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3232. Bubble Boy: Alan Greenspan's Rejection of Reason and Morality
- Author:
- Gus Van Horn
- Publication Date:
- 12-2008
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- Not long ago, Alan Greenspan was widely regarded as a sort of gnome of Zurich, on whose unique, ineffable powers our prosperity depended. His famously cryptic mumblings could spook markets and spur investors, many of whom believed that his every word carried great weight. One news channel would cite the thickness of his briefcase before certain meetings as an "economic indicator." The "Maestro," as one biographer called him, even appeared on the cover of Time as part of a three-man "Committee to Save the World." And, most remarkably, Greenspan's reputation as a brilliant economist and potential savior of the world was part and parcel of his reputation as a capitalist. Indeed, he had studied under the great "radical for capitalism" Ayn Rand and had written cogent essays in defense of individual rights and free markets. But then, on October 23, 2008, media outlets around the country dropped a bombshell: Alan Greenspan, "lifelong champion of free markets," had declared capitalism dead. The financial crisis, it seems, shook Greenspan to his core and led him to conclude that free markets do not work. As the San Francisco Chronicle reported: Asked by committee Chairman Henry Waxman [D-CA] whether his free-market convictions pushed him to make wrong decisions, especially his failure to rein in unsafe mortgage lending practices, Greenspan replied that indeed he had found a flaw in his ideology, one that left him very distressed. "In other words, you found that your view of the world, your ideology was not right?" Waxman asked. "Absolutely, precisely," replied Greenspan, who stepped down as Fed chief in 2006 after more than eighteen years as chairman. "That's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence it was working exceptionally well." But the idea that Greenspan possessed "free-market convictions" and that those convictions are why he failed to rein in unsound lending practices is ridiculous. The very purpose of the Federal Reserve-the central bank at the heart of our troubled, government-controlled economy and the money machine that Greenspan operated for almost twenty years-is to manipulate the market. Such a "bank" would not even exist in a free market, and its precise function in our mixed economy is to engage in unsound lending practices as a means of such manipulation. As explained in The Federal Reserve System: Purposes and Functions, which is available from the Federal Reserve's website, one of the primary functions of the Fed is "conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy." The document elaborates, explaining that the Fed "influences" the rate of inflation by setting the interest rate (known as the "federal funds rate") at which private banks can borrow from the various Federal Reserve banks. When the Fed lowers this rate, it thereby expands credit and increases the supply of fiat money-money that is unmoored to any commodity; money that is just printed paper representing no real value in the marketplace; money that is, essentially, worthless. This constitutes inflation and wreaks havoc on the economy. Once upon a time, Greenspan openly acknowledged the destructive nature of fiat money. "The law of supply and demand is not to be conned," he wrote in his famous 1966 essay "Gold and Economic Freedom": As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion. Again, "the earnings saved by the productive members of the society lose value . . . represent[ing] the goods purchased by the government for welfare or other purposes." In other words, Greenspan acknowledged in 1966 that one of the primary functions of the Fed is to violate property rights-yours and mine-by printing fiat money and thereby coercively decreasing the value of our hard-earned savings. The Federal Reserve-in all its anti-capitalistic glory-is by its very nature the primary generator of unsound banking. Greenspan knew this in 1966, when he wrote that article; he knew it in 1987, when he accepted his post as chairman of the Fed; he knew it during the eighteen years he manipulated the money supply; and he knows it today. . . .
- Topic:
- Economics
3233. New Deal or Raw Deal? How FDR's Economic Legacy Has Damaged America
- Author:
- Eric Daniels
- Publication Date:
- 12-2008
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- Seventy-five years have elapsed since Franklin Delano Roosevelt introduced the flurry of government programs he called the New Deal. In the years since, most historians have lavished FDR with praise, claiming that his bold leadership helped to pull America out of the Great Depression. Even those who acknowledge the failure of particular Roosevelt-era programs claim that FDR instilled hope and confidence in the American people, and that his economic failures were the result of his not going far enough in his policies and not spending enough money. Today, amidst calls for increasing government regulation of the financial industry and increasing government spending through stimulus packages, the New Deal is making a comeback. In light of the recent mortgage crisis and economic downturn, pundits are calling for a revival of 1930s-style policies. Daniel Gross claimed at Slate.com that New Deal reforms were "saving capitalism again." Newly minted Nobel economist Paul Krugman issued calls in the New York Times for President-elect Obama to mimic and expand FDR's response to the Great Depression. And a recent Time cover called for a "New New Deal"-and featured an iconic photo of FDR, with Obama's face and hands substituted. As the Obama administration begins to implement its economic plan, Americans would do well to reexamine the history of the original New Deal and its effects. Though most historians rank FDR as a great president, some, including Burton Folsom Jr., boldly dare to ask if "the New Deal, rather than helping to cure the Great Depression, actually help[ed to] prolong it" (p. 7). According to Folsom, a professor of history at Hillsdale College, the answer is clearly the latter. In New Deal or Raw Deal? How FDR's Economic Legacy Has Damaged America, he challenges the myth that FDR's New Deal represents a shining moment in American history. As long as the mythology surrounding the New Deal remains intact, he notes, "the principles of public policy derived from the New Deal will continue to dominate American politics" (p. 15), costing Americans billions of dollars and further damaging the economy. . . .
- Topic:
- Economics, Government, and History
- Political Geography:
- America
3234. Property Rights and the Crisis of the Electric Grid
- Author:
- Raymond C. Niles
- Publication Date:
- 09-2008
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- Surveys the history and achievements of America's electricity entrepreneurs, shows how government interference in the transmission grid has hampered their enterprises from the outset to the present day, and indicates what America must do to liberate the grid and enable a new wave of entrepreneurs to supply this vital product commensurate with the country's demand.
- Topic:
- Economics and Government
- Political Geography:
- New York and America
3235. Understanding Common History Ideas for Discussion
- Author:
- Petr Stegniy
- Publication Date:
- 12-2008
- Content Type:
- Journal Article
- Journal:
- International Affairs: A Russian Journal of World Politics, Diplomacy and International Relations
- Institution:
- East View Information Services
- Abstract:
- The evolution of the independent states that emerged following the disintegration of the Soviet Union has predictably prioritized the issue of the national-political identification of the former Union republics. However, the trend toward building national history concepts by radically revising the common experience at the expense of the former "big brother," which has been gaining momentum in a number of post-Soviet states, was less predictable - taking into account the proactive role played by Russia under Boris Yeltsin in dissolving the Soviet Empire, as well as the pledges that were made in 1991 in Belovezhskaia Pushcha.
- Topic:
- Cold War and Economics
- Political Geography:
- Russia, Ukraine, Soviet Union, and Georgia
3236. Is there an aid-for-participation deal?: US economic and military aid policy to coalition forces (non)participants
- Author:
- Atsushi Tago
- Publication Date:
- 09-2008
- Content Type:
- Journal Article
- Journal:
- International Relations of the Asia-Pacific
- Institution:
- Japan Association of International Relations
- Abstract:
- There is an empirical evidence of an aid-for-policy deal between the United States and other states; the United States has utilized aid programs to promote affirmative votes in the UN General Assembly and to maintain an alliance relationship with strategically important states. However, whether there is a systematic evidence of an aid-for-participation deal remains inconclusive. Does the United States generally utilize its foreign aid to reward the contribution of troops to the US-led multinational forces and to punish the lack of contribution? The author argues that US foreign aid is used to prevent free-riding in coalition participation. To test the argument, I examined whether states were punished or rewarded by the United States for their behavior in sending or failing to send troops to 15 post-Second World War US-led coalition forces. The results show that the United States punished states for unexpected nonparticipation, but did not always provide rewards for support.
- Topic:
- Economics
- Political Geography:
- United States
3237. US economic statecraft in East Asia
- Author:
- Maryanne Kelton
- Publication Date:
- 05-2008
- Content Type:
- Journal Article
- Journal:
- International Relations of the Asia-Pacific
- Institution:
- Japan Association of International Relations
- Abstract:
- This article analyzes the reasons that led to the six United States forces withdrawals from South Korea between 1947 and 2008 and the Republic of Korea's responses to these policies. The article discusses the local and global aspects of these forces' functions and tasks and attempts to understand why Korea has not prepared itself for the withdrawal of the US forces throughout the years. The article will argue that there might be a seventh withdrawal of US forces from Korea in the near future, which South Korea and the USA should begin preparing for.
- Topic:
- Economics
- Political Geography:
- United States and East Asia
3238. North Korea's foreign economic relations
- Author:
- Stephan Haggard and Marcus Noland
- Publication Date:
- 05-2008
- Content Type:
- Journal Article
- Journal:
- International Relations of the Asia-Pacific
- Institution:
- Japan Association of International Relations
- Abstract:
- Many debates about engagement with North Korea hinge on the precise nature of North Korea's foreign economic relations: whether trade and investment are on commercial or non-commercial terms; the extent of illicit activities, and the changing geographic patterns of North Korea's trade. This article provides an effort to reconstruct North Korea's foreign economic relations, subordinating our estimates to the discipline of the balance of payments accounting framework. Among the most salient findings for the debate about engagement and sanctions is that North Korea's trade and investment have continued to increase despite the onset of the nuclear crisis and a decline in illicit activities. This growth has occurred in part because of the growing weight of China and South Korea in trade, aid, and investment. We also find that economic relations between North and South Korea have a substantially greater non-commercial component than those occurring across the China–North Korea border.
- Topic:
- Economics
- Political Geography:
- China, South Korea, and North Korea
3239. Re-Orienting the Fundamentals: Human Rights and New Connections in EU-Asia Relations
- Author:
- Atsuko Abe
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- International Relations of the Asia-Pacific
- Institution:
- Japan Association of International Relations
- Abstract:
- Economic matters such as trade and investment have dominated the studies of EU–Asia relations partly because it was only after 1987 Single European Act and 1993 Treaty of European Union that the EU's competencies were extended beyond economic issues. Even the last decade and a half did not see much change in trend that both parties perceive each other as an economic partner/competitor. Consequentially, few studies have paid attention to non-economic interests in the diplomacy between EU and Asia. This tendency ignores much wider range of agendas between the two regions, such as human rights. This book focuses on EU foreign policy towards Asia, highlighting 'the role and development of human rights matters within the EU's dialogue with Asian partners', which has a low profile in the studies of EU–Asia relations.
- Topic:
- Economics
- Political Geography:
- Europe and Asia
3240. Ecological Macroeconomics: Consumption, Investment, and Climate Change
- Author:
- Jonathan Harris
- Publication Date:
- 07-2008
- Content Type:
- Working Paper
- Institution:
- Global Development and Environment Institute at Tufts University
- Abstract:
- The challenge of reducing global carbon emissions by 50-85 per cent by the year 2050, which is suggested by the Intergovernmental Panel on Climate Change (2007a) as a target compatible with limiting the risk of a more-than-2ºC temperature increase, clearly conflicts with existing patterns of economic growth, which are heavily dependent on increased use of fossil fuel energy. While it is theoretically possible to conceive of economic growth being “delinked” from fossil fuel consumption, any such delinking would represent a drastic change from economic patterns of the last 150 years.
- Topic:
- Climate Change, Economics, and International Political Economy