This chapter debunks the notion that the Federal Reserve is in any way libertarian just because Alan Greenspan was head of it once.
Debunks the myth that the Fed is in any way independent – Fed chairmen basically do the bidding of the president in order to maintain their jobs. President wants loose policy? President gets loose policy, and vice versa.
I liked his discussion on the damage done by typical college economics textbooks, particularly Paul Samuelson’s, which is most popular.
Explains how government caused the sub-prime mortgage meltdown.
This is useful because people often try to blame DE-regulation when nothing could be further from the truth.
As an aside, I found The Big Short an entertaining movie on the subject if you have not seen it, but it largely leaves unmentioned government as a cause and this chapter definitely fills in the blanks.
Macroeconomists Discover Economics and Debunk the New Deal (Again) is probably the most intriguing to me. Seven decades of economists who have sold us the line that the New Deal and large-scale government spending is what got us out of the Great Depression.
It took several decades but macroeconomic model builders, who consider themselves to be the elite of the economics profession, have finally discovered freshman-level principles of economics and have used that discovery to finally debunk FDR’s New Deal. (Beginning in the 1930s Austrian School economists like Henry Hazlitt recognized the truth about the New Deal: It made the Great Depression deeper and longer lasting.)
The only wise thing to have done was to have allowed the liquidation of hundreds of overcapitalized businesses to occur, cut taxes and spending, and deregulate. Instead, the Fed increased the money supply by 100 percent in a failed attempt to create another bubble while the president and Congress implemented an explosion of government interventionism. That was the
first time in American history that a depression was responded to with government interventionism rather than governmental retrenchment, and the result was a seventeen-year long Great Depression, the worst in history.
The essay is solid and I’ll need to look into Murray Rothbard’s America’s Great Depression to learn more.
That mainstream macroeconomists and their modeling have come around against governmental interventionism during a depression is great. Now, if the citizenry can learn that before the next bubble pops. I foresee politicians and special interests will use the next crisis as an opportunity to line their pockets.
Will Socialism Make You Happier? The Trojan Horse of “Happiness Research”I hadn’t heard of this statist argument before but basically
“…statists around the world are changing their tune and saying that prosperity doesn’t really matter after all; what matters is how happy we are. And, they say, that is what government can be really, really good at—making us happy. Consequently, they argue, there should be no more limits on governmental powers, for limiting governmental powers will limit our very happiness.”
In the year this book was published, Bhutan was the ‘Happiest’ according to the UN-sponsored “World Happiness Report”. Yes, Bhutan. This hellhole, ahem, I mean paradise:
As an intelligence officer which has experience in this part of the world… No.
This year’s winner is Norway, which is much more beautiful and bearable.Source:WORLD HAPPINESS REPORT 2017 It’s also a lot more socialist, which to be fair, is the point. It’s edited by leftist academic Jeffrey Sachs of Columbia University, what else would you expect?
As F.A. Hayek commented in The Road to Serfdom, the end of socialism was always egalitarianism; only the means changed over time, beginning with government ownership of the means of production and transforming to income redistribution through a welfare state and a “progressive” income tax.
These happiness researchers never make any mention at all of the well documented pathologies created by welfare statism, such as the destruction of the work ethic, family breakup, the growth of dysfunctionality caused by a welfare state that removes people from the working population, etc.
Thus, “happiness research” is part of a crusade to persuade the public that poverty and servitude to the state are superior to prosperity and freedom. It is a new version of what twentieth-century communists referred to as “socialism with a smiling face” during the last, dying days of totalitarian communism.
The Canard of “Asymmetric Information” as a Source of Market FailureGood information on the Nirvana Theory of Markets. I tried to look more into it, but it is unique to only this writing.
Nirvana Fallacy— comparing real-world markets to an unattainable utopian ideal (perfect competition), and then denouncing markets because they fall short of utopia or Nirvana. Having “proven” that markets “fail,” the analyst then proposes government intervention under the assumption that no such failures will infect government. Markets may not be perfect, but government is assumed to be.
Overall, I liked Section 5 the best. The ease at which he demystifies economic myths is extremely understandable. I just wish it was taken onboard by many voters who refuse to heed the empirical evidence against government intervention.
Asymmetric information problem really applies to government not the free market:
“In this case we are dealing with the well-established fact that, in their capacity as voters, people tend to be “rationally ignorant” of almost all of what government does. In fact, government is so pervasive that no human mind could possibly comprehend the tiniest fraction of one percent of what government in a country the size of the U.S. does. Consequently, special-interest groups dominate all democratic governments;”
A related problem I think is that “public servants” are allowed to keep secrets from their supposed masters.
“Politicians perpetuate the myth of government job creation because the government jobs that are created are seen by the average voter, whereas the private-sector jobs that are destroyed (or never created) are not.”
I.e. Hazlitt’s seen and unseen as described in Economics in One Lesson
DiLorenzo shoots down the gender wage gap myth. Tom Woods has done a couple of shows on this subject as well, as I recall.
DiLorenzo lays out a decent criticism of how Government, corrupted by size and motive, has engaged in forceful and deceitful acts against the populace.
To be honest, I really dislike collections of articles such as this and found in other “books”. If an author is still alive, such collections are always better to be formed in to a true book that is able to cleanly explain a subject from start to finish. While DiLorenzo’s articles are well written (and are quite often sourced with citations! Such a rarity among articles), the execution of the message would have been much better had he taken the time to write these out in to full chapters of their own.
The topics covered in the book were good ones to discuss (though I think that the mentions of the Civil war would be better served in a separate book), but I do wish that the author had expanded more on the topics of taxation, subsidies, and the enforcement of victimless crimes.
Overall a good read, and some articles were absolutely fantastic. If only the author could have written this out as an actual book and added another hundred pages or so, this could have been something especially fantastic.
edit: I’ve decided to give the book 5 stars, from the original 4. I find that I often go back to the book to re-read certain articles when I come across various topics of discussion. I still wish that the author had written a proper book instead of just compiling a collection of his articles, though.