Wednesday, July 30, 2008

Hyper-Inflation in Zimbabwe

I'm happy to say that I have no experience with hyper-inflation. I do have a growing concern about our growing inflation, so it was interesting and frightening to hear a man from Zimbabwe tell what it is like to deal with money that loses value as the minutes pass.

We're all feeling the pinch with marginal increases in inflation. Can you imagine going to the store for something, being interrupted by errands, returning to the store only to find the price has gone up 4x? Can you imagine that as a daily occurrance? This is life in Zimbabwe, where inflation is on a genuine runaway course.

Check out the Cato Daily Podcast for July 29, 2008, titled, "How Inflation Robs Zimbabwe". Link to Cato's podcast archive.

While most of the Federal Reserve's tinkering fixes one thing while creating other problems, one thing it can do well is to help keep inflation at bay. We need to stop borrowing money from foreign nations, and stop printing more money.

Tuesday, July 29, 2008

Intellectual Dishonesty

I can't stand it when libertarians are linked with George W. Bush, lumped together as fiscal conservatives. George W. Bush is not a fiscal conservative. He is a borrow & spend fiscal liberal. No president has increased spending at a faster rate than George W. Bush- not FDR, not LBJ, no one.

So the post on the blog Balloon Juice, "Fiscal Conservatism, Part Two" made me go to the garage to hammer the heavy bag for a few minutes.

The Bush economic record is a disaster, for taking a surplus and turning into a monstrous deficit. It was due to spending into a tax cut.

That's where the intellectual dishonesty comes in- blaming the tax cut while putting the blinders on for the increased spending Bush signed into law.

Libertarians, who are fiscal conservatives, have been beating up Republicans for their out-of-control spending for the better part of the 8-year Bush Administration. He didn't use his veto pen for a single appropriations bill while the Republicans had control of Congress. I must have had 20 posts on the subject by myself.

I thought people on the right were suckers for accepting this batch of Republicans as fiscal conservatives. But that people on the left apparently also accept them as such indicates to me that nobody really has a grasp of what a fiscal conservative stands for. Either that, or there is widespread engagement in intellectual dishonesty.

So, allow me to fill the breach.

Fiscal conservative: lower taxes, lower spending
Fiscal liberal, tax & spend variety: higher taxes, higher spending
Fiscal liberal, borrow & spend variety: lower taxes, higher spending, higher borrowing, higher taxes tomorrow

George W. Bush, the Republican leadership of the 108th and 109th Congress- all are of the latter stripe. Libertarians having nothing to do with that.

By the way, now that the 110th Congress is in power, and writes the law, including the budget, it could aggressively attack the deficit by cutting spending. But that's something it is unwilling to consider. To Democrats, the only way to balance a budget bloated by spending is to tax more.

More than one way to skin a cat, folks. Cutting spending balances the budget, too.

If Democrats don't know where to start, allow this Libertarian to give you some hints:


and, Iraq. At least live up to your rhetoric- even if Bush didn't live up to his on fiscal conservatism.

Old Kole posts on Republican spending, at various levels of government:


And, last but not least, here is my post from November 28, 2004. It was printed as a column in a few Indiana newspapers. It was a post-election analysis, on the Republican sweep, both nationally and here in Indiana. I warned fiscal conservatives that they would not be happy with the result of electing Republicans, hoping for spending cuts.
But, behind some of the grins, there is a group within the broad spectrum of conservatives that is gritting its clenched teeth behind a half-hearted smile. While excited for the possibilities Republican majorities bring, this group shares a great deal of the anxiety liberals have in anticipation of the first wave of new policy that will soon greet us. This group is the fiscal conservatives.

It was not a series of referendums on capping budgetary growth that swept George W. Bush to re-election. It was a series of referendums on gay marriage.

If Republicans won't do the job of reducing spending this year, with their majorities at home and in Washington, fiscal conservatives will know that it is time to look for a new political home. They will have no choice but to conclude that if spending won't be cut this year, it never will so long as Republicans are in charge.

Republicans didn't cut a thing. Grover Norquist got nothing. I got nothing... except a bigger share of a deficit, for money spent on things I generally don't approve of. And, I have liberals calling George Bush a fiscal conservative, sullying the good name of fiscal conservatism?

You want to come over and kick my dog, too?
Change In Perception

There was a day back in the early 90s when I really thought living off the grid in some very isolated place, being as fully self-reliant as possible. This was before I knew what a libertarian was. Two things have changed since then: Turns out that I like living near people and interacting with them. Also, this notion has gone from being thought of as kook stuff, to being thought of as environmentally responsible.

It came to mind as I encountered a copy of 'Backwoods Home' magazine at the barber yesterday. There were tips on composting, small family farming and canning, cloth diapers, solar energy, survival and weaponry.

An interesting mix of crunchy granola and the militia frontier, oddly, happily coexisting- some 80 or more acres or so apart.

It was interesting to see how many of these things we've been doing on our suburban property: composting, raising an organic vegetable garden, and looking into alternative energy like solar panels. We did cloth diapers, stopped buying paper towels and napkins, and went to the flourescent bulbs long before there was a law about it. These things aren't merely more environment-friendly. They're cheaper!

Monday, July 28, 2008

Take Away My Gridlock?

Gridlock. It's my only hope for limiting the otherwise rampant growth of government. Talk of eliminating it is talk of taking away my one last realistic hope for the 2008 elections at the federal level. We saw how destructive and government-growing one party rule was under a nominally 'smaller government' party. What's it going to look like if the plainly bigger government Democrats get their wish for their own brand of one party rule?

No sooner had I stuffed the McCain business reply letter full of newspaper, did I get an Obama mailing. Obama has as a new objective the elimination of gridlock.

So, that's the audacity of hope? Hell, that's the elimination of hope for me. I can't vote for McCain or Obama, since neither of them is pro-smaller government. Barr isn't likely to win. Gridlock is the best I can hope for, but Obama wants to squash my hope.

Thanks for nothing. Here- have your own envelope full of shredded newspaper.
Worried About China?

I'm not, even though it seems to be poised to surpass the USA in so many meaningful ways, with GDP being just one such. To me, the meteoric rise of the Chinese economy is an fine example of what even a little capitalism can do to raise the standard of living anywhere- even within a farily totalitarian regime.

It should be a stark lesson to us, and easy to see: More capitalism = more wealth. More government = less wealth.

There is an interesting Washington Post article today that gives many reasons not to worry about China, despite our huge trade deficit with that country. Here's one:
One important nuance we keep forgetting is the sheer size of China's population: about 1.3 billion, more than four times that of the United States. China should have a big economy. But on a per capita basis, the country isn't a dragon; it's a medium-size lizard, sitting in 109th place on the International Monetary Fund's World Economic Outlook Database, squarely between Swaziland and Morocco. China's economy is large, but its average living standard is low, and it will stay that way for a very long time, even assuming that the economy continues to grow at impressive rates.
Remember what kept that economy down- the Communist regimes, beginning with Mao, and to the present.

I don't like the conclusion in the quote, though. The USA was once in the position China was, relative to Britain, as an economic power. The US was the up and coming low-tech, cheap production underdog, while Britain was the high-tech economic ruler of the day. The British once scoffed at America's position in the world, confident it would never be surpassed. The USA kept producing cheaply and innovating, eventually becoming the high-tech producer of the world.

Why was Britain surpassed by the US? Two things. The UK became increasingly regulated, and Britain had a worldwide empire. "The sun never sets..." That took enormous effort to sustain, and proved unsustainable. The British choked off innovation in their industries, via regulation.

Here we are in the USA, repeating the mistakes of history. We hyper-regulate our industry, driving the business to other countries. We are trying to play the world's cop, intervening in affairs that don't affect us directly, paying for bases and operations in most of the world's nations.

The US built its wealth under relative 'isolation'. Notice that China, once greatly involved in funding revolutionary forces in SE Asia, now is relatively isolationist itself. How about that? Increase capitalism, reduce interventionism, and China begins to assert itself as a growing financial power.

China is hardly perfect, but in some important ways, they are going in the right direction, while here in the USA, in those same important ways, we are going in the wrong direction.