatshops abroad. But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don’t exploit enough.
Talk to these families in the dump, and a job in a sweatshop is a cherished dream, an escalator out of poverty, the kind of gauzy if probably unrealistic ambition that parents everywhere often have for their children.
“I’d love to get a job in a factory,” said Pim Srey Rath, a 19-year-old woman scavenging for plastic. “At least that work is in the shade. Here is where it’s hot.”
Another woman, Vath Sam Oeun, hopes her 10-year-old boy, scavenging beside her, grows up to get a factory job, partly because she has seen other children run over by garbage trucks. Her boy has never been to a doctor or a dentist, and last bathed when he was 2, so a sweatshop job by comparison would be far more pleasant and less dangerous.
I’m glad that many Americans are repulsed by the idea of importing products made by barely paid, barely legal workers in dangerous factories. Yet sweatshops are only a symptom of poverty, not a cause, and banning them closes off one route out of poverty. At a time of tremendous economic distress and protectionist pressures, there’s a special danger that tighter labor standards will be used as an excuse to curb trade.

I agree with Kristof that sweatshop jobs are a solution to poverty, not a problem. I disagree that Obama and the Democrats mean well in opposing them.

There seems to be a strong consensus among economists that sweatshops help the third world. I've seen Kristof's case made before by highly-respected liberal economists, such as Jeffrey Sachs and Paul Krugman. (For more on sweatshops from Krugman and Sachs, see here and here. Great arguments have also been made at LewRockwell, the Library of Economics and Liberty, and the Mises Institute.)

I find it hard to believe that our Democratic policy makers are unfamiliar with the names Paul Krugman and Jeffrey Sachs (or Nicholas Kristof, for that matter). So either they are familiar with their arguments, and choose to ignore them and instead lie in order to get votes, or they haven't even consulted the experts, and conduct policy with extreme recklessness. I personally believe the first option is more likely. Most Americans listen to racist idiots like Lou Dobbs over true experts, and it's much easier for politicians to pander to their incorrect notions rather than speak the truth and risk losing votes.

Ask yourself this: Why are American unions, such as the AFL-CIO, so vociferously against sweatshops? They don't have any dues-paying members in the third world; why do they care so much about their welfare? The truth is (and the AFL-CIO knows it) that increased labor restrictions in developing countries means fewer jobs there. The cost of doing business in these countries will increase, and more dated, inefficient manufacturing jobs will stay in the U.S. Unions claim to care about making sure workers in the third world aren't exploited. Really, they want to steal their jobs--no matter how much more people in the third world may need them--and make you pay more for goods at the same time. Liberals claim the free market is immoral, but this is 100% selfish, deceptive evil. And Obama and the Democrats play right into it.

"Leviathan is around the Corner"

2009-01-15T09:05:00.013-05:00

A revolution is coming.

It's no longer a doubt in my mind, that the intellectual climate shift towards Statism, big government, or Leviathan is in the air. It has always been present throughout the last century. The last eight years have demonstrated a scintillating move towards a militaristic, bail-out driven police state. The next eight, seek to complement the aspects of society that the Rightish could not complete. That is, the gradual socialization and intervention in several industries of the economy, such as food, health-care and more.

There isn't a difference between the political left and the political right. They're both warmongerers and big government utopists. They intervene abroad, spreading freedom in nations that don't seek it, at the expense of its citizens here. It's easier nowadays to purchase a rifle or light a cigarette in Baghdad than it is New York City. They prohibit our activities in our bedrooms, tap our phone calls, regulate, tax, subsidize or bailout our economies failing industries and pass legislation that violates our natural rights to life, liberty and private property. More importantly, both are submissive to the will of the Federal Reserve, save for the few dissenting voices in the campaign for liberty.

It's this fallacious notion that government can save us all and alleviate every aspect of society. That somehow, Barack Obama and George W. Bush are messianic saviors, with magical powers and special wands. It's depressing to see so-called intellectuals like Jeffrey Sachs call on openly in Time magazine for big government, and then go on to chastise the anarchy of the free market, as if capitalism were to blame for the present economic maladies. What idiocy from a Columbia University professor! An economist should know better! The pervasiveness of an anti-capitalistic mentality persists, particularly in Morningside Heights.

"...big difference between the U.S. and the rest of the rich world is that for the past 30 years or so, Americans consistently rejected "government solutions" to the problems of health, poverty, education and the environment. We've kept our taxes as a share of national income lower than Europe's by focusing on the private sector. But we're getting much less for our money. Markets are great at providing consumer goods and services. We don't want the government running our restaurants, movie houses, bookstores and manufacturers. Markets are not so good, though, at some very important things. A pressing example: our mostly private health system, at $8,000 per American, is twice the cost of Europe's mostly public system, yet with worse outcomes. And nearly 50 million Americans lack health insurance..."

This is an excerpt from Sach's article. It's interesting to see how he values efficiency. Apparently, the market is efficient at producing items like consumer goods and services. What does he call a consumer good or service? Basically, "unimportant", material items, like movie houses, restaurants, book stores and manufacturers. So does Professor Sachs agree with government abstinence for federal bailouts to the automobile industry in Detroit, the little three? A consumer good or service is any final item or activity produced on the market that satisfies the wants of the consumer. That's pretty much anything. If the market is so remarkable in producing bookstores and Leonard Reed's pencil, why do we put the government charge of producing and or micromanaging important goods and services, like our monetary system, the post office and our much of our transportation system.

So, the Professor likes the fact that markets can produce high quality Outback Steakhouses, but he disapproves our "mostly private health insurance". This is an utter fallacy!

"...In the days before Medicare and Medicaid, the poor and elderly were admitted to hospitals at the same rate they are now, and received good care. Before those programs came into existence, every physician understood that he or she had a responsibility towards the less fortunate and free medical care was the norm. Hardly anyone is aware of this today, since it doesn’t fit into the typical, by the script story of government rescuing us from a predatory private sector...we’ve had managed care, now, for about 35 years. It’s not working, and nobody’s happy with it. The doctors aren’t happy. The patients aren’t happy. Nobody seems to be happy--except the corporations, the drug companies and the HMOs. The most obvious way to break this cycle is to get the government out of the business of meddling in health care, which was far more affordable and accessible before government got involved. Short of that, and more politically feasible in the immediate run, is to allow consumers and their doctors to pull themselves out of the system through medical savings accounts. You don’t have to throw anybody out in the street, but long term you have move toward the marketplace. You cannot expect socialized medicine of the Hillary brand to work. And you can’t expect the managed care system that we have today [to work, because it] promotes and rewards the corporations. It’s the drug companies & the HMOs & even the AMA that lobbies us for this managed care, and that’s why the prices are high. It’s only in medicine that technology has raised prices rather than lowering prices. We’ve had managed care in this country since the early 1970s, and it hasn’t worked well. It’s very, very expensive, and it’s the fault that we changed our ERISA law and our tax laws that created this corporatism that runs medicine. Wall Street rakes off the profits. The patients are unhappy. The doctors are unhappy. And it’s a monopoly now. Who lobbies us in Washington? The drug companies and the HMOs. They come. And now what is the cry for? Socialized medicine. That’s not the answer. We need to get the government out of the way. Inflation hits the middle class and the poor the most. Those are the people who are losing it. We don’t have enough competition. There’s a doctor monopoly out there. We need alternative health care freely available to the people. They ought to be able to make their own choices and not controlled by the FDA preventing them to use some of the medications..."

- Bits and pieces from Congressman Ron Paul's "The Revolution" and GOP Presidential Debates in 2008

Jeffery Sachs is suggesting the socialization of consumer goods and services that he deems important, not what actually is. Not only that, he's smearing personal political aims, with tangible facts. Either that, or he knows very little of price theory. However, I do agree with Sachs on one level. The market does not always produce the greatest goods out there, as Ludwig von Mises indicated, the market is not moral or immoral, it is amoral. I love the fact that Black Sabbath hammers away on Planet Caravan and I have Microsoft providing a healthy alternative to Apple's iPods. The existence of Ron Paul silver bullion coins in existence, make me happy. I also consider psychedelic drugs, the writings of Anne Coulter, polka music and a plethora of bad economists as being detrimental to humane society. That does not mean I want the government tomusic and train economists. We have enough socialists coming out of the private sector in itself! I find the market has been pretty terrible at producing good economists, particularly at Columbia. Thankfully, the market has several handfuls of a few, damn good ones that are either dead, or in Auburn, Alabama. I cannot come to an understanding as to why socialists like Professor Sachs cling to their ideology when they know they have to be dishonest in order to defend it. Instead of planning for freedom, all we are going to get is planned chaos.

The first Mont Pelerin Society

Food for thought

2009-01-14T14:38:00.003-05:00

Ed Glaeser makes the case for "small-government egalitarianism."

Current American political discourse labels people as either anti-government or pro-equality, but wanting to help the poor should not require the abandonment of sensible skepticism about expanding the size of the state. Many of my favorite causes, like fighting land use regulations that make it hard to build affordable housing, aid the poor by reducing the size of government. In the wake of Hurricane Katrina, I also argued that it would be far better to give generous checks to the poor hurt by the storm than to spend billions rebuilding the city, because those rebuilding efforts would inevitably help connected contractors more than ordinary people.

The wisdom of Ayn Rand

2009-01-14T14:07:00.002-05:00

A must-read by Stephen Moore in the Wall Street Journal.

I should have made a point of losing my virginity over winter break. Oh well...there's always summer.

Why can't he be Treasury Secretary?

2009-01-14T13:43:00.005-05:00

Eugene Fama has another great post on his blog, this time covering bailouts and fiscal stimulus plans. The article is definitely worth reading in its entirety, but I'll quote his conclusion.

Even when there are lots of idle workers, government bailouts and stimulus plans are not likely to add to employment. The reason is that bailouts and stimulus plans must be financed. The additional government debt means that existing current resources just move from one use to another, from private investment to government investment or from investment to consumption, with no effect on total current resources in the system or on total employment. And stimulus plans only enhance future incomes when they move current resources from less productive private uses to more productive government uses - a daunting challenge, to say the least.

It's been over 150 years since the days of Bastiat, yet the government just keeps on breaking windows.

"The Pattern"

2009-01-14T13:21:00.003-05:00

With the government making so many mistakes these days, it can be hard to keep track of it all. Luckily, Arnold Kling at EconLog has helped us out with a handy graph (and some spot-on commentary).

Actor The Promise The Reality

Financial Executives Brilliant Risk Management Catastrophic Losses

Eliot Spitzer Mr. Clean, Financial Reformer Celebrity Prosecutions, Real Abuses Untouched, and Not So Clean

Sarbanes-Oxley Financial Responsibility Large Costs, No Apparent Benefits

Basel Capital Standards International Coordination, Sound Banks Worldwide Banking Collapse

Fannie, Freddie Stable Mortgage Credit Fed the Boom, Stuck Taxpayers with the Bust

TARP Unclog the Financial System Zombie Banks

Big Fiscal Stimulus Put the Economy on a Better Path Wait and See

The pattern is big egos, big money, and big power offering big promises, getting big media play, and making big mistakes (Spitzer's mistakes were relatively small, to be honest). To me, the fiscal stimulus represents yet another redistribution of power away from ordinary people and toward the elite, when already the imbalance is too high. I am more worried about rot at the top of society than at the bottom.

Actor	The Promise	The Reality
Financial Executives	Brilliant Risk Management	Catastrophic Losses
Eliot Spitzer	Mr. Clean, Financial Reformer	Celebrity Prosecutions, Real Abuses Untouched, and Not So Clean
Sarbanes-Oxley	Financial Responsibility	Large Costs, No Apparent Benefits
Basel Capital Standards	International Coordination, Sound Banks	Worldwide Banking Collapse
Fannie, Freddie	Stable Mortgage Credit	Fed the Boom, Stuck Taxpayers with the Bust
TARP	Unclog the Financial System	Zombie Banks
Big Fiscal Stimulus	Put the Economy on a Better Path	Wait and See

What happens when you give more money to public schools? (Part 2)

2009-01-14T13:06:00.002-05:00

I'm currently visiting a friend at UCSD for the last few days of winter break, and apparently the school is having a referendum on whether to raise the student activity fee. Some people think the school doesn't have enough money to pay for such necessities as week-long parties with everyone's favorite musicians.

While I was eating in one of the cafeterias, I encountered a sign advertising an open forum on the referendum. Here's the text:

A.S. Activity Fee Referendum
Open Forum
Jan. 7th PC Ballroom B at noon
Free food and refreshments

What's wrong with this picture?

Peter Schiff for Senate?

2009-01-13T23:37:00.005-05:00

Here's one of those rare political stories that should excite fellow libertarians everywhere.

Apparently the name of Peter Schiff is circulating amongst some Republicans as a possible 2010 challenger to Connecticut Democratic senator and head of the Senate Banking Committee Christopher Dodd.

Dodd, as you'll recall, was one of the main cheerleaders for Fannie Mae and Freddie Mac, repeatedly hailing them as amongst the most fundamentally sound institutions in America - all while collecting campaign funds galore from them.

Peter Schiff, President of Euro Pacific Capital and former economic adviser to Ron Paul, has gained much deserved respect over the past few months; despite being mocked by the conventional political and economic players, his spot-on analysis of the economy years ago led him to predict exactly the financial disaster we are in now.

Peter Schiff will be attending the Austrian Scholars Conference at the Ludwig von Mises Institute, hosted by Pace University's Graduate Program Chair, Professor Joseph T. Salerno. this March. He has continually stated that a sound understanding of economics, is the basis for his sucess at predicting and forecasting the market. He is an adherent of the Austrian School of Economics, which he calls "real economics", like Ron Paul, and makes it clearly evident in two excellent books. As a sidenote, they have been read by Joseph Mises and a review is pending. Peter Schiff is the son of Irwin Schiff, an infamous Libertarian activist, political protester and outspoken member tax honesty movement.

Time to cheer him on!

All the cool kids are doing it

2009-01-13T07:59:00.000-05:00

"Porn industry seeks federal bailout."

Righteous Indignation, Post Office edition

2009-01-13T07:34:00.003-05:00

Flipping through a magazine at the airport today, I came upon a full-page ad for the U.S. Postal Service, mentioning how it offers the lowest overnight rates.

In the words of Zbigniew Cheezinski, DISGUSTING! Seriously, think about this. Not only does the USPS have a legally-enforced monopoly on first-class mail, but we actually pay taxes to help them steal business away from legitimate private-sector companies.

And they have the nerve to claim to have the lowest rates...as if the rates would be anywhere near where they are without massive taxpayer subsidies. People complain about Walmart setting low prices to drive out competition, but it's happening within our own government! Where are the hippie protesters when we need them?

I seriously see no need for the USPS to exist. The fact that they need to advertise to avoid losing business to "competitors" is clear proof that the private sector is serving the market just fine.

This was the final straw, USPS! Next time I have gum to spit out, it might just find its way into a mailbox instead of a trash can.

More wise words on the fiscal stimulus

2009-01-13T07:30:00.002-05:00

This time from GMU economist Don Boudreaux at Cafe Hayek:

To claim that government cannot spend resources that it doesn't first acquire from the private sector is hardly bizarre. To claim that taking resources from the private sector reduces demands in those industries from which the resources are taken is hardly bizarre. To claim that any economic activity stimulated by increased government spending is offset by economic activity elsewhere slowed by government's need to get the resources it spends is hardly bizarre. Again, such claims might be mistaken -- but what about such claims is so ludicrous as to advertise persons who make them "ethics-free Republican hacks"?

"Demolition of Depression Economics"

2009-01-12T11:57:00.003-05:00

"The only good thing about Marx was that he wasn't a Keynesian..."

I was going to expand on an article on the Great Depression, but here landed another gift on the front of the LvMI from our friends at Rothbard's anarchocapitalist circles.

http://mises.org/story/3290

"The Wisdom of Henry Hazlitt"

2009-01-12T11:20:00.008-05:00

***Mr. Samuelson once said, “I don’t care who writes a nation’s laws or crafts its advanced treaties, if I can write its economics textbooks.”

The coming stimulus bill, warts and all, will demonstrate brilliantly what he had in mind.***

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I've been in somewhat of a baffling conundrum of late. I'm flabbergasted at many actions taken by the American state and by policy recommendations made by Harvard economists such as Professor Martin Feldstein, and of course, Lord Keynes eery disciple who's crusade against capital savings is startling. Our very own Nobel Laureate has not been silent on the matter either, but at least he's straight out, blunt about the blizzard we've consumed ourselves in. The latter video features him in a rare office hours. Ha! The Austrians, Ron Paul and Peter Schiff have spoken out against them. I'm not going to link you, they're on this site's new YouTube hoster, right there ------->

Secondtier's latest entry speaks of Harvard University Professor N. Gregory Mankiw, who points out that perhaps Rahm Emanuel's comments on the incoming administration ambitions are not that dissimilar to the outgoing one. This of course comes to no surprise, as both parties are in essence, identical when it comes to their faith in government's ability to work miracles.

For all of Professor Mankiw's studies in contemporary matters of scarcity and choice, his knowledge of Keynes (whom he references periodically throughout the article) and of the Great Depression, he knows very little of economics. Keynes was meticulously refuted by Henry Hazlitt in the 1950's. A brilliant contribution oversighted by nearly everyone. However, he makes an interesting comment towards the end of his treatise on Keynes. He writes that he personally believes that Keynes, being an outspoken elitist and master of rhetoric, may have simply concocted the general theory as a mere mockery or wordplay, to defy the laws of nature and economics and attempt to fool the masses, much in the manner of H.L. Mencken. Perhaps, he simply went along with the popular surge afterwards. This may also add to an explaination why Nobel Laureate Friedrich August von Hayek, Lord Keynes ideological, Austrian counterweight at the London School of Economics, never wrote a counter-treatise.

"I always felt like much of Keynes works was easily refutable by mere common sense; there was no reason for me to refute it at the time being. I did not feel it necessary to refure such ludicracy..."

- F.A. Hayek

Meet the new boss...

2009-01-11T05:46:00.003-05:00

Greg Mankiw has a good article in today's New York Times.

This part reminded me of Joseph Mises's comments about the Bush administration and 9/11:

Rahm Emanuel, the incoming White House chief of staff, has said, “You don’t ever want to let a crisis go to waste: it’s an opportunity to do important things that you would otherwise avoid.”
What he has in mind is not entirely clear. One possibility is that he wants to use a temporary crisis as a pretense for engineering a permanent increase in the size and scope of the government. Believers in limited government have reason to be wary.

Isn't change great?

Fama and French on Regulation

2009-01-08T23:04:00.002-05:00

In their new blog, the two highly-regarded financial economists discuss regulation. Here's Kenneth French:

Some people have argued that the turmoil was caused by a lack of government regulation. What do you think? Do we need more regulation?

KRF: It is not obvious that financial regulations were weakened during the last few years. This claim seems to have been the product of a Presidential election in which both candidates were running against the incumbent. In fact, one could easily point to important new laws and regulations such as Sarbanes-Oxley to argue that market regulation increased. As more tangible evidence, the SEC's budget increased from $377 million in 2000 to $906 million in 2008. It is certainly true that different regulations could have reduced the magnitude of the current turmoil, but that is like saying a different portfolio allocation could have produced higher returns.

So far so good, but I start to lose him later on in the Q&A.

Second, we should improve the capital requirements and other regulations that limit the default risk of financial firms. The ongoing bailout of Wall Street is probably not a one-time event. Even with an improved resolution mechanism, it is easy to imagine that under similar circumstances we will bail out the banks again. If so, they have a strong incentive to take more risk. When things work out their shareholders keep the profits and when they don't taxpayers cover the losses. As we saw with Freddie Mac and Fannie Mae, this is not a good business model for taxpayers. If we are going to insure financial firms, we need regulations that will limit the risk they take.

Perhaps greater regulations are necessary if we are going to insure financial firms. But why should we be insuring financial firms in the first place?! Is a private market for insurance really so hard to find? My spam email folder suggests otherwise. To those who would argue that government intervention is necessary because insurance companies (AIG) can mess up just as badly as financials, I have only one thing to say: buyer beware! Don't punish the taxpayers because a bank chose a reckless insurer.

I like how Eugene Fama finishes off the Q&A:

The ideal legal and regulatory system would be ground rules that allow bad financial innovations to fail and work themselves out of the system without government intervention. Again, the devil is in the details.

More generally, current events are certain to produce more regulation, and much of it is likely to be counterproductive. My longtime colleague, George Stigler, was famous for his argument, buttressed by empirical evidence, that regulators are eventually captured by the regulated. As a result, regulation often has results opposite those intended.

Amen!

"The Wisdom of Ron Paul"

2009-01-07T10:23:00.001-05:00

http://www.youtube.com/watch?v=aYNLXYLM44c&eurl=http://www.campaignforliberty.com/

Nothing new.

"Ludwig von Mises as TIME Person of the Year"

2008-12-26T10:17:00.004-05:00

http://www.time.com/time/magazine/article/0,9171,1865961,00.html

Congressman Ron Paul, yet again illuminates us with his primary source for libertarian gasoline, the great Austrian economist and political philosopher, Ludwig von Mises.

It is without a doubt that Ludwig von Mises is the intellectual foundationstone of Libertarianism.

Hold on...

2008-12-04T10:38:00.001-05:00

In yesterday's New York Times:

On Wednesday, people close to the discussions said that the Treasury had been talking with Fannie Mae and Freddie Mac about ways to drive down mortgage rates to as low as 4.5 percent. That rate is about a percentage point lower than the going rates for such loans.

Am I missing something? Isn't this exactly what caused the whole housing mess?

As much as the Austrians among us may dislike Milton Friedman, he does seem to have an appropriate zinger for every action the government takes. Quote of the day: "The government solution to a problem is usually as bad as the problem."

If you're a fan of Peter Schiff, and Ron Paul...

2008-12-02T23:14:00.001-05:00

"Let's see Cato people wear this shirt."

...then you have to give credit to Mises, Rothbard and Hayek. These are all true, bona fide Austro-Libertarians in every sense. Here is a brilliant, 15-minute broadcast from the Lew Rockwell Show, where Peter Schiff is commenting on how the government wrecked the economy.

http://www.lewrockwell.com/podcast/?p=episode&name=2008-11-20_072_how_the_government_wrecked_the_economy.mp3

The Business Cycle Dating Committee of the National Bureau of Economic Research, a private, nonprofit research organization, declared that the U.S. economy tumbled into a recession in December 2007. Austrians predicted this way before. Actually, a recession will have been a nice reprieve to have taken compared to the ice storm that is to come in the following months. Can anyone adjust the inflation module to hyperspeed any better than old Ben?

Keep hating/ignoring on the Austrians just cause their name sounds antiquated. Don't read Man, Economy & State, it just might stimulate one's neurons a bit away from all the Keynesian folklore spewing out of President Bush's mouth.

Beautiful

2008-11-29T02:02:00.000-05:00

Via Greg Mankiw's blog:

2008-11-18T23:46:00.001-05:00

As much as I appreciate Nobel Laureate Milton Friedman's defence of the free market, he was inconsistent in applying thouse classical liberal values across the board in the traditional libertarian sense.

He was not for the privatization of roads or oceans, the repeal of anti-trust laws, pro-flexible exchange rates and concocted this "libertarian" school voucher system. How a voucher system is Libertarian, is absolutely beyond me, or any sane-mind libertarian or classical liberal that is against bureacracy and inefficient government programs. I don't need to state in this entry what the appropriate libertarian position is with regards to that issue..

He called for a negative income tax, which is essential a dole, welfare minus the gigantic bureacracy and the substituted with a more effective one. Thank Friedman for making government more efficient! Got to love the free thinking man!

I'm not even going to comment on the epistemological errors of his economic methodology, logical positivism. Not only that, but he was a supporter of the Federal Reserve, deeming the gold standard to be impractical, The foundational conceptions of his monetary theory is presupposed to have some omniscient monopolistic diety with absolute control of the money supply, whether it's Chairman Benjamin Bernanke, some other neo-Keynesian Yale macroeconomist, or HAL-3000 for that matter.

Ludwig von Mises was right when he burst out of the Mt. Pelerin Conference in 1954, yelling behind him at Stigler and Friedman that they were "nothing but a bunch of socialists!"

Listen to Peter Schiff

2008-11-14T00:41:00.000-05:00

So are bailouts and increased government spending really the answer to the financial crisis? Peter Schiff, president of Euro-Pacific Capital (and Ron Paul's former economic advisor), argues against these policies. He is a man amongst fools; take a look at his track record over the past couple of years. Amazing how he was right on virtually every prediction he made: housing prices tumbling, financial institutions in trouble, credit markets freezing, everything. And all everyone did was laugh at him.
Hmm...I wonder if I should be buying any gold?

Franklin Delano Obama?

2008-11-10T01:57:00.007-05:00

Oh dear. Paul Krugman argues for a new New Deal - here. I was somewhat relieved when he said that FDR's policies weren't perfect, but I read on only to see this:

"My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent."

Something tells me to prepare for massive government expansion in the next four years...

The Savior is Here!

2008-11-05T15:39:00.002-05:00

Alright, Obama's the next President, but this is getting ridiculous. Charles Blow in the NYTimes:

"...“Yes We Can” escape the prison of lowered expectations and the cycles of poor choices. “Yes We Can” rise above history and beyond hatred. “Yes We Can” ascend to Martin Luther King’s mountain top and see the promised land where dreams are fulfilled, where the best man wins and where justice prevails....

So Obama really is the savior and will bring Heaven to Earth. That's exactly what we should expect of our politicians, right?

"Libertarianism"

2008-11-03T22:01:00.002-05:00

After visiting the Ludwig von Mises Institute's Supporter's Summit this weekend and getting a chance to chat with a plethora of libertarian thinkers, Austrian economists and Dr. Ron Paul, I realized that "liberalism" in the strain of Ludwig von Mises and the Austrian School of Economics is right. It proves itself right through self-evident axioms of irrefutable truth.

Dr. Ron Paul's Campaign of Liberty, and his entire political career, is inspired and draws upon the intellectual backbone of the Austrian School of Economics and the life & work of free-market intellectuals such as Ludwig von Mises, Murray N. Rothbard, Nobel Prize laureate Friedrich August von Hayek and Hans Sennholz. Withought these foundations, Ron Paul and many of us would not be writing or reading this post on this site right now.

I think it's time that FEE, FREE and the LvMI are reevaluated and reconsidered as critical sources for the future fight for freedom.

Conscientious nonvoting

2008-10-31T00:09:00.000-04:00

It's more than a little cheesy for my first post here to refer to my own blog, but there's a conversation brewing there that might be of interest. Feel free to jump in.

Libertarian reading list

2008-10-30T21:01:00.004-04:00

Courtesy of libertarian legal theorist Stephan Kinsella:

The following are listed in the order I would recommend reading them, or in order of appropriateness for an introductory text:

    1.    Economics in One Lesson by Henry Hazlitt.

    2.    For a New Liberty by Murray N. Rothbard.

    3.    The Machinery of Freedom by David Friedman (Milton's son).

    4.    Atlas Shrugged by Ayn Rand.

    5.    The Virtue of Selfishness and Capitalism: The Unknown Ideal by Ayn Rand.

    These are probably the most important ones. Other good introductory books are:

    6.    Capitalism and Freedom and Free to Choose by Milton Friedman.

    7.    The Law by Frederick Bastiat.

    8.    In Pursuit: of Happiness and Good Government by Charles Murray.

    9.    Libertarianism in One Lesson, 5th edition (1990) by David Bergland.

    10.    The Libertarian Alternative, collection of essays edited by Tibor Machan.

    11.    The Free Market Reader edited by Llewellyn H. Rockwell, Jr.

    12.    Libertarianism by John Hospers (though I have never read this one).

    13.    The Freedom Philosophy, collection of essays published by the Foundation for Economic Education.

    How about some excellent libertarian fiction (I already mentioned Atlas Shrugged):

    14.    The Fountainhead by Ayn Rand. Also We, the Living and Anthem.

    15.    The Moon is a Harsh Mistress by Robert A. Heinlein, the grandmaster of science fiction.

    16.    Alongside Night by J. Neil Schulman.

    For some more sophistocated books, past the introductory level, I would recommend highly these:

    17.    Anarchy, State and Utopia by Robert Nozick.

    18.    A Theory of Socialism and Capitalism: Economics, Politics and Ethics, and The Economics and Ethics of Private Property, by Hans-Hermann Hoppe.

    19.    The Ethics of Liberty by Murray Rothbard.

    20.    The Market for Liberty by Morris and Linda Tannehill.

    21.    Freedom and the Law by Bruno Leoni.

    22.    The Libertarian Idea by Jan Narveson.

    23.    Persons, Rights, and the Moral Community by Loren Lomasky.

    24.    "Ordering Rights Consistently: Or What We Do and Do Not Have Rights To," by Roger A. Pilon, in 13 Georgia Law Review 1171 (1979).

    25.    Human Rights and Human Liberties and Individuals and Their Rights by Tibor Machan.

    26.    The God of the Machine by Isabel Paterson.

    27.    The Discovery of Freedom by Rose Wilder Lane (mother of Laura Ingalls Wilder, who wrote the Little House on the Prairie series)

I.O.U.S.A. Screening: Sunday, October 26th

2008-10-25T21:29:00.004-04:00

Sunday, October 26th, 5 pm

Lerner Basement

The Columbia College Libertarians and Columbia University Conservative Forum will be sponsoring a free screening of the acclaimed film I.O.U.S.A.

Join us and Producer Addison Wiggin as we learn about the staggering national debt and what it means for our future. Q&A afterwards.

"The most unexpectedly frightening movie at Sundance." - The L.A. Times

Watch the trailer:

John Stossel's Take on the Presidential Election

2008-10-24T18:50:00.003-04:00

Simply brilliant.

20/20 - Politically Incorrect Guide to Politics - 1/6

...and check out parts 2-6.

I'm glad some people get it.

2008-09-28T23:20:00.001-04:00

I just noticed this list of economists against the Paulson bailout posted at Greg Mankiw's blog, with an explanation.

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

I was impressed with the big names on the list (3 Nobelists, Sam Peltzman), and the large number of Columbia professors on it. At the last meeting, we were discussing the distinction between being a libertarian and being free-market friendly. While most economists may be the latter and not the former, I still tend to think of them (there are exceptions of course) as people with genuine common sense who recognize the reality of unintended consequences.

Discuss this and more at our meeting!

Monday, September 29 @ 9:00 PM
315 Hamilton

Well done, sir!

2008-09-22T13:28:00.000-04:00

Check out Masood's excellent piece in today's Columbia Spectator.

When one bases his judgment to go to war on so many disparate criteria, chances are that one of them will fit the bill some time or another. The lack of a single consistent principle for opposing a war allows politicians to pick and choose their wars based on the reason du jour. The fundamental problem is that even though politicians often accuse one another of supporting unnecessary and ill-conceived wars, rarely do they articulate a firm moral and philosophical foundation for how and when to use military force against others in general.

Want to meet the man himself? Come to tonight's meeting!

Is anyone else tired of politicians?

2008-09-22T12:21:00.000-04:00

At EconLog, Bryan Caplan writes,

Googling "bail-out rich" basically kicks back a bunch of libertarians. Where are the left-wing demagogues denouncing the bail-outs as "welfare for the rich"? Where are the right-wing demagogues denouncing the bail-outs as "foreign aid for the rich"?

In an earlier post titled "Why Only Bush Could Bring Socialism to America," he seems to answer his own question.

If a Democratic president were backing a $700B bail-out, I have to think that Republicans would be crying "Socialism!" But if a Republican president does the same, the bail-out's natural enemies keep silent out of loyalty or ingroup bias. It's a lot like the contemporary Republican reaction to Nixon's price controls - if our boy is doing it, how bad can it be?

How can anyone stand to vote for these hypocrites?

Gary Becker on the financial crisis

2008-09-22T11:46:00.000-04:00

Nobel Prize-winning economist Gary Becker blogs about the recent financial turmoil.

Is this the final "Crisis of Global Capitalism"- to borrow the title of a book by George Soros written shortly after the Asian financial crisis of 1997-98? The crisis that kills capitalism has been said to happen during every major recession and financial crisis ever since Karl Marx prophesized the collapse of capitalism in the middle of the 19th century. Although I admit to having greatly underestimated the severity of this financial crisis, I am confident that sizable world economic growth will resume under a mainly capitalist world economy. Consider, for example, that in the decade after Soros' and others predictions of the collapse of global capitalism following the Asian crisis in the 1990s, both world GDP and world trade experienced unprecedented growth. The South Korean economy, for example, was pummeled during that crisis, but has had significant economic growth ever since. I expect robust world economic growth to resume once we are over the current severe financial difficulties.
...
Finally, the magnitude of this crisis must be placed in perspective. Although it is the most severe financial crisis since the Great Depression of the 1930s, it is a far far smaller crisis, especially in terms of the effects on output and employment. The United States had about 25 percent unemployment during most of the decade from 1931 until 1941, and sharp falls in GDP. Other countries experienced economic difficulties of a similar magnitude. American GDP so far during this crisis has essentially not yet fallen, and unemployment has reached only about 61/2 percent. Both figures are likely to get considerably worse, but they will nowhere approach those of the 1930s.

I stop agreeing with him when he says this:

Was the extent of the Treasury's and Fed's involvement in financial markets during the past several weeks justified? Certainly there was a widespread belief during this week among both government officials and participants in financial markets that short-term capital markets completely broke down. Not only Lehman, but also Goldman Sachs, Stanley Morgan, and other banks were also in serious trouble. Despite my deep concerns about having so much greater government control over financial transactions, I have reluctantly concluded that substantial intervention was justified to avoid a major short-term collapse of the financial system that could push the world economy into a major depression.

Still, the brilliant economist he is, Becker recognizes the potential trouble posed by government intervention.

Still, we have to consider potential risks of these governmental actions. Taxpayers may be stuck with hundreds of billions, and perhaps more than a trillion, dollars of losses from the various insurance and other government commitments.
...
Future moral hazards created by these actions are certainly worrisome. On the one hand, the equity of stockholders and of management in Fannie and Freddie, Bears Stern, AIG, and Lehman Brothers have been almost completely wiped out, so they were not spared major losses. On the other hand, that makes it difficult to raise additional equity for companies in trouble because suppliers of equity would expect their capital to be wiped out in any future forced governmental assistance program. Furthermore, that bondholders in Bears Stern and these other companies were almost completely protected implies that future financing will be biased toward bonds and away from equities since bondholders will expect protections against governmental responses to future adversities that are not available to equity participants. Although the government was apparently concerned that foreign central banks were major holders of the bonds of the Freddies, I believe it was unwise to give them and other bondholders such full protection.
...
Various other mistakes were made in government actions in financial markets during the past several weeks. Banning short sales during this week is an example of a perennial approach to difficulties in financial markets and elsewhere; namely, "shoot the messenger". Short sales did not cause the crisis, but reflect beliefs about how long the slide will continue. Trying to prevent these beliefs from being expressed suppresses useful information, and also creates serious problems for many hedge funds that use short sales to hedge other risks. Their ban can also cause greater panic in other markets.

Potential political risks of these actions are also looming. The two Freddies should before long be either closed down, or made completely private with no governmental insurance protection of their lending activities. Their heavy involvement in the mortgage backed securities markets were one cause of the excessive financing of home mortgages. I fear, however, that Congress will eventually recreate these companies in more or less their old form, with a mission to continue to artificially expand the market for mortgages.

New regulations of financial transactions are a certainty, but whether overall they will help rather than hinder the functioning of capital markets is far from clear. For example, Professor Shimizu of Hitotsubashi University has recently shown that the Bank of International Settlement (BIS) regulation on the required minimum ratio of bank capital to their assets was completely misleading in predicting which Japanese banks got into trouble during that country's financial crisis of the 1990s. Other misguided regulations, such as permanent restrictions on short sales, or discouragement of securitization of assets, will both reduce the efficiency of financial markets in the United States, and they will shift even larger amounts of financial transactions to London, Shanghai, Tokyo, Dubai, and other financial centers.

Becker blogs once weekly along with judge Richard Posner. Their comments are almost always worth reading.

"Let Our People Stay"

2008-09-22T10:34:00.000-04:00

Richard Cooper, former state chair of the NY Libertarian Party, writes on Columbia's use of eminent domain:

Eminent domain is a legalized assault on tenants, taxpayers and property-owners Moses said to Pharaoh, "Let my people go." The Libertarian Party says to our modern pharaohs, the politicians and bureaucrats, "Let our people stay." Bollinger cites our beloved Columbia’s educational mission and the infamous Kelo decision. Is it Columbia’s mission to teach that legalized theft is just and constitutional? Is it to teach that the end justifies the means?

Mark Axinn, a Manhattan real estate attorney and Manhattan LP treasurer, contends "I am particularly appalled that Columbia University, which already has significant real estate and financial resources far in excess of others is desirous of relying on the thuggery of government to force other real estate owners to relinquish their property rather than simply purchasing any land it desires on the open market. Surely an institution with the power and wealth of Columbia could, if it desired, simply buy contiguous property. By seeking to usurp others' legitimate property rights by eminent domain, a University of which I should be proud lowers itself to the level of the street bully simply taking what it wants from those weaker individuals who might also be on the schoolyard."

Discuss this and more at the meeting tonight!

Meeting Monday @ 9:00 PM!

2008-09-21T20:19:00.000-04:00

Join us for our second meeting of the year tomorrow in 315 Hamilton at 9:00 PM. We will be elaborating on plans for the year and voting on a change to the club's constitution, followed by our regular discussion.

Which will probably feature these RIDICULOUS bailouts! Masood recently showed me this article from the NY Times. Ugh.

Anyway, I hope to see you all tomorrow!

You're all a bunch of hypocrites!

2008-09-21T00:29:00.001-04:00

When I was in high school, I used to attend Junior State of America conventions (basically debate/model congress + speakers and political activists). I remember sitting in the audience during a particular debate about free trade, listing to a debater explain that international trade causes Americans to lose their jobs, and that "buying American" is every citizen's duty.

During the Q&A part, I asked the speaker where her shoes were made. She took them off, read the label, sheepishly said "Mexico" (yes!), and quickly told the audience, "But I wish they were made in America!"

I was reminded of the story by this video (admittedly infantile, but true) linked at Cafe Hayek. No one made the speaker buy foreign-made shoes. There are American shoes out there, but foreign ones are a lot cheaper. The entire shoe-wearing world is made better by free trade.

This is the problem with entire industries demanding protective tariffs. I guarantee that if you approached a random unionized auto-worker at some protest decrying the evils of free trade, his clothes would be foreign-made. If you followed him home, his appliances would probably be foreign made. Even if his car were made by GM, the parts used to make it come from many different countries. People will shout stupid things at protests, but when it comes to living their lives, they have no choice but to acknowledge the vast benefits free trade has brought everyone.

I believe good ol' Milt said it best in this video. (except for the sentence about commissars)

I <3 Creative Destruction

2008-09-20T22:52:00.001-04:00

At Marginal Revolution:

...the total liabilities of Deutsche Bank (leverage ratio over 50!) amount to around 2,000 billion euro, (more than Fannie Mai) or over 80 % of the GDP of Germany. This is simply too much for the Bundesbank or even the German state to contemplate, given that the German budget is bound by the rules of the Stability pact and the German government cannot order (unlike the US Treasury) its central bank to issue more currency. The total liabilities of Barclays of around 1,300 billion pounds (leverage ratio over 60!) surpasses Britain’s GDP. Fortis bank, which has been in the news recently, has a leverage ratio of "only" 33, but its liabilities are several times larger than the GDP of its home country (Belgium).
The Fed has possibly been bailing them out too (not necessarily by intention), as it is likely that some of these institutions had heavy exposure to the weaker U.S. institutions. Here is the link. Those failures should also put the U.S. regulatory failures in perspective. And what would happen if a big U.K. bank were on the verge of failing? Would the Fed have to step in there too? Contagion is contagion, as Aristotle once said...

These leverage ratios are INSANE! People thought LTCM had extremely high leverage, and yet these guys are almost double that! Why should any citizen have to suffer (by paying taxes for bailouts) because of some rich guys' ridiculously reckless behavior?

Please, Mr. Bernanke, let these companies (I'm referring to the American counterparts) die like they deserve to!

"Wall Street Socialism"

2008-09-17T23:58:00.001-04:00

I don't have any other name to call it but that.

Since the credit crunch has been flushing the multitude of misallocated (misallocated is a word from Austrian jargon) resources, with the nasty side effects of a barrage economic woes & maladies, the government has rushed with its bag of idiocy to worsen everything.

"...The increased emphasis on the faltering economy came on a day when stocks resumed their downward plunge following Tuesday night's government takeover of American International Group Inc. with an $85 billion two-year loan from the Federal Reserve in return for a majority stake in the company....The turnabout came a day after McCain strongly opposed additional government relief and praised the government's decision not to rescue Lehman Brothers after it had intervened to help investment bank Bear Stearns and mortgage giants Fannie Mae and Freddie Mac..." (Yahoo!)

It's ridiculous to hear that American International Group Inc. is now owned by the Federal Reserve. Not to make it seem like I am in favor of the Fed, but that isn't even in its mandate from Congress! It just continues to grow, like an autonomous biomechanical organism from Planet X. Its ridiculous, its only prolonging the inevitable cataclysmic implosion. It will be of quite an unimaginable magnitude. We're already in a state of depression. It's just covered with a veil of borrowed assets and imagined piles of currency, feeble constructs of the human mind.

Fannie Mae and Freddy Mac have been retaken under full government control, and the Fed has bailed out several other banks, namely, the former Bear Sterns. The Republicans, and the Democrats, now believe in socialism, for banks.

Statists are pigs, and I like bacon in my angus burger.

"A New Hope"

2008-09-15T23:49:00.000-04:00

Here's a barrage of useful links that pertain to Liberalism (not socialism)/Libertarianism:

1) Mises.org

2) Lewrockwell.org

3) cato.org

I emphasize the first two.

On other news, there's hope. Approximately 20 individuals, as diverse a bunch ranging from Columbia College to SIPA, showed up to tonight's Libertarian meeting, or as I like to call it, gathering of at-heart anarchists.

Murray N. Rothbard would've been proud. Let's get this semester rolling.

Speak for Yourself!

2008-09-15T10:59:00.000-04:00

Whenever I debate liberals about welfare policy, and argue that private, voluntary charity is a better alternative than government bureaucracy, I always get a response along the lines of, "But people don't give enough to charity! Poor people need the government."

Correction: You don't give enough to charity. According to an article at Beliefnet.com via Greg Mankiw's Blog,

conservatives who practice religion, live in traditional nuclear families and reject the notion that the government should engage in income redistribution are the most generous Americans, by any measure.

Conversely, secular liberals who believe fervently in government entitlement programs give far less to charity. They want everyone's tax dollars to support charitable causes and are reluctant to write checks to those causes, even when governments don't provide them with enough money.
...
liberals give less than conservatives in every way imaginable, including volunteer hours and donated blood.

Real generosity does not equal what you want to do with other people's money. Voting for universal healthcare is not generous. Donating money to a hospital in a world without universal healthcare is.

But for most affluent liberals/socialists, helping others does not seem to be the top priority. People love politics because they can stick a poster in their window, give up 5 minutes on election day, and feel like they did their part in helping to solve the world's problems. Then they can get back in their BMWs and continue complaining about how people don't do enough to help the poor.

For the Record

2008-09-14T14:52:00.000-04:00

Recently, I've gotten negative responses about much of this blog's content. Many controversial topics have been discussed, and I feel that it is important to clarify the nature of the blog.

First of all, the only issue the club takes an official stance on is the time and place of meetings. Everything else posted on this blog represents the views of the author, and no one else. Feel free to be offended, but not at the club as a whole. As libertarians, we tend to believe in free speech. The blog is a forum for all of our members to share their beliefs. If you are particularly offended by something said here, by all means respond! Attach a comment, or even write an entire post. If you are a member or an alum and want to post on the blog, send me an email and I'll make you a contributor as soon as I can.

I personally believe that the slippery slope of censorship is best avoided, and that this blog should remain a free speech zone. Disagree? I await your response in the comments section.

Or at the meeting! Which is Monday (9/15) at 9:00 PM in 315 Hamilton.

What's in a name?

2008-09-13T21:27:00.000-04:00

Reading F. A. Hayek's essay "Why I Am Not a Conservative" here, I came across this passage:

In the United States, where it has become almost impossible to use "liberal" in the sense in which I have used it, the term "libertarian" has been used instead. It may be the answer; but for my part I find it singularly unattractive. For my taste it carries too much the flavor of a manufactured term and of a substitute. What I should want is a word which describes the party of life, the party that favors free growth and spontaneous evolution. But I have racked my brain unsuccessfully to find a descriptive term which commends itself.

It really is unfortunate that the word "liberal" has been taken over by the big-government types, when it was rightly used by so many freedom-lovers such as Toqueville, Bastiat, Hayek, and Friedman. Seriously...how did this happen?! Dictionary.com defines "liberalism" as the following:

a political or social philosophy advocating the freedom of the individual, parliamentary systems of government, nonviolent modification of political, social, or economic institutions to assure unrestricted development in all spheres of human endeavor, and governmental guarantees of individual rights and civil liberties.

Freedom of the individual is what liberalism is! Not some weird blend of freedom in the "social" realm but government control of the economy. Speaking of which, doesn't anyone else find it odd that so many people who favor civil liberties also support cigarette taxes...or that people who oppose abortion support the death penalty? Perhaps the beliefs aren't completely contradictory, but is there any real reason why they should be paired together so commonly? Political divisions made much more sense in the old days--freedom (real liberalism) vs. authoritarianism--instead of these weird party divisions we have today.

On another note, come to Monday's meeting! 9:00 PM in 315 Hamilton.

First Meeting This Monday!

2008-09-13T18:27:00.000-04:00

Join us for our first meeting of the year this Monday (9/15) at 9 PM in 315 Hamilton!

We will be introducing ourselves, discussing libertarian philosophy and issues, and talking about what the club will be doing this year.

So stop by and join us!

In Liberty,

Masood