Mises Institute: Hooray; Walter Block: ???

Updated below.

The Washington Post recently ran an article covering the political relationship of Ron Paul and his son Rand.  I feel no need to dive into the details of this relationship – agreements, disagreements, etc. – as both I and others have covered this enough in the past.  I have, in any case, decided to rarely comment on Rand any more as I view him as more or less another politician – somewhat better on some issues than most politicians, but not principled and therefore in the end he is no different.

There are two points I do want to cover from this Washington Post story.  First is the coverage of the Mises Institute and their recently held conference in Houston:

HOUSTON — Rand Paul wants to lead the United States. On Saturday in Texas, his father was speaking at a conference about how to leave it.

“A lot of times people think secession, they paint it as an absolute negative,” said former representative Ron Paul (R-Tex.). After all, Paul said, the American Revolution was a kind of secession. “You mean we should have been obedient to the king forever? So it’s all in the way you look at it.”

The event was organized by the Ludwig von Mises Institute, an Alabama-based think tank named after an Austrian economist whose writings are highly respected by libertarians. Ron Paul is a member of its board.

The article also cited other speakers, including Jeff Deist and Brion McLanahan.

It seems to me rather important that the Institute has such mention in one of the more important rags in the country.  It furthers that the idea that liberty and free-market economics are being taken seriously by those thereby threatened.

My second point regards two comments attributed to Walter Block:

“If I were Ron, and my son were running for president, and we were in the same situation, I would shut up…”

“Ron is a millstone around Rand’s neck…”

I will not comment further on these statements until Block comes out with an explanation – I respect him too much to jump to any conclusion based on statements in the mainstream press (other than…Walter, why do you insist on talking to them?).

All I will say for now regarding these comments: I never want Ron Paul to shut up, and Ron is no millstone to Rand.  This is like saying Murray Rothbard is a millstone to the Mises Institute. 

The issue is legacy and importance to the ultimate cause of freedom.  In this regard, Rand is millstone enough for Rand.

Update: Walter Block has replied here.  I will leave his statements to stand on their own other than to suggest it seems to be playing with fire anytime one uses the words “Ron Paul,” “shut up,” and “millstone” in the same sentence when speaking to a mainstream source (frankly, I am not sure in what audience or in what forum those words even could go together – I wouldn’t even have these words intersect on a Scrabble board). 

No matter the qualifications Block feels he made, should have made or now makes, the risk of uttering these words in close proximity to one another in front of a mainstream reporter is too high – Block’s meaning, even when clarified, is too nuanced for such an audience.

The Swiss Declare War

Well, that is what one might conclude after the events of the last week.  As is well-known, the Swiss National Bank decided to remove the peg/floor in the exchange rate for the Franc against the Euro.  This move was made suddenly, with no announcement or even a hint beforehand.

There is so much wailing and gnashing of teeth in the financial media.  There is much I might say about this event; I will use the writing of two of the more prolific economic financial writers of today to help me on my way.  Both John Mauldin and Ambrose Evans-Pritchard (with two pieces, here and here) have written about this event; they each offer comments worth addressing – comments that help give context to some of my thoughts.  (Forgive me as I will write in the language of the macro-economist; using their own words, the failure of their logic can be demonstrated.)

Ambrose offers his analysis:

The Swiss National Bank has lost control.

Think about this…while the SNB allowed the ECB to dictate monetary policy for the Franc, the SNB had control; now that the SNB has decided an independent policy, it doesn’t have control.  What?  This passes for logic?

John Mauldin regularly writes about currency wars (describing the Swissie as “The First Casualty of the Currency Wars”), as if a currency war is something new to this generation.  It isn’t.  As long as money can be manipulated by fiat, there have been currency wars; as long as mercantilism has been official economic policy, there have been currency wars.

He offers the standard eulogy to the death of a weak currency:

Every bank and business that held non-Swiss-franc debt or investments took an immediate 15–20%+ haircut on its holdings. Swiss investors lost at least 10% on investments in their own stock market and more on shares they held in other stock markets.

In Swiss Franc terms, this is true.  However, 100% of the holders of Swiss Francs saw a tremendous gain on their holdings – of course, not in Swiss Franc terms, but relative to the wealth of everyone not holding Swiss Francs.  Denominated in dollars, Euros, Yen, Pounds, and even gold, the Swiss are much wealthier today than a week ago.  This is a great trade-off.

It gets even better, although you wouldn’t know it to read Mauldin:

Forty percent of Swiss exports go to the Eurozone, and the Swiss franc is now over 30% higher than it was five years ago – with almost half that movement coming in one day. Those exporters just got hammered.

Ambrose chimes in:

…the howls of protest this morning from the Swiss export sector. Nick Hayek, head of Swatch Group, said the collapse of the floor would cause havoc. "Words fail me. Today's SNB action is a tsunami; for the export industry and for tourism, and for the entire country," he said.

This is the tired old “a cheap currency is good for exports” line.  It might be good for specific companies (and one or two CEOs can always be trotted out to express this view).  But what about the other side?  Only a small portion of all goods and services produced in Switzerland are exported (net exports of about 5% of GDP).  Meanwhile, 100% of all goods and services consumed by people in Switzerland are either produced in Switzerland or imported; well, at least I am pretty sure about this.  Therefore, for a small percentage of the population (those producing for export), one could argue (although even here I disagree) that a cheaper currency is helpful; for the entire population, a stronger currency is beneficial.

Freedom of Speech

The right of people to express their opinions publicly without governmental interference, subject to the laws against libel, incitement to violence or rebellion, etc.

The right, guaranteed by the First Amendment to the U.S. Constitution, to express beliefs and ideas without unwarranted government restriction.

The right to express information, ideas, and opinions free of government restrictions based on content and subject only to reasonable limitations…

There is only speech, and government opposition to it.

The protests in France and elsewhere – supposedly in support of free speech – are laughable.  France, having some of the more draconian speech laws, is now the center of the world for free speech and expression.  The politicians, marching arm-in-arm in support of blasphemous cartoonists, are arresting free speakers at the same time they march.

This mass killing has been turned into a free speech issue – an issue guaranteed to garner public support (if the cartoons received as much publicity in the mass media as the march did, perhaps the public outcry would be tempered).  But what does Charlie Hebdo have to do with free speech?

Nothing.

What does free speech even mean?  I do not understand the idea of “free speech” in a private context.  If you are in my house and insult me, I will throw you out.  Have I violated your rights somehow?  If you are in my store and tell every patron that my prices are too high, must I allow you this platform?  I am not asking in the context of current law – I am asking in terms of a respect for private property.

I understand free speech in the “Congress (or whatever legislative body) shall make no law” sense (too bad the protestors don’t understand the thousands of laws that violate this concept).  But not in the private sphere.

And the Charlie Hebdo event was in the private sphere.  Technically, France has laws prohibiting what Charlie Hebdo was doing – yet, did not enforce these laws.  In other words, the government did not prohibit Charlie’s free speech in this case.

In the private sphere, I cannot grasp the concept of free speech.  I understand it only in terms of property rights.  I have a right to limit what is said on my property, and remove individuals of my choosing for reasons of speech.

In the private sphere, I cannot grasp the concept of violations of the right to free speech.  I understand it only in terms of aggression.  The employees at Charlie Hebdo suffered a violation of physical aggression.

There is so much hypocrisy in this episode, not the least of which is crafting the narrative into one of free speech.  It provides a much more sympathetic narrative than does the truth.

Violence? Yes; Extremism? Yes; Violent Extremism? NO!

“We will bring together all of our allies to discuss ways in which we can counteract this violent extremism that exists around the world.” (Emphasis added)

Eric Holder

Violent extremism?  There must be something special when these two terms, violent and extremism, are joined together.  What is Holder talking about?  Let’s unpack this phrase:

Violent: acting with or characterized by uncontrolled, strong, rough force; caused by injurious or destructive force; intense in force, effect, etc.; severe; extreme.

We know that governments of the west don’t mind violence – being the leading cause of violent death and destruction on the planet.  A quick check on the number of civilians killed by actions of the western military reveals:

The ongoing conflicts in Iraq, Afghanistan and Pakistan have taken a tremendous toll on the people of those countries. At the very least, 174,000 civilians have been determined to have died violent deaths as a result of the war as of April 2014.

Or this:

The major wars the United States has fought since the surrender of Japan in 1945 — in Korea, Indochina, Iraq and Afghanistan — have produced colossal carnage. For most of them, we do not have an accurate sense of how many people died, but a conservative estimate is at least 6 million civilians and soldiers.

And my eyeball check suggests only about 100,000 of these are US military.

So, there must be nothing wrong with violence, or at least not when it is government doing it.  Well, except for the private contractors. 

Extremism: a tendency or disposition to go to extremes or an instance of going to extremes, especially in political matters

The NSA collects every bit of digital data on and from just about every connected individual on the planet.  Doesn’t that sound a little extreme?  The TSA looks at the naked bodies (or otherwise feels up the clothed bodies) of every single passenger travelling in the US by airline.  Not extreme?  The IRS requires the reporting of virtually every financial account held anywhere in the world by every US person.  Extreme, I would say.

So, extremism also doesn’t seem to be a problem, as long as government is doing it.  Well, wait, that isn’t right.  Charlie Hebdo was pretty extreme.  To my knowledge, it isn’t a government operation.

So I guess extremism is OK if either a) government is doing it, or b) it is done by individuals that government isn’t targeting at that moment – for reasons known only to the state.

What is wrong, then, with violent extremism – when the two terms are put together?  It must be a problem only when done by a non-government actor not otherwise approved to be either violent or extreme.  These days, that happens to include anyone from…well, let’s allow the government actors to provide their own definition:

"We all agree that we need to put in place better control on certain passengers, on the basis of objective criteria and with respect for fundamental liberties and without disrupting cross-border travel," he said.

Certain passengers...objective criteria.  Code for what, exactly?  Either it is vague, to allow them to do whatever they want or he has something specific in mind.  Or both.

To add insult to injury, Cazeneuve wants to control hate speech on the internet:

Cazeneuve said the Internet needs to remain a space for free expression, but that Europe should fight against abusive use of the web to spread hate speech, anti-Semitic messages and the recruiting vulnerable young people for violence.

Hate speech?  I guess this didn’t apply to Charlie Hebdo, given what we now see as an outpouring of support for Charlie by the politicians.  Maybe it is only selectively applied, ignored when targeted at those whom the west wants to target. 

Violent extremism.  Just one more subjective term useful to the government to make an enemy of whomever they will – just like the terms terrorism and hate crimes.  It isn’t enough to merely call a crime a crime.  

The crime must have a provocative label, in order to generate the desired emotional response in the people; it must have a malleable label, in order to allow government the ability to label whoever they want.

And, begging for even more “safety,” the people cheer them on by the millions.

Je Suis Donald

There has been a global outpouring of support for free speech (more precisely, speech without consequence) in the wake of a recent tragedy…well let’s have Time Magazine tell the tale:

People protesting the Paris killings unauthorized recording met in Trafalgar Square LA Live as British Prime Minister David Cameron Los Angeles Mayor Eric Garcetti and German Chancellor Angela Merkel NBA Commissioner Adam Silver discussed the attack in Downing Street on Donald Sterling.

You see, Donald Sterling was recorded – unbeknownst to him – saying a few things that the NBA found politically incorrect.  Adam Silver, and many of the other NBA team owners, wanted to strip Sterling of his team – the Los Angeles Clippers.  Let’s see what happened next:

Out of the horror came something beautiful. Not all of the people who traveled to London’s Trafalgar Square Los Angeles, or attended similar vigils in other cities and countries states throughout Europe the country, could explain why they felt impelled to come.

The people came out in droves.  Social media played a major role in drawing together the supporters:

As the news of the attack spread, the hashtag #JeSuisCharlie — “I Am Charlie Donald” — became a declaration of solidarity…

They were in solidarity for Donald Sterling’s right to free speech – no matter how hateful or derogatory toward any racial group, he had a right to say it without fear of reprisal or consequence.

It was a solemn occasion:

They stood in near silence in a crowd of several hundreds under Nelson’s Column near the Los Angeles River…

Yes, there really is one.  I don’t make this stuff up.

With this, Donald Sterling – due to significant public pressure – was allowed to keep his basketball franchise.  Never again would comments deemed to be racist, recorded in secret, be used to foment anger toward another.

------------------------------------

My view at the time of the Donald Sterling incident was simple: face the consequences of what you say; if you happen to be a public figure, that can sometimes be painful.  It doesn’t matter what I think about what Sterling said – but losing an NBA franchise seemed a rather major punishment for something said in private.  Well, no one said life was fair.

What about Charlie Hebdo?  Like all writers on this topic, I will state the obligatory – nothing justifies the killing of another except for physical self-defense (or defense of another), in proportion to the perceived risk.  I think the murders were a horrendous act.

Having said that, how dumb do you have to be?  I don’t go walking around the seedier parts of town at 3 AM with hundred dollar bills falling out of my pockets. What might I expect if I did?  What about MY freedom?

I believe in free speech.  I also believe that there are stupid people with mouths…or pens.  People by the thousands are protesting for the right to protect such speech (have you seen any of the pictures from Charlie, which I won’t even link to because of my disgust?).  Of course, they protest only in selective cases (for those who haven’t figured out my post, there were no similar protests on behalf of Sterling).

They are protesting for protection from stupidity, from playing with fire, from walking around with hundreds of dollars falling out of their pockets.  Good luck with that.  All you are going to get is a more advanced police state, all because you are asking for it. 

And you are going to stick me with it.

Enough said.

Optimistic Imagination Minus Reality Equals Severe Trauma

Wartime: Understanding and Behavior in the Second World War, by Paul Fussell

This book is about the psychological and emotional culture of Americans and Britons during the Second World War.  It is about the rationalizations and euphemisms people needed to deal with an unacceptable actuality from 1939 to 1945.

So begins Fussell in the preface.  After touching on the physical damage, he continues:

Less obvious is the damage it did to intellect, discrimination, honesty, individuality, complexity, ambiguity, and irony.

In chapter 8 of Perpetual War for Perpetual Peace, edited By Harry Elmer Barnes, William Henry Chamberlin addresses this topic.  Chamberlin cites the hypocrisy of Roosevelt and his Atlantic Charter, the hypocrisy of the war crimes trials, the use of torture by the Allies, the lies of Roosevelt to the American people leading up to the war.

In chapter 9 of the same volume, George A. Lundberg cites Dr. Charles Beard, listing of twelve examples of the lies and manipulations by Roosevelt before and during the war.  There is no possibility of a properly functioning democracy or republic when lying is the means to secure support.

It is the damage done to the psyche of the American and British people that Fussell examines in this book.

Severe trauma was often the result of the initial optimistic imagination encountering actuality.

Obviously the line from which I drew the title of this post.  When reading this line in Fussell’s book, it struck me that besides having application to both those fighting and those at home regarding the war effort, it also might apply to the reason why so many worship those who fight.  But I will leave it to Fussell to tell the story.

At first everyone hoped, and many believed, that the war would be fast-moving, mechanized, remote controlled, and perhaps even rather easy.

Two things strike me about this: first, it seems a strange thought given the then-recent experience of the Great War, certainly for the British.  Second, nothing changes.  In every war, the lie is told that it will be quick and easy.  The first Gulf War is still being fought; it has merely had a few name changes – to include the latest chapter of Iraq, more than a decade old.  Its sibling in Afghanistan is even older.  I guess in this regard things are getting better – the mouthpieces now tell us that America will be at war for decades.

Wars are all alike in beginning complacently.

This hope was based on what, in hindsight, was naiveté: small tanks with one-inch armor, armed with nothing more than a 37-MM gun; 20,000 horses were procured for the cavalry, announced with fanfare; in Britain, lances and sabers were standard issue; rubber-tired armored cars with machine guns were a mainstay.  Such “preparation” makes the Polish defense on horseback seem not so silly.

Further silliness – and more evidence that nothing ever changes – was the belief that Yankee technology and precision bombing would win the war.  The B-17 could hit a target within 25 feet from an altitude of 20,000 feet, or so they said.

…it wasn’t long before soldiers and civilians would be killed in quantity and without scruple….

The reality of the Second World War is not so quaint, and does not need a refresher: hundreds of thousands of airplanes produced by the US alone; tanks of immense size and speed; carpet-bombing of civilian targets; the atom bomb.  Where the Great War put in knife in the idea of civilized warfare, the Second World War witnessed the obliteration of this concept – rules of warfare developed over centuries, having reached fruition in eighteenth and nineteenth century Europe.  By the end of the war, nothing mattered but heavy power and volume – fought as the North fought against the South under Lincoln. 

Outmoded now, hopelessly irrelevant, were such former military values and procedures as the alertness of the scout; the skill at topographical notice of the observer in the tethered balloon; the accurately worded message correctly written out (with carbon copy) in the nifty little book of Filed Message Forms.

Also quickly outmoded was the idea that the bombing could do the job, let alone do the job well or accurately:

As the war went on, “precision bombing” became a comical oxymoron relished by bomber crews with a sense of black humor.

In August of 1941 it was clear to the RAF that only one in ten bombers could even fly within five miles of the assigned target.  “We made a major assault on German agriculture.”

The Germans, when bombing London, dropped half of their bombs over the water.  On May 10, 1940, a Luftwaffe squadron…

…setting out to bomb Dijon, by some error dropped a load on its own civilians in Freiburg-im-Breisgau, killing fifty-seven of them.

When RAF reports indicated that bombers wholly missed the intended targets, the reports were rejected as inaccurate.  This inaccuracy (along with other, more sinister, reasons) eventually led to area bombing and ultimately Dresden and Hiroshima.

Bombs were dropped by Allied aircraft on Allied troops, resulting in Allied troops firing on Allied aircraft.  Weeks before D-Day, in an effort to soften the Germans fortifications, 480 B-27s dropped 13,000 bombs well inland, killing only French civilians and their livestock.  Naval bombardments cost thousands of Allied lives.

Even after being told beforehand that it would be Allied gliders overhead during the invasion of Sicily, the troops fired upon the aircraft, shooting down 23 planes carrying 229 men.  In 1943 it was a US PT boat – not a Japanese submarine – that sunk the Marine Corps transport McCawley.

“The loser of this war will be the side that makes the greatest blunders,” according to Hitler.

A world in which such blunders are more common than usual will require large amounts of artful narrative to confer purpose, meaning, and dignity on events actually discrete and contingent.

That this war is known to many in America as “the Good War” demonstrates the success of the narrative builders in their task.  The blind passion by which this narrative is accepted is, perhaps, proof of the severe trauma.