CHINA AND THE US: Two countries whose respective central banks are pursuing distinctly different policies.
Federal Reserve Chairman Ben Bernanke’s reason for living is to lower interest rates and inject liquidity into an overinflated economy. When Ben announced, a few days back, that he remains “open to using the blunt tool of higher interest rates to avert or pop future asset bubbles … particularly if other approaches aren’t working”—people were floored. (Yes, Ben considers raising interest rates a “blunt tool,” but keeping them artificially low quite okay.) For now, Our Ben is keeping rates near zero.
The People’s Bank of China, on the other hand, has moved to restrain lending by raising “the proportion of deposits that banks must set aside as reserves by 50 basis points starting Jan. 18.” This, anticipates Bloomberg.com, “may foreshadow higher interest rates.”
China is cooling its economy; Ben is heating ours’ up, as he tries to pump stale air into deflating balloons.
STATISM AND STUPIDITY ARE INTERCHANGEABLE. “Employers chopped 85,000 jobs last month, and difficulty finding work helped chase more than half a million people out of the job market,” reports the Hartford Courant.
To Obama, this is genuinely surprising. Didn’t he do everything possible to avert such a scenario? Didn’t he do everything right?
With “the $780 billion stimulus plan,” the prez purports to have saved 1 million jobs, but by Kudlow’s calculations, each cost “roughly $200,000 per job.”
Mr. Midas touch has closed “down federal lands for oil and gas drilling,” opened up more EPA departments for capping-and-trading, is leading a government takeover of health care, and this is barely the beginning of BO’s transformation of “the government’s relation to the private economy.”
Because he is a dyed-in-the-wool statist, BO cannot conceive that by dolling out unemployment benefits, and state aid; launching government jobs programs—all of which necessitate the seizure of private wealth through taxing, borrowing, and printing paper—he is taking a wrecking ball to the job market, and the private economy.
Update (Jan. 9): I think BO is genuinely surprised. Contra Glenn Beck, I am not a conspiracy theorist. I believe in the banality of evil. BO believes in the Keynesian “remedied.” I think he’s scratching his head.
The premise for imputing conspiracies to garden variety government evils is this: government generally does what is good for us (NOT), so when it strays, we must look beyond the facts—for something far more sinister, as if government’s natural venality and quest for power were not enough to explain events. For example, why would one need to search for the “real reason” for an unjust, unscrupulous war, unless one believed government would never prosecute an unjust war. History belies that delusion.
Conspiracy is not congruent with a view of government as fundamentally antagonistic to the individual and to civil society, a position I hold.
Or is Mr. Bernanke reading Meltdown? “The Federal Reserve Chairman’s views on asset bubbles,” writes The WSJ, are slowly changing.”
“Earlier this decade, when Mr. Bernanke was a Fed governor, he and other central bank officials said financial bubbles weren’t something the Fed could identify or pre-empt effectively. Its focus was on keeping inflation and unemployment low. [And how well that has been achieved.] Its bubble strategy was to mop up after a bubble burst with lower interest rates to prevent damage to the broader economy.”
In a speech on Sunday at the American Economic Association’s annual meeting, BB repeated the shibboleth about the need for “better regulation” as the first line of defense against future crises. But he also conceded to the need “to ‘remain open’ to using the blunt tool of higher interest rates to avert or pop future asset bubbles … particularly if other approaches aren’t working.”
Why is raising interest rates considered a “blunt tool,” keeping them artificially low is not?
Glenn Beck is invaluable in highlighting the constitutional underpinnings of the republic violated by almost every law enacted by both parties. However Beck’s discussion is generally incomplete (along the lines highlighted in the article “Life, Liberty, and PROPERTY,” where I also readily conceded that “The man exudes goodness and has a visceral feel for freedom”).
Again and again Glenn has alerted his viewers to Obama’s disdain for the Constitution as a “charter of negative liberties.” Said the president: (Transcript here)
If you look at the victories and failures of the civil rights movement and its litigation strategy in the court. I think where it succeeded was to invest formal rights in previously dispossessed people, so that now I would have the right to vote. I would now be able to sit at the lunch counter and order as long as I could pay for it I’d be o.k. But, the Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society. To that extent, as radical as I think people try to characterize the Warren Court, it wasn’t that radical. It didn’t break free from the essential constraints that were placed by the founding fathers in the Constitution, at least as its been interpreted and Warren Court interpreted in the same way, that generally the Constitution is a charter of negative liberties. Says what the states can’t do to you. Says what the Federal government can’t do to you, but doesn’t say what the Federal government or State government must do on your behalf, and that hasn’t shifted and one of the, I think, tragedies of the civil rights movement was, um, because the civil rights movement became so court focused I think there was a tendency to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalition of powers through which you bring about redistributive change. In some ways we still suffer from that.
I’m not optimistic about bringing about major redistributive change through the courts. You know, the institution just isn’t structured that way.
To the president’s telling complaint vis-a-vis the Constitution being deficient in its articulation of negative liberties only, Glenn has retorted as follows: “That’s the way the founders designed it, because they saw what governments do when they are allowed to do stuff for you.”
I’m afraid that’s not quite it. Articulated by the Founders, in the philosophy of classical liberalism and natural law, negative liberties are the only authentic rights. Glenn must articulate more than a utilitarian perspective, which doesn’t do justice to the profundity of America’s Founding Fathers. Glenn is welcome to use the following explanation from “CRADLE OF CORRUPTION,” in my book (buy it), with attribution, of course:
“The only rights of man are the rights to life, liberty, and property. These rights exist irrespective of governments. Rights always give rise to binding obligations. In the case of natural rights, the duty is merely a duty to refrain from doing. My right to life means you must refrain from killing me. My right to liberty means you cannot enslave me. My right to property means you should not take what is mine, or stop me from taking the necessary action for my survival, so long as I, in turn, heed the same strictures.”
“If to exercise a right a person must violate someone’s life, liberty and property, then the exercised right is not a right, but a violation thereof. Because my right to acquire property doesn’t diminish your right to the same liberty, this right is known as a negative right. Negative rights are real or natural rights because they don’t conscript me in the fulfillment of your needs and desires, and vise versa. They merely impel both of us to keep our mitts to ourselves.” [“CRADLE OF CORRUPTION”]
[SNIP]
You see, positive liberties are rejected outright in natural law, unless undertaken voluntarily. So, dear Mr. Beck, the reason the Constitution is by-and-large a charter of negative liberties, as the president put it, is because positive, state-minted rights violate the individual’s negative (real) rights.
The Great Glenn in action:
Update (Dec. 18): Sitting in for Glenn, Judge Andrew Napolitano delivers a superb explication of the natural-rights doctrine, joined by Joe Salerno, whose lectures at the Mises Institute I greatly enjoyed, and John Tamny of RealClearMarkets.com. What a shame the Wall Street Journal’s statist extraordinaire, Stuart Varney, now tenured at Fox Business, gets to TALK over the Three Wise Men. I’ve had enough of the Stephen Moores and Stuart Varneys of the world, wrong for decades, yet able to keep lucrative careers going, as they pepper their verbiage with the occasional, non-committal, crudely stated truths (“government needs to be throttled”).
Allow freedom and reality to be heard for a change. Expunge the snake-oil merchants from forums friendly to freedom.
Readers, please send me the YouTube clip of this round table, which should be up very shortly (after all, YouTube is not yet run by the state).
