Sharing Lungs - Deftones Online Community

Politics, Society etc.

Started by Nailec, Jun 02, 2009, 04:06 PM

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Corleone

lol donald trump would be a great president for the comedy factor alone... obama is so bland


can you imagine the south park episodes? and john stuart?

:)

black coffee

What is happening in Europe?

Lots of countries pissed at the European Union for helping Greece, Portugal and Ireland.
More and more countries with nationalistic thought, right-wing governments and hatred of foreigners.

Yesterday I read an interview of Lars von Trier ( Danish filmmaker ).... he became persona non grata at Cannes film festival for sympathizing with Nazi ideology... he actually said, in Denmark lots of people say "Nazis" when they refer to Germans. First I thought this was a joke, but in fact it wasn't. Makes me wonder if its really the year 2011 and what is going on here.

spitfire

Theres a revolution in the coming years, this democratic bullshit is fake. people are starting to open their eyes and see that this EU is fake just to protect hidden agendas and major corporations interests. 90% of politics are there either to protect their interest/someone else interest and actually dont give a shit about citizens. Here in Portugal things are slowly taking a turn back.

black coffee

#563
Looks to me like we were talking past each other.

Let's stick with your situation since you're from Portugal- your country is pretty much broke, and the people are angry because some will lose their jobs and others have to do short-time work with reduced payment...  but that's the thing: Your country, just like Greece, lived beyond their means for years, and now not only you guys have to deal with it, but all of the European Union has to.
So I don't get why the "blame the Germans" card is always being played, because whoever screws up next time, we have to pay for a big part anyways.

Also, people get mad because they think foreigners take "their" jobs, but thats the wrong attitude.
There is no god given right to work in a certain job, you have to earn it by graduating... and whoever is best qualified for a job should get it.

Obviously open borders and a free market economy won't make your apartment pay for itself, but it means there are so many chances for everyone, and you can either give up right away, blame foreigners and vote for a nationalistic party, or make the best of it and do something with your life.

Just like my uncle, he lives somewhere in the Algarve region in Portugal, doesn't have much cash nor a full-time job, but he did it his way and he's happy with his wife and kids. That's the thing.

theis

Quote from: black coffee on May 21, 2011, 02:39 PM
First I thought this was a joke, but in fact it wasn't. Makes me wonder if its really the year 2011 and what is going on here.

Come on...

He was obviously joking. Lars is a nutcase and has always been known for saying dumb shit. Can't believe that people are getting riled up over this.


Crazylegs

Quote from: theis on May 22, 2011, 01:21 PM
Quote from: black coffee on May 21, 2011, 02:39 PM
First I thought this was a joke, but in fact it wasn't. Makes me wonder if its really the year 2011 and what is going on here.

Come on...

He was obviously joking. Lars is a nutcase and has always been known for saying dumb shit. Can't believe that people are getting riled up over this.



I heard the interview on the radio. He's rowing for his life after he realized what he said. It obviously wasn't how he meant it to come out.

theis


black coffee

In an interview that was held after that incident, he was confronted with what he said before -

"The festivals criticism refers the most to sentences such as "Allright, I am a Nazi".

He replies:

"Let me make this clear - I have a very popular Danish-Jewish name, just like my children.
I've spent a big part of my life exploring my Jewish ancestry, until I found out the man who I thought was my father, was actually not my father. I am in fact of German descent. And in Danish slang Germans are called Nazis, even though that is far from funny, and stupid. I was not a Jew, but a Nazi instead - in other words: a German."

spitfire

Quote from: black coffee on May 22, 2011, 12:56 PM
Looks to me like we were talking past each other.

Let's stick with your situation since you're from Portugal- your country is pretty much broke, and the people are angry because some will lose their jobs and others have to do short-time work with reduced payment...  but that's the thing: Your country, just like Greece, lived beyond their means for years, and now not only you guys have to deal with it, but all of the European Union has to.
So I don't get why the "blame the Germans" card is always being played, because whoever screws up next time, we have to pay for a big part anyways.

Also, people get mad because they think foreigners take "their" jobs, but thats the wrong attitude.
There is no god given right to work in a certain job, you have to earn it by graduating... and whoever is best qualified for a job should get it.

Obviously open borders and a free market economy won't make your apartment pay for itself, but it means there are so many chances for everyone, and you can either give up right away, blame foreigners and vote for a nationalistic party, or make the best of it and do something with your life.

Just like my uncle, he lives somewhere in the Algarve region in Portugal, doesn't have much cash nor a full-time job, but he did it his way and he's happy with his wife and kids. That's the thing.
agree with you about countries living beyond their means for years, i mean decades. EU is a just a corporation to protect hight interests, it doesnt surprise me if it falls apart in the next decade.
concerning your point about immigration, im not right wing, neither against, its normal the existence of immigrants, most carry jobs that the locals dont want to do or think are not well paid. Also would be kinda stupid to be against immigration, since Portugal, got pretty much the same number of emigrants around the world as portuguese in Portugal.
The fact is that this democratic system, as its been implemented is fake, corrupt and lead to this. Real democracy is urgent.

black coffee

Direct democracy as performed in Switzerland on national level could be helpful when it comes to certain topics.
On the other hand European law is more likely to be infringed.... just like Denmark wanting to reintroduce border controls and now getting shit for it from Brussels.

But Politics shouldn't just be the path of least resistance, it has to be more about what the people want and need.

Take Switzerland for it - There was a referendum to forbid the construction of minarets... and while I don't agree with it, it was still what the majority wanted.
And that proves how dangerous direct democracy could be. Because is it always good what the majority wants? Can it be more important than basic law?


black coffee

Quote from: black coffee on May 23, 2011, 10:46 AM
just like Denmark wanting to reintroduce border controls and now getting shit for it from Brussels.

And they're really doing it, in time for the Summer vacation in most countries.

A German politician advised tourists not to go to Denmark for their holidays and rather visit Poland or Austria.
Now they cry out loud because they need German tourists... Its your own fault Denmark, ever heard of the Schengen Agreement?

alvarezbassist17

#572
So how do Germans feel about all of these PIGS bailouts? It really sucks because there are no winners, Germans get fucked and all that happens is benefit to the bondholders of Greece. Sure as hell isn't going to help anyone else besides Greek public-sector workers (in the short term anyways).  Definitely not the majority of the populace.

Also, is anyone in Europe really a fan of the European Union?  All it does is necessitate blanket policies for potentially extremely different societies, force the responsible countries to bail out the irresponsible ones and give the irresponsible countries more rope with which to hang themselves, metaphorically speaking.  Not saying the union in the United States is much better at this juncture, but I would argue that it's precisely because of the belief in a strong central government for a union (and the redistribution that comes with it) that both the US and the EU are having problems.  California, Illinois, New York, are our little Greeces, and will be bailed out in a similar fashion because we have shredded our Constitution which says nowhere that a state bears financial responsibility for another.  But that's where we've gotten to.

Variable

#573
I'm a fan of the EU. Because it makes me feel a little bit better about how fucked up the US is.

The whole western world can burn down at the same time (finally putting a final chapter to those enormous "western civ" text books) and there will be no lone-survivor to act smug about it.

Besides all of Asia of course, who will undoubtedly start their importing their own obtuse "eastern civ" text books into the inferior continents of Europe and the Americas. If nothing else, just to serve as a final "fuck you" to all of the youth in the western world during finals week, and a grim reminder of how we fucked up so bad.

Posterity will laugh someday, at how we were all born with silver spoons, then ended up working in sweat shops making Nike's for the Chinese.

black coffee

#574
Especially in Greece, people are proud citizens, but when it comes to stuff like taxes, they become suspicious... Its pretty much like this : You take as much as you can ( pensions, salaries, moonlighting ), and give as little as possible ( taxes ) ..

An interesting fact - Greece is the country in the world with the most people above 100 years of age who still get pensions...

If you think about it, it's pretty obvious what that means. You bury your mother/father in the garden, and receive the pension from them.
The State is your friend - as long as he gives enough.

Take a look at this- one fourth of all employed people in Greece work for public service. That is not only way too many, but leads us to the next big problem: Nepotism... the elites get their kids into decent positions in public service, and the highly educated without Vitamin B are jobless. That is injustice as its best, but brutal reality.

Also you can hardly operate in Greece without bribing someone... because that is the attitude: You want something from me? Then pay me extra!

I've been to Athens in 2004... we were waiting for a cab one night, there were a lot of people waiting with us and not nearly enough cabs... so we get into one, and the driver immediately tells us "you have to pay extra or you get outside my cab right now and I find someone who pays me the price I want. And believe me I will"

The rules of supply and demand, its that simple.

But again I'm getting side-tracked... I for one like the idea of the European Union. We can travel anywhere, work anywhere. If one country is having problems, we are there for them... that sounds really nice, but doesn't solve the problem at all, because the Greeks know that we will always jump in if they fuck up. Again and again.

alvarezbassist17

#575
Quote from: Variable on Jul 07, 2011, 05:01 AM
I'm a fan of the EU. Because it makes me feel a little bit better about how fucked up the US is.

I dunno man, at least there's some countries in the EU with net exports.  I see what you're saying though.  A similar point is how, at least from my perch on this side of the Atlantic, it seems as if there aren't a whole lot of Euro free marketers, at least compared to over here.  So that makes me feel better, but worse at the same time because the US gov't has done such a better job about suppressing our free marketers.  Maybe it's because we're feigning freedom while actually being socio-fascists and Europe isn't so disingenuous.

Quote from: black coffee on Jul 07, 2011, 11:14 AM
Especially in Greece, people are proud citizens, but when it comes to stuff like taxes, they become suspicious... Its pretty much like this : You take as much as you can ( pensions, salaries, moonlighting ), and give as little as possible ( taxes ) ..

An interesting fact - Greece is the country in the world with the most people above 100 years of age who still get pensions...

If you think about it, it's pretty obvious what that means. You bury your mother/father in the garden, and receive the pension from them.
The State is your friend - as long as he gives enough.

Take a look at this- one fourth of all employed people in Greece work for public service. That is not only way too many, but leads us to the next big problem: Nepotism... the elites get their kids into decent positions in public service, and the highly educated without Vitamin B are jobless. That is injustice as its best, but brutal reality.

Also you can hardly operate in Greece without bribing someone... because that is the attitude: You want something from me? Then pay me extra!

I've been to Athens in 2004... we were waiting for a cab one night, there were a lot of people waiting with us and not nearly enough cabs... so we get into one, and the driver immediately tells us "you have to pay extra or you get outside my cab right now and I find someone who pays me the price I want. And believe me I will"

The rules of supply and demand, its that simple.

But again I'm getting side-tracked... I for one like the idea of the European Union. We can travel anywhere, work anywhere. If one country is having problems, we are there for them... that sounds really nice, but doesn't solve the problem at all, because the Greeks know that we will always jump in if they fuck up. Again and again.

See, that's my central argument.  My hypothesis is that Greece has had such shit policies for such a long time, that it simply bred the type of person you're thinking of and before you knew it, you had a country full of the type of folks you just described.  The thing is, this process, by which people become so used to consuming without actually producing anything, should NOT be sustainable in the long-run.  Greece would have had to have learned its lesson and changed its behavior as an aggregate had they been unable to join the EU and receive all of this assistance.  

It's the same principle with the United States.  Had we been unable to export all of our inflation to those who peg their currencies to the dollar or sell our massive amounts of bonds, our gluttonous (not because of the amount that we consume, but the amount that we have produced, relative to consumption) behavior, along with our shitty labor policies, dumbass socio-fascist environmental regulations,  military adventurism, etc. would not have been able to persist.  

So, for those reasons, fuck that stupid bailout and all of its ilk.  But the point also must be made that it doesn't even help the Greek people anyways; it only helps those who were stupid enough to loan money to Greece anyways (AHEM, GOLDMAN SACHS).

alvarezbassist17

http://wiki.mises.org/wiki/Financial_crisis

Everybody should really check this out.  It's an ever-expanding wiki page on the histories and causes of every major financial crisis in history.  Spoiler Alert: every time, it is solely the fault of government, central banking, government-granted privileges to business, or some combination of the three.  NEVER free-market capitalism.

Variable

Quote from: alvarezbassist17 on Jul 07, 2011, 05:25 PM
Quote from: Variable on Jul 07, 2011, 05:01 AM
I'm a fan of the EU. Because it makes me feel a little bit better about how fucked up the US is.

I dunno man, at least there's some countries in the EU with net exports.  I see what you're saying though.  A similar point is how, at least from my perch on this side of the Atlantic, it seems as if there aren't a whole lot of Euro free marketers, at least compared to over here.  So that makes me feel better, but worse at the same time because the US gov't has done such a better job about suppressing our free marketers.  Maybe it's because we're feigning freedom while actually being socio-fascists and Europe isn't so disingenuous.


Man, there was a perfect skit on the Daily Show tonight to expand on my little joke about how Europe makes me feel better to be an American. I couldn't find the video (probably because I suck) but it was a skit between John Stewart and John Oliver, debating about who was more fucked up; the US or the UK.
It had no real implications about the economic directions that either country are going in. But I still found it very relevant to this conversation. You should try to watch it if you can, not because it's enlightening or smart, just because its ironically relevant to what we are talking about. aired on 07/11/2011.

alvarezbassist17

Had to post these in their full form.  They were too good to pass up.  Enjoy!

A couple weeks ago a critic of the free market, quite appalled that I would exonerate the free market of blame for child labor, poor working conditions, and the like, unleashed a barrage of comments on Twitter directed my way (@ThomasEWoods). She was responding to a blog post in which I promoted this presentation to a group of high school students at the Mises Institute:

Her tweet read, "How right-wing Ayn Rand disciples INDOCTRINATE high school students." Subtle, she isn't.

As I clicked on her various links, I discovered scores, perhaps even hundreds, of common fallacies about the free market. I found very few I hadn't seen numerous times before. I'll take some of them on in this series – not to persuade my critic, who has unfortunately already made up her mind, but to help other people respond to arguments like these and to show people on the fence how backward and easily refuted these claims are.

(1) Among her criticisms was the familiar "survival of the fittest" accusation – why, the market rewards the strongest and grinds everyone else into the dust!

But it is precisely in a pre-capitalist economy – where the division of labor is poorly established and where capital investment is practically nil – that only the fittest survive. As F.A. Hayek pointed out, before the Industrial Revolution those who could not make a living in agriculture and lacked the tools to support themselves in a craft had no way to integrate themselves into the economy at all. The wealth (and employment opportunities) that the market economy creates makes possible the sheer survival of countless millions of the world's weakest and most vulnerable people, for whom the necessities of life would not previously have existed in sufficient abundance to keep them alive.

It is the capital investment that the unhampered market economy encourages that increases people's real incomes over time and makes the necessities of life less expensive over time, relative to wage rates.

When firms increase and improve the equipment and machinery at the disposal of workers, their labor becomes more productive. Imagine someone using a forklift, as opposed to stacking pallets with his bare hands, or producing books with modern equipment as opposed to a 16th-century printing press. The amount of production the economy is capable of is thereby increased, often dramatically, and this increase in production puts corresponding downward pressure on consumer prices (relative to wage rates).

There is nothing natural or inevitable about the availability of this productivity-enhancing capital equipment. It does not fall out of the sky. It comes from the wicked capitalists' abstention from consumption, and the allocation of the unconsumed resources in capital investment.

This process is the only way the general standard of living can rise. Only in this way can the average laborer produce the tiniest fraction of what today he is accustomed to producing. It follows that only under these conditions can he expect to be able to consume the tiniest fraction of what today he is accustomed to consuming.

The increases in the productivity of labor that additional capital brings about push prices down relative to wage rates. By increasing the overall amount of output, such increases raise the ratio of consumers' goods to the supply of labor. Put more simply, improvements in the production process that lead to an increased supply of output make that output cheaper and easier for people to acquire. (On this, see George Reisman, Capitalism, ch. 14.)

That's why, in order to earn the money necessary to acquire a wide range of necessities, far fewer labor hours are necessary today than in the past. Thanks to capital investment, which is what businesses engage in when their profits aren't seized from them, our economy is far more physically productive than it used to be, and therefore consumer goods exist in far greater abundance and are correspondingly less dear relative to wage rates than before.

As I've shown in Rollback, the poverty rate in the United States fell from 95 percent in 1900 to around 12-14 percent in the late 1960s – a period in which government antipoverty measures were fairly trivial. By the late 1960s, when Lyndon Johnson's War on Poverty programs began receiving substantial funding, the poverty rate stagnated. By 1994 it was about the same as it had been in the late 1960s, even though the federal government was by that time spending four times as much per capita as it had under LBJ.

Now suppose the situation had been reversed. Suppose the dramatic fall in poverty had occurred under the War on Poverty, and that it was under the free market that the poverty rate had stagnated. We would never hear the end of it: the free market does nothing to eradicate poverty, and only our wise overlords in the political class can do the job! But when exactly the opposite is the case, the facts are simply passed over in silence.

(2) We read in one of her links: "In the ideology of the free market, freedom is conceived as the absence of interference from others. There are no common ends to which our desires are directed. In the absence of such ends, all that remains is the sheer arbitrary power of one will against another. Freedom thus gives way to the aggrandizement of power and the manipulation of will and desire by the greater power."

Let's take this odd paragraph apart one sentence at a time.

(2)(a) "In the ideology of the free market, freedom is conceived as the absence of interference from others."

Correct. Freedom means no one has the right to initiate aggressive force against anyone else. What else could it mean without becoming Orwellian?

(2)(b) "There are no common ends to which our desires are directed."

I'm not entirely sure what this means. True, no one has the right to force anyone else to pursue any particular end he does not wish to pursue, but why is that a bad thing? Would it be better if we could all be coerced into pursuing particular goals? Are we sure the goals of the coercers would always be laudable? Where do the coercers derive the right to decide for everyone else what their goals should be?

And of course it is not true that, just because guys with guns can't order peaceful people around, we have no common ends in a free market. In the market economy we cater to each other's needs. We fit ourselves into that place in the division of labor where our abilities best serve the most urgent needs of our fellow men. Without any commissar having to dictate what to produce, in what quantities, and in what location, we devise structures of production in which labor, capital, and nature-given factors proceed through a series of stages until the finished consumer good is finally reached. It is an astonishing phenomenon, entirely missed by critics.

There are limitless ways business firms can combine factors of production to produce an equally limitless potential array of goods. Thankfully, firms do not have to grope around in the dark amid these trillions of choices.

If their production process uses an input more urgently needed elsewhere, that input gets bid away from them and they find a substitute. If they produce too much of something, their resulting losses prompt them to produce less, thereby releasing resources for the production of another good that consumers value more highly. At all times, resources are directed, in light of consumer wants, to those production processes in which they are most urgently demanded.

No dictators are necessary to force us into the coerced pursuit of common goals in order to bring about this happy outcome.

And far from dog-eat-dog, the resulting structures are fundamentally cooperative, with the industries in lower-order stages of production depending for their success on the output of the higher-order stages, and the higher-order stages depending on the demand of the lower-order ones. Our critic thinks we can't have common goals unless someone holding a monopoly on the initiation of violence – i.e., a government official – forcibly imposes them on us. This strange proposition is contradicted in a billion ways every day the market economy operates – even in the gravely hampered market economy of today. The title of Frédéric Bastiat's book Economic Harmonies reflects a central though unjustly neglected insight into the true nature of the market economy.

(2)(c) "In the absence of such ends, all that remains is the sheer arbitrary power of one will against another."

This is supposed to be a description of the market economy. It is instead a description of government. How else do we describe the exercise of force by a privileged class against peaceful individuals, in order that the peaceful individuals be expropriated and ordered about by that privileged class?

No one forces you to buy a Twinkie. But governments do force you to fight in their wars and pay for their bailouts. Some people might consider that "sheer arbitrary power." (Those people are probably just right-wing supporters of Ayn Rand.)

(2)(d) "Freedom thus gives way to the aggrandizement of power and the manipulation of will and desire by the greater power."

Again, this has things exactly reversed. It is government that does these things. Ever see governments propagandize for war? They manage to turn their populations against peoples they have never even heard of, much less actually met. If it is manipulation of the public our critic opposes, she might start with the political class in which she reposes so much misplaced confidence.

(3) She linked to this quotation from Abraham Lincoln: "Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."

Unfortunately for her, that quotation is a fake.

To be continued...

alvarezbassist17

#579
Yesterday I replied  to some arguments against capitalism leveled at me by a persistent Twitter critic. I was just getting started. Here are some juicier ones.

(4) Another of her tweets read, "Our main enemies: Corporatocracy, American Empire...."

Supporters of the free market agree with her here, so I do not understand what she could be thinking. Meanwhile, her Twitter avatar includes the logo for Obama 2012. This is cognitive dissonance of an unfortunately very common kind. She believes herself to be an opponent of "corporatocracy" and the "American Empire," while lending support to a candidate and a political party that have done as much as anyone else in this country to bring those very things about.

As Anthony Gregory noted in a recent essay (one of the best I have read in a long time, I might add), Obama

   shoveled money toward corporate America, banks and car manufacturers. He championed the bailouts of the same Wall Street firms his very partisans blamed for the financial collapse. He picked the CEO of General Electric to oversee the unemployment problem. He appointed corporate state regulars for every major role in financial central planning. After guaranteeing a new era of transparency, he conducted all his regulatory business behind a shroud of unprecedented secrecy. He planned his health care scheme, the crown jewel of his domestic agenda, in league with the pharmaceutical and insurance industries.

As for foreign policy, my critic evidently thinks the American empire, which is the product of a thoroughly bipartisan foreign policy extending over sixty years, is the exclusive creation of wicked Republicans. To the contrary, as Andrew Bacevich shows in his new book Washington Rules, the foreign-policy differences between people like Hillary Clinton and John McCain are essentially trivial. Hillary was a major supporter of the Iraq war, as were the New York Times, the Washington Post, and pretty much all the major U.S. newspapers. My critic's own heroes are just as responsible for the morally and economically disastrous American empire project as anyone else.

Again Gregory:

   [Obama] continued the war in Iraq, even extending Bush's schedule with a goal of staying longer than the last administration planned. He tripled the U.S. presence in Afghanistan then took over two years to announce the eventual drawdown to bring it back to only double the Bush presence. He widened the war in Pakistan, launching drone attacks at a dizzying pace. He started a war on false pretenses with Libya, shifting the goal posts and doing it all without Congressional approval. He bombed Yemen and lied about it.

   He enthusiastically signed on to warrantless wiretapping, renditioning, the Patriot Act, prison abuse, detention without trial, violations of habeas corpus, and disgustingly invasive airport security measures. He deported immigrants more than Bush did. He increased funding for the drug war in Mexico. He invoked the Espionage Act more than all previous presidents combined, tortured a whistleblower, and claimed the right to unilaterally kill any U.S. citizen on Earth without even a nod from Congress or a shrug from the courts.

By supporting Obama instead of taking a principled stand against the system, my critic lends aid and comfort to the very "corporatocracy" and "American empire" she claims to oppose.

(5) "Another problem with the idea of the free market is that humans make decisions based upon the short term rather than the long term."

Assuming this dubious psychological generalization to be true, why would it not apply equally well to the political class itself? Why would it not apply equally to the voters who will elect the political class? No one ever answers this question.

And since the unfunded liabilities of the major transfer programs are greater than twice the GDP of the entire world, I think my suspicions are vindicated.

Here her criticism of the market misses the idea of capital value. Does she go 80,000 miles between oil changes? I'll assume not. But if it is some kind of psychological law that "humans make decisions based upon the short term rather than the long run," then why doesn't she? She can save money today, in the short term, by neglecting the maintenance of her car and therefore its performance in the long run. Who cares about the car's condition two years from now? That's the long term! Human beings, she says, don't care about that.

When you own a car, you own the rights to the flow of services it can render over the course of its useful life. That alone gives you ample incentive to think about the long term. The longer a durable good's useful life is, the more services it can render its owner. Therefore, property owners have an interest in taking actions that will increase the lifespan of the good in question.

Do governments operate under such incentives? Of course not. As Hans-Hermann Hoppe has frequently pointed out, the caretakers who operate the machinery of state in a democratic system do not own the resources they employ. Unlike private owners, they have no economic incentive to preserve the capital value of the country. It does not matter to them how long its capital stock lasts, how much debt it accumulates, or how many of its citizens it conscripts and leads to slaughter. These are all long-term questions. Their effects will be felt long after the politicians in question are retired.

(6) "This [alleged psychological law according to which people act only with very short time horizons] enables shrewd individuals or groups to manipulate markets and exploit individuals for their own gain. The invisible hand Smith described is either too slow or becomes too entangled to effectively make corrections to the market in sufficient time to prevent real, long term, harm for occurring. Consequently free-market corrections can produce enormous misery for the many while they take their sweet time to correct the market."

I do not understand this passage. Evidently individuals or groups "manipulate markets" and "exploit individuals," though no examples or definitions of these terms are provided. This anti-social behavior apparently causes the entire market economy to suffer, such that a wrenching recovery process is necessary. These recoveries take too long, and cause further suffering.

Assuming for the sake of argument that these market manipulations, which are never defined or illustrated, really are the cause of recessions – and with the relevant terms not defined and a causal mechanism not even hinted at, I think I am ascribing more dignity to this position than it deserves – we are left to wonder why the economy is not in a state of permanent recession. Aren't greedy manipulators everywhere? If so, why does greed manifest itself only in cyclical patterns, rather than constantly?

Nowhere in my critic's brief is the Federal Reserve System even mentioned. (That is revealing but unfortunately rather typical: an alleged opponent of "corporatocracy" cannot bring herself to mention the institution that backstops some of the fattest of American cats.) She is not even curious enough to wonder what supporters of the free market – whom she imagines as little men with white mustaches, running about with sacks of money with dollar signs on them – might think causes economic downturns.

Our position actually involves a full-fledged theory, not merely a vague pointing of fingers at economic malefactors. In our theory, the central bank – the very institution our critic neglects as if it had absolutely nothing to do with the condition of the economy – interferes with credit markets to push interest rates to below-market levels, thereby setting the stage for a series of consequences that produces first an artificial boom and then an inevitable bust. I explain it in greater detail in my 2009 book (and New York Times bestseller) Meltdown.

The boom-bust cycle, according to the Austrian School of economics, is caused not by the market economy per se but by this intervention into the market. The bust, in turn, is brief or prolonged depending on the response by government.

"The lower interest rates stimulate investment in long-term projects, which are more interest-rate sensitive than shorter-term ones. (Compare the monthly interest paid on a thirty-year mortgage with the interest paid on a two-year mortgage — a tiny drop in interest rates will have a substantial impact on the former but a negligible impact on the latter.) Additional investment in, say, research and development (R&D), which can take many years to bear fruit, will suddenly seem profitable, whereas it would not have been profitable without the lower financing costs brought about by the lower interest rates.

We describe R&D as belonging to a "higher-order" stage of production than a retail establishment selling hats, for example, since the hats are immediately available to consumers while the commercial results of R&D will not be available for a relatively long time. The closer a stage of production is to the finished consumer good to which it contributes, the lower a stage we describe it as occupying.

On the free market, interest rates coordinate production across time. They ensure that the production structure is configured in a way that conforms to consumer preferences. If consumers want more of existing goods right now, the lower-orde...r stages of production expand. If, on the other hand, they are willing to postpone consumption in the present, interest rates encourage entrepreneurs to use this opportunity to devote factors of production to projects not geared toward satisfying immediate consumer wants, but which, once they come to fruition, will yield a greater supply of consumer goods in the future.

Had the lower interest rates in our example been the result of voluntary saving by the public instead of central-bank intervention, the relative decrease in consumption spending that is a correlate of such saving would have released resources for use in the higher-order stages of production. In other words, in the case of genuine saving, demand for consumer goods undergoes a relative decline; people are saving more and spending less than they used to.

Consumer-goods industries, in turn, undergo a relative contraction in response to the decrease in demand for consumer goods. Factors of production that these industries once used — trucking services, for instance — are now released for use in more remote stages of the structure of production. Likewise for labor, steel, and other nonspecific inputs.

When the market's freely established structure of interest rates is tampered with, this coordinating function is disrupted. Increased investment in higher-order stages of production is undertaken at a time when demand for consumer goods has not slackened. The time structure of production is distorted such that it no longer corresponds to the time pattern of consumer demand. Consumers are demanding goods in the present at a time when investment in future production is being disproportionately undertaken.

Thus, when lower interest rates are the result of central bank policy rather than genuine saving, no letup in consumer demand has taken place. (If anything, the lower rates make people even more likely to spend than before.) In this case, resources have not been released for use in the higher-order stages. The economy instead finds itself in a tug-of-war over resources between the higher- and lower-order stages of production.

With resources unexpectedly scarce, the resulting rise in costs threatens the profitability of the higher-order projects. The central bank can artificially expand credit still further in order to bolster the higher-order stages' position in the tug of war, but it merely postpones the inevitable.

If the public's freely expressed pattern of saving and consumption will not support the diversion of resources to the higher-order stages, but, in fact, pulls those resources back to those firms dealing directly in finished consumer goods, ...then the central bank is in a war against reality. It will eventually have to decide whether, in order to validate all the higher-order expansion, it is prepared to expand credit at a galloping rate and risk destroying the currency altogether, or whether instead it must slow or abandon its expansion and let the economy adjust itself to real conditions.

It is important to notice that the problem is not a deficiency of consumption spending, as the popular view would have it. If anything, the trouble comes from too much consumption spending, and as a result too little channeling of funds to other kinds of spending — namely, the expansion of higher-order stages of production that cannot be profitably completed because the necessary resources are being pulled away precisely by the relatively (and unexpectedly) stronger demand for consumer goods. Stimulating consumption spending can only make things worse, by intensifying the strain on the already collapsing profitability of investment in higher-order stages.

Note also that the precipitating factor of the business cycle is not some phenomenon inherent in the free market. It is intervention into the market that brings about the cycle of unsustainable boom and inevitable bust. As business-cycle theorist Roger Garrison succinctly puts it, 'Savings gets us genuine growth; credit expansion gets us boom and bust.'"

The first time government responded to a depression with a ceaseless program of intervention, namely the Great Depression, was also the first one to last so long.  It was different in 1920-21

"The economic situation in 1920 was grim. By that year unemployment had jumped from 4 percent to nearly 12 percent, and GNP declined 17 percent. No wonder, then, that Secretary of Commerce Herbert Hoover — falsely characterized as a supporter of laissez-faire economics — urged President Harding to consider an array of interventions to turn the economy around. Hoover was ignored.

Instead of "fiscal stimulus," Harding cut the government's budget nearly in half between 1920 and 1922. The rest of Harding's approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third.

The Federal Reserve's activity, moreover, was hardly noticeable. As one economic historian puts it, "Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction." By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and it was only 2.4 percent by 1923.

It is instructive to compare the American response in this period to that of Japan. In 1920, the Japanese government introduced the fundamentals of a planned economy, with the aim of keeping prices artificially high. According to economist Benjamin Anderson,

'The great banks, the concentrated industries, and the government got together, destroyed the freedom of the markets, arrested the decline in commodity prices, and held the Japanese price level high above the receding world level for seven years. During these years Japan endured chronic industrial stagnation and at the end, in 1927, she had a banking crisis of such severity that many great branch bank systems went down, as well as many industries. It was a stupid policy. In the effort to avert losses on inventory representing one year's production, Japan lost seven years.'"


Again, suppose the situation were reversed. Suppose the depression of 1920-21, in which the federal government and the Federal Reserve did next to nothing, had persisted for a decade, but the Great Depression had lasted only a year or two after the New Deal programs were instituted. We would never hear the end of it: why, this proves the stupid free market can't correct itself! We need our wise overlords!

But when the truth of the matter is exactly the opposite, we hear only crickets.

(7) "FREE MARKET ENCOURAGES the elimination of the weak."

Then why have population figures and life expectancy exploded under capitalism? Why do the poorest enjoy the greatest material advantages in those countries where the free market is least hampered by violent intervention?

(8) "It quickly became apparent that humans could be sold products with lower or even negative utility by appealing to the consumer on a deeper emotional level.... This discovery along with mass advertising enabled by mass communication effectively destroyed the free market observed by Adam Smith."

This is a bastardized version of John Kenneth Galbraith's critique of the market. According to this argument, the market isn't really free because advertising brainwashes consumers into buying whatever product a clever firm offers them. But as Murray Rothbard noted long ago, if this critique were correct we would have a hard time accounting for how much money firms devote to marketing research to try to ascertain whether consumer demand exists for the product they seek to develop. Why bother spending so much time and money figuring out what consumers want if a clever advertisement is enough to snooker them into buying almost anything?

All the advertising in the world couldn't save New Coke or the Edsel, and once people can download music in mp3 format or watch streaming movies, no amount of celebrity endorsements is going to prop up Sam Goody's or Blockbuster.

To be continued...