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Source link: http://archive.mises.org/9329/the-mad-men-of-libertarianism/

The Mad Men of Libertarianism

January 28, 2009 by

Politico, the ultimate Beltway newspaper, notes with amusement the presence of a “Do-Nothing Crowd” faction that opposes any “stimulus” plan at all:

“The economy was too big. It was all phantom wealth borrowed from abroad,” says Andrew Schiff, an investment consultant at Euro Pacific Capital and a card-carrying member of the stand-tall-against-the-stimulus lobby. “All this stimulus money is geared toward getting consumers spending and borrowing again. But spending and borrowing were the problem in the first place.”

[ . . . ]

There is no doubt these are minority views. Most lawmakers, economists and policymakers say the economy desperately needs a massive infusion of money to prevent collapse — and needs it now. The Obama administration, backed by many economists, says unemployment could easily top 10 percent and the gross domestic product could tank absent government intervention.

The language used to make the case for stimulus is stark and gloomy — and, by all measures, pretty accurate. But there is also a caveat attached to every solution proposed: that it simply might not work. Economists on the right and left say there is a chance, perhaps a decent one, that $1 trillion injected into a $14 trillion economy might be too little, too late to turn things around anytime soon.

In fact, government stimulus plans have a long history of failure. Remember last February’s $168 billion economic stimulus package? President Bush called it “a booster shot for our economy” and promised that it was large enough to have an effect. It wasn’t, and it didn’t work.

This time around, the Do-Nothing Crowd argues that the new spending — which dwarfs last year’s effort — is probably insufficient and definitely unwise. It is largely an economic argument. But there is also a cultural dimension. Many of the Do-Nothings argue that a painful recession is the best way to destroy America’s runaway culture of irresponsibility and debt. Economic turmoil, after all, has a way of grounding Americans.

Of course, the valiant “Do-Nothing” folks inside the Beltway aren’t exactly doing nothing:

To help push [the Do-Nothing] argument on Capitol Hill, the libertarian Cato Institute plans to take out a full-page ad in The New York Times and The Washington Post on Thursday and Roll Call on Wednesday, making the case against stimulus. The ad will include the names of 250 economists across the country who oppose the massive spending and tax cut program that’s backed by President Barack Obama and many congressional leaders. Many of those are Do-Nothings, while others have more nuanced views about how the proposal as packaged won’t work.

There are many things that are laugh-out-loud funny about this idea. First, it relies on newspapers — an economically inefficient medium on a the road to irrelevancy. Second, it relies on three newspapers that most Americans never have read and never will read. Third, the advertisement itself is a list of names of economists few people have ever heard of. (Now if the ad listed the names of 250 NFL players, folks might pay attention!) Fourth, we’re learning about the advertisement from an article in Politico, another Beltway publication that few Americans ever read. Fifth, the “newspaper ad with names” approach essentially reduces free-market economics to just another political lobby that employs a woefully outdated method of communication. It also reduces the legitimacy of economics by turning it into a numbers game — e.g., “we have more experts than you!”

And finally, it’s more then a little ironic that a libertarian, free-market think tank would oppose wasteful spending by dropping a six-figure sum of donor money on a project that is guaranteed to have absolutely no impact. It’s almost like Barack Obama thought of the idea himself!

{ 34 comments }

Jeremy January 28, 2009 at 11:24 pm

The only thing that’s “laugh-out-loud funny” to me about this is that you would actually spend time attacking an earnest effort to fight the stimulus package. If you think the article is such a waste of time, why not offer some alternative ways of educating the public that aren’t already being done.

Reason January 28, 2009 at 11:28 pm

S.M.,

The papers where the ads will go are becoming irrelevant to most people but are still read by older generations that, most importantly, have the money and power.

C. Evans January 28, 2009 at 11:56 pm

S.M.,
I must disagree with your assessment of the efficacy of placing this ad in the newspapers. I would suspect that some of the people who read the article would have no idea that there exists economists who think that the stimulus package will not work. Some of those who read Politico may also not know that there are economists who disagree with the stimulus package. Such individuals may begin to search for other contrarian voices and possibly find the Mises Institute. Granted, this ad may not make any decisive changes, but as Frank Chodorov says, libertarians are found, not made. This ad may find a few.

robroy January 29, 2009 at 12:27 am

“Adrew” Schiff says stimulus might not work because it’s not “big enough”?

Wow! managing to couch austrians as krugmanites is no mean feat… those guys at Politico can really do the doublethink…

S.M. Oliva January 29, 2009 at 12:29 am

Here is a link to Cato’s advertisement:

http://www.cato.org/fiscalreality

newson January 29, 2009 at 12:30 am

maybe it’s more a reputational investment. cato wants to go on the record, so when stimulus turns to flatline, some kudos flow their way.

Brent January 29, 2009 at 1:21 am

Well, in the “political market” like any other market, successful entrepreneurship pays dividends — unless the politicians decide to stamp you out as payback. I don’t know if this is a wise use of resources by Cato, but anyone with a decent understanding of the economy should want to put their money on the “stimulus” failing.

Arend January 29, 2009 at 2:23 am

“Physicists on the left and right say there is a chance, perhaps a decent one, that nuclear fusion in consumer products will be some decades away.”

Or in other words, it’s a real shame that political background seems to influence the judgement of the economists to a great extent, while at the same time they are pretending to practice a science…

Friedrich January 29, 2009 at 2:56 am

Irrelevant or not does not matter. It’s better to state this clealy and and in public. How should we liberals work against this f….. stupidity. It must be written everywhere it must be tons of letters to any kind for politican who backs this braind-dead plans. I’m glad that at least a few people stand up against this nonsens.

I for my part have contacted an advocate and ask if one can raise a constitutional complaint.

And I can not see why you care if they spend one million or a trillions. Have they asked for your money?

ktibuk January 29, 2009 at 4:52 am

Ads in newspapers have indirect effects too. Since they are “mainstream” or “establishment”, a political ad in them would create a buzz in other “mainstream” media. Other newspapers, their online editions, TV channels etc.

Although I don’t approve much of CATO’s approach, this one is not something that should be criticized.

Marc Sheffner January 29, 2009 at 4:54 am

“Now if the ad listed the names of 250 NFL players..”
250 NFL players who strongly disagree with the President’s economic philosophy and policy. Yeah. that’d be persuasive. After all, an NFL player’s opinion is worth more than an economist’s, because he’s more famous, right?

The Politico writes, “There is no doubt these [of Peter Schiff and his ilk] are minority views.” And that makes them ….. wrong?

Inquisitor January 29, 2009 at 7:19 am

So what isn’t nuanced about the “Do nothing” crowd as opposed to the “do something!” monkeys with wrenches?

geoih January 29, 2009 at 7:47 am

They make fun of Schiff when he predicted the present state of affairs two years ago, while being vilified the whole time. Now he’s proven correct and they still vilify him.

Jounalism has become nothing but statist propaganda.

Alex January 29, 2009 at 8:14 am

There is nothing wrong with this initiative – the message is right to the point, backed by names of people who do research and/or teaching in economics. I have already forwarded the link to the people on my mailing list and I would encourage everyone seeing any merit in it to do the same. It is only by educating people that a progress can be made. Otherwise, the looters will keep on looting the nation of sheep unhampered.

Lucas M. Engelhardt January 29, 2009 at 8:16 am

Sadly, there is a difference between reason and persuasion. Some people ARE more convinced by the fact that a lot of “experts” believe a certain thing than by their own reasoning through it. The whole problem with fallacious reasoning is that it IS persuasive on some level. If it weren’t, there’d be little reason to care if reasoning was fallacious, as no one would believe it if it were.

Also, the Washington Post and New York Times are still read by many of the “people that matter”. Of course, Joe Schmoe doesn’t read them. But, he’s not really in a position to influence policy. Joe Schmoe didn’t like the financial system’s bailout, but decided to reelect the very Congresspersons that passed it.

I wondered about “Andrew” Schiff, too… Ends up he DOES work for Euro Pacific Capital. http://www.europac.net/management.asp

So, at least they didn’t get that wrong.

Lucas M. Engelhardt January 29, 2009 at 8:33 am

One other point:

They also posted the ad on their website – a far more economical medium, and something that can reach young people.

Ed January 29, 2009 at 8:47 am

Perhaps more people would see it if it were an article on Mises.org?

Deefburger January 29, 2009 at 8:56 am

Any effort to make the public aware that there are economists, many economist, that oppose the spending of more of their future into oblivion is a good thing. The people I talk to are all convinced that they have no voice. They see the large numbers of people who turned out for Ron Paul as encouraging, but the landslide victory of Obama as discouraging. They are unaware of the true numbers of other people who think as they do.

Since the majority of the media is making hay with the Obama victory, and the great crisis, (and the economists that want government grants to continue their carreers), it is a good idea to loudly shout, in any way possible, the idiocy of these huge spend-until-you-drop “stimulus” measures.

We are not alone. Nor are we a small minority. We are just quiet.
Time for a change. Time for us to stand up and say enough is enough.

People need to be shown that the unholy union between the Fed and Congress is both the cause of the current crisis as well as the reason for the disconnectedness that follows election. Congress only needs votes to get in. After that, there is no accounting for their actions. It’s bill for this and bill for that, and so long as the Fed teat can be milked for funds that they can funnel home to the companies and institutions who employ the voters, they can continue their careers as congress people.

We need to point out that the “Modern Times” argument is a fallacy. That Human nature hasn’t change one iota in several thousand years. We need to show that the founding fathers had it right in the first place and that such thinking still applies in “These Modern Times”.

We need to show that the forces that ate away at our freedoms as establised by the Founding Fathers are the same ancient foes that destroyed every other great civilization thoughout history. Not only has human nature not changed, but that the enemies of freedom have not changed either.

We need to show that the only thing that has changed is the technology and the means of enslavement, not the ends or the motivation.

Shout it out in every place possible!

Benjamin Burkley January 29, 2009 at 8:58 am

I really like this web site, but sometimes it feels to negative for me. We need to be providing reasons why stimilus will not work. Not simply trashing it, nor trashing the people who are trying to do something about it.

Investors times January 29, 2009 at 9:57 am

The bailout is a necessary step in this recession. It can be economic because there is a small chance that it might work.The population of countries around the world are waiting for that signal to have a run of the banks. As long as it seems that the governments are behind the banks then the economy is saved for another day.

However at the first signal, a run will cause massive bank failure and we will have 1930 repetition.

Also it might be possible that with this bailout enough people, albeit economically ignorant ones, are convinced that the upswing is near and start consuming and borrowing. Economics is also psychology. Think of volker in the 1980s suggesting high interest rates and you had people rushing to buy cds.

However we know that Obama is surrounded by economists, good ones. Even Gordon brown is an economist. They know that not doing anything is suicide. Even if the plan is worthless.

Bruce Koerber January 29, 2009 at 10:56 am

Going on record in whatever form is a good thing.

Historically, at least, it will not be said that these ‘Dark Ages of Economics’ were completely devoid of anyone with any economic sense!

And it also counteracts the propaganda spewed forth by the devious sucophants like Krugman and Bernanke. They are identified as charlatans by their peers which, if brought to justice, they will be judged by!

Inquisitor January 29, 2009 at 10:58 am

Doing “nothing” is political suicide, yeah. Too bad they didn’t worry about this when they caused the goddamn problems…

Bruce Koerber January 29, 2009 at 10:59 am

Going on record in whatever form is a good thing.

Historically, at least, it will not be said that these ‘Dark Ages of Economics’ were completely devoid of anyone with any economic sense!

And it also counteracts the propaganda spewed forth by the devious sycophants like Krugman and Bernanke. They are identified as charlatans by their peers which, if brought to justice, they will be judged by!

Craig C. January 29, 2009 at 12:30 pm

This is exactly what we need to do. Most people do not go to Cato or Mises, and have little, if any idea of what Libertarians stand for and represent. I applaud Cato for doing this. The general populous believes whatever is given to them from the MSM, so why not give it a try?

Russell January 29, 2009 at 12:38 pm

I think the CATO ad was fantastic. The President told a lie (or a mis-statement, you decide), and they called him on it.

As for using newspapers (a dying resource), how many here read or saw the ad in an actual newspaper? I don’t buy newspapers any more, and I’ve seen it mentioned all over the internet in the past 24 hours. The ad was extremely effective.

Richard Garner January 29, 2009 at 12:57 pm

You did forget to mention that several of the signatories on this “laugh out loud” advert are Mises Institute faculty members.

Oil Shock January 29, 2009 at 1:06 pm

The bailout is a necessary step in this recession. It can be economic because there is a small chance that it might work.

Yes! There is a small chance that you will win the Lotto Jackpot. Why don’t you sell everything you have, then borrow some more and buy lottery tickets with it.

bob January 29, 2009 at 1:30 pm

The easiest argument against a different “modern” economy and arguments of “laissez faire didn’t make ipods” is to point out that the Soviets produced nuclear reactors, jet fighters, and badass helicopters. None of this means that the average worker didn’t struggle to survive. It doesn’t mean people decided to move to Russia to pursue better opportunities. And it certainly doesn’t indicate they are better at producing such goods than free markets.

The point is that any modernity or science/technology arguments are moot. A command economy can obviously produce sophisticated weapons or power generators, but they will come at the expense of the efficient production and distribution of some other useful good, like medicine or bread.

N. Joseph Potts January 29, 2009 at 2:00 pm

IS there ANY medium that most Americans read (hear, see)? It SOUNDS like there is, and that Cato should have used IT, whatever its cost and whomever it reaches.

But there isn’t. Very much a wasted remark, accompanied by some others like it.

Austin Wilkes January 29, 2009 at 3:09 pm

I am sicked by your attack on Cato. It seems like you rather them preach to the choir over and over rather than publicly expose the lies the President is using to increase the size of government. Hell, if you are going to speak badly of people inside the beltway, at least aim the attack on the neoconservatives and liberals.

Artisan January 30, 2009 at 1:53 am

I wonder about the “bank run” .

Is the population really not aware of the fact that bank runs will precisely crush their banking system faster..? Or is that the real reason why there hasn’t been a run yet?

Wouldn’t runners be left with nothing under the mattress anyways when devaluation comes and “The New Currency” is finally established anyways… not talking about gold confiscation.

DavidShockey January 30, 2009 at 7:07 am

In the banner of this page, above this blog post, is a motto. It says, “Do not give in to evil, but proceed ever more boldly against it.”

Isn’t it ironic that right under that banner is this post criticizing fellow soldiers for fighting the good fight.

TimG January 30, 2009 at 11:37 am

I have to say that this ad that was put out by the Cato Institute has received mentions in national mainstream media outlets, as well as my local news sources.

Every bit of attention we can get will help.

Felix January 30, 2009 at 11:44 am

I know this is merely anecdotal evidence, but my parents saw the ad and sent me an e-mail noting that they were surprised. Like a lot of Americans (and they are Republicans), they assumed all economists supported the stimulus.

And it also seems to me that Obama himself has toned down his rhetoric in response.

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