Category Archives: Communism

Update II: The Commie Who Controls the Economy From the Grave

Communism, Democrats, Economy, Political Economy, Republicans, Socialism

The excerpt is from my new WND column, “The Commie Who Controls the Economy From the Grave“:

“Republicans are as devout about Keynes as are [Democrats] Reich and Krugman. Nixon famously declared, ‘We are all Keynesians now.’ But my comment is redundant; Bush has bested the most committed Keynesian. ‘Nixon’s Keynesian conversion … looks positively quaint compared with the fiscal and monetary stimulus’ Bush has initiated, quipped Steven Pearlstein of the Washington Post.”

“How much to hand out; who to hand it to; which handout makes the best use of taxpayer money; do the Big Three submit a business plan with their bailout requisitions, or not—that’s the depth of the ‘philosophical’ to-be-or-not-to-be among Republikeynsians.”

“So who was this man, John Maynard Keynes, who controls the economy from the grave?”

“Keynes was a Fabian socialist strongly opposed to private enterprise. … Fabians departed from communists on the use of force. Whereas the communists believed in ‘attaining power by violence,’ Fabians perfected a form of the Islamic takiya—lying to spread the faith, in their case, state-socialism.”

Read “The Commie Who Controls the Economy From the Grave.” You need to know who Comrade Keynes was!

Update I (Dec. 5): Speaking of Republikeynsians, I heard Tony Blankley, editor of the Washington Times, tell the Obama Headquarters@Hardball, care of Chris Matthews, that the government must spend inordinate amounts of money. Demand has fallen. When consumers stop spending (at last!), urged Blankley, the government must step in and fill the gap; in other words spend like the consumer would have spent had he had the money, but since he can’t spend what he doesn’t have, the government must step in and spend what it doesn’t have.

This glut; this orgy of idiocy, reminds me of a Fellini film, I think it was, where the heroes decide to get together and eat themselves to death. Anyone old enough to remember its name?

This won’t keep the nausea at bay, but I recommend reading “Keynes and the Reds” by historian Ralph Raico. More examples of takiya à la socialism–the myths Keynes’s acolytes have spun around him. His theories ought to have been sufficient to discredit him.

Update II (Dec. 9): In case readers have disobeyed me and failed to read Raico’s “Keynes and the Reds, here is an excerpt:

“…it is commonly held, Keynes was a sincere, indeed, exemplary, believer in the free society. If he differed from the classical liberals in some obvious and important ways, it was simply because he tried to update the essential liberal idea to suit the economic conditions of a new age.”

“But if Keynes was such a model champion of the free society, how can we account for his peculiar comments, in 1933, endorsing, though with reservations, the social “experiments” that were going on at the time in Italy, Germany, and Russia? And what about his strange introduction to the 1936 German translation of the General Theory, where he writes that his approach to economic policy is much better suited to a totalitarian state such as that run by the Nazis than, for instance, to Britain?” …

“A notable feature of Keynes’s praise of the Soviet system is its total lack of any economic analysis. Keynes appears blithely unaware that there might exist a problem of rational economic calculation under socialism, as outlined a year earlier in a volume edited by F. A. Hayek, Collectivist Economic Planning, which featured the seminal 1920 essay by Ludwig von Mises, ‘Economic Calculation in the Socialist Commonwealth.'”

“Economists had been debating this question for years. Yet all that concerns Keynes is the excitement of the great experiment, the awe-inspiring scope of the social changes occurring in Soviet Russia under the direction of those ‘disinterested administrators.'”

“This brings to mind Karl Brunner’s comment on Keynes’s notions of social reform: ‘One would hardly guess from the material of the essays that a social scientist, even economist, had written [them]. Any social dreamer of the intelligentsia could have produced them. Crucial questions are never faced or explored.'”

Read the complete essay “Keynes and the Reds, and report back.

Home Invaders-Cum-Home Liberators

Communism, Crime, Individual Rights, Private Property, Socialism

All the characters involved in this operation are de facto and de jure squatters, trespassers, and home invaders.

But to the Associated Press, they are “activists,” “homeless,” and “realtors” with a difference. In an article titled “Activist moves homeless into foreclosures,” the AP prattles:

Rameau is an activist who has been executing a bailout plan of his own around Miami’s empty streets: He is helping homeless people illegally move into foreclosed homes.
“We’re matching homeless people with people-less homes,” he said with a grin.
Rameau and a group of like-minded advocates formed Take Back the Land, which also helps the new “tenants” with secondhand furniture, cleaning supplies and yard upkeep. So far, he has moved six families into foreclosed homes and has nine on a waiting list.

It takes all kinds to make a village of idiots.

GOP Sticks With Karl (Marx)

Barack Obama, Communism, Democrats, Elections 2008, Republicans, Socialism, Taxation

“To get a Democrat to admit to practicing socialism is a lot like frisking a wet seal.

To get Republicans to confess to their role in socializing America is an equally slippery affair.

The latter have been grandstanding about the plan of the wily pitch-man Obama to plunder taxpayers (the minority) so as to pay tax consumers (the majority). For the edification of GOP grandstanders, America has a tax system that energetically distributes income.

The progressive income tax is a good example of Karl Marx’s maxim, “From each according to his ability, to each according to his need.” It is socialism by any other name.

Obama is an adherent of this socialism; as is McCain. And so is George Bush, who, as a campaign ploy, had promised to reform America’s steep tax system, but decided to stick with Karl.

Indeed, America, the cradle of capitalism, clings to Karl. Russia, the cradle of communism, has abandoned him in favor of a flat—and very low—tax on income. …”

Read the complete column, “GOP Sticks With Karl (Marx)“, on WND.com

Hydra-Headed Commie Talking Heads

Business, Capitalism, Communism, Debt, Economy, Federal Reserve Bank, Inflation, Israel, Journalism, Media, Republicans

Last night I watched one of the many performances Stephen Moore and John Fund give on Glenn Beck’s show, talking up the bailout while making the obligatory noises about their free market credentials.

I wonder why Glenn Beck, whose instincts are generally good, and who disagreed with them, tolerates such obfuscation. Has Glenn done no research? Stephen Moore authored a book paradoxically titled Bullish on Bush: How the Ownership Society Is Making America Richer.

Here’s my truism, excerpted from “Bush & The Bailout Bandits”: “Bush’s ownership society, built as it was on quicksand, has metamorphosed into the bailout society.”

Is America ever going to fire its failed philosopher kings when they fail to predict anything?

Here is an excellent antidote (via LRC.Com) to the hydra-headed talking heads, exposing them for the philosophical commies they are. It’s written by the Canadian Austro-libertarian Martin Masse:

KARL’S COMEBACK

Martin Masse
Financial Post, September 30, 2008, FP13

In his Communist Manifesto published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes over power, with the aim of centralizing all instruments of production in the hands of the state. Proposal #5 was to bring about the “centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.”

If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favour the free market, agree with him.

Indeed, analysts at the Heritage Foundation and Cato Institute, and commentators in the Wall Street Journal and in this very page, have made declarations in favour of the massive “injection of liquidities” engineered by central banks in recent months, the government takeover of giant financial institutions, as well as the still stalled $700-billion bailout package. Some of the same voices were calling for similar interventions following the burst of the dotcom bubble in 2001.

“Whatever happened to the modern followers of my free-market opponents?” Marx would likely wonder.

At first glance, anyone who understands economics can see that there is something wrong with this picture. The taxes that will need to be levied to finance this package may keep some firms alive, but they will siphon off capital, kill jobs and make businesses less productive elsewhere. Increasing the money supply is no different. It is an invisible tax that redistributes resources to debtors and those who made unwise investments.

So why throw this sound free-market analysis overboard as soon as there is some downturn in the markets?

The rationale for intervening always seems to centre on the fear of reliving the Great Depression. If we let too many institutions fail because of insolvency, we are being told, there is a risk of a general collapse of financial markets, with the subsequent drying out of credit and the catastrophic effects this would have on all sectors of production. This opinion, shared by Ben Bernanke, Henry Paulson and most of the right-wing political and financial establishments, is based on Milton Friedman’s thesis that the Fed aggravated the Depression by not pumping enough money into the financial system following the market crash of 1929.

It sounds libertarian enough. The misguided policies of the Fed, a government creature, and bad government regulation are held responsible for the crisis. The need to respond to this emergency and keep markets running overrides concerns about taxing and inflating the money supply. This is supposed to contrast with the left-wing Keynesian approach, whose solutions are strangely very similar despite a different view of the causes.

But there is another approach that doesn’t compromise with free-market principles and coherently explains why we constantly get into these bubble situations followed by a crash. It is centered on Marx’s Proposal # 5: government control of capital.

For decades, Austrian School economists have warned against the dire consequences of having a central banking system based on fiat money, money that is not grounded on any commodity like gold and can easily be manipulated. In addition to its obvious disadvantages (price inflation, debasement of the currency, etc.), easy credit and artificially low interest rates send wrong signals to investors and exacerbate business cycles.

Not only is the central bank constantly creating money out of thin air, but the fractional reserve system allows financial institutions to increase credit many times over. When money creation is sustained, a financial bubble begins to feed on itself, higher prices allowing the owners of inflated titles to spend and borrow more, leading to more credit creation and to even higher prices.

As prices get distorted, malinvestments, or investments that should not have been made under normal market conditions, accumulate. Despite this, financial institutions have an incentive to join this frenzy of irresponsible lending, or else they will lose market shares to competitors. With “liquidities” in overabundance, more and more risky decisions are made to increase yields and leveraging reaches dangerous levels.

During that mania phase, everybody seems to believe that the boom will go on. Only the Austrians warn that it cannot last forever, as Friedrich Hayek and Ludwig von Mises did before the 1929 crash, and as their followers have done for the past several years.

Now, what should be done when that pyramidal scheme starts crashing to the floor, because of a series of cascading failures or concern from the central bank that inflation is getting out of control? It’s obvious that credit will shrink, because everyone will want to get out of risky businesses, to call back loans and to put their money in safe places. Malinvestments have to be liquidated; prices have to come down to realistic levels; and resources stuck in unproductive uses have to be freed and moved to sectors that have real demand. Only then will capital again become available for productive investments.

Friedmanites, who have no conception of malinvestments and never raise any issue with the boom, also cannot understand why it inevitably leads to a crash. They only see the drying up of credit and blame the Fed for not injecting massive enough amounts of liquidities to prevent it.

But central banks and governments cannot transform unprofitable investments into profitable ones. They cannot force institutions to increase lending when they are so exposed. This is why calls for throwing more money at the problem are so totally misguided. Injections of liquidities started more than a year ago and have had no effect in preventing the situation from getting worse. Such measures can only delay the market correction and turn what should be a quick recession into a prolonged one.

Friedman – who, contrary to popular perception, was not a foe of monetary inflation, but simply wanted to keep it under better control in normal circumstances – was wrong about the Fed not intervening during the Depression. It tried repeatedly to inflate but credit still went down for various reasons. This is a key difference in interpretation between the Austrian and Chicago schools.

As Friedrich Hayek wrote in 1932, “Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion. … To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about…”

The confusion of Chicago school economics on monetary issues is so profound as to lead its adherents today to support the largest government grab of private capital in world history. By adding their voices to those on the left, these confused free-marketeers are not helping to “save capitalism”, but contributing to its destruction.

*Martin Masse is publisher of the libertarian webzine Le Québécois Libre and a former advisor to Industry minister Maxime Bernier

[Further recommended reading is here, scroll down, please.]