Sunday, January 30, 2011

Regulation Watch - 01-30-2011

I'm going add news about the Federal Reserve from time to time because it regulates money, through actual regulations as well as through its open market operations, and like the other regulatory agencies is largely unaccountable. This week was a fairly busy one.

SEC: Madoff victim takes gov't at its word that its trying to protect, sues SEC for negligence
SEC: Any wonder more companies are going private? SEC gives stockholders vote on exec pay
FCC: Democrat Cantwell tries to support FCC's internet power grab
FCC: Verizon, MetroPCS fight FCC's power grab
FCC: Phone companies have to get approval from the FCC to release a new phone. Who knew?
FDA: FDA loses second court battle over attempt to regulate e-cigarettes as medical devices
CA: Emergency regulation by Insurance Commissioner Jones enables early adoption of Obamacare regulations in California
DoE: Rand Paul suggests eliminating Energy, Education and HUD, now THAT would be a step forward
NRSRO: The credit rating agency cartel, I'm so glad government hacks are monitoring asset bubbles
Fed: Now that Fannie and Freddie are nationalized can we use FOIA? And what about GM?
Fed: Who received the bailouts OR remember how the East End Baptist Tabernacle Federal Credit Union was critical to the stability of the global credit market
HHS: Wavers for Favors, government not of laws but of men

FCIC: Democrat led financial crisis panel ignores role of aggressive government housing policy
FCIC: Investigation misses big picture: Fed, Fractional Reserve Banking, Welfare State Deficits
House Republicans attack regulations, Democrats defend
Interior: Dept. of Interior pretends oil companies aren't ready, ignores gov't role in preventing non-union, non-U.S. ships from assisting in gulf
NLRB: Union takes 15 months to back out of hospital after nurses vote to decertify
NLRB: States vow fight with NLRB to protect workers from union bullying
NLRB: Obama renominates Becker who couldn't even get approved when congress was Democratic 
NLRB: More help to the unions at the point of a gun
NLRB: Details on NLRB's bullying tactics against employers
DoL: Intimidation tactics of the department of labor
EPA: Gringrich has a half-good idea: abolish EPA, replace it with another regulatory agency
EPA: Texas defies federal regulators, grants air permit
EPA: Boxer, Feinstein call for more regulations of drinking water, will Republicans privitize utilities?
EPA: Browner--adviser for energy and climate change--leaves,  trying to avoid testifying to Congress?
EPA: W.Va. drafts bill to prevent EPA from retroactively vetoing permits
EPA: Wyoming politicians recognize the threat of administrations attack on coal mining
EPA: Issa asks businesses to name names, they target EPA, Davis-Bacon and OSHA
EPA: Environmentalists call for banning other environmentalists from trying to save rare plants
EPA: EPA and Chrysler team up on hybrid vehicles, assure public that there's no conflict of interest in a regulator working with a nationalized company to compete with private companies regulated by the same agency
TSA: TSA Shuts Door on Private Airport Screening Program That Exposed TSA’s Inefficiency
TSA: Jesse Ventura Sues TSA and DHS Over Airport Screening Violations
NHTSA: NHTSA supports first steps towards monitoring you in your car
Bill to give president power to shut down internet ('kill switch') without court review will return
Immelt, GE CEO and longtime rent-seeker, appointed to Council on Jobs and Competitiveness panel

Ed Cline on The State of the Union Speech

Ed Cline has an excellent piece on the state of the union speech. Two money quotes:

What is a “principled compromise”? Principles should not be compromised or adulterated. Those that are, are merely “stances” hiding a pretence. The principles were never there. Republicans may be ready to surrender half a loaf to the Democrats, who have no bread of their own to negotiate. But they and Obama will in the end possess half a loaf, and in a spirit of bipartisan magnanimity, be ready to compromise even further. Follow the syllogism, and see who winds up with the whole loaf.

Only those bedazzled and mentally benumbed by his word cloud will believe he is changing direction. They should deconstruct that word cloud and piece together the words to form whole sentences. Then they would see the ominous message contained in the State of the Union.

Saturday, January 29, 2011

Introductory Economics

A friend of mine recently e-mailed me for a list of introductory economics texts that might help a non-economist understand our current and looming economic crises. Below is my response with some edits.

Books explaining basic economics principles and/or financial crises:

1. Atlas Shrugged by Ayn Rand - Best explanation of the role of production and innovation in the economy and how the welfare/regulatory state leads to stagnation and poverty. Extremely relevant now and will be for the next couple decades.
2. Economics in One Lesson by Hazlitt - Explains several economic fallacies with special attention to production and goods.
3. Capitalism: Then Unknown Ideal by Ayn Rand - Many essays on different aspects of capitalism and the destructive effects of regulation and redistribution.
4. How an Economy Grows and Why it Crashes by Peter Schiff - Good Austrian explanation of production, savings and money using 'crusoe economics' ultimately elaborated to the point of explaining our current crisis.
5. Crash Proof 2.0 by Peter Schiff - Explanation of the coming crisis, its causes and how to protect yourself.
6. Capitalism by George Reisman - College level textbook on Austrian economics covering everything. Probably too big and dry for background reading but easier than most of the other academic Austrians (von Mises, Bohm-Bawerk etc.). Available free as PDF but $150 to buy a physical book.

The coming crisis is the result of the bankruptcy of our welfare state (of altruism really). We give too much to the non-productive, punish the productive too heavily with taxation, inflation and regulation and have made way too many promises to the future non-productive (the aged, sick and retiring union members). Most of the manufacturing industries in the U.S. have closed down or moved offshore. Our economy has been limping along a few decades longer that it should have, supported by the Asian economies. But it all can't last much longer. The politicians and bankers are trying to paper over the problems with fiat credit but its just about to explode. Basically we don't make anything anymore in the US, what we do make we plunder and we are buying everything from Asia with printed money. The Chinese are realizing that they're the suckers. Just like the American entrepreneurs and doctors are realizing it. When they shrug, the economy collapses. Or some other event will expose the whole scheme for what it is.

There is a big debate even among Austrian economists about whether the crisis will be inflationary or deflationary. Schiff is an inflationist because he believes our politicians will keep attempting to escape the consequences of their policies via inflation until it explodes into hyperinflation (with a significant fraction of the inflation coming from US dollars returning from China etc.). In addition to his books, Schiff has tons of material available on youtube, his europac website and his new schiff radio website. Mike 'Mish' Shedlock is one of the best deflationists. He doesn't have any books but has an excellent blog. The deflationist argument is basically that there's a huge credit bubble that can't be maintained, that the banks are insolvent and due to collapse and that the government is powerless to create the required credit expansion to combat it. When the banks do collapse then businesses will fail right and left, not being able to borrow as they expected and there'll be a deflationary depression (perhaps followed later on by hyperinflation). Although I've been reading and thinking about this stuff for over a year I don't know which is right. Regardless of whether the inflationists or deflationists are right, they both agree that there's a crisis looming and that gold is the best protection. As Schiff puts it, we're speeding towards a cliff and so far the politicians answer is to press on the gas pedal, expanding all the bad regulations and policies that lead to the mini-crises of 2006 and 2008.

Regarding economic histories, I don't know of a book to recommend. Like you, I've picked most of it up in different books, articles and blogs.

Some other blogs/economists worth a look are Investors Business Daily, Marc Faber, Karl Denninger, King World News (mostly gold stuff).

Tuesday, January 25, 2011

GOP Rep. Sensenbrenner Joins Citizen Spy Push

In an earlier post I described the DHS's push to enlist citizen spies through Walmart. Now the GOP has joined in, in a lovely example of that 'bipartisanship' that Democrats are all of a sudden supporting. Representative Sensenbrenner (Wisconsin), the new head of the Subcommittee on Crime, Terrorism, and Homeland Security, is pushing a bill that would require internet service providers to keep records for two years. He has clear support of other Republicans and Democrats who previously introduced similar legislation.
The new chairman of the House Judiciary committee is Lamar Smith of Texas, who previously introduced a data retention bill. Sensenbrenner, the new head of the Subcommittee on Crime, Terrorism, and Homeland Security, had similar plans but never introduced legislation. (It's not purely a partisan issue: Rep. Diana DeGette, a Colorado Democrat, was the first to announce such a proposal.)

Police and prosecutors are the biggest backers of data retention. FBI director Robert Mueller has said that forcing companies to store those records about users would be "tremendously helpful in giving us a historic basis to make a case" in investigations, especially child porn cases. An FBI attorney said last year that Mueller supports storing Internet users' "origin and destination information," meaning logs of which Web sites are visited.
The fact that these records would be helpful to law enforcement is beside the point. The point is that the constitution protects us from intrusions by the state until we have given evidence of wrongdoing, i.e. like the TSA screening, this is a violation of the Fourth Amendment. If and when law enforcement has sufficient evidence against someone, they can subpeona the ISPs to start retaining records and not before. Forcing ISPs to keep records on fellow citizens is one more step towards the government establishing a network of citizen spies.

From the article:
Jim Harper, director of information policy studies at the free-market Cato Institute, says the push for legislation is an example of pro-regulatory Republicans. "Republicans were put in power to limit the size and scope of the federal government," Harper said. "And they're working to grow the federal government, increase its intrusiveness, and I fail to see where the Fourth Amendment permits the government to require dragnet surveillance of Internet users."
The fact that this is coming from the GOP is not surprising. That they would start talking about it just days into their new majority elected on the premise of reducing the government is infuriating. Contact your representatives to tell them that you elected them to limit state power, not increase it.

Sunday, January 23, 2011

Regulation Watch Sunday

I'm going to try posting article links describing the growth of the (unaccountable) regulatory state every Sunday. This is important for a few reasons. First our regulatory state was established by FDR and effectively transferred the larger part of law making (a power that's supposed to reside with the Legislative branch) to the Executive branch. The Federal Register, which lists the rules established by the agencies, has grown like a cancer since. Second, this illegitimate lawmaking has never been seriously tackled by conservatives. The Federal Register even increased by some 9,400 pages under Reagan. It can be and should be attacked by the Tea Party. Eliminating the regulatory agencies and their rules is an almost no cost means of restoring individual freedom (unlike dismantling entitlements for example). Third, Obama and the Democratic party will be ruling through these agencies for the next couple years since they (the Democrats) can no longer rule legitimately through Congress.

If you know of sites that track these stories better or that I should monitor, please let me know.

FCC: Verizon Sues the FCC over Net Neutrality
NLRB: Labor law will bypass congress
EPA: EPA attacks stripmining
FCC: Surpreme Court appears to be ok with violating privacy rights of corporations
FEC: Self-hating businessmen perfer to give up right to free speech
DHS: Prison Planet's You are the Resistance Against the DHS Campaign
NHTSA: 2010 sets record for 'voluntary' recalls
DOEd: Textbook approval processes flawed
DOE: DOE offers $1.2bn to Solar, bio-diesel projects
ID: Interior Department unveils two new bureaus to oversee offshore drilling
DOI: Alaska native groups oppose habitat designation
Labor Department: Union membership in companies record low 6.9% in 2010
DOT: Former TDOT worker accused of taking $30,000 bribe
FCC: AFP Arizona, stop the FCC's regulatory takeover of the internet
CPA: Government takeover disguised as regulatory reform. Creation of the Consumer Protection Agency
SEC: Dodd-Frank requires tracking conflict minerals back to source
Every insane rule has some defender somewhere
Obama assures us that his massive new regulations are going to help us live longer
DOEd: July 1 regulations to require greater state regulation of for-profit-schools, schools sue
NLRB: Commentary on NLRB suiing four states over secret unionization ballots
HHS: GOP calls favoritism on wavers, Sebelius says 'ludicrous'
FCC: Verizon suit could block net neutrality indefinitely
EPA: Congress tries to repeal incandescent bulb ban
Obama's new plan to squeeze out private industry from medicine: a state drug development center
United States #9 on freedom index, not 'free' just 'mostly-free'

Saturday, January 22, 2011

Money Down the Toilet

Please take your time to peruse the following posts.

First, is W.C. Varones piece explaining the $500 billion-ish discrepancy between the budget deficit and the national debt from the last couple years:
I and many others suspected the answer was in some off-budget shenanigans like Fannie/Freddie, GMAC, etc. It turns out we were right in general but missed the biggest specific off-budget item: student loans. In table S-14 of this FY2011 OMB Mid-Session Review shown to me by Menzie, you'll see that the financial asset "Direct loan acccounts" increased from $489 billion to $689 billion. And the prior Mid-Session Review (table S-15) shows that account at $196 billion at the end of FY08. So an increase in student loans accounted for $393 493 billion of the missing money over the two years.
Next you can wander over to Beers with Demo to see what that $500 billion is going to buy us taxpayers. Like a vastly more intelligent workforce?
After two years in college, 45% of students showed no significant gains in learning; after four years, 36% showed little change.
Dean also shares this wonderful video:

Finally check out Mish Shedlock's take home message:
Time to Scrap Entire Student Loan Program

That debt is government (taxpayer) guaranteed. It is one of the primary things fueling the ever-rising cost of higher education. Amazingly students scream for more aid, and Obama want to give it to them, even though the debt destroys millions of lives in the process.

I propose the entire student loan program be scrapped. Much of that alleged "aid" goes straight to corrupt institutions like the University of Phoenix which charges exorbitant amounts for fluff degrees leaving students trapped as debt slaves for the rest of their lives.
I'll also point out that having the government directly behind all of higher education funding is a serious threat to our Republic. That position gives it the power to dictate the contents of that education (or lack thereof) and morally and intellectually disarm the citizenry.

Greenspan is a Tool

[UPDATE: Greenspan's statement discussed in the Zero Hedge piece is from 2007, i.e. this is old news. See W.C.Varones' comment below.]

Despite having laid out a rock solid case decades ago, Greenspan did nothing to defang or close down the Fed once he was head of it. He discouraged George H.W. Bush from eliminating the deficit, sanctioning Bush's massive spending spree. He also suggested changes to the Consumer Price Index that have made it almost useless (giving rise to the popular traditional measure being maintained privately). And now that he doesn't matter anymore, is completely discredited and has no power to implement anything, he's changed his tune again. I wonder if he has any ideas that stick. He should have just stuck to his Keynesian/Monetarist line and sunk into oblivion.

From Zero Hedge:

Stunner: Gold Standard Fully Supported By... Alan Greenspan!?

You read that right. After such establishment "luminaries" as World Bank president Robert Zoellick, Warren Buffett's father Howard, Jim Grant, and, most recently, Kansas Fed president Thomas Hoenig, all voiced their support for a return to a gold standard, the most recent addition to the motley group of contrite voodoo shamans is none othe than the man who is singlehandedly responsible for America's addiction to cheap toxic credit, who spawned such destroyers of the middle class as the current Chaircreature, and who currently is the chief advisor in John Paulson's crusade to gobble up every ounce of deliverable physical in the world: former Fed Chairman - Alan Greenspan! In an interview with Fox Business, the man who refuses to go away into that good night: "We have at this particular stage a fiat money which is essentially money printed by a government and it's usually a central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or a currency board, because unless you do that all of history suggest that inflation will take hold with very deleterious effects on economic activity... There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard." And a further stunner: Greenspan himself wonders if we really need a central bank. Now our only question: why couldn't the maestro speak as clearly and coherently during his tenure which resulted in our current near-terminal financial state. And as a reminder, courtesy of Dylan Grice, if and when we do get a return to a gold standard there would be a need to reindex the monetary base to a real time equivalent price of gold, putting the price of the precious metal at about $6,300: "The US owns nearly 263m troy ounces of gold (the world's biggest holder) while the Fed's monetary base is $1.7 trillion. So the price of gold at which the US dollars would be fully gold-backed is currently around $6,300." And here you have people worried about day trading volatility...

Friday, January 21, 2011

Jefferson Believed in God--So What?

In an IBD editorial from a couple days ago Carl Anderson repeats an oft heard line among religious conservatives (too often repeated in Tea Party contexts): the First Amendment to the Constitution is intended to keep the government out of religion, not to keep religion out of the government. In some versions of this argument Jefferson's letter from which the 'wall of separation' language comes is denigrated. Anderson chooses to just ignore the meaning of the metaphor.

In support of this position Anderson and others argue that, surprise surprise, Jefferson and Washington and Hamilton all believed in God! OMG! I guess the point is that if there was a separation of church and state, a wall, then political office would only be open to atheists? This is nonsensical. The separation of church and state doesn't mean the religious can't hold office. Its not a separation of the state from religious practitioners its a separation of the state from religious practice. It means that the state should do nothing to either suppress or support religion. It means that the state shouldn't be licensing religions, banning them, or outlawing religious imagery. It means that there shouldn't be an officially declared religion of the government. And it means that there should not be religious messages or imagery that are part of official government property or government ownership and maintenance of religious property like the Mt. Soledad Cross. The state should have no expressed opinion on any religion. (Whether this means that politicians should be banned from making reference to God in their official capacities is debatable.)

The fact that most of our founders were religious is not an argument for infusing religion into government. Just the opposite. Despite their faith they decided to build a secular government that recognizes reason as the ultimate arbiter in human relations.

Prayers in public schools and crosses on public property are not a catastrophic threat to our lives and liberties, but that doesn't change the principle. There should be a wall separating religion and government. Schools should be privatized and the Mt. Soledad property should be sold to the highest bidder.

Thursday, January 20, 2011

Minimum Wage Destroys Samoa

Here's a case study in the devastating effects of minimum wage laws. In brief, Congress decided in 2007 to apply our minimum wage law to all U.S. territories, with stepwise increases concluding in 2009. This imposed a minimum wage of $7.25 on an island, Somoa, where factory workers earned a bit above $3, and were happy to do so. The predictable happened, one plant closed and the other (there were only two) might do so as well. If it does, most of the island will be unemployed. And they have the gall to pretend such laws guarantee a 'living wage'. Nothing living comes from government controls. Only death and destruction.

You can read the whole piece at Peter Schiff's Europac site.

Wednesday, January 19, 2011

Gun Control Disarms the Innocent

All the discussion around the Arizona shootings got me thinking about gun control (abolishing or restricting private ownership of firearms). The thought I keep circling around is the following: If you make owning guns illegal you disarm people who would own them for legal purposes: self-defense, hunting, collecting, target shooting. You do not disarm people who intend to use them for purposes that are aggressive and already illegal: murder, armed robbery, kidnapping.

To a criminal, any added risk related to gun ownership is usually dwarfed by the risk involved in the intended crimes. So the penalty for gun ownership itself would have to be raised as high as the penalties imposed for those illegal purposes in order to deter criminals from obtaining guns. And the penalties would probably have to be even higher than that because secretly owning a gun doesn't attract much attention and the risk is thereby reduced. It is only during the commission of a crime that the criminal advertises that he has a weapon. So you arrive at the conclusion that in order for gun control to deter criminals the penalty for owning a weapon has to be higher than the penalties for the crimes committed with those weapons. You have to punish the potential for committing a crime higher than the actual crime.

The calculation for the potential gun owner with no aggressive intent is completely different. Not intending to commit a crime, the punishment for owning the gun itself is the major deterent, unsurpassed by any greater penalty. Against this he weighs the value to himself of owning a gun for self-defense, hunting, collecting or target shooting. The last are essentially hobbies that most enthusiasts would simply abandon rather than risk fines or imprisonment. The same is largely true of hunting, though some hunting is done for food and might be worth the risk--if done alone and not spoken of to your law abiding friends. Think here of the law against hunting the kings game in England. Some poachers risked it, but probably not many. In the case of self-defense, you'd have to decide how useful is a gun that drawn during a false alarm or non-lethal situation could land you in jail. After all, the police are probably going to be called in any situation where you might draw your gun in self-defense and if the assailant doesn't do time, you probably will. Add to all of these the risk of being turned in by acquantances, friends and family members, which is very real for law abiding (or otherwise law abiding) citizens and less so for criminals.

The calculations for criminals and non-criminals is completely non-equivalent. To the criminal, gun control is irrelevant and mostly ignored. To the non-criminal it is a huge deterent. A man intending to kill his wife would meeting in a dark alley and exchange cash for a revolver wrapped in a brown paper bag and a handful of bullets. A civilian wouldn't so he could shoot empty beer cans on the weekend with his buddies.

I say that gun control is irrelevant to the criminal, but this isn't entirely accurate. Gun control creates an environment where the risk associated with his crimes is actually reduced. By reducing or eliminating the presence of armed civilians capable of self-defense, the criminal no longer has to worry about 'heroes' (as in 'don't nobody try to be a hero'). A civilian population under gun control is a safer environment...for criminals. Which means its a more dangerous environment for civilians. In a gun controlled environment a criminal merely needs to monitor for actual police. If there are no cops around, there are no other guns around. Is crime less prevalent in Mexico, where gun ownership is limited to a sliver of hunters?

Lastly I'll point out that gun control is a well-documented measure used by totalitarian governments intent on controlling or murdering their citizens. They start with gun registration and restrictions and end in confiscation and complete disarmament. A well-armed citizenry is one of the best safeguards against an out of control government. This is the primary reason for the 2nd amendment of the Constitution. Its not likely that the 2nd amendment alone would save us from dictatorship, but its part of the range of checks the Constitution grants the U.S. citizenry against the government.

The right to own guns derives from our fundamental right to live our own lives according to our own decisions, which means to defend ourselves from those that would use means other than reason to change our actions. The right to own guns derives from our right to defend ourselves against aggression. The police are not always on hand and when they are not it would be a gross injustice if only the criminal aggressors could arm themselves. Furthermore history has shown that criminal states, governments that recognize no individual rights, are the greatest aggressors and gun ownership goes some way in protecting us from the possibility of such a state.

The appropriate response to the events in Arizona should have been to encourage more gun ownership, not less. The more heroes, like one of those that took down Loughner who had a concealed weapon, the better. Its unlikely that more widespread gun ownership would have stopped Loughner, but gun control wouldn't have either and there are plenty more cases where gun control simply disarms and creates more victims.

Gun Facts - Overview with lots of statistics addressing e.g. consequences of gun control
Denninger on Second Amendment
Zero Hedge on Gun Control

John Stossel program on gun control:

Innocents Betrayed - history of gun control and totalitarianism:

Monday, January 10, 2011

Book Review: Ill Fares the Land by Tony Judt

I haven't seriously delved into leftist literature since college. And having sworn off the leftist 'mainstream' media a year or so back, I don't even get the distasteful occasional exposure. At a friend's suggestion, however, I recently read Tony Judt's Ill Fares the Land, twice. Broadly it's a egalitarian's attempt at rededication to the welfare state, or 'democratic socialism' as he prefers to call it. It is partly historical, partly moral, partly political but on close inspection mostly a tired rehash of discredited leftist ideas and arguments. It starts out with an attack on 30 years of the pursuit of self-interest including an attempt to discredit classical economics. The middle of the book is filled with some history of welfare statism as well as numerous assertions of Keynes' greatness without any serious description of his views or any substantive quotes. Then Judt moves on to a description and attempted discrediting of Austrian economists. He closes with an idea that is at least new enough that I've not seen it before. More on that later.

The most fallacious aspect of the book is its use of straw men. Rather than picking the best, most logical, most philosophical opponents, he picks the worst, the most inconsistent and of course makes them look ridiculous. So he criticizes selfishness throughout the book, opening with an attack on the "thirty years we have made a virtue out of the pursuit of material self-interest" but doesn't have the courage to take on the quintessential advocate of the Virtue of Selfishness, Ayn Rand. Rand showed that only life gives rise to the need for goal directed action and that an organism's life can be the only standard of value. In other words Rand gives a logical defense of self-interest way beyond some simple advice to go to business school, which Judt considers the depth of the quest for personal happiness. Instead of Rand, Judt prefers to attack Margaret Thatcher and Ronald Reagan, neither of whom would have defended the morality of self-interest. 

Judt attacks 'capitalism' throughout the book without defining it. Only late in the book does he say that it is "not a political system; it is a form of economic life, compatible in practice with right-wing dictatorships (Chile under Pinochet), left-wing dictatorships (contemporary China), social-democratic monarchies (Sweden) and plutocratic republics (the United States)." He dares not define capitalism even as Marx did (a political system where the means of production are privately owned) nor mention the early days and thinkers of the United States like Thomas Jefferson. 

And my favorite straw man is in his attack on the 'Austrians'. Anyone partly educated in economics, politics or current events might have heard mention of the Austrian economists, staunchly pro-individual economists deriving their name from the birthplace of their founders (Menger, Boehm-Bawerk, von Mises and Hayek). They are much in the news lately because they (e.g. Peter Schiff) constitute a vast majority of the economists who saw the housing bubble and financial crisis in advance. Well Judt's handling of the 'Austrians' is first to group them not by thought, but by literal birth, so his Austrians are von Mises, Hayek, Schumpeter (~), Peter Drucker (!!) and Carl Popper (!!!) (pg. 98). Secondly rather than describe their views on economics he focuses on their prediction that western countries were becoming like Nazi Germany. Haha, weren't they silly. No need to read them I guess.

Here are some of the other outstanding absurdities from the book:
  • Unregulated capitalism caused the crash of 2008, and free market economists didn't see it coming, invalidating the entire field of economics [too bad Judt didn't pay attention to some of those Austrians]
  • Government can play an enhanced role in our lives without threatening our liberties [how exactly is that role going to be paid for?]
  • Climate change will force us to choose between fascism and socialism
  • Without the state, private individuals cannot create roads, fire-fighting services, schools, lamp posts or post offices [never mind that most of these were created privately, and that now the gov't goes out of its way to make it illegal for private individuals to compete with it in these areas]
  • Taxes are consensual
  • Social Democracy has never descended into authoritarianism [hello?!? Weimar Germany -> Nazi Germany]
  • Political freedom is only freedom of speech (pg 200)
  • Communism's fall did not discredit state planning
Judt's positive message is that the failure of the left is not a failure of substance but of talk. The failure of every communist regime, the failure of every government assistance program and the impending failure of welfare states globally doesn't count. What counts is how we talk about it, or perhaps how we skillfully avoid talking about it. "Our problem is not what to do; it is how to talk about it" (pg 6), "Our disability is discursive: we simply do not know how to talk about these things any more" (pg 34), "The problem today lies not in social democratic policies, but in their exhausted language" (pg 144),  "to recast our public conversation--seems to me the only realistic way to begin to bring about change" (pg 171), "We need to re-open a different sort of conversation. We need to become confident once again in our own instincts: if a policy or an action or a decision seems somehow wrong, we must find the words to say so" (pg 173), "What we lack is a moral narrative: an internally coherent account that ascribes purpose to our actions" (pg 183). 

My favorite along these lines is the following: "So what is to be done? What sort of political or moral framework can the Left propose to explain its objectives and justify its goals?" (pg 179) Read that again. What moral framework can the Left propose to justify its goals? That means that its goals (egalitarianism, the destruction of the rich, the enslavement of all for all) are unarguable axioms that only need an invented justification for public consumption. He says if something seems wrong we must "find the words to say so," but what he means is not 'the' words, but any words. The feeling of something being right or wrong is self-evidently valid and the words are window-dressing. This is the fundamental subjectivism of the Left and by itself invalidates the entire movement. A movement based on unanalyzed feelings has no validity. Subjectivism rejects reality and reason, the only means of determining truth or falsehood. (Keep this in mind next time you hear about 'bad optics' or 'managing the narrative' or quibbling about the meaning of 'is'.)

If that's not enough I'll point out that after all his talk about changing the language of discourse and re-imagining, he doesn't. He doesn't talk any differently about the state or politics than any old pragmatic welfare statist. He talks about changing the talk, but its all talk. All promise and no delivery. He even trots out the old private-individuals-couldn't-create-a-railroad argument. Give me a break.

Judt's sole novelty is around page 221. He makes the argument that social democracy and the Left are conservative movements.
The Left has always had something to conserve. We take for granted the institutions, legislation, services and rights that we have inherited from the great age of 20th century reform. It is time to remind ourselves that all of these were utterly inconceivable as recently as 1929. We are the fortunate beneficiaries of a transformation whose scale and impact was unprecedented. There is much to defend.
He goes on to connect 'defensive' Social Democracy with 'caution', 'prudence' and an 'idealized past'. At first I thought Judt was trying to destroy what vestiges of meaning 'conservative' still has, to confuse pro-capitalists. But then he drops this bombshell:
It is doctrinaire market liberals who for the past two centuries have embraced the relentlessly optimistic view that all economic change is for the better. It is the Right that has inherited the ambitious modernist urge to destroy and innovate in the name of a universal project. From the war in Iraq through the unrequited desire to dismantle public education and health services, to the decades-long project of financial deregulation, the political Right--from Thatcher and Reagan to Bush and Blair--has abandoned the association of political conservatism with social moderation
Nevermind the factual inaccuracies. If this is the moral position of the modern Leftist, then they have utterly lost and we have nearly won. What he's saying here is that the 'market liberal' (a good term, he should've used it more) is the moral crusader for a more beautiful future and the Leftist is the burnt out pragmatist trying to hold on to his comfortable past. This is true, but for most of the 19th and 20th centuries the Left has pretended to be the voice of the future and the Right have dutifully taken up conserving the past. On the very next page Judt says about social democracy: "Incremental improvements upon unsatisfactory circumstances are the best we can hope for, and probably all we should seek." If this isn't a declaration of moral failure and massive concession to the righteousness of market liberalism, the Constitution and the Tea Party, I don't know what its.

Judt's book was written for young people who feel there's something wrong with the world but can't define it. There is something wrong. We're facing several crises in our time, but privatization and growing inequality (his boogeymen) are not among them. The crises we are facing are 1) the failure of democratic socialism in the U.S. and Europe and its rapid decline into authoritarianism 2) the related failure of altruism as a guide and the idea of 'the common good' as a standard  3) the expansion of Islam into the moral void left by Western altruism, aided by the failing welfare programs. The answer to these crises is not to unleash our feelings, but to think, to understand, to know and to judge. Read Rand, read the Austrian economists, read history. We have much to learn, but we are winning.