The Conservative Case Against Rand Paul

October 4th, 2010 at 11:14 am | 137 Comments |

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In my more generous moods, I am apt to excuse Kentucky Republicans for nominating Rand Paul for Senate. To the rank-and-file, he is not a man, but a symbol: he, like his father, comes out swinging with his hard-edged libertarianism and veneration of constitutional originalism. He doesn’t mince words for the media like, say, Mitch McConnell, and he’s never held political office. He’s proudly angry, and he’s not in the good graces of Senate Republicans or the Republican National Committee.

I can sympathize with the discontent of the Tea Party. All that I listed makes for very compelling abstract symbolism. Unfortunately, we are not sending a symbol to the Senate.

Rand Paul has hijacked the Tea Party movement to appropriate it to his family’s radical brand of libertarianism. Led by Lew Rockwell and Thomas Woods, two of Ron Paul’s most prominent boosters, the ‘paleo-libertarian’ movement that the Pauls belong to has done a pretty good job of hiding its fringe elements from the eye of the mainstream media and the broader public.

Rand Paul has not been as active as his father in this movement, but from the available evidence, we know that at the very least, he is a fellow-traveler. Paul is on record as believing in a conspiracy to create a “North American Union,” warning ominously of the imminence of a new currency called the “amero.” He regularly sits down to chat with radio talk show host Alex Jones, a man who believes that the United States government is behind 9/11. Rockwell, infamous for his pro-Confederate views, has been boosting Rand Paul since the start, and has sat down to interview him. (Playing a simple game of connect-the-dots, is it any wonder that a man like this wants to abolish the Federal Reserve? Has anyone asked him about the Bilderberg Group yet?)

No one on the right would — or should — give Harry Reid or Nancy Pelosi a free pass if they allowed a 9/11 Truther to casually interview them about tax policy. Alex Jones, in between slamming the U.S. government for knocking down the Twin Towers, calls Rand Paul “real change” in 2010.

We turn, then, to the only viable alternative to Mr. Paul. Jack Conway is not a particularly compelling candidate, but he is not a radical. Although he supports Obamacare, he also supports extending the Bush tax cuts, opposes feckless cap-and-trade measures, and is certainly stronger on national security issues than Rand Paul, who, in the final analysis, believes that the United States is an oppressive global empire which has no business being in Afghanistan — or anywhere else.

Paul, like his father, does not believe in the American exceptionalism of Ronald Reagan’s variety. Indeed, he doesn’t even share the views of Sharron Angle. Paul’s America — one without NAFTA, one in which the Federal Reserve magically disappears overnight, one in which America retains no global military presence — is utterly oblivious to the economic and military realities of the 21st century. It is oblivious to the changes that globalization is demanding of us and it is oblivious to the military and cultural threats of Islamic fanaticism.

More saliently, it is completely oblivious to the practicalities that cultural change demands. One can’t even make the argument that I should hold my nose and support Paul on the basis that he’ll be a vote for most Republican legislation. If he’s truly a Mini-Me clone of his father — which he appears to be — then he’ll oppose most of the party’s legislation, anyway! At least with Conway, who seems to resemble Ben Nelson more than Barbara Boxer, we’d retain a fighting chance of winning his vote on crucial legislation. Ron Paul, with his exhaustive history of making the perfect the enemy of the good, has proven to be totally useless where it counts. At the heart of everything, Rand Paul, like his father, is an ideologue, and the rules of Congress do not cater to ideologues.

Because of Rand Paul’s ideological rigidity, we face this reality: no matter who wins in Kentucky in November, the Republicans have lost a key vote on many major issues. We should at least honor sanity by sending the man to Congress who doesn’t affiliate himself with anti-American conspiracy theorists.

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137 Comments so far ↓

  • CD-Host

    Willy –

    Are you even reading the articles you are posting? Inflation is a quiet but effective way for the government to transfer resources from the people to itself, without raising taxes. Agreed. What does that have to do with fiat vs. hard money? Both systems allow for inflation. Even what vindician is arguing for i.e. no fractional reserves, allows for accidental inflation, 1896-1907 USA being a perfect example. I’m not even sure if it does prevent government inflation because neither one of you has explained what the banking system would look like yet, or if one would even exist. At this point the proposal has essentially an ancient coinage system with people using precious metals for money and a layer of storage and checks that don’t seem to serve much purpose.

  • Those Fake Conservatives Love Obamacare | Robert L. Bryant

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  • WillyP

    cd,
    I was responding to your assertion that fiat money has nothing to do with spending. It does; governments print fiat money, and therefore have no practical limit on spending.

    I told you how the banking system would work earlier – warehousing and investing. Notes would represent coins in vaults. Every week or month, the accounts would be settled and the gold moved from one bank to another, keeping everybody honest. If a paper not got tired, you’d go to the bank, they’d destroy it, and issue you a new one.

    Inflation is, what? The creation of specie or credit out of thin air, correct? You cannot create gold out of thin air. You could create a new NOTE, representing a certain weight of gold, with a printer… but that would be fraud, or counterfeiting.

    In days past, Kings (and FDR for that matter) used to have to collect all the gold and debase it. This was a considerable challenge and not exactly surreptitious. FDR seized gold for notes, and then flooded the market with the collected gold, reducing the value of the notes by 30%. It was economically identical to coin debasement, and accomplished the same ends.

    There’s no need for any of that now. All our government (i.e. our Fed) has to do is announce that it’s inflating. “We’ll be buying $500 billion worth of government bonds with freshly printed money.” Isn’t that, uh, inflation? Isn’t that monetizing government debt? Does that not effectively remove nearly all spending restraints on the government? Yes, eventually they have a limit too; it’s called hyperinflation.

    I don’t actually know what you’re arguing. Do you like fiat money? Do you like fractional reserve banking? Do you like what the Fed has done with our money supply and the value of our savings, not to mention the entire economy?

    What system are you advocating? I am delivering a consistent system that would prevent inflation by both banks and governments, and accomplish it through the gold standard. Alternatively, we could do away with any standard and let the market choose its own money. In times past, such “policy” (or lack thereof) has resulted in gold and silver being selected as the best monies. It doesn’t matter per se what the commodity standard is, just that one (or more!) exists!

    I don’t understand how a full reserve system based on commodity money could result in inflation, except perhaps in some very special and minor cases (bad accounting, for example). I’ve never read of a case of “accidental inflation.” Inflation is a deliberate choice. “Oh no, I’m accidentally pregnant! How did this ever happen!”

  • vindician

    CD-host

    I have not said that the US has had full reserve banking, I merely pointed out that banking was invented long before the US was even thought of, and that banking in the beginning consisted of deposit banking and loan banking. Fractional reserve banking was originally considered fraud, and rightfully so. The usual penalty for that was death, not seldom at the hands of the defrauded lynch mob. The first step towards legalization of FRB was taken in England in 1811, the case Carr vs. Carr, many centuries after banking had been invented.

    Your analogy does not bear much relevance to our discussion, and I would advice you to tone down your arrogance, because that won’t carry far in a discussion about banking with me. As for your “most famous speech” that is a ridiculous claim. In addition, many American politicians and scholars have been great advocates of the gold standard. You might want to read what the Constitution says about money. I think it was something about only gold and silver being legal tender.

  • vindician

    CD-host

    What on earth does a publication in 1867 have to do with anything? The claim was that no one cited the preservation of slavery as the reason for secession before the war began. Not even the Northern politicians cited slavery as a reason for invading the South, because they knew that their citizens would never agree to a war over slavery alone. Lincoln couldn’t have cared less about the slaves and repeatedly said so. It was about the tariffs imposed on the South. Slavery became a political issue only after the war had begun. Lincoln even supported fugitive slave laws.

    And who mentioned banking policy?

  • vindician

    CD-host

    If you can’t discern between hard money and fiat paper money, then you have no place in this discussion. Governments can literally create billions and trillions of dollars out of thin air with the stroke of a key , and have repeatedly done so in the past. This is impossible under a gold standard with full reserve banking, as the government can’t conjure up gold out of thin air.

    Are you actually saying you don’t grasp this fairly obvious fact?

  • WaStateUrbanGOPer

    Apparently Rand Paul is now promosing Kentucky voters he won’t support medicare cuts. Maybe Knepper’s right and Jack Conway isn’t such a terrible choice.

    I suppose there is a conservative case against Paul now.

  • CD-Host

    WillyP –

    Inflation is, what? The creation of specie or credit out of thin air, correct?

    No not correct. Inflation is a general rise in the price of goods. It makes no difference whether there is a hard metal behind the rise or not.

    If you have an economy if a fixed size on a gold standard and a technological innovation occurs that leads to a sudden surge in gold production you get inflation. That is precisely what happened in 1896-1907.

    If you have a growing economy and an essentially fixed amount of gold you have deflation. That’s essentially what happened in 1873-1896.

    You cannot create gold out of thin air. You could create a new NOTE, representing a certain weight of gold, with a printer… but that would be fraud, or counterfeiting.

    So what? The notes don’t represent gold they are redeemable for gold. Or more likely they are redeemable for certificates redeemable for gold, or 3 levels removed or 4 levels removed or 5 levels removed.

    For example in today’s money we have
    M: actual currency
    M0: The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency.
    M1: The total of all physical currency part of bank reserves + the amount in demand accounts (“checking” or “current” accounts).
    M2: M1 + most savings accounts, money market accounts, retail money market mutual funds,and small denomination time deposits (certificates of deposit of under $100,000).
    M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements.

    All throughout the 1970s we experienced an increase in monetary velocity. That is a situation where these higher measures are growing faster than the lower measures. So for example in 1979 M1 grew by 9% but M2 by 12%. In fact this sort of divergence is not at all uncommon:
    http://upload.wikimedia.org/wikipedia/en/a/a4/Changes_in_US_money_supply_1960-2007.gif

    I don’t actually know what you’re arguing.

    Well originally I was arguing that monometalism is a terrible idea. But at that point I thought I was arguing against the gold standard. That is to say something like Portugal or the UK’s system in the 19th century.

    Then it became clear that neither of you was actually even arguing for the gold standard. You were arguing for a system that existed in the middle ages when paper money began to be used, primarily for trade over dangerous routes. So it stopped being an argument about what was better, but a simple question of historical fact. What was banking law in the 19th century. And I’m arguing both of you are absolutely dead wrong and grossly oversimplifying the banking system we had back then.

    Everyone is entitled to their own opinion but not their own facts. This debate really isn’t about right or wrong or good or bad. It is a simple question of history.

    Now in terms of my personal opinion…. I’m mixed. I think our current monetary system is doing a pretty good job of accomplishing the goals of our government: high levels of adjustability, internal price stability, moderate – high level of international trade. It does so at the cost of creating a government which has infinite financial power. While there are some checks and balanced to avoid abuse, they are more a matter of convention so I have little confidence in them and the history so far is not good.

    I’d be interested in having a real discussion with someone who was proposing another system. But I would expect them to be able to address all the what-if type questions. There were very good reasons mono-metalism failed in the United States. I’d expect someone arguing for a return to propose mechanism to avoid those problems, and that requires that they are dealing with actual complexities of real policy and real history.

    And that’s my opinion.

  • WillyP

    cd,
    “Inflation is a general rise in the price of goods. It makes no difference whether there is a hard metal behind the rise or not.”

    See, when you are supposed to be heading West, and you head East instead, no matter how many times you turn to the North or to the South… until you turn around and actually head West you’ll never be on course.

    Inflation is my definition. You are describing one necessary effect of inflation.

    It’s not a question of history. It’s a question of economics, which is a science all to itself. Specifically it’s a question of catallactics, or the science of exchange.

    OK I’m done.

  • CD-Host

    Vindican –

    I have not said that the US has had full reserve banking,
    Well actually:

    Oct 5, 2010 at 11:40 am
    As explained, the amount of M1-dollars and ounces of gold are not important, they only serve to fix the definition of a dollar if its defined as a given amount of gold. The more M1-dollars and the less ounces, the smaller amount of gold one dollar will be.

    The first step towards legalization of FRB was taken in England in 1811, the case Carr vs. Carr, many centuries after banking had been invented.

    And no. While we don’t know for sure what “praescriptiones” were (1st century) we know for sure that ṣakks/chaks were in use in Persia by the 3rd century. The very first European banks, came from people traveling to Muslim countries and hence the term cheque came into European speech in the 12th century. That is banking entered Europe at the same time as checks / fractional reserves.

    What Carr vs. Carr established was an accounting principle that debt could be treated as an asset and carried on the books as such. I’ve seen articles arguing that this accounting principle is vital for fractional reserve banking but you can see this is obviously untrue by just looking at the bond or stock market today. Synthetic treasuries far far outnumber actual treasuries and the government doesn’t create synthetic treasury bonds. They are a creation of the free market. I’m going to end with a link to mises.org which discusses Hayek vs. Rothbard on the whole fractional reserve issue.
    http://mises.org/journals/rae/pdf/RAE9_1_3.pdf

    You’ll see a couple of quotes like Hayak arguing that full reserve banks aren’t really banks at all but “the role of brokers, trading in savings”. You’ll also see this was a theoretical conversation, because the type of bank you are talking about hadn’t existed for centuries when Hayek and Rothbard were writing. They had to argue that such banks could ever be profitable.

    Hopefully if you won’t take my word for it, mises.org is a good enough source.

  • CD-Host

    Willy –

    Inflation is my definition. You are describing one necessary effect of inflation.

    You don’t get to define inflation. It is a well defined term. You want to discuss economics with the rest of American society you need to use their terms. But just to show you weren’t just having a definition argument:

    Oct 5, 2010 at 9:23 am
    why would you ever purposefully destroy the integrity of the unit of account through distorting its worth through incessant inflation?

    Oct 5, 2010 at 1:41 pm
    Isn’t that, uh, inflation? Isn’t that monetizing government debt? Does that not effectively remove nearly all spending restraints on the government?

  • vindician

    CD-host

    I’ve been discussing monetary theory and history for a long time. However, you don’t seem to have enough knowledge of either to hold up your end of the discussion.

    Inflation is the increase in the money supply. A natural consequence of that is rising nominal prices (or nominal prices not falling fast enough). Deflation is the opposite of inflation.

    Bank notes under a gold standard are money certificates, representing a given amount of gold held by the issuing bank. I don’t know what you’re talking about.

    You may at some point have been arguing that monometallism is a terrible idea, buy you’ve failed to produce any serious argument. You can maintain that “we are dead wrong”, but again, you’ve produced nothing to support that claim. To the contrary, you have flaunted your ignorance in almost every comment you’ve posted.

    You are right that our current monetary system is doing a good job of achieving our government’s objectives. The problem is, those objectives are completely at odds with the public interest.

    Secondly, how anyone can claim that price stability has been achieved or even been a true objective of government is outrageous. The dollar has lost over 95% of its value since the creation of the Fed and continues to lose value every day. This is why every working American has to become a speculator and gamble with his pension on the stock market, buying expensive financial services and insurance policies. He can’t save his money in the bank or in his home, like he could from the birth of the US until 1913, because if he does so, the government will have robbed him the value of his savings through the inflation tax.

    As for the “high level of international trade”, the US international trade is very one-sided with a 40-50 billion trade deficit per month, an ever shrinking manufacturing base and skyrocketing debts, both national and individual.

    To say that the government does all these “good” things at the cost of having infinite financial power is as ludicrous as Paul Samuelson’s question whether the loss of civil and economic liberties in the USSR was worth the economic prosperity created by the command economy. There is no trade off her, just a rip off. The government has infinite financial power and with that power it plunders the public through inflation and destroys the economy.

    The gold standard did not fail in the US in the 19th century any more than the gold standard failed under the Bretton Woods system. As long as fractional reserve banking is allowed, there cannot be a gold standard. As for failure, what do you call the economic mayhem visited upon us since the creation of the Fed? What do you call the recurring economic crises, ever growing and appearing with shorter and shorter intervals? What is that, if not evidence of the colossal failure of fiat paper money?

    I have addressed every “what if question” you’ve posed, you haven’t answered any questions or responded to any arguments.

    And as for you “reply” to my comment, how exactly is declaring that the M1 and gold ounce amounts are not important synonymous to saying that there has never been full reserve banking in the US?

    It is obvious that you don’t understand how the accounting of FRB works from your description of Carr vs. Carr, which was a milestone in the legalizing of FRB. The mere use of cheques doesn’t constitute FRB, by the way. Carr vs. Carr declared that a deposit was no longer considered a bailment, but a loan from the depositor to the banker. With that loan, the banker assumed the property right of the deposited amount, allowing him to lend it out. This is the very essence of FRB. What the present day bond market has to do with anything is beyond me.

    Likewise, you misunderstand completely the so called discussion between Hayek and Rothbard. There is no reason to suggest that deposit banks and loan banks couldn’t be profitable, even less to say that they aren’t real banks. Such claims are utterly ridiculous and crumble at first scrutiny.

  • WillyP

    the problem is, if you use inflation to describe a general rise in prices, you are not left with any word to describe legal counterfeiting.

    i don’t realllly care what words we use… my points stand as correct.

  • CD-Host

    Wow you two are really too much. Lets some real data on the meaning of the word:

    U.S. Bureau of Labor Statistics (the people who publish the CPI): Inflation can be defined as the overall general upward price movement of goods and services in an economy. BLS has various indexes that measure different aspects of inflation. . Of course the CPI is the standard measure of US inflation.

    Wyplosz & Burda 1997 (Glossary), Blanchard 2000 (Glossary), Barro 1997 (Glossary)
    Abel & Bernanke 1995 (Glossary), inflation is a rise in the general level of prices of goods and services in an economy over a period of time

    And just to pick an Austrian Lawrence White: an ongoing rise in the general level of prices quoted in units of money.

    Investopedia: The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

    Your constant ad-homonym attacks that I don’t know what I’m talking about when I quote actual history as opposed imaginary nonsense, actual policy of actual central banks actual data and definitions of actual central banks has gone on enough. You can have the last word in discussing how nice it would be to return to systems that never existed, in terms of policy debates that never happened.

  • WillyP

    here’s what prof. mises had to say:

    “Everybody knows that inflation consists of a large increase in the available quantity of money and money substitutes such as bank credits. In a country like the United States, which transacts so much of its business by checks and through bank credits, the main vehicle of inflation is not so much the printing of additional paper money as the increase of deposit currency. Everybody also knows that a general rise of prices and wages is the unavoidable and inescapable result of inflation. And finally, most people realize that when inflation is going on price control is a quite ineffective method of controlling prices and wages; at best, it is a temporary expedient to break or postpone the force of inflationary effects.”

    http://mises.org/efandi/ch18.asp

    or:
    “What many people today call inflation or deflation is no longer the great increase or decline in the supply of money, but its inexorable consequences, the general tendency toward a rise or fall in commodity prices and wage rates” (Ludwig von +Mises Human Action 1963, p423).

  • vindician

    CD-host

    Who cares what a government agency calls inflation. A rise in prices is exactly that, a rise in prices. The question is why does prices rise. There are a number of reasons for that, inflation being one of them. In addition, inflation has other effects than rising prices, effects that are far more serious. Also, have you ever considered why inflation is just the price level rising for no apparent reason, but hyperinflation is the excessive printing of money?

    Your last basking in self pity pretty much sums up your “contribution” to this discussion. You leave having left virtually all arguments and questions unanswered. Good riddance.

  • WillyP

    more to the point, how is there a “general rise in prices” without a rise in specie? again, we’re not really discussing only semantics, but trying to establish what LEADS to the general price rise.

    the answer, of course, is additional specie/credit. this is a result of a) FRB b) Fed counterfeiting.

    anybody seriously going to argue these points? they’re almost tautological.

  • CD-Host

    Willy –

    Here is an article from mises.org on exactly this topic: http://mises.org/daily/3018
    The author does agree, “here is almost complete unanimity among economists and various commentators that inflation consists in general increases in the prices of goods and services. ” but then goes on to argue we should use the definition of an increase in the money supply. I’m not pulling your leg here you are using a completely non standard definition.

    Notice the difference between his definition and yours: available quantity of money and money substitutes such as bank credits the main vehicle of inflation is not so much the printing of additional paper money as the increase of deposit currency.

    That would still be wrong, or at least using a non standard definition, but it is getting closer. Part of the problem you are having is that you haven’t actually defined the money supply in your vision yet. For Mises himself though it is a bit more tricky:

    In theoretical investigation there is only one meaning that can rationally be
    attached to the expression Inflation: an increase in the quantity of money
    (in the broader sense of the term, so as to include fiduciary media as
    well), that is not offset by a corresponding increase in the need for money (again
    in the broader sense of the term), so that a fall in the objective
    exchange-value of money must occur. Again, Deflation (or
    Restriction, or Contraction) signifies: a diminution of the quantity of
    money (in the broader sense) which is not offset by a corresponding
    diminution of the demand for money (in the broader sense), so that an
    increase in the objective exchange-value of money must occur.

    Note he was using this definition in a purely theoretical sense.

    For practical usage, he used the standard definition:
    They ignore these necessarily perpetual fluctuations as far as they are
    only small and inconspicuous, and reserve the use of the terms [inflation and deflation] to big
    changes in purchasing power. Since the question at what point a change
    in purchasing power begins to deserve being called big depends on
    personal relevance judgments, it becomes manifest that inflation and deflation are
    terms lacking the categorial precision required for praxeological, economic, and
    catallactic concepts.

    If you want a good source about what Mises thought about the definition: http://libertarianpapers.org/articles/2009/lp-1-43.pdf

  • WillyP

    Right, and you’ve just quoted a number of sources that explicitly reject the term “inflation” as a general price rise, from Frank Shostak to Mises.

    You finished my argument for me… thanks librarian.

    An increase in money or money substitutes. Did I not say that before? Have I not used the term “fiduciary media” on several occasions in describing what constitutes the full money supply?

    You’re very odd, and I don’t think you’re quite getting that you’ve conceded your original point. An arbitrary increase in specie/fiduciary media/credit/MONEY causes a general rise in prices, ceteris paribus.

    I’ll go further an qualify it… if the money supply increases due to counterfeiting, but the counterfeiter never spends it, the “price level” will not change because it will have no effect on the bidding process.

    I don’t really think you need to send me links on Mises as I’ve read nearly a dozen of his books and monographs, and likely a hundred of his articles, including Socialism, Nation, State, and Economy, Omnipotent Government, the Anti-Capitalist Mentality, Marxism Unmasked, The Nationalization of Credit, Interventionism: An Economic Analysis, Bureaucracy, Economic Calculation in the Socialist Commonwealth, large chunks of Human Action, etc….

    To give you a sense of where I’m coming from, I’ve also read much Bastiat, Carl Menger, Hayek, Rothbard, and George Reisman. I think I have a pretty good handle on my semantics.

  • vindician

    CD-host

    I take it you’re not going to answer the criticisms to your claim that the present monetary system has been “doing a good job”?

    This is main reason for why it is so difficult to have a rational debate about these issues. People like you, who in lack of anything else, advocate the present systems seem to assume that whatever we have now is the best we’ve ever had. Typical positivism. From there you always assert that anyone who suggests change must make the case for change. It is never you that have to make the case for keeping the status quo.

    Considering the fact that we once again find ourselves in a gigantic economic mess, which is proven to have been brought on by the inherent and structural flaws of the present system, I really think its time you admit that the burden of proof is on you. If you want to maintain that the present monetary systems works, and works well even, you really need to start addressing the criticisms against it and explain why we constantly go from crisis to bigger crisis, and why it is a good thing that the value of incomes and savings is systematically transferred from society’s poorest to society’s richest.

    Before you do that, you have no right demanding answers from anyone else, certainly not after all the answers have been given and you’ve simply chosen to ignore them.

  • Non-Contributor

    Anyone saying that the Fed is counterfeiting won’t ever be taken seriously.

    No credible economist is arguing if the monetary system is working or if it needs to be somehow radically changed. The debate is how best to increase employment without creating either inflation or deflation.

  • CD-Host

    Vindician –

    I was giving up on talking. Quite simply the tone plus ignoring the counter evidence made me consider this fruitless.

    Considering the fact that we once again find ourselves in a gigantic economic mess, which is proven to have been brought on by the inherent and structural flaws of the present system, I really think its time you admit that the burden of proof is on you. If you want to maintain that the present monetary systems works, and works well even, you really need to start addressing the criticisms against it and explain why we constantly go from crisis to bigger crisis, and why it is a good thing that the value of incomes and savings is systematically transferred from society’s poorest to society’s richest.

    Well the first thing I would say is that present needs to be compared an actual system as it actually existed in another country at a place in time. What you are advocating, is not a system that existed in the modern world but rather a system that died in the middle ages. So why did it die?

    In most societies at most places at time that have a currency there is an obvious imbalance, called the duration mismatch. There are more people (or actually a higher percentage of the monetary base) who want to make short term loans than want to borrow short term. That is people who want to hold liquid reserves but don’t actually want to spend exceeds the amount of short term investment the economy can absorb. There is however a tremendous amount of long term, more than enough to absorb this short term money, but this investment is illiquid.

    The obvious solution is an institution that pools the short term lenders together and provides loans to the long term illiquid lenders. That is what banking is. The whole purpose of a monetary system, rather than simply using precious metals, is to allow for banking. (And again I’m using banking in the borrow short, lend long sense; I don’t consider what you were describing to be banks at all).

    With all this nonsense about counterfeiting, fraud and fake history we couldn’t get to this point. But this is absolutely the core point. Any system that doesn’t allow for banking simply isn’t a monetary system at all. So the argument I wanted to have was about the best monetary system. The argument you wanted to have is why as a society we should have banks.

    The reason we should have banks is to divert a much higher percentage of societies assets into investment than would be the case without banks. That is have much higher economic growth and a higher standard of living. Once a society gets it, that is understands the point of banking, they don’t go back. Abandoning banking would be like abandoning the wheel, the alphabet or mass production. The idea of not having it simply isn’t even a consideration. I kept trying to give you analogies that people create this borrow short / lend long layer everywhere in our society when it doesn’t exist because they don’t want the inefficiencies of simply having warehousing. Clearinghouses vs. brokerages or synthetic vs. actual bonds were too examples. Hayak made the same point so this isn’t even debated by Austrians. I’m not sure whether you were being deliberately obtuse or not. But you were being rude, so I gave up.

    Your cure of eliminating banking is far worse than the disease. You want to move money down the ladder tax the wealthy and have welfare for the poor. That problem is easy to fix compared to fixing the duration mismatch problem.

  • vindician

    CD-host

    What counter evidence? You’ve offered nothing but opinions and misinterpretations in addition to outright falsehoods, and you’ve been called on it.

    Firstly, the present system doesn’t need to be compared to anything, it can be examined on its own merits alone. This is an inherent logical flaw in positivism, the inability to evaluate a system without comparing it to something else. During the course of human history, many systems have been discarded without reference to some other, existing system. If change was dependent on the existence of something else, then change would never occur.

    Why do we have our present system? You could begin answering that question with considering who it was that wrote the Federal Reserve Act and who benefits from it. Any thoughts on that perhaps? For a historical, you might consider the fact that the kings and emperors of old always strived to debase their nations’ currency, because that was a convenient way of enriching themselves. You may also take a moment to ponder the fact that the will and objectives of the government is quite often completely at odds with the will and objectives of the people.

    There is no one definition of banking, there are various types of banking. Deposit banking and loan banking are the original forms of banking. What you describe (or try to describe) is financial intermediary, which is part of loan banking.

    The purpose of a monetary system is to facilitate exchange. The use of medium of exchange, that is money, predates banking by thousands of years. So your claim is demonstrably false, which has been the case with most of the things you’ve claimed. What you consider to be banking or not is utterly irrelevant, because you clearly have no idea what you are talking about.

    I understand that for a positivist statist like yourself, such things as fraud, counterfeiting and false history isn’t important. Well, that will have to remain a description of your morals. The notion that a system of sound money wouldn’t allow for banking is ridiculous. By that logic, what you’re saying is that banking, and therefore a monetary system as a whole, is impossible if you don’t grant a small number of actors the legal right to counterfeit and commit fraud. Well, if you want to think that then that is your business, but that being the case, you can hardly be surprised when you’re called on your ignorance.

    Since no one is objecting to the existence of banks, quite the contrary, your whole paragraph about why we should have banks was unnecessary. Your analogies were completely irrelevant to the present discussion, and your constant wallowing in self pity just annoying. And for all your comments, you still haven’t addressed any of the criticisms and arguments against the present system. This is probably because you, like Krugman, don’t argue against what your opponent actually says. Instead, you make something up and argue against that. As far as the Austrians go, if you think that Austrians at large favour FRB and the current system, you’re as wrong as wrong can be.

  • Rabiner

    Sorry but the gold standard just isn’t a realistic option no matter how badly you long for those days.

    The value of currency is a reflection of the money supply and the goods produced in an economy. If we went to the gold standard then the value of currency would simply be a reflection of the gold bullion that government has. This is a silly exercise because this would cause deflation as the money supply would not grow at a rate close to that of the growth of value produced in the economy (a scarcity of money would occur).

    vindician

    Your last post was worthless. The second to last at least had something of substance.

    “Considering the fact that we once again find ourselves in a gigantic economic mess, which is proven to have been brought on by the inherent and structural flaws of the present system, I really think its time you admit that the burden of proof is on you. If you want to maintain that the present monetary systems works, and works well even, you really need to start addressing the criticisms against it and explain why we constantly go from crisis to bigger crisis, and why it is a good thing that the value of incomes and savings is systematically transferred from society’s poorest to society’s richest.”

    Sure, I’m game at explain this in small words for you. The FRB system is far superior to what was in this country from the 1840s to 1910s. Since the 1910s we’ve had 2 large economic recessions/depressions: The Great Depression of the 1930s and today. The first was caused by multiple things and occurred when we were under the gold standard which is being argued to be brought back (no clue why). The second was under the current system of money value being a reflection of the money supply and value of goods/services produced in this economy.

    Also just because there were structural problems with the system doesn’t mean that we should scrap the entire system but rather to modify the structure.

    The reason the wealthy have been doing better than the poor over the last 30 years has nothing to do with the federal reserve which deals with monetary policy and everything to do with Congress and the President who have cut tax rates for the wealthy in ways that let them reap the biggest benefits.
    WillyP:

    “more to the point, how is there a “general rise in prices” without a rise in specie? again, we’re not really discussing only semantics, but trying to establish what LEADS to the general price rise.”

    If a good has a sudden and permanent change in demand or supply it can cause a ‘general rise in prices’ for that good. If that good happens to be used indirectly by every company like energy is, then it will cause this ‘general rise in prices’ throughout the economy. Of course examples of this would be the oil shocks of the 1970s.

    Shocks can lead to general price rise for as long as the shock occurs. So can an increase in money supply that outpaces the increase in value of goods produced in the economy. Shortages as well can lead to general inflation like labor shortages experienced in economies exceeding natural full employment.

  • vindician

    Under a gold standard, the value of the currency would reflect the relationship between dollargold and goods and services. How much gold to pay for a given good or service. It would have absolutely nothing to do with the bullion holdings of government. With a stable money supply, the purchasing power of the money would rise as the productive capacity increased. This is a GOOD thing, it happened in the US from the creation of the nation up until 1913. That is what is SUPPOSED to happen in a growing economy. There is no such thing as scarcity of money. Any given supply works, the key thing is that it is kept fairly stable. I mean really, where do these insane ideas come from?

    Rabiner, what you think is worthless or not is utterly irrelevant, you’ve proved that with your opening paragraph.

    As far as your explanation goes, simply saying that FRB is far superior to what the US had from 1840 to 1910 is not only not an explanation, it is a completely false statement. Not least because the US actually had FRB from the 1840 – 1910. During the war years and thereafter the US even had fiat paper money.

    As for the crises, there has been a few more than those you list.

    In 1920, the US had a very deep recession following the war inflation of WW1. At its onset, it was far worse than the crash of 1929, the main cause of which again was runaway inflation. The US money supply rose about 70% during the 1920s. The fact that it turned into a great depression that lasted 16 years was because of Hoover’s and FDR’s interventions. In 1920-21, Harding had the good sense to cut government spending in half while the FED remained passive. That is how you “solve” recessions.

    Then there was the Bretton Woods system, which lasted from 1944-1971. During this time, the US printed money like there was no tomorrow. Foreign countries naturally picked up on this, and started to convert their dollar holdings into gold. This system obviously couldn’t last, so Nixon closed the gold window in 1971. Then the US had a decade long stagflation with high unemployment and rising prices, so much so that Nixon imposed price controls.

    Then came the 1980s with the S&L crises, quickly followed by the dot.com bubble which burst in 2000-2001. However, no one wanted a recession on their watch, so the FED papered over that recession, thus creating the present calamity, which our wise overlords are trying “solve” using the same tricks as all the failures before them.

    So you see, there have been many crises, but the last ones have been glued together.

    I must say I can’t understand the eagerness of so many to flaunt their economic ignorance. Tell me, when you transfer the value, that is the purchasing power, of people’s income and savings from one group to the other, how is that not relevant to the fact that the latter group has done good at the former’s expense?

  • CD-Host

    vindician –

    One of your consistent failures is to understand the difference between a currency system and a banking system. The purpose of a currency system is to facilitate exchange. I’ve mentioned direct metal coinage about 100x.

    As for self pity I’m not pitying I just find you insulting, historically ignorant and obnoxious. That’s not inducing pity. Your arguments are simply stupid, there are a propagandistic version of what various Austrian writers have written about.

    If you are now admitting that your system has never actually existed anywhere that is progress. During most of this thread you were claiming it was the system the United States used to have. As I mentioned I actually think that it is effectively to systems that existed in the middle ages when “deposit banking” (i.e. storage and safekeeping) of precious metals existed but interest baring savings did not, and to get interest one had to buy bonds. Something like middle ages Vienna seems to be what you are talking about. I can’t tell because:
    1) You are simply too obnoxious to get information from.
    2) You refuse to use words in their standard meaning, instead employing the Humpty Dumpty theory that words mean whatever you take them to mean.
    3) You intermix your theory with propaganda and similarly your analysis.

    As for rejecting rationalism as a basis for how we are going to design a financial system, absolutely. I make no apologies for using a scientific method in examining data. The single biggest failure of the whole Austrian school is a failure to create testable hypothesis that can be checked against future and past financial data. In religions people start with axioms that seem reasonable and then draw conclusions based on sound argumentation. In sciences they draw testable hypothesis and check against data. Austrian economics is essentially a religion. But unlike Hayak most of the followers of Austrian economics haven’t read mainstream economics, nor have read economic history. As for false history not being important, that is a total lie; I value history tremendously. My whole disagreement with you has been your false history.

    As for the counter arguments against the current system your argument is that adjustability isn’t important for a monetary system. The current system is designed to allow fo adjustability, the ability of the government to arbitrary set interest rates. It goes without saying that you can design a much better system if you see adjustability as a negative. Adjustability is a Keynesian feature not an Austrian feature. Austrians seek interest rate stability over the medium term, the natural rate of interest. So what’s to discuss, the current system from an Austrian perspective is designed with one of its core objectives to allow the government to do something that is harmful to the economy? Obviously if you assume Austrian economics you would choose a different system than the one we have, but that was the interesting conversation I wanted to have with someone who was discussing these things in good faith.

  • CD-Host

    With a stable money supply, the purchasing power of the money would rise as the productive capacity increased.

    Tell me, when you transfer the value, that is the purchasing power, of people’s income and savings from one group to the other, how is that not relevant to the fact that the latter group has done good at the former’s expense?

    Creating a situation where the money supply is stable vs. one where it is growing is transferring wealth if anything from lenders to borrowers. That is if anything it is helping the poor not harming them. That’s why in the 19th century populists were advocates for inflation while those who supported business class and the wealthy were advocates for mild deflation.

    This [mild deflation] is a GOOD thing, it happened in the US from the creation of the nation up until 1913.

    And this is a perfect example of the historical poppycock you keep using while accusing everyone else of being ignorant.

    1913 — No particular change in monetary policy. Fed was created but simply acted like the bank consortium that J.P. Morgan put together.
    1896 – 1907 exactly the opposite of what was claimed was happening. The money supply was growing very fast as a result of a technological discovery. No, central bank or government you can blame for this inflation. This one came purely from science expanding the money supply.

  • WillyP

    vindician,
    you’ll waste your entire life trying to convert someone like cd-host. he’s unreachable and pretty dull. i suggest you take your energy and be more proactive elsewhere. find a candidate who supports ending the fed (for the right reasons) and campaign for him.

  • vindician

    CD-host

    I specifically said that the purpose of a monetary system was to facilitate exchange. Banking is a natural part of any monetary system, but the use of money predates banking by quite a lot. Learn to read, for heaven’s sake. As far as ignorance goes, I’ve corrected you in more or less every single comment so far. To say that my arguments are “stupid” instead of actually trying to counter them shows what level you’re really on.

    The world has known monetary systems based on sound money and full reserve banking. I’ve NEVER claimed that the US has had such a system, which you would know if you actually read what I write, but I guess that is too much to ask.

    As for your points, they’re as ridiculous as anything you’ve posted so far.
    1. I’ve given very detailed argument FOR what I advocate and equally detailed arguments AGAINST what you advocate. You’ve done neither.
    2. I use words in their original meaning. The fact that you don’t know the original meaning of banking and inflation is your problem
    3. You are the propaganda tool here, no me, or was it not you who said that the current system had worked well to achieve the objectives of our government?

    As far as the “scientific method” goes. Economics is a SOCIAL science, did you know that? It is not a natural science, which means that the methodology used in the natural sciences cannot be applied to economics. It is impossible to conduct controlled experiments to “prove” a hypothesis in economics, it simply can’t be done. However, if look what has actually happened and what Austrians have been saying over the past 100 years, they’ve been proven right every single time, whereas the Keynesian approach you advocate has been an utter failure. Not understanding the impropriety of natural science methodology in the study of econoimcs is enough to disqualify you from serious debate.

    Then you predictably come to the whole religion indictment, which further proves that you’re nothing but a shill reading off a script. Austrians recognize the existence of economic law. That humans act is a fact, an axiom. That they act to further their own interest, whatever that may be, is also a fact, an axiom. From there Austrians deduct economic laws which then form the basis for their theories. As for not having read economic history, Murray Rothbard was one of the greatest historians of the 20th century. Mises devoted much of his work to history, always stressing the importance of history. Many of the most prominent Austrians today are historians. I knew you would stoop to this sort of inane mudslinging at some point, I’m only surprised it took this long. In any case, it proves that you’re nothing but a krugmanite. You say you value history, but you know nothing of history.

    My arguments against the current system was much broader than mere adjustability. But as for countering them, again you do and say nothing.

    “I wanted to have with someone who was discussing these things in good faith.”

    We can forget everything else and have that discussion if you want.

    As for the money supply thing.

    A stable money supply benefits everyone, it is not transferring wealth to anyone. The purchasing power increases because of increased production, that is miles away from the government taking the value of people’s income and savings and giving it to it lackies. Allowing certain actors to increase the money supply benefits those who get the new money first at everybody else’s expense. That is why high inflation always wipes out the middle class first, dividing the society into a very few rich and a great mass of poor. Since the poor always get the new money last, they are the ones who actually pay the inflation tax.

    As for the US dollar. From 1776 up until 1913, the value of the dollar rose with about 12 percent. From 1913, the US dollar has lost over 95 percent of its value. Now please, what does this tell you?

  • WillyP

    vid,
    “As for the US dollar. From 1776 up until 1913, the value of the dollar rose with about 12 percent. From 1913, the US dollar has lost over 95 percent of its value. Now please, what does this tell you?”

    As per Rab, I attribute this to various demand shocks!

    BTW, it is refreshing to actually read somebody who “gets it” rather thoroughly. Having been nearly the lone Austrian (with perhaps 1 exception) here for many months, I’ll let you know: you’re really in for a headache. It’s not worth it.

    With our Fed hellbent on monetizing the debt to the tune of $500 bil – $1.5 tril, they’ll all learn their lessons first-hand soon enough.

    http://www.minyanville.com/businessmarkets/articles/quantitative-easing-qe2-federal-reserve-the/10/6/2010/id/30409

  • CD-Host

    OK Vid lets do a little correction here:

    That is why high inflation always wipes out the middle class first, dividing the society into a very few rich and a great mass of poor.

    Now I’ll just remind everyone that “inflation” here is used to mean expansion of the monetary base. In which case there is a classic graph:
    http://2.bp.blogspot.com/_H2DePAZe2gA/STCNtAV_UfI/AAAAAAAAGlU/PuN5PEkz1Pc/s1600-h/depsupply.gif

    But lets address the question. We have data so lets look as US inequality over time. This is the Gini index based on census bureau data:

    1929: 45.0 (estimated)
    1947: 37.6 (estimated)
    1967: 39.7 (first year reported)
    1968: 38.6 (lowest index reported)
    1970: 39.4
    1980: 40.3
    1990: 42.8
    2000: 46.2
    2005: 46.9
    2009: 46.8

    So basically we had poverty and inequality in 1929, it got much better under FDR stayed flat until about 1980 and has risen since them. Basically what seems to make people relatively poor is having lots of Republicans in power.

    Now lets look at inflation. Here is a graph of the CPI:
    http://upload.wikimedia.org/wikipedia/commons/thumb/3/34/US_Consumer_Price_Index_Graph.svg/750px-US_Consumer_Price_Index_Graph.svg.png

    There is no obvious connection. We had low inflation leading up to 1929 which should have been good for middle and lower class under Vin’s theory. Then we had inflation growth under FDR where the lower and middle class started to prosper. We then have wild fluctuations in inflation with no major impact at all. And then in 1980 there was an attack on inflation corresponding to the increase in inequality. Finally a 1990-2010 inflation is under control while the middle class is devastated.

    So yet again the data contradicts the hypothesis. It appears that US inflation was uncorrelated with middle class poverty, and if there is any case to be made it is that reflation is good for the middle class while disinflation is bad, and that stable lowish inflation doesn’t do much of anything. And surprise surprise that’s exactly Keynes predicted.

  • CD-Host

    If there is anyone lurking or if at some point someone finds this various claims above are a pretty good example of what is the difference between Keynesianism and Austrian economics. Austrians have these sort of “self evident” claims which they reason from. “Markets know better than governments”.

    Keynesians want to rephrase these sorts of questions as testable hypothesis.

    Austrian — Inflation is harmful to the middle class as it transfer wealth away
    Empirical — We should see a negative correlation between equality and inflation in serial data over various societies.

    This method allows for testing hypothesis. For example if the correlation between inflation and equality is positive or zero then: the data is biased, the theory is wrong, the hypothesis is not an accurate test of the theory…. What should not be done is just pontificate. Kant in the Critique of Pure Reason put an end to rationalism as a means of investigation. Austrian economics is essentially rationalism applied to libertarianism. That’s why Vin is accusing me (rightfully I might add) of being a positivist because I’m rejecting the idea that we should reason without evidence that our reason is correct. Reason for post Kantian is a means of generating worthwhile hypothesis not a means of knowing truth.

    Here is a video that says the above in slightly more detail: http://www.youtube.com/watch?v=rMn2R5txO2

    I’ll do another post with some actual information about a monetary policy from a Keynesian perspective.

  • VA

    I was wondering about the lack of quality in this post. Then I saw the author is only 20 (ageism alert!) from the Homocon post. A word of advice: if you’re going to offer analysis, it helps to have some factual basis for your opinions. Check out Matt Taibbi’s recent article about Rand Paul, especially the last page. He uses what we used to call “journalism” to find out what Rand Paul has been doing, and then forms an opinion. It’s a handy skill when trying to be taken seriously.
    http://www.rollingstone.com/politics/news/17390/210904

  • CD-Host

    Here are my final comments on a monetary policy for any lurkers. There are 3 primary things that a society considers valuable in a monetary policy.

    a) Adjustability. The ability for the government to be able to counter the business cycle increasing or decreasing demand to avoid economic dislocation.

    b) Convertibility. The ability for a currency to be traded freely for other currencies. In other words no trade restrictions.

    c) Stability. The ability for a currency to be stable relative to other currencies. Exchange rate stability.

    the problem is these conflict with one another. You can any 2 but only at the cost of not having the third. Assume that A and B both are countries with a stable and convertible currency. If A’s government wants to cut interest rates below the rates in B that is just going to cause capital flight not stimulate purchasing. Conversely if A wants to raise interest rates above B rather than a fall off in demand they are going to get large inflows from B’s investor class chasing yield.

    In 1873 the US was interested in boosting international trade. We went for the gold standard: that gave us (b) and (c). The lack of adjustability caused ever increasing financial crisis.

    The Bretton Woods system was an international system that offered (a) and (c). The IMF sought to resolve any problems in differences between balances of payments, which made it difficult to take advantage of relative advantages, and hence led to a low level of international trade and currency flows. In 1958 in Europe and 1964 in Asia trade started to pick up and the system was badly strained.

    In 1971 we went to the modern system, the Washington Consensus which offers (a) and (b). That is moderate trade (not as good as b&c) combined with the adjustability of Bretton Woods. The downside is that currencies move relative to one another quite rapidly and violently. International financial crisis are up 300% from under Bretton Woods. Since 1997 emerging markets are maintaining a large currency account surplus (primarily with the US) to help them maintain some more stability.

    If one thinks politically they can see why support for the Washington consensus would be high. I suspect the majority of Americans if they could vote, would vote this option.

    However, from a conservative standpoint adjustability is very very bad. Especially since the US uses a fiat currency, and a high level of federal taxes. The combination basically means the government has almost complete control of where money goes. The market exists in so far as the government desires it to exist to incentive people to carry out government programs. In practical effect it probably doesn’t do much to limit freedom outside the financial services sector. But it certainly is an area for concern, America has always been founded on the idea of limited government and what can be abused will be abused.

    This is precisely the type of conversation that FrumForum was designed to facilitate. What is the right balance between conservative theory of limited government and conservative desires for the economic stability that adjustability provides. Should we enhance democratic control of the Fed or reduce it? Did we make the right choice among the 3 options?

  • WillyP

    “This is precisely the type of conversation that FrumForum was designed to facilitate.”

    What? How do you know? Did you design FrumForum?

    BTW, since I’ve done it a thousand times and grow tired… I won’t bother refuting again the nonsense that economics is an empirical science. IT simply isn’t. People aren’t atoms. They have motivations, direction, and goals. You need to proceed differently than you would in physics. It is a priori for a reason, though I realize this offends your (not terribly sensible) sensibilities.

  • vindician

    CD-host

    Again, you produce a lot of text, but no counter arguments and no answers.

    The inflation thing. During the 20th century from 1913, the US did experience substantial inflation. However, for a long time, its effects were offset or at least limited by the increasing US productive capacity and strong economic fundamentals (relatively high savings rate, broad manufacturing base). Poverty was coming down with about 1 percentage point a year until the end of the 1960s, when the Great Society programmes started to kick in. Since then, its remained fairly flat.

    The US was the world’s greatest creditor nation until the 1980s. From there, it has rapidly declined and is now the world’s greatest debtor nation. The American savings rate have even gone negative under the recent decade. With the current economic crisis raging on, the disconnect between New York/Washington and the rest of the country is becoming ever more apparent. Unemployment is rising, food stamp use is reaching record levels, and public sector jobs pay a lot more than private sector jobs. If this development continues, you will see a decline in the US middle class.

    As for empirical “evidence”, look at Zimbabwe today. There, hyperinflation as wiped out a country that for not so long ago was one of the most prosperous on the continent. This has left a small ruling elite and a great mass of impoverished people. Same thing can be seen in other countries that have gone suffered runaway or hyperinflation, and signs are showing already in the US.

    Now, you should note that even though this “empirical evidence” seem to prove the Austrian claim, no Austrian would ever say that the claim was proven by this evidence. Rather, the Austrian would say that here are the reasons for why Zimbabwe looks the way it looks today, and present his claim. The same way, Austrians are still the only group who have been able to give a coherent, logical explanation of the roots and origins of the present economic crisis. But again, no Austrian claims that the current economic crisis, which surprised everyone except the Austrians and still is incomprehensible to most, “proves” the Austrian theory of the Business Cycle. They simply say that we are in this current economic mess because of these reasons.

    As far as Keynesian predictions go, they’ve been proven wrong at every turn the last 100 years. Keynesians predicted that 1946 would be the worst year in American history, because that year, the US government was set to and also did cut its budget by two thirds following the end of WWII. The whole Keynesian school agreed on this. Turns out that 1946 was the single greatest year in American history in terms of economic growth. Then of course we had the 1970s stagflation, which saw rising prices and high unemployment, something that according to Keynes was impossible. My personal favorite though is Keynes greatest student, Paul Samuelson, who as late as 1989 was adamant that the USSR would overtake the US.

    You can’t make this stuff up. Only reality can produce a freak show like Keynesian economists, and only in reality can they still be revered as the great sages of our day. You admit to using natural science methodology to a social science. As said before, a person who can’t even distinguish between right and wrong methodology is automatically disqualified from serious debate. And you’ve just shown why. You look at aggregate statistics, not having the faintest clue what is behind those figures, nor of the millions of other factors and variables that weigh in. You look at government numbers and conclude that this is the case. This is the Keynesian method, this is what made Samuelson assert that many times from the 1960s through the 1980s that the USSR would overtake the US. Not only that, this method made him describe the USSR economy as a “robust engine of prosperity”.

    Anyone who still believes in the words and methods of these witch doctors is not only a fool, he is a misanthrope.

  • vindician

    Willy

    I know, I can spot hopeless cases when I see them. But its good to put up a few posts, so that people can see how wrong they are.

    What bugs me though is that people like CD-host and Alex Knepper, who quite obviously know nothing about anything, actually believe they have a better understanding of how the world works than people like Ron Paul. The arrogance of these ignoramuses.

    But then again, we all have the right to flaunt our ignorance and stupidity. Alex and CD are simply exercising that right.