Category Archives: The State

The Survivalist’s Guide to ‘Obammunism’ & Beyond

Classical Liberalism, Debt, Economy, Government, Healthcare, libertarianism, Political Economy, Regulation, Socialism, The State, Welfare

“The Survivalist’s Guide to ‘Obammunism’ & Beyond” is the current column.

“No statist lies are safe from his scrutiny,” writes Lew Rockwell about economist Thomas J. DiLorenzo’s latest book. What follows is an excerpt from my conversation with professor DiLorenzo about, ”Organized Crime: The Unvarnished Truth About Government,” and the timeless truths to which it speaks.

5. ILANA MERCER: You write: “At the heart of the U.S. government’s continued takeover of the health care sector of the economy was a law passed during the Obama administration that would eventually drive the private health insurance industry out of business and transform it into a de facto nationalized industry.” Elaborate. Since, as you repeatedly warn, the natural laws of economics cannot be repealed, what will these health care exchanges achieve? How will they invariably be funded? What will be the cost to business? To the millions who’re losing coverage? Who will ultimately fork out for the per-head fee imposed on medical plans?

THOMAS DILORENZO: The Obama version of health-care socialism forces insurance companies to cover people with expensive diseases without charging them higher rates to compensate for the additional risk. This effectively will force the insurance companies to pay out billions in health care costs, and then the Obammunists will impose price controls on the industry because that’s what socialists always do once they intervene in a market by forcing businesses to offer something for nothing, thereby driving demand through the roof. The price controls will cause massive bankruptcy, at which point the argument will be made that what is needed is “single-payer healthcare,” a euphemism for health-care socialism or government-run monopoly. In the meantime, they seem to be imposing hundreds of relatively small, hidden taxes to come up with the revenue to keep the scheme going.

6. MERCER: “The Obamacare Survival Guide” is a best-seller on Amazon. The market is producing survivalist literature to help Americans navigate the treacherous shoals of this law. What does it tell you? Like me, you must know plenty of Obama-heads (doctors too) who shrugged off the idea that further centralizing health care—a modest healthcare expansion totaling $2 trillion, I believe—would cost them anything at all. As The Lancet recently confirmed, in the UK’s National Health Service funding is inversely related to patient outcomes. You speak of “inputs” and “outputs.”

DILORENZO: I cited a study by the late Milton Friedman entitled “Inputs and Outputs in Medical Care,” published by the Hoover Institution some twenty years ago. In it the Nobel laureate economist showed that, historically, as government became more and more involved in health care by taking over hospitals and funding Medicare and Medicaid, inputs – in terms of money spent – skyrocketed while “output” in terms of patients served declined. He spoke of something called “Gammon’s Law,” named after a British physician named Max Gammon, who noticed that with healthcare socialism in England, increased “inputs” in the form of massive amounts of money spent always seemed to disappear “as though through a black hole” with little or nothing to show for it in terms of health care.

7. MERCER: You touch briefly on the “private component of GDP.” Free-market thinkers get that the private economy alone produces wealth. But no. GDP is a political construct, defined, tracked and manipulated by the D.C. political machine. Unpack the GDP gambit for us, down to its deceptive components.

DILORENZO: Including government spending in the definition of GDP was a creation of John Maynard Keynes, who defined it as C (Private Consumption) + I (Private Investment) + G (Government Purchases) + X-M (Net Exports). In so doing, Keynesians concluded that the most prosperous year in American economic history – 1946 – was actually a year of revival of the Great Depression with a precipitous drop in economic activity because of the huge decline in federal government spending after World War II. Of course, this was NOT a year of depression but an explosion of private investment, consumption, and job creation.

8. MERCER: About that elusive economic recovery: My colleague Vox Day (who sadly called it a day on WND) argued that, “The Great Depression 2.0 will be worse than its predecessor.” Day chalked that up to today’s unprecedented levels of debt, consumption and credit, private and public. It’s a hunch. But I think you’ll disagree.

DILORENZO: No one can predict something like this, especially since today’s economy is vastly different from the 1930s. Capital markets are much more sophisticated, for one thing, although government regulators by the thousands do their best to destroy them – and with them what’s left of American capitalism. Predictions like this always ignore the resilience of entrepreneurs. As the Austrian Business Cycle theory of Mises and Hayek contends, it is the boom period where all the damage is done in the form of “malinvestment” – in the latest bust this was mostly in real estate. During the recession or depression is when entrepreneurs are forced to become more efficient, more inventive, more creative – or else. This is how the Japanese recovered from something much worse than a depression – long years of war and the dropping of atomic bombs on their country – in a little over a decade.

More on “sequesteria,” tax loopholes and Obamacare, at www.ilanamercer.com, where the conversation with professor DiLorenzo continues.

Read the complete column, “The Survivalist’s Guide to ‘Obammunism’ & Beyond.”

A Budget Cut In D.C. Doublespeak (I.E., Bowel-Speak)

Barack Obama, Debt, Economy, Government, Taxation, The State

Tom DiLorenzo (he’s a friend) on D.C. bowel-speak:

In Washingtonese, if one proposes a $100 billion spending increase, and actual spending increases by “only” $90 billion, they call it a $10 billion budget cut.

And on the Washington Monument Syndrome game, via LRC.com:

The game is this: Whenever a politician is “threatened” with a minor slowdown in spending, the first thing to do is to eliminate police, firefighters, ambulance services, school buses, etc. — everything that inflicts the maximum discomfort on the victims of the government monopoly (a.k.a., taxpayers). The booboisie then wake up from their American Idol stupor for a moment to raise a fuss, and the proposals to slow down spending growth disappear. (It’s called the “Washington Monument Syndrome” because the head of the National Park Service shut down the Washington Monument in the ’60s in response to Congress’s temporary refusal to fund his complete spending wish list. Tourists from every state complained to their congressmen, and the Park Service wish list was fully funded).

Rand Paul: Political Performance Artist, Or Action Hero?

Economy, Government, libertarianism, Liberty, Paleolibertarianism, Political Economy, Political Philosophy, Ron Paul, The State

The purist in me recoils at Sen. Rand Paul’s latest political performance art. As Glenn Beck reports, the senator from Kentucky “took the $500,000 in savings he had from running a frugal, cost-efficient office and returned it to the treasury.”

“Hey, Senator Paul, wait a minute. You know better,” I want to shout. “That money you’ve returned to Treasury in a grand gesture doesn’t belong there, it belongs to taxpayers. Why stuff stolen goods down the maw of the federal beast, into which scarce resources only ever disappear without trace, and where everything is fungible? Rand’s $500,000 could be directed into the domestic drone program. See what I’m saying? The principles absolutist in me rejects many of Rand’s gestures. On the other hand, what American doesn’t like an action hero?! I like Rand Paul’s energy.

The question: Is this Randian energy or Brownian Motion?

Rand Paul is front-and-center in media, showing what some people like to call “leadership,” a contemptible phrase, I know. The libertarian Paul is a pragmatist, whereas his father, Ron Paul, is an idealist.

So far, I’ve been critical of Rand’s compromises, but perhaps he deserves more support? After all, have I not condemned the sin of abstraction we libertarians tend to commit, writing against the libertarian “specimen that has nothing to say about policy and politics for fear of compromising precious libertarian purity”?

Suspended as he is in the arid arena of pure thought, this species of libertarian will settle for nothing other than the immediate and absolute application and acceptance of the non-aggression axiomatic ideal. And since utopia will never be upon us, he opts to live in perpetual sin: THE SIN OF ABSTRACTION.

Ambition no doubt has a lot to do with Rand Paul’s positions, but, boy, is he a doer. The question is, is he doing the right things?

Here’s Paul putting in a good performance over the sequester nonsense:

PAUL …for goodness sakes, it was [Obama’s] proposal. He proposed the sequester. It was his idea. He signed it into law, and now he’s going to tell us that, oh, it’s all our fault?
I voted against the sequester because I didn’t think it was enough. The sequester cuts the rate of growth of the spending, but the sequester doesn’t even really begin to cut spending, which we have to do or we are going to get a credit downgrade, another credit downgrade.
BLITZER: So you don’t think that the $85 billion this year, that would be the forced cuts this year, from your perspective, that’s not enough?
PAUL: It’s a pittance. I mean, it’s a slowdown in the rate of growth. There are no real cuts happening over 10 years.
Over 10 years, the budget will still grow $7 trillion to $8 trillion. He added $6 trillion to the debt in his first term. He’s on course to add another $4 trillion to $6 trillion in his second term. So, really, this is just really nibbling at the edges, and he’s saying, oh, it’s some dramatic thing where all of a sudden it’s still the rich’s fault.
Didn’t he already raise taxes on the rich? I’m having trouble even understanding what he’s talking about because he sets up this rhetoric and this sort of game of let’s go get the rich again that really is divorced from any reality. It’s his sequester we’re talking about, his bill.

Updated: The Oink Sector Is Always Seen (‘A Decrease In the Spending Increase’)

Barack Obama, Debt, Economy, Government, libertarianism, Paleolibertarianism, Political Economy, The State, War, Welfare

“The art of economics,” wrote Henry Hazlitt, “consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” Hazlitt was encapsulating Bastiat’s What-Is-Seen-and-What-Is-Not-Seen principle.

“Flanked by emergency medical personnel,” write the editors at the WSJ, “Mr. Obama made his usual threat of Armageddon if automatic spending cuts go forward on March 1. Americans can expect more such melodrama in the coming days, so as a public service we thought we’d break down the President’s three biggest political tricks.”

Members of the “oink sector” were front and center in Obama’s show. What you didn’t see were the many private-sector suckers who work to fund the wealth consuming sponger sector, members of which were on show. What you didn’t see were the unemployed in the private sector, who are displaced because of the growth of government.

Think zero-sum, or parasite vs. host. The first (the parasite) is sucking the lifeblood of the second (the host). The larger the parasite gets, the weaker the host will grow.

UPDATED (2/22): “What a bunch of Keynesians,” writes the Fox News column “Power Play” about … the Republicans. Now that’s progress. (Fox News is usually a megaphone for the GOP.)

So here sit Republicans, teeth clenched, gripping their desks, waiting for the “devastating” cuts to explode the economy and just hoping that Obama will get some of the blame for having invented the thing. They are assuming that $85 billion less spent by the government will cause devastation in an economy of some $16 trillion.

The sequester, as everyone knows, “was …the brainchild of Team Obama.” It is nothing more than a “decrease in the increase in spending,” another good way to describe the “crippling reductions [Obama] says will result from the government spending only $15 billion more this year than last year.”