Wednesday, November 20, 2013

I Dislike the Brand Austrian Economics

I really dislike how people try to stuff all free market thinking into the category of Austrian-economics. Personally, I think the freedom movement is better off ditching this label and sticking to the discussion of ideas.

Austrian Economics is simply one of thousands of "ideologies" that appeared in the 1800s. The term "ideology" moved into our lexicon with the works of DeStutt de Tracy (1754-1836). He published Eléments d'idéologie 1817. The first politician to use hatred of ideology to rally people was none other than Napoleon Bonapart (1869-1821).

In the 1800s, everyone and their dog came up with new ideologies. The partisan ideologies of Modern Liberalism and Modern Conservatism trace to this corrupt age.

Wikipedia and others trace the Austrian school of economics to Carl Menger who was tutor to Archduke Rudolf von Habsburg (the Crown Prince of Austria). The view of this school was at odds with Historicists following Hegel. The school itself offers a contemptuous top down view of economics and has a tendency to favor big finance to the actual economics needs of the people.

That said, Austrian economics is a bit more conducive to free market concerns than other ideologies of the 1800s. There were several notable disputes between thinkers in the Austrian camp and the Hegelian camp. The arguments made by the Austrian School played an important historical role in unmasking many of the fallacies of the Hegelian school of thought.

Friedrich Hayek (8 May 1899 – 23 March 1992) was born in Austria-Hungary and was influenced by people in his native country (as if that is some sort of great surprise). Hayek leaned heavily on Austrian thought in his writings against the Hegelians of his day.

Hegel's historicism and Austrian Economics are but two of the thousands of ideologies that popped up in the 1800s.

Quite frankly, I find the 1800s to be a time of deep intellectual dishonesty and I question all of the ideologies that popped up in that period (including Modern Liberalism, Modern Conservatism, Progressivism, Communism and the list goes on).

Many of the best ideas associated with liberty came about well before Carl Menger took on the job of tutoring the Archduke. One finds elements of the classical liberal arguments for liberty stretching back to the Ancient Greeks, Ancient Israel and Ancient Rome.

I admit, I have spent more time studying the US Founders (who predated Menger), The scientific revolution (which predated Menger), and classical history (which predates Menger) than I've spent studying Menger.

Undoubtedly, the Archduke of Austria-Hungary had a great tutor. But I hate having what I say about free market economics being lumped in with the Austrian school. The 1800s was a time of great intellectual corruption. Just as people are drawn into inane conversations today, people of the 1800s were drawn into inane conversations of their day.

I fervently believe the freedom movement needs to develop a better name for free market economics than "The Austrian School."

JP Morgan Fine

I heard on the news that JP Morgan> was just hit with a $13 billion Fine largely for misleading mortgages and mortgage backed securities leading up the the financial meltdown.

The reporter was a typical MSM drone who truly hated investment banks and took toward berating JP Morgan for all of their inherent evilness.

The report sounded odd to me. JP Morgan is an investment bank. It is not the type of retail establishment that originates loans. So, I decided to look up JP Morgan and the fine.

It appears that a large portion of the fines are related JP Morgan's purchase of Washington Mutual and Bear Stearns in 2008. Both acquisitions were prompted by the US Government.

A funny thing about Washington Mutual. It, along with Golden West, were praised at the most progressive banks of our generation. Both banks had absurdly lack lending requirements. Both banks routinely berated others for predatory lending, while engaging in predatory type lending themselves. Both banks had the habit of lending people money to pay their minimum balances. This type of action inflates the balance sheet while increasing instability. The two most progressive banks of the early 2000s had both created debt bombs which not only lead to bankruptcy but caused major legal problems for the banks that acquired them.

Washington Mutual was seized by the FDIC and sold to JP Morgan in September 2008 for $1.9 Billion. Apparently, JP Morgan later sold many of the mortgages to Fannie Mae.

Golden West was acquired by Wachovia at the time of the merger held the time "Most Admired" mortgage lender by Fortune Magazine. After the acquisition, Wachovia discovered the balance sheet was so thoroughly distressed that Wachovia was forced into bankruptcy and later acquired by Wells Fargo. Wachovia swallowed a poison pill.

I am not a fan of JP Morgan. However, I believe that responsible reporting on this current fine would report the amount of the fine that resulted from the acquisition of Bear Stearns and Washington Mutual.

The one great danger of this current fine is that the government is setting a precedent of levying huge fines on the buyers of troubled assets for the sins of the people who created the troubled asset. This type of precedent could make things worse in the next round of financial troubles.

I am no fan of JP Morgan. It is too big. The acquisition of troubled assets in the financial meltdown was rife with financial mischief. Washington Mutual had billions in unpaid taxes. I am simply stating that reporting of fines resulting from a merger should include details on the merger.

Think of it this way. Imagine you bought an icepick at a garage sale. Police later identify it as the murder weapon. Are you guilty of murder? Mergers and Acquisitions is a complex topic. The players on Wall Street are adept at leaving small investors holding empty bags while they run off with the loot. In the world of finance, the people who engage in misdeeds are rarely the people who pay for the misdeeds. I am not celebrating this fine or seeing it as an application of justice. I wish Americans would realize that small is better and move away from dependence on big banks.

Friday, November 15, 2013

Workshop A Bust

The Health Care Reform Workshop was a bust. Not only did no-one show, I received absolutely no contacts or interest in the program.

Health care is the single most important issue of our generation. If we do not find a way to restore free market health care, the rest of our freedoms will simply vanish.

But, in five years of actively searching, I have been unable to find a anyone (within 500 miles of Salt Lake) interested in even talking about free market health care.

But, Utah is Utah. Maybe there are people outside Utah interested in the subject.

I am once again thinking that the only way to find people willing to discuss free market health care reform is to leave this pathetic anti-freedom state.

I learned that this this week marks the 150th anniversary of Lincoln's Gettysburg Address. So, I decided to wax poetic with today's lament.

A hundred and fifty years ago this week, President Abraham Lincoln visited the scene of the Gettysburg Battle field and asked rhetorically if any nation conceived in Liberty and dedicated to the proposition that all men are created equal could long endure.

Sadly, it appears that the age old dream of liberty will disappear within my generation, and there is absolutely nothing I can do about it.

The one and only way that Americans could defend health freedom is if people spoke about health freedom. If no-0ne is even willing to discuss the subject, then the issue is lost and lsot and perhaps lost forever.

Monday, November 04, 2013

A Tale of Two Events

I had been upset with the complete lack of activity of the freedom movement in Utah.

I was delighted last week to see two events in the Utah FreedomConnector Calendar last week. The first meeting was a presentation on managing media relations by FreedomWorks. The second meeting was a rally for Mike Lee organized by the Utah Eagle Forum.

The first meeting was well researched and had valuable information for any group needing to manage media relations. The meeting was sparsely attended. There was about a dozen people from FreedomWorks, and 20 attendees from the public at large.

The Mike Lee Rally had a thousand or so attendees.

I admit, I am puzzled as to why the meeting that imparted valuable information was sparsely attended and the rally that was seen as provocative was heavily attended.

The Eagle Forum is not really pro-freedom. It is a pro-family group. The Eagle Forums support any legislation or government program that fits an agenda and fiercely attacks anything outside their agenda. So, I am really not sure if the Mike Lee Rally was pro-freedom.

I attended both meetings. The picture below is from the rally.

I was saddened though that neither event had any follow through. The calendar was empty; So, I decided to take another stab at holding a meeting on free market health care reform.

Okay, yes, this is the meeting that I've been trying to talk people into attending for the last five years. But, you know, the way I see it: If people never talk about freedom, we will be forced to capitulate to the forces of tyranny...just as Senator Mike Lee was forced to capitulate to Harry Reid after the ill fated Government Shutdown.

Wrapped in Flags