Keynesian Economics in a Nutshell

From Peter Klein of the Mises Institute:

Hayek on Keynes:

The decisive assumption on which Keynes’s original argument rested and which has since ruled policy is that it is impossible ever to reduce the money wages of a substantial group of workers without causing extensive unemployment. The conclusion which Lord Keynes drew from this, and which the whole of his theoretical system was intended to justify, was that since money wages can in practice not be lowered, the adjustment necessary, whenever wages have become too high to allow “full employment,” must be effected by the devious process of reducing the value of money. A society which accepts this is bound for a continuous process of inflation.

From Sudha Shenoy’s excellent 1972 compilation, A Tiger by the Tail: The Keynesian Legacy of Inflation (p. 68).

NEWS FLASH: Statement from Edward Snowden in Moscow

The following text is a verbatim statement from famed NSA whistle blower Edward Snowder. 

One week ago I left Hong Kong after it became clear that my freedom and safety were under threat for revealing the truth. My continued liberty has been owed to the efforts of friends new and old, family, and others who I have never met and probably never will. I trusted them with my life and they returned that trust with a faith in me for which I will always be thankful.

On Thursday, President Obama declared before the world that he would not permit any diplomatic "wheeling and dealing" over my case. Yet now it is being reported that after promising not to do so, the President ordered his Vice President to pressure the leaders of nations from which I have requested protection to deny my asylum petitions.

T

his kind of deception from a world leader is not justice, and neither is the extralegal penalty of exile. These are the old, bad tools of political aggression. Their purpose is to frighten, not me, but those who would come after me.

For decades the United States of America has been one of the strongest defenders of the human right to seek asylum. Sadly, this right, laid out and voted for by the U.S. in Article 14 of the Universal Declaration of Human Rights, is now being rejected by the current government of my country. The Obama administration has now adopted the strategy of using citizenship as a weapon. Although I am convicted of nothing, it has unilaterally revoked my passport, leaving me a stateless person. Without any judicial order, the administration now seeks to stop me exercising a basic right. A right that belongs to everybody. The right to seek asylum.

In the end the Obama administration is not afraid of whistleblowers like me, Bradley Manning or Thomas Drake. We are stateless, imprisoned, or powerless. No, the Obama administration is afraid of you. It is afraid of an informed, angry public demanding the constitutional government it was promised — and it should be.

I am unbowed in my convictions and impressed at the efforts taken by so many.

Edward Joseph Snowden

Monday 1st July 2013

Full Disclosure: What the Media Isn't Telling You About War in Syria

Ron Paul: Obama Should Send Snowden a Thank You Note

Edward Snowden and the American Police State

Ever since technical contractor Edward Snowden leaked details about the massive government surveillance program that the NSA has used against American citizens, the U.S. government has been in a frantic frenzy to capture him. Since the NSA leak, the U.S. government has charged Edward Snowden with "espionage" under the the Espionage Act of 1917, the unconstitutional law passed by President Woodrow Wilson which made it a crime to be against U.S, involvement and participation in World War 1. By charging Edward Snowden with "espionage" and demanding that countries who have Edward Snowden in their borders (like Russia or China) extradite him, the U.S. government is showing the whole world it's dangerous fangs and it's blind hubris. To the Washington elites, it is okay for if the government spies on you and snoops through your emails, letters or phone conversations. But if anyone dares to challenge the American police state or reveal the massive unconstitutional violations of our civil liberties, why you are a spy!

That is what is essentially Edward Snowden's "crime": telling the truth and revealing to the American people the massive violations of civil liberties by the U.S. government in the name of "security". To the elites in Washington D.C., the private lives of private citizens are not a concern when it comes to "national security". You can't keep secrets, but the government apparently can. And if you reveal these secrets, then you are a traitor! That is how I am interpreting the behavior of the U.S. government during this whole episode with Edward Snowden. The U.S. government is behaving in a similar manner to when Bradley Manning and Julian Assange leaked "classified" information about the U.S. government and it's activities around the world. 

The revelation that the NSA has been spying on American citizens along with the revelation that the IRS has been targeting opponents of the President is further evidence of the Obama Administration's poor record when it comes to constitutionally protected civil liberties. It should be noted that the NSA program of spying has been around for over a decade, and that a failure to either wind down or dismantle such unconstitutional operations is evidence that the popular perception that leftists Democrats care about civil liberties is false. President Obama even initially promised to protect "noble" and "patriotic" whistle-blowers while guaranteeing transparency in government. But as the Obama Administration's actions towards Julian Assange of Wikileaks and Bradley Manning illustrate, the Obama Administration never really intended to protect whistle-blowers.  As Glenn Greenwald has pointed out,

Prior to Barack Obama's inauguration, there were a grand total of three prosecutions of leakers under the Espionage Act (including the prosecution of Dan Ellsberg by the Nixon DOJ). That's because the statute is so broad that even the US government has largely refrained from using it. But during the Obama presidency, there are now sevensuch prosecutions: more than double the number under all prior US presidents combined. How can anyone justify that?

Indeed, the U.S. government believes that Edward Snowden's actions constitute "espionage". How exactly is  revealing to the American people about an unjust, unconstitutional and secret government effort to spy on citizens "espionage"? It isn't. As Glenn Greenwald reminds us, espionage constitutes working at the direction of a foreign government, selling the information to a foreign intelligence service, or covertly passing the intelligence to America's "enemies". So far, Edward Snowden has done none of these things. Instead, Edward Snowden, believing that the government has become unjust and corrupt and that the law in question is a tool of injustice, took great personal risks to reveal to the America people the violations of privacy by the U.S. government. 

It is interesting to note that Edward Snowden has been pretty good at avoiding the wrath of the U.S. government. Edward Snowden's escape from the U.S. government shows how powerful an individual can be against the lumbering leviathan state and it's bloated bureaucracy. Writes Professor Butler Shaffer of the Ron Paul Institute for Peace and Prosperity:

What amuses me the most in the current Snowden episode, is that the American government, with all of its supposed intelligence-gathering capacities - the revelations of which are at the core of the case against Snowden - cannot locate this man's presence. "All the king's horses, and all the king's men" - even with access to all communications of all Americans - can no more find him than could they anticipate the collapse of the Soviet Union or the attacks of 9/11.  The entire affair - along with the actions of Bradley Manning, Julian Assange, and other whistleblowers - helps answer the pessimists who ask "but what can one person do?


So how exactly is the U.S. government's efforts to spy on American citizens, or even non-citizens, unconstitutional? Keeping tabs on the traffic of communications and content that people engage in and actually examining such content and communication violates the Fourth Amendment to the U.S. Constitution which states the following: “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” In this case, governmental spying on the phone calls, emails and other forms of communications is in essence "search and seizure" that requires a warrant that is supported by Oath of affirmation. 

As Ivan Eland explains,

The NSA evidently did obtain an order from the secret Foreign Intelligence Surveillance Act (FISA) court to acquire data on phone traffic of most Americans. But we should not be under the illusion that this court can correctly read even the text of the Constitution. Granting this order either means that the court stretched the “probable cause” requirement beyond all recognition—every American with a phone cannot really be legitimately suspected of being a terrorist or committing another crime—or did not use the standard at all, the more likely case but just as unconstitutional. A provision in the 2001 PATRIOT Act made it easier to obtain a court order for the government to get business records if they are considered merely relevant to a national security investigation. Yet the aforementioned Fourth Amendment makes no exception for national security matters, and the courts should have thrown out not only the request for the order but this section of the PATRIOT Act as unconstitutional for violating the more strict “probable cause” standard. 

Many believe that government spying programs are necessary to fight terrorism. Certainly, terrorism presents a threat to the safety of the United States. But the main reason terrorism is even a threat to begin with is because of a militaristic and interventionist foreign policy of war and empire, especially in the Middle East. American foreign policy is the main motivating factor that drives people, especially young Muslim men, to commit violent acts of terrorism like 9/11. If we wish to combat terrorism, the wars of empire in the Middle East and around the world must come to an end and American military personnel must withdraw from the 800-1000 military bases in 135 countries around the world to return to a foreign policy of armed neutrality, where the military is limited to defending our country from invasion and attack, not actively going abroad in search of monsters to destroy.

Also, constitutionally protected civil liberties should never be violated in the name of "national security". There should always be a bias toward liberty. Part of living in a free society (as the United States should have) means that some amount of risk must be taken if freedom is to survive and thrive. Edward Snowden's efforts demonstrate the need to defend the Constitution and it's limits on government power along with civil liberties now more than ever. Edward Snowden is a hero. 

Judge Andrew Napolitano VS. John Stossel on the NSA

The Tollkeepers on the Road to Serfdom

By D.W. MacKenzie

Elected Federal officials can be voted out of office. But the entrenched army of empowered, unelected Federal bureaucrats remains to wield its power, and the Internal Revenue Service bureaucrats are some of the worst. Six years ago I published an article in The Freeman on the incompatibility of the tax code and liberty, and the threat to liberty continues unabated.

Friedrich Hayek described the process by which bureaucratic empowerment and discretion extirpates personal liberty and democracy as “the road to serfdom.” He warned us all that socialism requires bureaucratization. In the socialist state bureaucrats would become the new aristocracy and its citizens would take on the role of serf. My article argued that similar dangers existed with increasing the powers of the IRS bureaucracy, and that democracy could not be relied upon to hold it in check. Recent abuses validate this fear. Any agency without restraint and accountability is a threat to personal freedom and should be abolished.

I have published critiques of the US government and politicians without IRS reprisal, including some that targeted tax policy and the IRS specifically. The types of concerns I raised regarding IRS authority were spelled out by Hayek in his classic The Road to Serfdom. Scholars from Jeff Sachs to Gordon Tullock have claimed that Hayek’s warnings about abuse in social democracy were overstated. After all, many Western nations have large public budgets and extensive regulations without suffering the dire results that Hayek predicted.

The current IRS scandal has renewed concerns regarding abuse of IRS power. One flagrant example from the last election was the partisan use of the IRS as a political weapon. The IRS has a history of political abuse. Hoover, FDR, JFK, and Richard Nixon all used the IRS against enemies, long before Clinton or Obama. In the wake of recent scandals, some politicians are now investigating the IRS. IRS officials, like Douglas Shulman, Lois Lerner, and Holly Paz, in their appearances before Congress, have exhibited the arrogance of an entitled aristocrat instead of the public servants that they are.

Read the rest of the article here.