George Rebane
This weekend Jo Ann and I, along with some Nevada County friends, attended the annual retreat in Scottsdale, AZ put on by the Mercatus Center and the Institute for Humane Studies (both at George Mason University). The conference for liberty prone supporters was a welcome opportunity to hear stimulating speakers, attend breakout sessions on various national issues, and eat great food at the Montelucia resort.
The format of the retreat allows its attendees (slightly north of 200) to have ample time for one-on-one discussions with nationally recognized scholars and well-published pundits. I especially enjoyed my chats with economists Tyler Cowan and Peter Boettke, and philosopher Matt Zwolinski. It was good to re-establish that one’s understanding and interpretations of what is going on in the country are not a lonely collection of notions shared by no one else. While we did identify some differences, they were not of the magnitude that would put us in different ideological camps. It was truly a libertarian lovefest.
Saturday night’s speaker at the concluding gala dinner was none other than Peter Schiff, nationally known media pundit and author who at times gives me pause when I consider his assessment of how far beyond the tipping point America has gone in the management of its fisc. Schiff’s latest book, The Real Crash – How to save yourself and your country, sums up his views. But if you’ve been a regular RR reader, you already know Schiff’s copy fairly well (summary notes here).
A common theme of all the speakers and discussion leaders was that they are ‘short term pessimistic, and long term optimistic’. It was that proposition in which I most strongly differed with my betters, for I believe exactly the opposite. Our political system is geared for the short term; every program, legislative vote, and lie to constituencies is designed for just one objective – re-election. The long term is treated as if it either doesn’t exist or matter. When we combine this political behavior with accelerating technology, we get what I believe is the fundamentally strong socio-economic result I have long argued, and that we are now witnessing.
On its current course America's economy will continue to reduce the number of available jobs per capita, and its population will not produce the sufficient number of workers to fill the jobs that are produced.
I did my best to make the case for growing systemic unemployment in these pre-Singularity years. And to my pleasant surprise found these ideas to be received well with serious consideration if not downright acceptance. We shall see if there are any spreading ripples.
Schiff’s talk covered the details of how we got into this mess called the Great Recession (which I call Depression2), and the nature of the outright lies that we are being told about the non-existent recovery. Numbers can be deliciously slippery things, and there’s no way that a progressive will acknowledge, let alone agree with a libertarian’s interpretation of economic history. In any event, Schiff ran out of time before he could switch from diagnosis, prognostications, to prescriptions for a better future. To remedy that I present some stepping stones on his path to salvation as described in his above referenced book.
- Jobs: Government can improve employment only by getting out of the way;
- Fixing the financial industry: Deregulate;
- Sound money: Return to the gold standard;
- Tax Reform: For starters, end the income tax;
- Tear up the “third rails”: End Social Security and Medicare;
- Fixing Higher Ed: Time to drop out of college? (also see MOOCs);
- Healthcare: Repealing Obamacare is just the beginning;
- America is bankrupt: Time to admit it.
[25mar14 update] Dr Matthew Slaughter, professor and associate dean at Dartmouth, makes the credible claim that America’s H1-B visa and immigration policies are costing the country an additional 500,000 jobs annually. This is based on the fact that the 85,000 restricted H1-B applicants consist primarily of degreed STEM workers whose demonstrated multiplier effect results in the half million figure. There are about twice as many STEM applicants annually as are allowed in by our misguided immigration policies. These foreigners are also the people who found companies that bring untold wealth, trade balances, and prestige to the United States as a leader of the developed world. Each year the fraction of native born Americans in the STEM ranks continues to shrink while our politicians are finagling how to get more illegals amnesty to join the constituencies that keep them in office. (more here)
Meanwhile, our own universities are pumping out graduates an ever increasing fraction of whom are winding up unemployed with unpayable college debt. Why are they unemployed? Well they studied stuff that no one cares about enough to take a chance on their ability to do a job in this Potemkin economy. (more here and H/T to reader)
[26mar14 update] The big debate forming up between factions of the Right is how to go forward as the self-purported conservators of the nation’s fisc and future. Republicans are the party of prominence and power for the Right, and leaders of that party have been pushing proposals and legislation that take major steps toward what Schiff and other national thought leaders have prescribed for at least twenty years now. Today those proposals are ignored by Democrats, and worse, denied that any such proposals have ever been put forward by Republicans. The lamestream dutifully echoes that message and repeats it to keep the uninformed misinformed.
But the Repubs have not been innocent in contributing to the fiscal and social train wreck ahead. When they did get their fingertips on the levers of power, they have been simply overwhelmed by the reality of an entrenched liberal government bureaucracy and an electorate that has gotten more than used to the handouts of a carefully constructed nanny state. And the result has been that the party’s sage heads have always concluded that it would be imprudent to be prudent – imprudent in the sense that if prudence were proposed, Republicans would be thrown out of office.
So today we have the more socialist than ever Democrats with their back firmly turned on reality, believing that they can bamboozle the voters and lenders forever, as they continue to lavish goodies for votes – goodies that are paid for with borrowed money that is even used to service the ever growing debt. The whole game is based on new lenders forever lending more at ridiculously low interest rates, and old lenders continuing to cook their books, having long abandoned hope of recovering their principal. To the collectivist, that is how the financing of governance works.
To support this ongoing fiasco requires the careful management of ‘information’ from the government and their corporate cronies. For example, we are told that America is recovering from the Great Recession. But by any real measures of the economy’s progress or comparisons to baseline amounts and rates, nothing could be further from the truth. So the farce will continue until the lenders start demanding real interest for the risk of playing perpetual Ponzi with Uncle Sam. When that happens the fiscal flywheel that has kept things going will simply disintegrate, spraying shrapnel into every corner of our economy. Then as we gather in the streets with our pitchforks and torches, it will dawn on us why our police have been quietly militarized.
And no one in our fair land is prepared to do anything to break this vicious cycle of ever more debt to fund ever more spending to buy ever more votes to remain ever more in office.
When we look at the Republicans as the loyal opposition whose long voiced principles are supposed to be the great hope that pulls us back from the brink, we see sage heads shaking and advising that the GOP should help the Dems stay the course. These ‘pragmatic’ pundits inhabit the full range of Republican politics, telling our candidates that it is better to forego principles and be re-elected, than remain principled and risk being defeated in the next election. For after all, what can an unelected politician do to help the country right itself?
This Catch-22 is so firmly in place that even local county level advisors to our congressional representatives are not willing to discuss the ridiculous state of affairs in which we find ourselves. In my talks with these folks, I simply run into a brick wall when making the case that what can’t go on forever, won’t. Everyone on the Right agrees that what’s happening can’t go on forever, but they will not even consider advising our electeds to do anything that would prevent the train wreck. I take that back. These advisers and their elected Republican patrons concur that the country only needs a little magical pixie dust to bring back the Ozzie and Harriet world of the 1950s, and then the country will somehow be back on the yellow brick road to full employment, robust GDP growth, shrinking national debt, and an ever positive current account.
But the numbers say it ain’t gonna happen.
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