The people applauding the Fed keep stressing that Bernanke isn’t yet “out of ammunition.” Yet this openly militaristic vocabulary should be a red flag to wise observers. When the government declares war on something—whether it’s poverty, drugs, or terrorism—it means we’re in store for a campaign that will cost trillions and take decades, at least. This notion that if Bernanke would just “take the gloves off and print some money, already!” that we’d solve this recession, is quite simply insane.

I use the term insane quite consciously, in the sense of repeating the same policies and expecting a different result. We must remember that Chairman Bernanke has already created more than twice as much “base money” since 2008, as all previous Fed chairs combined.

Robert Murphy | QE Forever

He concludes:

If the fundamental problem with the U.S. economy these past four years really has been about “demand”—that businesses and households just aren’t spending enough—then further money-creation by the Fed could plausibly help promote recovery.

Yet suppose that the fundamental problem is a “real,” structural one, in which resources have been misallocated across various sectors due to prior Fed inflation and counterproductive government policies. In this scenario, the Fed’s latest announcement of open-ended purchases—in an effort to prop up housing, the very sector that was responsible for our previous financial catastrophe—represents the worst possible remedy. Bernanke and the rest of the Fed policymakers would be sowing the seeds of an even bigger crash down the road, one that will make 2008 look like a walk in the park by comparison.

What I have been trying to say is that Mises’s utilitarian, relativist approach to ethics is not nearly enough to establish a full case for liberty. It must be supplemented by an absolutist ethic — an ethic of liberty, as well as of other values needed for the health and development of the individual — grounded on natural law, i.e., discovery of the laws of man’s nature. Failure to recognize this is the greatest flaw in Mises’s philosophical worldview.

Murray Rothbard

I greatly admire Ludwig von Mises’ economic theory. What I didn’t realize until today is that he was a moral relativist. Rothbard pinpoints this chink in Mises’ philosophical armor, and in contrast praises those who

accept both praxeological and ethical absolutism, and recognize that both are vitally necessary for a complete philosophical view, as well as for the achievement of liberty.

Good stuff.

Obama’s proposal to raise taxes only on “the rich” doesn’t really amount, in itself, to [what the left is calling] “shared sacrifice.” True, he defines “rich” quite broadly; lots of people who make over $200,000 or couples making $250,000 don’t live like rich people. Still, it’s a relatively small segment of the population that would be immediately affected by Obama’s preferred tax-hike program. Now, you could say that people who don’t make that much money would end up paying a price anyway, since socking it to “the rich” would depress the broader economy. Call it trickle-down sacrifice.

James Taranto

Trickle-down sacrifice!

When currying favor with Washington is seen as a much easier way to make money, businesses inevitably begin to compete with rivals in securing government largess, rather than in winning customers.

Corporate Cronyism Harms America

Thisis the main problem with big business: it’s collusion with government to distort a free-market economy. More from the article:

We are on dangerous terrain when government picks winners and losers in the economy by subsidizing favored products and industries. There are now businesses and entire industries that exist solely as a result of federal patronage. Profiting from government instead of earning profits in the economy, such businesses can continue to succeed even if they are squandering resources and making products that people wouldn’t ordinarily buy.

At a time when poverty is increasing, when public parks and public libraries are being closed and when public schools are shrinking their offerings and their hours, when the nation’s debt is immense, and when the 400 richest Americans have more wealth than the bottom 150 million of us put together — Romney’s 13 percent is shameful.

Robert Reich (via azspot)

I call BS on this. If government is failing in its basic legitimate functions (parks, libraries, schools—although even that last one is debatable), it’s not due to lack of funds. It’s because government spends way too much on all the extra junk beyond its constitutional restrictions. It also helps that it feels free to dishonestly print its own money—which is yet another indirect tax on the the people.

I support any legal and ethical means of avoiding taxes. The more money in the pockets of people like Romney—who actually know how to earn and mange wealth—and the less that enters government “management,” the better.

(via sds)

I’m trying to formulate a coherent response to your comments, sds, but I’m too busy picking my jaw up off the floor.

WWJD, indeed.

I mean, I don’t entirely disagree with your first paragraph addressing the failings of government to this point… but to counter that with the idea that, in the simplest terms, “the rich getting richer is better for everyone” without taking into consideration how that wealthy minority may have come into such fabulous wealth (corruption or taking advantage of those less fortunate) nor the relative percentage of their assets and income paid out as taxes (hilariously out of whack with what “regular” folks pay)… that it’s just so devoid of reason and common sense I find it irresponsible, proven historically ineffectual at improving our country, and an affront to basic human decency.

(via apoplecticskeptic)

My point was that money in the hands of citizens is better, overall, than money under government (mis)management. Of course I am opposed to actions that create/accumulate wealth by unscrupulous means. But that’s not really the topic here. How people earn money is a totally different question from how much the government should take of it.

Everyone wrings their hands about disparity of wealth. The truth is, there will always be wealth disparity in a capitalist society, and rightly so. It’s unavoidable. The flip side alternative is socialism—to each according to his need and all that jazz. So the disparity focus is a red herring.  The real question is whether there is economic liberty. If the top 1% make eleventy billion dollars per year, and the rest of us are stuck making $20k, it’s pretty likely that free market capitalism is nowhere to be found.

We know that once basic needs are met, money does not tend to make us happier, and the vast majority of Americans do have their basic needs met. Poverty doesn’t mean what is used to. The other day I looked up my eligibility for food stamps on my state’s website, just for kicks, and I was eligible for a few hundred bucks a month of support! I make an income in range of the national median. We are by no means rich; we struggle to be fiscally responsible and save for the future just like many others. But we are by no means poor. Nobody in our situation should accept (or be offered) government support.

SIDE BAR:

Government management of money does not make us more free. Here’s an example illustrating the relationship between government power and money (this isn’t related to the rich/poor). Ron Paul and many on the left argue that the U.S. engages in what they call “illegal wars” oversees. Agree or disagree with the morality or legality of the wars, it’s pretty likely that we wouldn’t even be capable of engaging in them if the government wasn’t able to print money out of thin air. They’d have to either raise taxes or cut spending—and do so out in the open, not behind Bernanke’s closed door—and we all know how that sort of thing goes over with the public.

Fiat currency is leaving your car unlocked in a run down neighborhood with all your Christmas shopping left on the front seat. Gold and silver need not be the only thing backing the currency — it simply has to be something that politicians can’t print.

The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost.

Ben Bernanke | 30 Bernanke Quotations That Are So Stupid You Won’t Know Whether to Laugh or Cry

(OP LALiberty) (dead link fixed)