On the eve of the early 1980s high inflation rates, mainline economists James Buchanan and Richard Wagner drew attention to the rising debt and inflationary risks of the time. Their 1977 book carried the evocative title, Democracy in Deficit: The Political Legacy of Lord Keynes. Buchanan and Wagner’s prose minced few words, describing the Keynesian influence as the culprit behind “continuing and increasing budget deficits, a rapidly growing governmental sector, high unemployment, apparently permanent and perhaps increasing inflation, and accompanying disenchantment with the American sociopolitical order.”
Buchanan and Wagner argue that the post-Keynesian era suffers from the “presuppositions of Harvey Road.” Harvey Road is a reference to the Keynes family home in Cambridge. A biographer of Keynes, R. F. Harrod, coined this “presuppositions” expression, and Buchanan and Wagner use it to argue that Keynes’s economic theory operates in a political vacuum where the world of monetary and fiscal policy is carried out by wise men in authority. This intellectual aristocracy could ensure conditions of prosperity, freedom, and even peace. In 2011, after President Obama’s stimulus package, many remarked that “Keynes was back.” In reality, the Keynesian influence never died, and modern macroeconomists and policymakers still suffer from the presuppositions of Harvey Road.
John Cochrane (2022), a Senior Fellow at the Hoover Institution, makes a convincing case that, although inflation generally can be understood as a monetary phenomenon, its roots often can be traced to fiscal dominance—that is, to political pressure to use the central bank to accommodate government deficit spending. Both debt monetization and fiscal helicopter drops—or what Cochrane calls “fiscal inflation”—need to be recognized.
Ryan Bourne reports that, thankfully, “economists still believe in the price mechanism.” (DBx: Well, most economists still believe in the price mechanism. It’s distressing that not all do. Those economists who don’t believe in it – those economists who ‘agreed’ with the propositions in the survey reported by Ryan – are the equivalent of modern-day ‘biologists’ who do not believe in natural selection.)
But the second pair of Roosevelt’s four freedoms, “freedom from fear” and “freedom from want,” are positive ones, and dangerous. They are freedoms to have, like Amartya’s “capabilities.” In the short run, obviously, if the state taxes Giovanni and is enabled thereby to give a positive liberty of free goods and services to Dario, Dario is mightily pleased—at any rate if he does not have ethical worries about the negative liberty not granted to Giovanni. Giovanni in turn views the transfer as an act of goberno ladro, and feels justified to turn to the Italian indoor sport of evading the taxes.
The true threat DeVos posed to the Washington education “blob” was her commitment to localism, pluralism, and federalism in educational matters and her belief that parents should be the ultimate arbiters of how and where their children are educated. These values are anathema to Washington’s self-appointed mandarins and the self-serving national teachers’ unions, which are more interested in pressing their influence in Washington than in fighting for better schools state by state.
Mocking climate-change warriors for their private jets and yachts, far-flung vacation homes, and chauffeured SUVs has become routine among jaundiced observers of the world’s increasingly numerous environmental conferences. Such mockery hasn’t had the slightest effect on the conferees’ conspicuous consumption of the miraculous products of Western innovation and capitalism. The celebrities and climate ministers continue to enjoy their fabulous lifestyles in plain view, confident in the cardinal rule of all environmentalism: one’s own activities are always important enough to be exempt from any environmental limits. Only the other person should have to sacrifice.
Raising two-year-old twins, my wife and I faced the real prospect of having our children taken from us into quarantine facilities with no way to contact them. We deliberately began sharing cups and utensils with our kids with the hope that if one of us contracted Covid, we would all test positive and avoid family separation. We made plans to bar our door if we tested positive and kept a list of emergency numbers, including that of the U.S. Consulate in Shanghai, which would soon order non-emergency employees to depart China.
We also began hearing reports of more compounds in both Pudong and Puxi where residents were unable to receive food deliveries. I began calling colleagues and friends to check in on them, and I discovered, to my horror, how lucky our family was to live in a large, centrally located compound. Several of them who lived in smaller compounds were struggling to get food. The logistical nightmare of a 25-million-person lockdown was already coming into focus.
Nothing made much sense about how the lockdown was implemented, and we had nowhere to turn for answers. In the first month of lockdown, almost no one could leave their apartment for access to healthcare. Of the three times I am aware someone in our compound called an ambulance, each time the ambulance was denied. There is no official toll of those who died due to Covid hospital restrictions, but many stories were shared on WeChat, including that of a nurse who died from asthma after being refused access to her own hospital. Every time one of our kids bumped his head or choked on his food, we immediately entered triage mode because the ambulances weren’t getting through.