Patterico's Pontifications

9/3/2015

rnc to gop candidates: swear your loyalty to us

Filed under: General — Dana @ 6:43 am

[guest post by Dana]

It is being reported that the RNC is attempting to control GOP candidates by having them pledge fealty to the party. And specifically, they are targeting Donald Trump in an effort to force the front-runner’s hand. Huh? When has Trump ever shown himself to be easily controlled and concerned with what the RNC thinks about him??

The Republican National Committee on Wednesday privately reached out to GOP presidential candidates to ask whether they’d be willing to sign a pledge stating they would not run as an independent candidate in the event they fail to win the Republican nomination in 2016.

The move is an implicit challenge to Trump, who pointedly refused to rule out a third-party run during the first GOP debate. He was the only candidate who declined.

The language of the draft pledge speaks directly to the issue vexing Republicans – the possibility that the billionaire could choose to wage a third party bid if he fails to win the GOP nomination, a prospect that could seriously damage the GOP’s prospects of reclaiming the White House. Tapping into deep anti-establishment animosity among the conservative grassroots, Trump has surged to the lead of the deepest presidential field in recent memory. If Trump were to pull just a fraction of the vote as an independent, write-in or third party candidate, it could be enough to sink the eventual Republican nominee.

Signing a loyalty pledge won’t stop Trump from doing anything. It’s foolish to think it would. Demanding this also shows who is in control – and it’s certainly not the RNC. Further, if the party establishment wants to fire up Trump supporters even more than they already are, then just go right ahead and try to strong-arm their candidate.

–Dana

Rocker Assumes Responsibility For Her Rape; Outrage Follows

Filed under: General — Dana @ 6:09 am

[guest post by Dana]

For daring to suggest that women can play a role in contributing to sexual violence by their actions and how they dress, Chrissie Hynde, front woman for the Pretenders, is now facing a backlash from the sisterhood.

During an interview published this weekend, Hynde, 63, openly discussed being raped by a biker gang at age 21. What is causing the feminist rancor isn’t the fact that Hynde was raped while a student at Kent State, but rather it’s that she assumed responsibility for the rape. Hynde, who was drunk and high at the time, freely climbed onto the back of one of a biker’s motorcycle and was subsequently taken to a vacant house and forced to perform sexual acts. Assuming responsibility for this, according to Hynde, is just “commonsense”:

“Technically speaking, however you want to look at it, this was all my doing and I take full responsibility,” she told the Times.

“You can’t f— about with people, especially people who wear ‘I Heart Rape’ and ‘On Your Knees’ badges,” Hynde added.

“Those motorcycle gangs, that’s what they do… You can’t paint yourself into a corner and then say whose brush is this? You have to take responsibility. If you play with fire, you get burnt. It’s not any secret, is it?”

She then pointed to women’s presentation in provoking attacks:

“You know if you don’t want to entice a rapist, don’t wear high heels so you can’t run from him.”

“If you’re wearing something that says ‘Come and f— me’, you’d better be good on your feet,” she continued.

Hynde offered this distinction:

“If I’m walking around and I’m very modestly dressed and I’m keeping to myself and someone attacks me, then I’d say that’s his fault,” said Hynde. “But if I’m being very lairy and putting it about and being provocative, then you are enticing someone who’s already unhinged — don’t do that.”

The blowback came quickly:

“Victims of sexual violence should never feel or be made to feel that they were responsible for the appalling crime they suffered, regardless of circumstances or factors which may have made them particularly vulnerable,’’ said Lucy Hastings, the director of the group Victim Support.

A columnist for Britain’s Independent newspaper, Holly Baxter, added, “This persistent belief that men are naturally inclined towards rape and that women have to dress or act or behave accordingly . . . is one that prevents so many assaults from being reported or prosecuted every year.”

Jackie Fox, lead singer of the Runaways, and rape victim, offered this:

“It bothers me, because I don’t know that she’s gone out there and talked to [other] rape victims. If you had seen the messages that people sent me, so many of them were about ‘I’ve always thought it was my fault.’ We already think that anyway. So this is just telling people who’ve recently gone through this experience of being raped or abused, ‘Yeah, you’re right, it is your fault.’ But there’s no such thing as asking for it. And poor judgment is not an invitation to rape, nor an excuse for it.

“I know so many women who were raped while they were drunk or high, and they all blame themselves. To say that a woman can’t misjudge how much she’s drinking, or dress in a way that makes her feel good about herself for fear that men aren’t going to be able to control themselves, or that she has to be able to know who is dangerous and who isn’t, is asking an awful lot of men and women — especially young people.”

Offering another perspective is Julia Hartley-Brewer, who recognizes that Hynde lives in the “real world” and understands people do not act the way we hope and believe they should:

Hynde was simply suggesting that women have to live in the real world, as it exists, and not a utopian paradise where sexual violence is a thing of the past.

There will always be rapists, just as there will always be murderers and thieves.

Pretending they don’t exist doesn’t make them go away.

You have every right to leave your front door wide open while you are away on holiday and assert your right not to be burgled, but most people (including your insurance company) might advise against it. Similarly, you are entitled to walk into an opposing football team’s local pub wearing your own club’s shirt and demand not to be punched in the face, but you probably shouldn’t be surprised if it happens.

In the same vein, telling a young woman she can wear what she wants, drink as much alcohol as she wants, go off with any strange man she wants and to hell with the consequences, is not a victory for modern feminism. It’s just irresponsible.

All Chrissie Hynde has done is recognise that the world is not always as we would like it to be.

That does not make her a rape apologist. It just proves she is the one living in the real world and it is the Sisterhood who are the pretenders.

Hynde is not excusing her rapists nor condoning what they did. She is not saying that rape should be decriminalized or that those who commit such a heinous act should not be legally prosecuted and face serious consequences. Rather she has attempted to learn and grow from her own personal experiences. Whether one refers to it as self-blaming or self-responsibility, she is using the opportunity to empower other women by reminding them that behaving responsibly is one of the greatest protections against those would seek to harm them. It should go without saying that this isn’t foolproof and I don’t think Hynde is foolish enough to believe it is. But what she is doing is using an ugly event in her life as a cautionary tale for women: To a great degree, you have the power to protect yourselves, so take care not to diminish that power by allowing yourself to get into an out-of-control situation where vulnerability is increased and decision-making becomes clouded. As much as is within your power, remain in control.

–Dana

9/2/2015

Report: More Than Half of Nation’s Immigrants Receive Welfare

Filed under: General — Patterico @ 10:22 pm

USA Today:

More than half of the nation’s immigrants receive some kind of government welfare, a figure that’s far higher than the native-born population’s, according to a report to be released Wednesday.

About 51% of immigrant-led households receive at least one kind of welfare benefit, including Medicaid, food stamps, school lunches and housing assistance, compared to 30% for native-led households, according to the report from the Center for Immigration Studies, a group that advocates for lower levels of immigration.

“It is one thing to have free immigration to jobs. It is another thing to have free immigration to welfare. And you cannot have both.” — Milton Friedman

Regarding the Kentucky Clerk’s Refusal to Grant Same-Sex Marriage Licenses

Filed under: General — Patterico @ 8:05 pm

First we have Rand Paul, saying the clerk’s refusal is “part of the American way.” No, Senator. Adherence to the rule of law is the American way.

Sen. Rand Paul (R-KY) suggested Tuesday that a Kentucky clerk who is refusing to grant marriage licenses to same-sex couples was “making a stand” and “an important part of the American way.” But he argued the whole situation could have been avoided if states stopped processing marriage licenses entirely.

“I think people who do stand up and are making a stand to say that they believe in something is an important part of the American way,” Paul told Boston Herald Radio, according to The Washington Post.

Mike Huckabee is even worse, saying thank God for the clerk. Ted Cruz has a slightly more nuanced version (see the link immediately above), decrying the assault on religious liberty currently taking place in the U.S., but implicitly acknowledging that the law must be carried out, and pleading (without specificity) for “alternative ways” to allow the law to be carried out without trampling on religious liberty.

Which sounds good . . . but unless they want to reassign her, the main “alternative way” I see is: resignation. Even when you don’t like the law, as a government official, you must carry it out (unless to do so would be so immoral that it would represent the very breakdown of society).

Jonathan Adler quotes Justice Scalia on a similar issue: the role of judges:

[W]hile my views on the morality of the death penalty have nothing to do with how I vote as a judge, they have a lot to do with whether I can or should be a judge at all. To put the point in the blunt terms employed by Justice Harold Blackmun towards the end of his career on the bench, when he announced that he would henceforth vote (as Justices William Brennan and Thurgood Marshall had previously done) to overturn all death sentences, when I sit on a Court that reviews and affirms capital convictions, I am part of “the machinery of death.” My vote, when joined with at least four others, is, in most cases, the last step that permits an execution to proceed. I could not take part in that process if I believed what was being done to be immoral. . . .

[I]n my view the choice for the judge who believes the death penalty to be immoral is resignation, rather than simply ignoring duly enacted, constitutional laws and sabotaging death penalty cases. He has, after all, taken an oath to apply the laws and has been given no power to supplant them with rules of his own. Of course if he feels strongly enough he can go beyond mere resignation and lead a political campaign to abolish the death penalty” and if that fails, lead a revolution. But rewrite the laws he cannot do.

Ed Morrissey makes the argument very well today at Hot Air. I can’t add anything to it.

We’ve written plenty of posts defending religious freedom and the right to choose not to participate in private ceremonies, but this case is different. The other cases about which we have written involve private enterprise — bakers, photographers, venue owners — who do not exercise a monopoly on their markets. Operating a private business should not strip people of the right to free religious expression in all phases of their lives; other businesses can and do wish to participate in those events, and the free market should be free for all within it.

Government is not a free market, however; it is a monopoly backed up by force. If the law says these couples can apply for and receive a marriage license, then government has to abide by that law. They exercise a monopoly on marriage licenses; these couples cannot go anywhere else to get one. This is a denial of access to market by government force, essentially, a much different situation than with bakers, photographers, and so on.

One might sympathize with Davis on her religious objections to same-sex marriage, but that doesn’t give her the authority to deny it if it is lawful. A politician might object to alcohol purchases, perhaps even on religious grounds, but he can’t deny permits to liquor stores in a jurisdiction that allows them just because of his religious objections to alcohol consumption. That would be an abuse of power, the kind conservatives would protest in other circumstances.

Accepting office in government means upholding the law. If that conflicts with Davis’ religious beliefs, then she should resign and find other work.

I’d be open to “alternative ways” that don’t involve rejection of the rule of law (as strongly as we might disagree with the “law” as the Supreme Court has determined it) — but I think Sen. Cruz should tell us what those alternative ways might be.

Whatever they might be, they can’t involve simply refusing to carry out your duty. That is not the “American way” in my book.

Caveat: I have not heard Sen. Paul’s interview. If it turns out he was misrepresented — as Scott Walker was, when he supposedly advocated a wall on our border with Canada (watch the video and you’ll see he was simply being inattentive, and talking over Chuck Todd) — I’ll defend him. Until then, the criticism stands.

Carly Fiorina Now Very Likely To Be On Main Stage At GOP Debate

Filed under: General — Dana @ 7:15 am

[guest post by Dana]

Do you think Fiorina is now vulnerable to being accused of gender politics given that she benefits the most from the rules being tweaked? And will Trump, with the most to lose, be the one making that accusation?

The organizers of the next Republican presidential debate have announced changes to debate criteria that mean former Hewlett-Packard CEO Carly Fiorina will almost certainly join the rest of the top-tier candidates on the main stage at the Reagan Library on Sept. 16.

“CNN reevaluated its criteria and decided to add a provision that better reflects the state of the race since the first Republican presidential debate in August,” the network announced. “Now, any candidate who ranks in the top 10 in polling between August 6 and September 10 will be included.”

–Dana

New Planned Parenthood Video: “It Just Fell Out”

Filed under: General — Dana @ 6:35 am

[guest post by Dana]

Yet another Planned Parenthood video has been released by the Center for Medical Progress. In this video, Planned Parenthood’s business of organ harvesting fetal baby parts is discussed in graphic terms:



The video features undercover conversations with Dr. Katharine Sheehan, the long-time medical director of Planned Parenthood of the Pacific Southwest until 2013; Perrin Larton, the Procurement Manager for ABR; and Cate Dyer, the CEO of rival fetal tissue procurement company StemExpress.

Sheehan tells actors posing as a new human biologics company that at Planned Parenthood Pacific Southwest, “We have already a relationship with ABR.” Sheehan explains, “We’ve been using them for over 10 years, really a long time, just kind of renegotiated the contract. They’re doing the big collections for government-level collections and things like that.” When one of the actors negotiates, “We return a portion of our fees to the clinics,” Sheehan responds eagerly, “Right, get a toe in and make it, make a pro–alright.”

Perrin Larton, the Procurement Manager at ABR, is shown describing ABR’s fetal tissue harvesting practice to a prospective buyer. “I literally have had women come in and they’ll go in the O.R. and they’re back out in 3 minutes, and I’m going, ‘What’s going on?’ Oh yeah, the fetus was already in the vaginal canal whenever we put her in the stirrups, it just fell out,” she explains of situations where there has been a great enough degree of cervical dilation to procure an intact fetus.

ABR, founded in 1989 by CEO Linda Tracy, charges $340 per second-trimester fetal tissue specimen, yet seems less concerned about tissue quality than other harvesting companies: “Whenever we have a smooth portion of liver, we think that’s good!” says Larton

Unsurprisingly, Sen. Majority Leader Mitch McConnell said this week that there are not enough Republican votes to defund Planned Parenthood as part of a federal spending agreement:

“We just don’t have the votes to get the outcome that we’d like,” McConnell said during an appearance on WYMT. “The way you make a law in this country, the Congress has to pass it and the president has to sign it. The president has made it very clear he’s not going to sign any bill that includes defunding of Planned Parenthood, so that’s another issue that awaits a new president hopefully with a different point of view about Planned Parenthood.”

Well, there are enough votes for a shutdown, but who wants that, right?

–Dana

9/1/2015

Paul Krugman: Democrats Don’t Create Cults of Personality Around Politicians

Filed under: General — Patterico @ 10:39 pm

Well, at least not undeserving ones.

John Sexton’s post is classic John Sexton: hard-hitting, fair, and well-reasoned. I can’t do it justice with an excerpt. Go read it all.

UPDATE: Maybe they just come dangerously close?

Nadia Naffe Dismisses Lawsuit Against Me — Without Collecting a Penny

Filed under: General — Patterico @ 5:18 pm

Nadia Naffe and I have settled her lawsuit against me. I am paying her nothing. I am retracting nothing. There are no secret promises. The lawsuit has been dismissed, in exchange for my waiving any claims for attorneys’ fees or costs.

Throughout this lawsuit I have vigorously defended my First Amendment rights, and continue to do so. I stand by what I have said about Ms. Naffe, and I remain free to criticize her in the future. I continue to believe Ms. Naffe’s lawsuit was a vehicle designed to silence me. Ms. Naffe sued my wife. Ms. Naffe even sued Steve Cooley — who at the time was the Los Angeles County District Attorney, and my boss.

I continue to believe these were obvious attempts to misuse the court system, to punish me for my speech about a matter of public interest. Recall that the trial judge threatened to sanction Ms. Naffe and her lawyer Jay Leiderman for, as the judge put it, “Plaintiff’s (and/or her counsel’s) willingness to play fast-and-loose with the language that is actually at issue here.”

In the end, these tactics were unsuccessful.

It was interesting to be a defendant in a frivolous lawsuit. I went through the experience of watching media outlets publish stories about this case that repeated Ms. Naffe’s allegations as if they were true. It will be interesting to see whether any of them report that the lawsuit has been settled, with nothing retracted, and not one cent paid to Ms. Naffe. Frankly, I doubt it. Big Media loves to repeat wild allegations made in frivolous lawsuits — but the dismissal of those lawsuits is, all too often, not considered newsworthy.

While litigation is never pleasant, this litigation had some positive effects. For example, it set an important Ninth Circuit free speech precedent, holding that public employees are allowed to discuss matters of public concern on their own time. I am proud to have had a part in setting that precedent. The courts have ruled that I did not act under color of law. I did not blog or tweet about Ms. Naffe on taxpayer time.

The best part about the experience was the support I received. Not only did you, the readers, stand by me, but three lawyers stepped up and helped me throughout the process. I owe a huge debt of gratitude to attorneys Ronald D. Coleman (from Likelihood of Confusion) and Kenneth P. White (from Popehat), who both worked endless hours on this case for zero pay — and came up with the strategy that made this result possible. I would like to thank also Eugene Volokh of UCLA Law School and the Volokh Conspiracy blog at the Washington Post. Eugene wrote an amicus brief supporting my position in the Ninth Circuit, where I prevailed on the “color of law” claim.

These gentlemen all did outstanding work — not so much for me, but for the cause of free speech. I was just an incidental beneficiary . . . but a very pleased and grateful one.

Please join me in thanking Ken White, Ron Coleman, and Eugene Volokh for their efforts in bringing home this victory.

“Human Action” and Robert Murphy’s “Choice,” Part 11: Indirect Exchange and Money

Filed under: Economics,General,Human Action and Choice — Patterico @ 7:30 am

This is Part 11 of a 17-part series of posts summarizing Bob Murphy’s indispensable book Choice: Cooperation, Enterprise, and Human Action. Murphy’s book is itself is a summary of Ludwig von Mises’s classic treatise “Human Action.” Like previous posts, this post is a summary of a summary.

The purpose of these posts is to popularize and spread the word about Austrian economics and educate the public. Rather than list all the previous parts, I have created a category for all these posts, called “Human Action and Choice,” so that all these posts can be read (in reverse order) with a single click. Note well: any errors in these summaries are mine and not Murphy’s.

This is one of the longest chapters in the book, and I think it’s the toughest post in the series (at least so far). Some paragraphs may need to be read twice, or perhaps you should just read them more slowly than you’d normally read a blog post. But I think the concepts are among the most fascinating. You should learn something today.

INDIRECT EXCHANGE

Murphy begins by explaining the difference between direct and indirect exchange. We have explored simple examples of direct exchange before, in post 7 (trading one flavor of ice cream for another) and post 10 (selling ice cream for money). Let me illustrate indirect exchange while sticking with the ice cream example.

Say Milton has chocolate, but wants vanilla. Murray has vanilla, but wants strawberry. Ludwig has strawberry, but wants chocolate. No two of these men can trade with one another and have both sides directly obtain they want. But any two of the three can trade directly, and thereby have one side get what they want directly, and have the other side obtain what he needs to successfully trade with the third party. The party that uses the first transaction to get what he needs for a second transaction is engaged in indirect exchange.

For example, if Milton trades his chococate for Murray’s vanilla, Milton is immediately happy, because he wanted vanilla. Murray, exchanging his vanilla for chocolate, is not happy yet — because Murray wanted strawberry, and he has chocolate. But now Murray can go to Ludwig, and exchange strawberry for chocolate. After two transactions, everyone’s happy.

Here, Murray used strawberry ice cream as a medium of exchange. Trading something of value for strawberry did not satisfy Murray immediately, but using that strawberry ice cream as a medium of exchange allowed Murray to get what he wanted.

THE ORIGINS OF MONEY

Carl Menger, the father of Austrian economics, explained that money got its start with this sort of indirect exchange. People recognized that they could not always trade goods directly. But they also realized that if they could trade their goods or services in return for a widely accepted medium of exchange, they could get what they wanted.

Menger explained that money must of necessity emerge in this way. His was not a historical analysis, as there are no clear records of how this happened; rather, he argued from economic logic. Money could not have emerged because a wise ruler said: “everyone should start accepting these shiny rocks” (or pieces of metal, or whatever) “in return for the valuable stuff they have.” It seems very unlikely that people would have signed onto such a bizarre-sounding plan. And if a wise ruler had managed to pull this off, how would he know how many shiny rocks people should have to exchange for one sheep? for three cows? for one day’s labor picking crops? and so forth.

No: instead people started trading for things that they knew would be widely accepted, because they were useful commodities on their own. In some societies the initial medium of exchange was tobacco. It has been cocoa beans at times. (I explained the origins of money more fully in May 2014, and for a fuller description, I refer you to that post, but here we will just summarize it.) But over time, people gravitated towards previous metals like gold and silver, because they had the properties you would expect from a medium of exchange: they were recognizable, scarce, liquid, divisible, durable, easily stored, and transportable. The general idea, however, is that money was a commodity — and it cannot logically emerge any other way. (Gold is thus a “commodity money” — as contrasted with fiat money, which is money simply because government declares it to have value.)

Now comes the fun part — that I think is going to upset some of you, because it may run counter to the conventional way you have likely thought about money for most of your life. (Why “fun”? Well, where’s the fun if I’m not challenging your ingrained beliefs a little bit?)

ANALYZING MONEY USING SUPPLY AND DEMAND

Mises’s great insight into money (one of them, anyway) is that money is a good that is demanded by people, just as they demand any other good. It’s not just what’s left after you get through satisfying your other demands. It’s something you demand just as you demand traditional goods or services. Money is demanded, not so we can consume it (obviously), but because we can hold it, and it provides a flow of services to the person who holds it.

If you view money as a good, there are immediately some problems that need to be addressed. For one, how do you value it? Oranges might be said to be worth $2 per pound. Bicycles might be $200 each. What is money “worth”? The answer is: the reciprocal of all the goods and services it could purchase. If oranges are $1 for a half pound, then $1 is worth a half pound of oranges. If bicycles are $200, then $1 is worth 1/200 of a bicycle. Etc.

Viewing money in this way helps you to understand general price fluctuations as a function of the demand for money. If the price of money goes up (because the demand for money goes up), then the price of all these other goods goes down. When people demand money more, prices fall. Put another way, money’s purchasing power rises. Like any other good, as its price goes up, people will hold less of it, because they can get more for it. (As a side note — and this is my own observation, not endorsed by Murphy — this is why deflation is not worrisome. As people hoard money, it becomes more valuable, and naturally people will want to exchange it for goods, since they can buy more with it.)

By contrast, when money’s purchasing power (or price) falls, prices of other goods go up. This is what is typically thought of as “inflation” (price inflation, or rising prices) — and it is a function of money losing its purchasing power. Put another way, the price of money is falling, which is often a side effect of expansion of the money supply — the marginal utility of extra units of money decreases as the supply available increases.

Ultimately, then, the purchasing power of money is a function of the demand for money. (Remember, Mises liked to explain the economy in terms of demand.) The purchasing power of money throughout the economy adjusts so that the total quantity of money demanded by all people (taking into account what they would have to exchange to get it) equals the total amount of money in existence. (This is the same thing that happens with goods and services: the quantity of a good in an unhampered market economy tends towards the level equal to the total amount demanded at the market clearing price.)

Viewing money as a good collapses the artificial distinction between microeconomics and macroeconomics. It allows Austrian economists to analyze the macro economy according to the common-sense principles (incentives and purposeful behavior) that govern decisions on the individual level.

THE REGRESSION THEOREM

Other problems come to mind, however. Remember, we have said all value is subjective. How can we use subjective value theory to explain the value of money without engaging in circular logic? Before Mises, explanations of the purchasing power of money seemed to travel in a circle: money can buy stuff because people demand it . . . and people demand money it because it can buy stuff.

Mises introduced the time element to break the circle. He explained that money’s purchasing power today is based on people’s expectations of what money’s purchasing power will be in the future. We’re no longer explaining money’s current purchasing power by reference to money’s current purchasing power, but rather by referring to the purchasing power we expect it will have in the future. This evaluation of the future is crucially aided by knowledge of what money was worth in the recent past.

You might say: that breaks the logical circle, but it leads us into a another problem: of infinite regress. If today’s purchasing power is based on yesterday’s expectations, and yesterday’s purchasing power was based on the previous day’s expectations, where did the original purchasing power come from? That’s where Menger’s explanation of the origin of money, described above, comes in. Mises said all money started as commodity money, like gold. Mises called this the “regression theorem.” At some point in the past, the community was in a situation of direct exchange (as opposed to indirect exchange) and this explains the origin of the purchasing power of money.

Mises argued that, if everyone in the world suddenly forgot tomorrow what the prices had been for everything in the past, people could reconstruct the process of comparing the relative values of different goods or services (a Ferrari is worth more than an orange), but nobody would know what a “dollar” is worth anymore. This is why Mises says that money — a medium of exchange — must begin as an economic good for which people assign an exchange value. People who have commonly used nothing but fiat money in their lives may have a hard time accepting this. But there is no fiat currency in existence whose value can’t be traced backwards in time to a commodity money. (This may help explain why people are having such a hard time determining a stable value for Bitcoin. Murphy acknowledges in a footnote that Misesians are still debating whether Bitcoin can escape the logic of the regression theorem.)

THE NON-NEUTRALITY OF MONEY

Mises also argued that money is not “neutral.” As noted, many economists would explain prices through the examples of a barter system, and throw in money as an afterthought. Mises did not. One effect of this view is Mises’s views on the effects of new money entering the economy. Many people seem to assume that if you double the stockpile of money, prices will double and purchasing power will halve, but otherwise people’s relative economic positions will remain constant. First, it’s not so neat and mathematical as that — but more importantly, money enters the economy in different places, and the people who get to use it before the prices rise are benefited. So, during QE, for example, large investment banks received the new money injected in the economy first, and benefited at the expense of others.

Another Mises tenet was that the currently available quantity of money is sufficient. Many people assume that, as the population rises, it is necessary to expand the money supply to forestall that horrible bogeyman called “deflation.” Mises emphatically disagreed. Doubling the money supply does not make people richer, and halving it does not make people poorer.

THE GOLD STANDARD

Mises was also a fan of the gold standard, seeing it as a critical bulwark against government power — as important as a written constitution or bill of rights. (I hesitate to use the words “gold standard” in a post, as it is almost certain that the comment section will fixate on it, making arguments that have nothing to do with the points made in the post. Still, this is part of the chapter.) Mises did not want governments to have the power to take action (even war) without the political accountability that comes with raising the money for the government action through taxation or borrowing. Simply inflating the currency allows governments to pretend that the government action costs them nothing.

The gold standard sets an automatic brake on inflation. If countries tried to inflate their currency, gold would flow out of the country as the government would be forced to redeem the inflated currency for gold. The money supply would have to shrink (or, if you were insistent on inflating, you could just pull a Richard Nixon and kill the gold standard — the “to hell with everything” strategy — leading to the price inflation we saw in the 1970s).

This mechanism also keeps foreign trade in balance; if more Americans bought British products than vice versa, they would have to buy pounds to do so. The surfeit of dollars chasing pounds would cause pounds to increase in value relative to dollars. But the gold standard would keep this from getting out of control, because if the value of a dollar became too low vis-a-vis the pound (meaning it took more dollars to buy a pound), gold owners could simply sell gold to England, buy U.S. dollars with the pounds, exchange those dollars for gold in the U.S., and end up with more gold than they started with. The net effect is that gold would flow out of the U.S., causing U.S. prices to fall, which would cause the British to buy more American goods, bringing everything back into balance. This mechanism has been understood since the days of Hume and Ricardo.

THE MEANING OF “INFLATION”

Finally, Mises was very clear that we should use the term “inflation” to refer to the quantity of money, and not the rise in prices that an increased quantity of money causes. (In a slight concession to the widespread use of the term to refer to the latter concept, Murphy uses “price inflation” to refer to the rise in prices, and “monetary inflation” to refer to an expansion in the money supply, which is what Mises insisted inflation really means.) Mises reasoned: “It is impossible to fight a policy which you cannot name.” (Shades of Ted Cruz talking about radical Islamic terrorism!) The root cause of price inflation is monetary inflation, and if we call rising prices “inflation,” we are then left without a term to describe what the real problem really is.

That was a bear of a chapter; possibly the toughest one in the book. I may give you a few days to reflect on this one before moving ahead with the next post.

8/31/2015

Remember When Hillary Clinton Said, “I’m confident that this process will prove that I never sent, nor received, any email that was marked classified”??

Filed under: General — Dana @ 5:23 pm

[guest post by Dana]

Well, so much for her confidence because this is the scandal that just keeps on giving:

The State Department has deemed roughly 150 more of Hillary Clinton’s email messages to be classified, a move certain to fuel the roiling controversy over her use of a private email server instead of an official government account when she served as secretary of state.

The new classifications will more than triple the previous total of 63 classified messages on Clinton’s account, but State Department spokesman Mark Toner stressed that the information was not marked classified at the time it was sent several years ago. He also said the decisions to classify the information did not represent a determination that it should have been marked or handled that way back then.

“That certainly does not speak to whether it was classified at the time it was sent, or forwarded, or received,” Toner said during the daily State Department briefing on Monday. “We stand by our contention that the information we’ve upgraded was not marked classified at the time it was sent.”

And more defense:

Toner batted away questions about whether State Department policy dictated that Clinton and other agency employees treat as classified information obtained in confidence from foreign officials or diplomats.

“Classification — we’ve said this many times — is not an exact science. It’s not, often, a black-and-white process,” Toner said. “There’s many strong opinions. … It’s not up to me to litigate these kinds of questions from the State Department podium.”

All of this comes in advance of the State Department’s pending release of 7,000 “additional pages” of her emails.

Also, not only did Clinton use a private server for official State Dept. business, a new report asserts that she also shared an email network with the Clinton Foundation:

Records reveal that Hillary Clinton’s private clintonemail.com server shared an IP address with her husband Bill Clinton’s email server, presidentclinton.com, and both servers were housed in New York City, not in the basement of the Clintons’ Chappaqua, New York home.

Web archives show that the Presidentclinton.com Web address was being operated by the Clinton Foundation as of 2009, when Hillary Clinton registered her own clintonemail.com server.

Numerous Clinton Foundation employees used the presidentclinton.com server for their own email addresses, which means that they were using email accounts that, if hacked, would have given any hacker complete access to Hillary Clinton’s State Department emails, as well.

The bombshell revelation raises new concerns about the possible illegality of Hillary Clinton’s private email use. The former Secretary of State is under federal investigation for potentially violating the Espionage Act by allowing people without a security clearance to access classified information. The fact that Hillary was sharing an email network with a private foundation means that people without a security clearance almost certainly had physical access to her server while she was working at the State Department.

As a reminder, this was Hillary back in March, 2015:

“Well the system we used was set up for President Clintons office and it had numerous safeguards it was on property guarded by the Secret Service and there were no security breaches, so I think that the use of that server which started with my husband proved to be effective and secure,” Hillary Clinton said in a March 2015 press conference.

But hey, don’t make a big deal about her email issues, it’s all good:

The New York Times ‏@nytimes Aug 26

Hillary Clinton takes responsibility for email use, saying it “wasn’t the best choice” http://nyti.ms/1EjMxdN

What do you think it will take for her to suspend her campaign?

(I’m thinking nothing short of being escorted away in handcuffs…)

–Dana

UPDATE BY PATTERICO: Yes, there is a vast right-wing conspiracy!

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UPDATE BY PATTERICO x2:

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