Free markets speed economic recovery

In August 2020, under President Donald Trump, the U.S. unemployment rate fell in one month from 10.2% to 8.4%. Under President Barack Obama, the U.S. unemployment rate peaked at 10.0% in October 2009; it then took 27 months, until January 2012, to fall to 8.4%.

That is not a commentary on the relative competence of the two Presidents concerned; it is a commentary on the relative efficacy of their economic policies. The free market moves very quickly indeed to restore full employment when disruption has occurred; the regulated and micro-managed socialist market may never restore full employment at all.

The nineteenth and early twentieth century were filled with deep recessions that solved themselves very quickly, with no help from government:

In 1819, Britain suffered a deep recession when Lord Liverpool took the country back onto the Gold Standard at the pre-1797 parity, because this required a price deflation of a full 40%. However, in the event the recession began after the Prince Regent’s speech to parliament in January 1819 and was already lifting by the time of the “special session” of Parliament that passed the “Six Acts” in November/December of that year. Only the 15 unfortunate victims of the “Peterloo Massacre” were permanently affected by it.

Even at the time, voices spoke against the government’s Gold Standard policy, notably the radical Whig Henry Brougham and the self-dealing foreign exchange trader Nathan Mayer Rothschild, both of whom argued that Gold Standard resumption would be ruinous. It wasn’t.

In December 1825, the British banking system came close to collapse. Again, the Liverpool government in 1826 put in protections against a repeat of the problem but did nothing to bail out the banks or the economy. The result was a short, sharp recession, that was well into recovery by September 1826.
Like the two British recessions above, the Panic of 1819 in the United States was short and sharp, with little remedial action being taken and a fast recovery.

The following Panic, that of 1837, was much more serious, however, because the Andrew Jackson administration had de-chartered the Second Bank of the United States, collapsing the U.S. banking system, which relied on the Second Bank to ensure Mississippi bank banknotes were accepted in Pennsylvania at close to par, rather than at a 30-40% discount. With the country’s common currency abolished (there being now no nationally-issued banknotes) and a shortage of gold and silver, the depression lasted until 1843. The moral of which is that governments cannot usefully alleviate lengthy depressions, but they can sure as hell cause them.

Moving closer to living memory, the 1920-21 U.S. recession was ended quickly by Andrew Mellon’s preferred method of “liquidate, liquidate, liquidate.” Then the 1929 recession became the Great Depression because Presidents Herbert Hoover and Franklin Roosevelt did exactly the opposite, using Keynesian methods to prop up uneconomic companies, inordinately increasing tariffs and taxes and imposing regulations that severely dampened new business formation.

In Britain in 1929-31 the economy was depressed by an overvalued Gold Standard sterling parity, a refusal to match other countries’ tariffs and excessive government spending. Since the Labour government would not cut spending, the markets forced Britain off the gold standard, whereupon a new National government instituted modest Imperial Preference tariffs by the Ottawa Agreement. The depression disappeared as if by magic, except in a few specific areas such as Jarrow’s shipbuilding (in deep depression because world trade had halved).

The Great Depression and its interminable length, together with Maynard Keynes’ theories of “stimulus,” have ensured that governments now meddle incessantly whenever their economies fall from full employment. This has resulted in much slower economic recoveries than we previously enjoyed. The prime example of this was the recovery from the 2007-09 financial crisis, which was hindered not helped by artificially low interest rates and incessant regulatory meddling by the Obama administration, particularly in finance and energy.

As a result of these poor policies, we had an appallingly sluggish economic recovery, in which it took 27 months to reduce unemployment from its peak of 10.0% in October 2009 to 8.3% in January 2012 (the first month below August 2020’s 8.4% figure). The true cost of that failure showed up years later in the surge of opiate deaths among working class men who had despaired of ever finding work.

This time around, the drop from 10.2% to 8.4% unemployment was accomplished in just one month. That is a tribute to President Trump’s free-market instincts and to the ending at July 31 of the $600 per week subsidy to unemployment claimants. Going forward, we are likely to get further economic bad news — there is far too much dozy investment that has been created by funny money, all of which must be liquidated.

However, we can at least be confident that with Trump in office, the recovery from any “double dip” will likewise be swift, and there will be no Roosevelt-Obama “lost decade” of unemployment and waste. We can also rejoice that we are starting from 8.4% unemployment, not 10% — the difference represents millions of people whose lives have NOT been wrecked by the follies of government.

The policies that make the economy operate optimally are those that gave Britain the Industrial Revolution. Government must be as small as possible, with a currency whose value is stable from decade to decade – which in practice means a Gold Standard or maybe a robot Paul Volcker at the Fed, with an inflation target of zero, not 2%.

Real interest rates will fall out from monetary policy but should generally be positive but not too heavily so – between 2% and 5% per annum above inflation for risk-free long-term paper will work fine and will ensure that productivity growth is optimized, since dozy unproductive investment will be discouraged. That interest rate and monetary framework will generally set favorable conditions for middle-class saving, perhaps the most important factor in generating new business formation, the key element of growth. Add rock-solid property rights, a flat income tax with no exemptions, a simple and transparent legal system and minimalist government regulation, and we’re good to go.

It really is not difficult; it simply gets messed up by democratic politicians seeking to offer handouts to the electorate, when neither the politicians nor the electorate really grasp free-market basics. Ayn Rand was right in “Atlas Shrugged” – in a sensible system you would write this stuff into the Constitution, to stop politicians making a mess of it. By all means have democracy; but have the basics of free market economics written into some unalterable underlying law, so they are not subject to uninformed popular debate.

In the world we unfortunately live in, we have President Trump, and maybe after January President Joe Biden. Whichever of them we choose on November 3, we are unlikely to get a sensible Fed policy until we are forced into one by economic disaster. We are also likely to get a further downturn in the economy.

However, at least if we keep President Trump we will have a good chance of rectifying any such disaster fairly quickly. With President Biden, judging by the Obama record, there will be no such assurance – Democrats are inveterate economic meddlers.

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The Richness of Leftist Fascists Decrying ‘Fascism’

The fascist left regularly typifies the very qualities it professes to abhor. The only thing more pronounced than its totalitarianism is its stunning lack of self-awareness.

It’s ironic that leftists think of themselves as liberals, as the term “liberal” is historically and etymologically connected to the concept of liberty. Not only are they merely selective champions of liberty but the logical extension of their agenda is an eradication of liberty, from socialism to Supreme Court legislation, from radical redistributions of income to oppressive pseudo-environmental regulations.

What do I mean by “selective champions of liberty”? Simply that they believe conservative ideas are so odious they must be excluded from the classroom; social media; university student organizations; and, in too many cases, restaurants, yard signs and baseball caps.

Try teaching intelligent design in many public schools. In the name of science, they’ll exclude ID’s scientific findings. They believe that conservatives and their ideas are inherently racist and sexist and, in many cases, lead to violence, which means conservatives are not entitled to First Amendment protection or free expression on social media. It’s scary how these leftists have blinded themselves to their own hypocrisy and fascism in trampling the same rights they purport to celebrate.

Invisible authoritarians running social media platforms cite arbitrary rules of conduct that conveniently censor conservative opinion to allegedly ensure decency and decorum. Yet the opinions they muzzle are only dangerous and indecent if you define danger as the free expression of opposing views. While prohibiting conservative views that don’t remotely advocate violence, they permit overt leftist calls for violence. The chilling process by which this “private” and sometimes-government-supported censorship occurs is that leftists subjectively determine conservative speech is offensive or hateful and must be banned.

The First Amendment free-speech guarantees were designed precisely to protect controversial political speech, as uncontroversial expression obviously needs no protection. In the not-too-distant past, liberals understood that protecting the expression of all ideas was the essence of liberty. Yesterday’s American Civil Liberties Union defended the rights of neo-Nazis to march through Skokie, Illinois, in 1978.

MAGA Hat Boy Witch Hunt Continues: ACLU Staffer Condemns School for Admitting Nick Sandmann
Examples of the tyrannical leftist mindset abound. Nicholas Sandmann’s admission to Transylvania University in Kentucky incensed certain leftists. They clearly loathe Sandmann, who was brutally slandered by CNN and other leftists when activists accosted him for simply wearing a MAGA hat and standing for the pro-life cause.

“Does anyone else think it’s a bit of a stain on Transylvania University for accepting Nick Sandmann? I’m sure it’s a ‘both sides’ defense, but it’s pretty counter to their mission and another instance of there not being equal sides to an issue,” wrote ACLU staffer Samuel Crankshaw on Facebook. “This kid clearly is a provocateur in training with no intention of learning. He exists only to troll, intimidate and play victim.”

“Counter to their mission?” What mission would that be: the promulgation of leftist propaganda and the suppression of opposing ideas? Note Crankshaw’s revealing admission that he doesn’t believe there are even two sides to the Sandmann controversy. This is more remarkable considering that the media’s original reporting of this event was debunked at the time and then more resoundingly discredited when Sandmann settled a major defamation suit against CNN and others.

Despite Sandmann’s vindication, this ranting ACLU ideologue can’t even acknowledge that Sandmann had a legitimate position. And without knowing Sandmann personally, Crankshaw presumes he has no intention of learning — leftist open-mindedness on parade.

Crankshaw isn’t alone. Transylvania University professor Avery Tompkins, who paradoxically identifies as a “diversity scholar,” went further. “If (Sandmann) were to cause problems by being disruptive, trolling, or engaging in unethical behavior of any kind, I would immediately document it … and he would just be putting himself in a position for me to file a conduct report,” commented Tompkins on Crankshaw’s Facebook page.

This unmistakably reads like a threat against Sandmann should he express his views. If that weren’t sickening enough, Tompkins’ claims are preposterous. Sandmann wasn’t disruptive at the pro-life march. He trolled no one; a Native American man approached and taunted him, obnoxiously banging a drum in his face. Nor did Sandmann behave unethically, unless, perhaps, you believe that gathering in support of innocent unborn babies is unethical.

Tompkins’ thinking is disturbing (though I would still defend his freedom to express this stupidity), as is his attempted intimidation of a student entering his university. It’s rich that on the university website, Tompkins is quoted as saying: “I don’t want to be the authoritative person in the classroom. … The classes are there for the students. It’s not my soapbox.” Hmm. Could have fooled this casual observer.

Tompkins’ later apology in which he paid lip service to “diversity” is laughable. He is an adult with fully formed ideas, and a poster child for illustrating that the left’s idea of “diversity” means anything but ideological diversity.

Another example involved leftist University of Rhode Island professor Erik Loomis, who defended an anarchist’s murder of Trump supporter Aaron Danielson in Portland. “He killed a fascist,” Loomis said. “I see nothing wrong with it, at least from a moral perspective.” This abomination speaks for itself.

Before you call this an extreme example, note that this kind of thinking drives the widespread leftist violence throughout American cities that was enabled by Democratic governors and mayors.

I wouldn’t be so alarmed about any of this if the left weren’t promising to ratchet up its violence if President Donald Trump is reelected. If you doubt this, you’re not paying attention, and as young people say, “That’s on you.” Prayers and more prayers for this great nation.

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Detroit Police Chief Explains the Real Issue Behind Riots – and It’s Not Race

Detroit Police Chief James Craig told Townhall in an exclusive interview that the unrest that’s taking place across the nation has less to do with race relations and is more about a radical faction of people attempting to undermine the government.

“I can tell you that this group that’s marching, like so many across the country, the anarchist factions of these groups are promoting violence and attacks on police officers. They don’t speak for Detroit,” he told Townhall. “And I recognize that it’s not all of the protestors it’s the core, that little small group, that really tries to create violence.”

According to Craig, Detroiters have helped prevent groups like Black Lives Matter from causing chaos and destruction in the city .

“I can tell you: Detroiters don’t like it. They support this chief. They support this police department. They do not support defunding [the police],” he explained. “They know what defunding looks like.”

When Craig was appointed seven-and-a-half years ago, “police officers lost 10 percent of their pay as the city was rapidly approaching municipal bankruptcy, which ultimately happened.”

“Detroiters don’t support [defunding] and police officers don’t support it,” he said. “And I absolutely don’t support it.”

Craig, who was has had a long career in law enforcement, has been part of departments in various cities. He previously served as Chief of Police in Cincinnati, Ohio and Portland, Maine. He was also an officer with the Los Angeles Police Department for 28 years.

The biggest difference between Detroit and other cities across the nation, like Portland and Seattle, according to Craig, is the lack of support from city officials.

“The mayor here in Detroit has confidence in my experience and my ability to do the job,” Craig told Townhall. “He trusts that. We talk about different issues, but, at the end of the day, he trusts me to make the right decision. And, frankly, he has as little tolerance as I do with violence, violent attacks on police officers, destroying property. [Mayor Mike] Duggan and I are in lockstep.”

In other cities, chiefs are afraid to stand up to things they believe is wrong because law enforcement officials are at odds with city leaders.

“How do you allow someone to set up a no cop zone, an area of lawlessness?” he asked rhetorically, referring to Seattle’s CHOP/CHAZ zone.

“When they tried that ridiculous move here in Detroit, the message was clear: you’re not going to set up a zone and make demands,” Craig explained.

When rioters attempted to create a zone in Detroit, police immediately arrested people. The message was apparent: lawlessness and violence wouldn’t be tolerated.

“Because of our firm stand, this department has won tremendous praise from not only our residents but also folks in metro Detroit. I get tremendous support from my colleagues across the state – and across the country – for standing up and speaking out in a bold, fearless way, that we’re not putting up with this,” Craig explained.

One of the concerns Americans have is whether or not this violent movement is going to come to their city. Areas that traditionally don’t have officer-involved shooting or destruction are feeling the impact of the Black Lives Matter movement. With riots breaking out in smaller cities and towns, like Kenosha, Wisconsin and Lancaster, Pennsylvania, the fear is justified.

“This is happening all across America. There’s an uptick in violence. A lot of it has to do with the uptick in anti-police rhetoric and criminals are now feeling emboldened to be aggressive and attack police officers,” the chief explained.

The middle ground that Americans and law enforcement can come to, according to Craig, is simple: officers can make it clear they support a person’s First Amendment right to peacefully protest.

“What’s non-negotiable is violent attacks against police officers,” he explained. “Most Americans would agree with that.”

Law enforcement leaders should not waiver on what they expect of protestors. Setting buildings and property ablaze, taking over the streets, and making demands are non-negotiable, Craig told Townhall.

“As a country, we have to stand firm in our resolve. We have to be unified and work together,” he said. Regardless of where a person stands politically – whether left, right or in the center – and what race we are, Craig said Americans should come together to condemn violence.

“We support our men and women in uniform and, of course, in cases when an officer exceeds his authority and uses excessive force, we hold that person accountable,” the chief explained. “That does not reflect the entire profession.”

Craig also said the other thing that should not be tolerated are “radicals” manipulating facts surrounding an instance to incite violence.

As cities across the nation look at diversifying their police forces, Craig pointed out that departments should be reflective of the demographic they serve. The one thing that we’re seeing today are mayors and radicals calling on police chiefs to resign, regardless of their race or sex.

“Race doesn’t matter,” Craig explained. “What matters to them is someone who speaks truth against what their narrative is [which is that] they’re peacefully protesting, which isn’t always the case.”

“The real issue is not as much about the race,” the chief said. “The anarchists and the Marxist Ideology, they have no support for anybody in government. They want to undermine that so it doesn’t matter what race your race is. It’s less about that.”

“We’ve seen an exit of African American chiefs, some white chiefs, female chiefs. It just doesn’t matter,” Craig concluded.

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Joe Biden called for Christians to be added to terror watch list!

Former Vice President Joe Biden – who will never be elected president, by the way – has a message for American Christians: If you don’t defect from your faith and embrace leftism, then you’re going to be added to the government’s terror watch list.

This is what Biden promised during a recent CNN “town hall” event as he decried believers in Jesus Christ for opposing the radical LGBTQ agenda.

In Biden’s view, unless you vigorously support the transgender mafia in its effort to “transition” all children into something other than their natural biological sex, then you’re a terrorist who deserves to be marginalized from society, and possibly even shipped off to Guantanamo.

Biden’s antichrist position stems from a suggestion put forth by the radical, far-left Southern Poverty Law Center (SPLC) hate group, which is pushing for all opposition to the Cult of LGBTQ to be designated as “terrorism,” which under George W. Bush’s “Patriot Act” means that an individual’s constitutional rights are nullified.

“What we had before to deal with hate crimes was we had a position in our administration, within both the Department of Justice as well as within Homeland Security, a provision to keep watch on these groups that we know are out there – like terrorist groups, they’re similar,” Biden stated, referring to the “danger” of Christians in American society.

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Political correctness is most pervasive in universities and colleges but I rarely report the incidents concerned here as I have a separate blog for educational matters.

American “liberals” often deny being Leftists and say that they are very different from the Communist rulers of other countries. The only real difference, however, is how much power they have. In America, their power is limited by democracy. To see what they WOULD be like with more power, look at where they ARE already very powerful: in America’s educational system — particularly in the universities and colleges. They show there the same respect for free-speech and political diversity that Stalin did: None. So look to the colleges to see what the whole country would be like if “liberals” had their way. It would be a dictatorship.

For more postings from me, see TONGUE-TIED, GREENIE WATCH, EDUCATION WATCH INTERNATIONAL, AUSTRALIAN POLITICS and DISSECTING LEFTISM. My Home Pages are here or here or here. Email me (John Ray) here. Email me (John Ray) here.
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