Calling all extremely ardent libertarians

Those of us who object to taxation and seignorage on the grounds that they are theft have effectively been objecting to this and all similar nonsense before it was ever proposed.

Russ -

How about a post on this? I think this paints an insightful picture of the stimulus package from a sector level.

It shows the distortionary and inflationary nature of it.

It shows what happens when politicians write economic policy, not economists.

http://www.youtube.com/watch?v=uyPcRGvtu18

Er, I mean vidyohs was completely moderate in observing the absence of punctuation in the previous post by some completely legitimate participant stating thing which seem slightly odd.

Slightly.

Sorry for my exuberance. Very sorry. Quite so.

Vidyohs bitch-slappin the anti-punctuatin punk asses!!!

Yeah!!!

Oh and BTW, there is no silver bullit and your investment advisor doesn't know it either,

T L Holaday:

Who gives a shit what Peter Schiff thinks... if you bought his advice a year ago you'd be out 70-80% of your investment.

He's selling his book which is why you see him on TV. Do remember Prechter? Zwieg? They all argued the same points in the 80's. Wanna make some money? Then do your homework and find out those things you believe in....

I'd like to know where this guy went to school.

"Posted by: owen a wallace | Feb 19, 2009 8:56:01 PM"

Where ever it was they need some serious concentration on composition in the English language.

I mean Peter Schiff.

Oil Shock,

Do you have a link to any of the Peter Schiffer op-ed works in the Wall Street Journal where he advocated "Let Them Fail" as a policy for the GSEs? I searched wsj.com using its search field and came up with nothing.

1. How about having some non-economist and non-scholars as part of Obama's Economic Counsel? Such as:

For housing Real Estate:

a.) General, Independent Trend Analysts have had more acumen as a group than govt economists and the secret CFR scholars.

b.) Someone to represent the group of the top bloggers that have shown past successes in their writing.

c.) A representative for home owners, choosing be home owners is some way, one for each of the six regions of America.

d.) six governors or preferably indepndent reps, one in each region.

e.) a web-based opinion survey of home-owners, etc.

Other

A top independent trend analysts from each country or global region.


Similar independent trend analysts for CRE, retail, etc.

NOTE: all of these analysts and representatives NEED be disconnected from PACs and mainstream media. True honest input with as little conflicts as possible.

Etc, etc...

This would not take long to organize. It could be an NGO that reports to the President.

Unless, Obama, the Fed and Treasury are so arrogant (or have ulterior motives) there is every reason to do this. Most of these people would offer there services for free (plus travel expenses).

Obama says he wants input from all points of view. If he TRULY does, some form of this should be something he wants to do.

Further, and maybe as important, this would go a long way toward increase to some level our confidence in the system (a vital component of recovery) and would get more citizens involved because they may feel the government might actually be on their side.

The excuse would be it takes too much time, but that isn't true. If Obama gives the word, the people, some of them, would create this NGO panel in no time.

We can dream

Many economists, including prominent economists, suffer from the herd instinct. Where do economists get most of their stroking? From other economists.

If one looks at who some of the earlier critics of the GSEs were, libertarian public policy experts and applied economists, such as Peter Wallison (a lawyer)at AEI and Fred Smith at CEI have argued for almost a decade for privatizing the GSEs.

See http://www.aei.org/books/filter.all,bookID.794/... and http://cei.org/articles/fannie-freddie-critic-r...>

Do I have to be a libertarian to disapprove of this sort of thing.

I'm a middle of the road Classical liberal and I disapprove.

Dave: "but we all know that the direct costs of this will be paid mostly by future high income taxpayers."

Perhaps. But if personal income tax rates become even more progressive - and business tax rates rise as well - will high incomes and business investment remain in the U.S.? Who pays then?

What is the public policy justification that makes virtually all economists, even mere ardent libertarians, unwilling to say no to this madness?

Maybe being an ardent libertarian economist does not necessarily make one a good economist.

Russ,

Time to get Patri Friedman back on and see how his Seasteading prodject is coming. I am ready to sign up.

I'm also an EAL who believes Fannie and Freddie should suffer the fate of Bonnie and Clyde, or rehabilitated and set free.

Yes, add me to the extremely ardent libertarian group. No amount of money within the reach of the Federal government is going to save F&F and all the banks. There is overcapacity in housing lending and overcapacity in the banking system as a whole. The financial system needs to shrink and that means some banks and maybe F&F going bankrupt. Let the system adjust as rapidly as possible. Bailouts only make spread the costs and expose the govt and taxpayers to insolvency as well.

The government has now extended $400 billion or roughly $4000 per household to keep Fannie and Freddie afloat. That may not be enough.

Not enough? Are you suggesting that if $400 billion doesn't make it all better that they should spend even more? I assume you didn't mean this & that it was merely a poor choice of words, but when even those opposing the policy speak from within the faulty paradigm of those advocating the policy, it only legitimizes the bad ideas that support the policy. This may be a small part of why the madness continues.

What if they actually printed and delivered the actual cash (trillion dollars) into the system. You know, made real circulating capital as opposed to more digital money that just gets eaten by credit expense in the system. Do you think that would make a difference?

The shear magnitude of mortgaged "equity" in the system begs the question of how much real cash or equity will actually survive this credit "crisis". But most importantly, can our economy take advantage of the Keynesian system finally revealing its true unsustainable colors.

The AEA's Committee on Graduate Education in Economics called it in 1991 -- the economics profession is producing generation after generation of "Idiot Savants".

Reference:

Krueger, Anne O., Kenneth J. Arrow, Olivier Jean Blanchard, Alan S. Blinder, Claudia Goldin, Edward E. Leamer, Robert Lucas, John Panzar, Rudolph G. Penner, T. Paul Schultz, Joseph E. Stiglitz, and Lawrence H. Summers. 1991. “Report of the Commission on Graduate Education in Economics.” Journal of Economic Literature, 29 (3), pp. 1035-1053.

At least now there' some opposition.

I don't know, Ray. If the white house went to the Repubs and the congress to the Dems, He would have been compelled to rebel against congress. Or not.

Arguing that Obama is the better option is a lot like arguing that the stimulus saved jobs. There's just no way to prove either.

That's an odd lexicon he has there.

Oddly enough, having Obama in office is the best case scenario.

Richard Epstein recently remarked on the old truism that Republicans are best in exile. Point being, can you imagine the kind of legislation that would be coming down the pike if McCain was in office trying to reignite his love affair with the media?

At least now there' some opposition. Otherwise, we would have had a bi-partisan version of the same thing for the most part minus perhaps the VD money, and the ACORN crap, and the only dissenters would have been Ron Paul, Jeff Flake and maybe one or two others wherein they would have been labeled as kooks.

although i agree with most of what has been said i do wonder why economist keep blaming politicians for listening to them. from my limited perspective our economy has been led for the last century or so by mainly academic economists. true that politics has interjected and made things worse in many occasions but why does it seem as though we economists like to pat ourselves on the back when things go well and when they crumble under our watchful eye we blame everyone else.

also, i do believe markets are essential for prosperity, however free market economists just like any other human will place political judgements into their rhetoric. such could be the case of labor unions. yes they lower overall wage levels for those non union workers but isnt the laor force just one more market? why should it not be a free market?

it seems to be the ultimate double standard with many of this view, regulate some markets and not others just by convinience sake. like having speed limit is ok but dont make me stop texting because i own this


phone.

i think this whole debacle should make economist feel less certain about their understanding of the system not trench up and boast claims of insider knowledge that the other side just doesnt get the obvious

although i agree with most of what has been said i do wonder why economist keep blaming politicians for listening to them. from my limited perspective our economy has been led for the last century or so by mainly academic economists. true that politics has interjected and made things worse in many occasions but why does it seem as though we economists like to pat ourselves on the back when things go well and when they crumble under our watchful eye we blame everyone else.

also, i do believe markets are essential for prosperity, however free market economists just like any other human will place political judgements into their rhetoric. such could be the case of labor unions. yes they lower overall wage levels for those non union workers but isnt the laor force just one more market? why should it not be a free market?

it seems to be the ultimate double standard with many of this view, regulate some markets and not others just by convinience sake. like having speed limit is ok but dont make me stop texting because i own this


phone.

i think this whole debacle should make economist feel less certain about their understanding of the system not trench up and boast claims of insider knowledge that the other side just doesnt get the obvious

"The government has now extended $400 billion or roughly $4000 per household to keep Fannie and Freddie afloat."

That stat might be mathematically correct, but we all know that the direct costs of this will be paid mostly by future high income taxpayers. That's why most of the public goes along with this nonsense.

Without polling data how do they know how economists really feel? Especially libertarian economists?

Perhaps he meant it in the sense President Obama meant “economists from across the political spectrum agree” when discussing the need for stimulus: “economists from across the political spectrum [who agree with me] agree”.

Ok, now it is official. Harvard economists are going crazy.... first larry summers and now ed glaeser.

and it is amazing the way these guys talk in the name of libertarian economists. Do they have a petition for that?

it is not enought to them to talk by themselves, they need to talk in the name of another group of economists. They are going crazy!!!!

It is as though we live in an Ayn Rand novel.

Shame on the economics profession for lacking the courage to speak out against this.

Here’s some startling scale to this fiasco so far:

<a href=" http://www.bloomberg.com/apps/news?pid=20601087... rel="nofollow">U.S. Taxpayers Risk $9.7 Trillion on Bailout Programs
Email | Print | A A A

By Mark Pittman and Bob Ivry

Feb. 9 (Bloomberg) -- The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.


The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged up to $5.7 trillion more. The Senate is to vote this week on an economic-stimulus measure of at least $780 billion. It would need to be reconciled with an $819 billion plan the House approved last month.

And:

BY MARK STEYN

...


Barry Ritholtz, author of the forthcoming book Bailout Nation, calculated — gosh, was it only six weeks ago? — that the tab for the bailout by November 24 was already $4.6165 trillion, which looks much more convincing because it’s big but not round. It’s specific to four decimal points, which sounds like they’ve got way down in the weeds of taxi receipts and lunch money. The media coo over Obama’s “new New Deal,” but, as Mr. Ritholtz pointed out, if you adjust for inflation, the combined costs of the old New Deal plus the Louisiana Purchase, the Marshall Plan, the Korean, Vietnam, and Iraq wars, and every NASA project in history — oh, and the S&L crisis — add up to a mere $3.92 trillion. Even as he was totting up his numbers, the Bloomberg news service estimated that, factoring in Citibank and a couple of other Johnny-come-latelies, the bailout bill was in fact up to $7.76 trillion — which is the combined cost of all that other stuff (Louisiana Purchase, etc.) plus the $3.6 trillion of the Second World War.


...





Appalling.

Posted by Blackadder:

"The sunk costs fallacy, I'm guessing."

Thank you, Blackadder -- my sentiments exactly.

T.L Holaday,

I don't know about Forbes, but Peter Schiff had a couple of opeds in WSJ.

The reality being that he's a novice in some of the harder periods ever in our lifetimes, and he has got absolutely no clue what he's doing.

that's why he has to copy a previous president.

What is the public policy justification that makes virtually all economists, even mere ardent libertarians, unwilling to say no to this madness?

The sunk costs fallacy, I'm guessing.

I think people are numb to this insanity. I don't think the sheer amount of money that is being thrown around has sunk in.

I think people are stupid enough to think 'surely that nice man Obama knows what he's doing, he sounds so reassuring'.

The reality being that he's a novice in some of the harder periods ever in our lifetimes, and he has got absolutely no clue what he's doing.

Robert Reich wrote in October 2008, "If they are too big to fail, they are too big."

What libertarian has published in Forbes or the WSJ an essay which unequivocally urged "Let Them Fail"? The auto companies, yes, plenty of "Let Them Fail" for the auto companies, but where is the record of Austrian economists urging that policy makers let the GSEs fail?

"What is the public policy justification that makes virtually all economists, even mere ardent libertarians, unwilling to say no to this madness?"

I suspect the answer is to be found in the question: Strike the word "justification," and replace it with a pejorative from the economist's vocabulary of "perverse incentives, radical uncertainty, rational irrationality, et al."

This may sound like a group ad hominem, but when considering reasons for belief, as opposed to reasons for truth, an ad hominem is precisely what the doctor ordered.

Russell,

The only justification that E. Glaeser presents is summarized in his last sentence: "It could have been much worse." This is how low the standard for public policy has declined, not just for Harvard economists but for most economists, even for some of your colleagues at GMU. So to answer your question I think it is the kind of herd behavior that these same economists have denounced as the source of all bubbles. Most people are an easy prey to the bully behavior of few self-appointed prophets. They may talk a lot when they are having lunch together, but to outsiders they want to show how clever they are with great ideas (most are attempts to reinvent the wheel) and at the same time that they are part of a powerful tribe.