Abraham Lincoln’s Letter to Horace Greeley

June 30, 2020

Slavery as practiced here in the United States was an immoral abomination. It is too bad that Mr. Lincoln was not trying to abolish it.

Abraham Lincoln wrote a letter to Horace Greeley, the editor of the New York Tribune. Mr. Lincoln told us in this letter the real purpose of the Civil War was not to free slaves, but to “save the Union”. I am not sure how unions are “saved” at gunpoint. Mr. Lincoln revealed his real purpose in this line, “The sooner the national authority can be restored….” Mr. Lincoln said everything else was subordinate to this purpose. “My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery.” Unopposed “national authority” was his goal. This authority would be used to impose protectionist tariffs, create a central bank to control the money and for internal improvements (Railroads, etc.). The Civil War was a repeat of the Revolution, except this time “Great Britain” won.

Executive Mansion,
Washington, August 22, 1862.

Hon. Horace Greeley:
Dear Sir.

I have just read yours of the 19th. addressed to myself through the New-York Tribune. If there be in it any statements, or assumptions of fact, which I may know to be erroneous, I do not, now and here, controvert them. If there be in it any inferences which I may believe to be falsely drawn, I do not now and here, argue against them. If there be perceptable in it an impatient and dictatorial tone, I waive it in deference to an old friend, whose heart I have always supposed to be right.

As to the policy I “seem to be pursuing” as you say, I have not meant to leave any one in doubt.

I would save the Union. I would save it the shortest way under the Constitution. The sooner the national authority can be restored; the nearer the Union will be “the Union as it was.” If there be those who would not save the Union, unless they could at the same time save slavery, I do not agree with them. If there be those who would not save the Union unless they could at the same time destroy slavery, I do not agree with them. My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that. What I do about slavery, and the colored race, I do because I believe it helps to save the Union; and what I forbear, I forbear because I do not believe it would help to save the Union. I shall do less whenever I shall believe what I am doing hurts the cause, and I shall do more whenever I shall believe doing more will help the cause. I shall try to correct errors when shown to be errors; and I shall adopt new views so fast as they shall appear to be true views.

I have here stated my purpose according to my view of official duty; and I intend no modification of my oft-expressed personal wish that all men every where could be free.

Yours,
A. Lincoln.

The Deep State in Great Britain

June 25, 2020

One of my favorite shows used to be “Yes, Minister”. The show is about the perennial conflict between the entrenched bureaucracy and the elected politicians. The bureaucrats or civil servants stayed, while the elected officials came and went. Watch Sir Humphrey explain to Bernard what happens when there is too much local rule/autonomy.

Government Spending on Innovation

June 5, 2020

Some argue that we need government spending to fund “innovation”. Too bad most of that “innovation” is sought to further the ends of the “war state.” This argument attempts to focus on results: “See we spent all this money and we got computers”, or whatever. This is poor reasoning and obscures that fact that taxpayer money was forcibly extracted from the population to perform this “research”. What might the people of the population have done with that money had it not been taken from them and devoted to government “research” projects? An example of such a project is virus GoF studies, which may have led to the COVID-19 pandemic.

This is from an article posted in 2015:

“University of Sussex Professor Mariana Mazzucato is making headlines with her 2013 book The Entrepreneurial State, which argues that government, not the private sector, ultimately drives technological innovation.”

We also need to consider that the Federal government has a virtually limitless supply of “money” via Treasury bonds and its partner, the Federal Reserve. Many believe in something called “liquidity”, which means being able to buy and sell things without disturbing market prices. This obviously is a fantasy, especially when it comes to a “fat finger” like that of the government. When the government “jumps into the pool” it is like an elephant jumps in and it makes huge waves and splashes a lot of water out.

The New York Times offered this opinion:

“Fundamental innovations such as nuclear power, the computer and the modern aircraft were all pushed along by an American government eager to defeat the Axis powers or, later, to win the Cold War. The Internet was initially designed to help this country withstand a nuclear exchange, and Silicon Valley had its origins with military contracting, not today’s entrepreneurial social media start-ups. The Soviet launch of the Sputnik satellite spurred American interest in science and technology, to the benefit of later economic growth.”

It is ironic that post World War II, a war supposedly fought to defeat fascism, our country became increasingly fascist. See Wikipedia:

“Fascists believe that liberal democracy is obsolete and regard the complete mobilization of society under a totalitarian one-party state as necessary to prepare a nation for armed conflict and to respond effectively to economic difficulties.[9] Such a state is led by a strong leader—such as a dictator and a martial government composed of the members of the governing fascist party—to forge national unity and maintain a stable and orderly society.[9] Fascism rejects assertions that violence is automatically negative in nature and views political violence, war and imperialism as means that can achieve national rejuvenation.[10][11] Fascists advocate a mixed economy, with the principal goal of achieving autarky (national economic self-sufficiency) through protectionist and interventionist economic policies.[12]”

Here is the support for the notion that our country has become the very thing it allegedly fought in World War II:

“The Second World War changed the nature of scientific research as well. After the war, large-scale federally-funded laboratories devoted to practical applications for new research replaced the small academic laboratories that had existed before the war. Naturally, these new laboratories were geared toward producing new technologies that the federal government wanted, and scientists flocked toward these jobs and new well-funded facilities.
It’s true that many (though not all) of these technologies were developed — typically not invented, but refined — by government scientists working on military projects. The question nevertheless remains as to whether or not this model of innovation benefits society at large. Is this a “good side” of war?”

I think this is actually pretty self-evident. How many billions were spent on the “space race” after Soviet Russia put up sputnik? What sorts of innovations might have come out of the private sector, if that money had been left to private citizens to spend or at the very least was not used to suck brilliant minds into government employ?

Here is more support for fascism:

“We can see these distortions in the effects of the work of Vannevar Bush, the initiator of the Manhattan Project. Bush was chairman of the National Defense Research Committee (NDRC), and later director of the Office of Scientific Research and Development (OSRD), in the Second World War.

Bush wanted a peacetime successor to the OSRD and pushed for creation of the National Science Foundation, which was established in 1950. The NSF was controversial (one proposal was vetoed by Truman in 1947) because of the lack of accountability. A key figure was Senator Harley Kilgore of West Virginia, who initially opposed Bush’s plan to distribute the money through universities (he preferred the government to own the labs) but later agreed to Bush’s model. As Kealey describes it, Kilgore’s goal was not to generate new knowledge. Rather,

‘Kilgore wanted to create a reserve of scientifically trained personnel who could be mobilized for strategic purposes. … The National Science Foundation, therefore, was created in 1950, in the same year (and for the same reasons) as the National Security Council.1’”

Ibid.

Remember these “agencies” had budgets that probably dwarfed anything in the “private sector” and they were not subject to rigorous profit and loss weeding. You cannot argue against this, because that is Mazzucato’s thesis – private industry is not willing or able to fund “innovative” research.

Remember Betamax versus VHS?

“There is no doubt that military spending had a substantial effect on technological innovation. But was it a good one? Military spending distorts the efforts of scientists and engineers, and redirects them to particular projects, ones that do not necessarily generate benefits for consumers.

Military-funded R&D, like any government-funded projects, does not have to pass any kind of market test, so there is no way to know if it is actually beneficial to consumers. We cannot rely on the judgments of government scientists and scholars to say what are the “best” technologies. Remember Betamax? The experts told us that Betamax technology was superior to VHS tapes, from an engineering point of view. Yet, in the end, VHS proved to be economically superior in that consumers ultimately chose VHS over Beta. Betamax failed the market test in spite of its arguably superior technology.”
Ibid.

Putting “experts”, “scientists” in charge of government and its spending and market influence is anti-Democracy. Your greatest “democratic” expression is carried out daily in the market place when you “vote” with your money, your feet and your eyes. When your “disposable” income is diminished by government taxation your “voting” power is reduced!

When will we decide that we have had enough of the war machine and end it?

George Floyd

June 3, 2020

I feel that I need to weigh in on the George Floyd case. The reason is this case bears upon my theme of a limited government that protects individual’s property rights. I am reading about violent protests throughout our “country” and these “protests” are depriving many other people of their property rights. Government has one job and one job only and that is to protect an individual’s right to property. Since contracts are essentially about the transfer of title to properties, they are included. The solution to the government’s failure to do its job is surly not to engage in the same behavior as the government. The behavior of these “protesters” has led to the government failing in its duty to protect property rights again. It appears that law enforcement simply withdrew from the area of violent protests. Here is a brief and probably inadequate summary of the George Floyd case:

“On May 25, 2020, George Floyd, a 46-year-old black man, died in Minneapolis, Minnesota after Derek Chauvin, a white police officer, pressed his knee to Floyd’s neck for almost nine minutes while Floyd was handcuffed face down in the street;[2][3][4] two other officers further restrained Floyd and another stood by and prevented onlookers from intervening.[5]:6:24[6][7] During the last three minutes, Floyd was motionless and had no pulse,[2][4] but officers made no attempt to revive him.[8]:6:46 Floyd was pronounced dead at a nearby hospital.

Floyd was being arrested on suspicion of passing a counterfeit $20 bill at a market.[9] Police said Floyd physically resisted arrest.[10][11] Security camera footage from a nearby business did not show Floyd resisting.[12][13] The criminal complaint stated that, based on body camera footage, Floyd repeatedly said he could not breathe while standing outside the police car, resisted getting in the car and intentionally fell down; he went to the ground face down and, after Chauvin placed his knee, Floyd repeatedly said “I can’t breathe”, “Mama”, and “please”.[2] Several bystanders took videos, all of which were widely circulated and broadcast.[14] While knee-to-neck restraints are allowed in Minnesota under certain circumstances, Chauvin’s usage of the technique has been widely criticized by law enforcement experts as excessive.[15][16][17] At two points, the police officer that was holding Floyd’s legs asked to roll Floyd on his side.[2] All four officers were fired the following day.[18]”

From the little information that I have, it appears that these police officers egregiously deprived Mr. Floyd of his property – his body and they may have taken something that did not belong to them – Mr. Floyd’s life. Unfortunately, what happened to Mr. Floyd is not unique. An innocent man was beaten in the case of Brownback v. King.

Every man and woman on this earth should be a leader, even if they only lead themselves. A leader should do what he or she would like their followers to do. I think what everyone wants is respect for their property. If you WANT PEOPLE TO RESPECT your property, then you sure as hell had better respect other’s property. That means these riots need to stop NOW!

Riots will not solve this problem, but diligent participation by people near to this event in the judicial process hopefully will. I agree there are many things about our “justice system” that are bad, but acting unjustly and taking the property of others will not help the situation. I trust that you have heard, “Two wrongs do not make a right.”

Fed Buying Ever Riskier Assets

May 25, 2020
2 Sivan 5780

Our government is driving us into deep bankruptcy.

After the “crisis” of 2008 all sorts of debt increased. The increase is attributable to Fed “monetary policy”. Interest rates were low and it was easy to get “money” from the corporate paper market. I am very curious to know who owns all that corporate paper. I guess there is a lot in ETF’s, but that does not tell us who really owns this garbage. As a result of all that easy Fed credit we now have a “liquidity” problem (aka falling prices. Liquidity means you can buy and sell your “assets” and not disturb “market prices”). Here is the Fed’s response to this:

‘“This came two days after Powell defended the Fed’s program to buy junk bonds during his testimony before the Senate Banking Committee, which asked how purchases of junk bonds is “helping folks on Main Street.” Powell flagged that the Fed allowed for buying bonds from so-called “fallen angels” to ensure there is “no cliff” between the two lending markets (even though as we pointed out previously, a clear cliff has formed), saying “we don’t want to have a cliff there to where investment grade markets are working well, but the leveraged markets are not, non-investment grade markets are not.”
He then added that “we made a very limited, narrow set of actions to support market function in these markets, including buying ETFs, and that’s had an effect to improve market function there.”
Powell concluded by saying “we’re not buying junk bonds generally across the board at all,” which of course is correct: he is merely buying ETFs that have junk bond constituents.
And this is where the Fed’s first major test of directly manipulating and intervening in market functioning is about to take place.
While the Fed’s H.4.1 statement does not breakdown how much of the $1.8 billion in ETF holdings is allocated to investment grade and how much is junk, it is safe to say that at least $1 dollar of that amount has been allocated to purchases of Junk ETFs.
That will be a problem for Powell, because a quick scan of the holdings of both HYG and JNK reveals that these junk bonds ETFs own, among the hudnreds of other securities, several bonds from the just defaulted rental giant, Hertz.’
Here are HYG’s holdings of HTZ bonds: they amount to just over $50MM in face value across 4 bonds (out of a total of $23.3BN in holdings across just over 1,000 bonds).”

This problem is well illustrated by the Fed’s balance sheet. On 8/28/19 its “assets” were 3.8 trillion dollars and now its “assets” are 7 trillion dollars.

This the result of the Fed trying to maintain “liquidity”. It is another way of saying that Fed pets found themselves holding bags of excrement and they needed a place to unload it and the Fed is that place.

You might think the Fed is not all that smart, but that is not the case. Here is why this is YOUR problem and not the Fed’s problem:

“Is U.S. currency still backed by gold?

Federal Reserve notes are not redeemable in gold, silver, or any other commodity. Federal Reserve notes have not been redeemable in gold since January 30, 1934, when the Congress amended Section 16 of the Federal Reserve Act to read: “The said [Federal Reserve] notes shall be obligations of the United States….They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.” Federal Reserve notes have not been redeemable in silver since the 1960s.

The Congress has specified that Federal Reserve Banks must hold collateral equal in value to the Federal Reserve notes that the Federal Reserve Bank puts in to circulation. This collateral is chiefly held in the form of U.S. Treasury, federal agency, and government-sponsored enterprise securities.”

If you read the above carefully, you noted that Federal Reserve notes are the obligation of the United States. As seen above, the Fed has nearly doubled its balance sheet and it is “buying” ever MOAR risky “assets” with those Federal Reserve “notes” that “we the people” back. In other words as the Fed adds to its balance sheet, the liabilities of “we the people” increase. Who do you think will pick up the tab when those “assets” tank completely? If you said, “We the people”, go to the head of the class! “We the people” are the bag holders and there is no gold in that bag!

Here is some information regarding the “bag” from the ZH article above:

“To be sure, we can only extrapolate but it is safe to say that the Fed’s holdings of both these ETFs are modest for the time being, and we assume that the bulk of ETF purchases have targeted the investment grade, LQD ETF; still the fact is that as of this moment, the Fed is a holder, via BlackRock and via HYG and JNK, of bonds which are in default, and which make the Fed a part of the Hertz post-petition equity once it emerges from bankruptcy!”

You can hear and view a brief history of the Fed here and see a hypothetical balance sheet that illustrates what is happening (2:58 – 12:50).

A very interesting thing about the Fed history is how it has gradually taken on assets of poorer and poorer quality. Up until 1932 the “currency” issued by the Fed was backed by 40% gold and 60% commercial paper. In 1932 the backing was 40% gold and 60% Treasuries. Then in 1935 the gold backing was removed and the only backing was by Treasuries. Then in 2008 the Fed added Mortgage Backed Securities into the backing mix. Now it is adding “commercial paper” back into the mix and some of that “commercial paper” is junk.

Remember, always privatize your profits and socialize your losses!

Silver Lining of The Pandemic?

May 19, 2020

It looks like government may lose power due to its response to COVID-19. The shutdowns have resulted in a population with little to lose:

“Of course, Governor Wolf did not take such defiance lightly and unleashed a torrent of threats and abuse on the recalcitrant offenders, declaring that they had “decided to surrender to the enemy” and that they were “choosing to desert in the face of the enemy, in the middle of a war.” He then threatened to withhold any discretionary federal funds from any counties that rebelled, and then went even further, warning businesses that he would unleash the regulatory goons on them to make them bend the knee. Restaurants’ liquor licenses would be suspended, any business that reopened in defiance would no longer have business liability insurance, and they could risk losing certificates of occupancy and health certificates.

However, having already pushed thousands of businesses to the brink of extinction, it seems unlikely that Wolf’s threats have much persuasive power. The state simply doesn’t have the resources to hunt down every rebellious business owner, so at the worst, an owner is taking a gamble between going out of business for sure if the shutdown continues and facing regulatory headaches in the event that the state authorities actually manage to find out about it. Although the state department of health has set up a complaint form for people to inform on businesses, even state lawmakers have likened it to the East German secret police, and the form has reportedly been inundated with online trolls submitting bogus reports.”

What we are seeing is a repeat of Shay’s Rebellion, where the government called for the militia, but the militia either didn’t respond or joined and supported the “rebels”.

“The governor may issue all the orders he desires, but without the cooperation of the lower levels of government and the people themselves, they are toothless. In the unlikely event that he desired to escalate the situation to enforce his emergency decrees, he would lack the resources to realistically do so, having only forty-seven hundred state police under his control who could not hope to replace the local police across the nearly forty-five thousand square miles that make up the state. Even if he tried, local district attorneys have already indicated that they will not prosecute such cases.”

Central Planning Failure?

April 19, 2020

Get ready to hear even MOAR panic than we have been hearing up until now. I thought we were about to go over the top of the curve?

OK, so what has changed? Random testing of people for anti-bodies has begun and I suspect the CENTRAL PLANNERS will be shocked, I tell you, shocked.

Before becoming alarmed I recommend that you watch this video of an interview with Dr. Jay Bhattacharya.

If the test results obtained by Dr. Bhattacharya are accurate, the virus has infected far MOAR people than previously thought. If you listen at about 12:20, Dr. Bhattacharya said that a lot of people who had it, probably never knew they had it. Dr. Bhattacharya admitted the error rate of the testing has not been solidly quantified.

Now this type of test has been conducted elsewhere. See here and here.

I think Dr. Bhattacharya interpreted his results as positive. His tentative conclusion is the virus mortality rate is far less than previously thought and that it may be safe to “lift the caps” in some areas.

My fear is this will be seen negatively and we will double down on the current policy, because it appears the virus is MOAR widespread than thought. If we keep on this course, we might run out of food.

I think that we are seeing the parable of the broken window playing out before us.

The parable seeks to show how opportunity costs, as well as the law of unintended consequences, affect economic activity in ways that are unseen or ignored. The belief that destruction is good for the economy is consequently known as the broken window fallacy or glazier’s fallacy.

In the broken window parable, people only focus on what they can see (naturally). They do not consider the costs they cannot see. Our response to the virus has led to all sorts of consequences that won’t be seen. An example is the Mayo clinic is anticipating a big revenue shortfall (32:40) because elective surgeries have been postponed. Peter Robinson talked about the lack of a cost/benefit analysis (31:49). He also talked about the cancers that would go undiagnosed because of the shut-down. There are many costs that are not seen. At about 34:02 Dr. Bhattacharya spoke about the health effects of a depressed economy. A depressed economy destroys people’s health. The first victims are the poor.

End The Shutdown

April 1, 2020

As everyone knows, we are in the midst of a “crisis” because of a Corona virus. The government response has been a shutdown of many businesses. This shutdown is being imposed from the top down. In other words government has imposed shutdowns. Obviously this has reduced income and made people poorer. The government did this, allegedly, in the name of protecting us, but there is a huge problem with this. This is from Mises:

There is no conflict between humanitarian and economic concerns; in fact they are flipsides of the same coin. A poorer America will be a much less healthy America, one more vulnerable to future illness and disease. Technology, modern medicine, and market actors can address a virus; already we see entrepreneurs producing cheaper ventilators and doctors using cheap generic drugs with very promising results.

This local, bottom-up approach is the only effective way to confront the virus. The federal government, as we see now and have in the past, is comically incapable of competence in times of crisis.

On a fundamental level, freedom really is more important than security—or, in this case, an illusion of security. We all demonstrate this in our personal lives every day, from flying to driving to riding bicycles, to consuming unhealthy food and drink simply because we like it. Security has never been the sole or even primary goal for a country born in rebellion.

Government cannot decide what aspects of our lives are essential or nonessential. The American people cannot simply sit at home and wait for government checks written on funds that government does not have.

I have added the emphasis regarding a “poorer America”. This is not theoretical! See this story today:

Alteon Health, a staffing company backed by private-equity firm Frazier Healthcare Partners, will cut salaries, time off and retirement benefits for providers, citing lost revenue. Several hospital operators announced similar cuts.

Emergency room doctors and nurses many of whom are dealing with an onslaught of coronavirus patients and shortages of protective equipment — are now finding out that their compensation is getting cut.

Most ER providers in the U.S. work for staffing companies that have contracts with hospitals. Those staffing companies are losing revenue as hospitals postpone elective procedures and non-coronavirus patients avoid emergency rooms. Health insurers are processing claims more slowly as they adapt to a remote workforce.

Granted, the delay in the revenue producing procedures may have been self-imposed, but this clearly illustrates that, “A poorer America will be a much less healthy America, one more vulnerable to future illness and disease.

Many have used the metaphor of war to describe the response to this “pandemic”, but I think they have forgotten the response to WWII (I am sure that is the war they referenced). That response was massive work. The United States basically, out manufactured its enemies. That is how it won WWII.

What happened to our can do attitude? What happened to the “land of the free”? The strength of a nation or any corporate body lies in its diversity, or in other words in the freedom of its individuals to create solutions to problems. Maybe this “crisis” will backfire on those in power and the grassroots will realize who really holds the power in our land.

One last thing. The Fed cannot print its way out. Spouting counterfeit currency does not get tests done, does not get masks made, does not feed the doctors and nurses who are working so hard to help people. It is work that produces these vital goods and services. The only thing the Fed “printing” can do is support banks’ mark-to-fantasy (there is no “market”) valuation of their assets, so they can maintain the illusion they have “capital”.

Money Printing – Will it Help?

March 25, 2020

What are prices? A price is simply the ratio of one good to another. Usually a trade can take place when the ratio is met. For example a TV may “cost” $300.00. The ratio of dollars to TV’s is 300 to 1. What determines this ratio is generally the amount of dollars available versus the number of TV’s available. This is usually expressed as “supply and demand”. If MOAR dollars become available for trading for TV’s, the ratio of dollars to TV’s may go up. For example if the number of dollars available doubles, but the amount of TV’s remains the same, we would expect the ratio to be come 600/1 and the price of a TV would be $600.00.

History teaches that increasing the supply of money does not bring greater “wealth”, it brings higher prices. An example comes from the 1400’s to 1800’s when Spain began to bring gold and silver from the New World:

The Price Revolution, sometimes known as the Spanish Price Revolution, was a series of economic events that occurred between the second half of the 15th century and the first half of the 17th century, and most specifically linked to the high rate of inflation that occurred during this period across Western Europe. Prices rose on average roughly sixfold over 150 years. This level of inflation amounts to 1–1.5% per year, a relatively low inflation rate for modern-day standards, but rather high given the monetary policy in place in the 16th century.[1]

We are currently in a panic about a Corona virus. Much of the world’s economic output and trade has been shut down by this panic. This is called a “supply shock”. This means the number of “TV’s” (representing all goods), has gone down drastically. As far as we know the number of dollars available for purchasing “TV’s” has not gone down. This means the ratio of dollars to “TV’s” will go up. It has to do so. If it does not, then no one is buying.

How do you think the Federal Reserve has responded to these circumstances? If you guessed “create MOAR currency”, go to the head of the class! (Thank you Walter Williams). Here is Zero Hedge on Fed actions:

As part of the Fed’s ongoing nationalization bailout of the entire market, yesterday we pointed out that in a dramatic reversal away from years in which the Fed would not intervene in the corporate market, the US central bank would now buy Investment Grade corporate bonds, and would even intervene in equities, by purchasing the LQD investment grade debt ETF.

Will this encourage production? I doubt it. I am waiting for my helicopter money. How about you?

“Our” Congress does not want to be left out:

We have a deal, folks!

It appears on early Wednesday morning, the White House and Republican and Democratic Senate leaders reached a deal to keep the American economy humming during the virus crisis and hopefully avoid depression in the second and third quarters.

The new Senate proposal will inject $2 trillion into the US economy, just like a shot of heroin, providing tax rebates, four months expanded unemployment benefits, and several business tax-relief provisions aimed at supporting individuals, families, and businesses, reported The Hill.

There is MOAR:

The deal includes $500 billion for a major corporate liquidity program through the Federal Reserve, $367 billion for a small business loan program, $100 billion for hospitals and $150 billion for state and local governments.

It will also give a one-time check of $1,200 to Americans who make up to $75,000. Individuals with no or little tax liability would receive the same amount, unlike the initial GOP proposal that would have given them a minimum of $600. – The Hill

Have you ever wondered why businesses in this country become fewer and fewer and larger and larger? I think you just got your answer above.

So what do the Fed actions and the Congressional actions achieve (spoiler alert – increase some people’s popularity and not much else):

Oh, sure, handing out billions of dollars via various spending boondoggles ostensibly targeted at those hit hard by the decline in national income may give the impression of having avoided the cost. Ditto for having the Federal Reserve System flood the economy with new money.

No matter how you slice it, however, the pie is still smaller. That won’t change until production facilities reopen and people are allowed to move around. At best, the boondoggles and new money redistribute claims over the now smaller economic pie. They don’t avoid the cost of lost production.

The boondoggles do provide political cover for those enacting them. An electorate unschooled in economics falls for their hook, line, and sinker—seemingly every time. So it is with our government’s attempt to offset the consequences of shutting down economic activity. Lots of pomp and circumstance signifying nothing save the creation of yet more spending constituencies feeding at the public trough.

MOAR Liberty.

Faith In Government?

March 23, 2020

I am hopeful that this pandemic is leading to a loss of faith in the Federal Government and an increase in faith in “We the People” and free markets. The development of tests for COVID-19 is an excellent case in point:

The government reversed course on February 29 and allowed private labs to begin developing their own tests. The results have been spectacular.

The old tests took two to seven days to process. The patient was left in limbo in the meantime. Within a matter of days of the government dropping its restriction, the Cleveland Clinic developed a test that delivered results within eight hours.

“The great strength the US has always had, not just in virology, is that we’ve always had a wide variety of people and groups working on any given problem,” Keith Jerome, the head of virology at the University of Washington, told the MIT Technology Review. “When we decided all coronavirus testing had to be done by a single entity, even one as outstanding as CDC, we basically gave away our greatest strength.”