Monday, February 27, 2012

My Comment to the Wall Street Jounal re: America's Iranian Self-Deception

Re: America's Iranian Self Deception

Here is the comment that I posted at the Wall Street Journal online in reference to this article about Iran attempting to acquire nuclear weapons:

Here's the bottom line: Iran is a sovereign nation. No other nation can morally dictate to Iran how it can defend itself. The West has accepted the fact for over a half century that many anti-Western nations have nuclear weapons--Russia, China, and now North Korea. Pakistan has nuclear weapons. India has nuclear weapons. Israel has nuclear weapons. Is it any wonder that Iran feels that it must have nuclear weapons in order to remain a sovereign nation? There is no reason that we have to trust Iran any more than we have to trust Russia, China, or North Korea. We DETER aggression from these nations by our own nuclear arsenal. We can do the same with Iran.

My Letter to National Review re: The Peril of Paul

Re: "The Peril of Paul" by Jamie M. Fly and Robert Zarate

Dear Sirs:
Mr. Fly and Mr. Zarate paint Ron Paul's advocacy of a strong national defense combined with a non-interventionist foreign policy as isolationist and irreconcilable with those of our Founding Fathers. They call as "spurious" Paul's attempts "to return America to the type of foreign policy envisioned by the Founders" and refer to the "efforts by America's early presidents to repel and eventually wage war against the piracy of the Barbary States..." This is a poor example indeed of the supposed counterexample to Paul's policy. America's war on the Barbary pirates was waged to protect American commercial shipping, not to intervene in the internal affairs of other nations. Former president John Quincy Adams gave perhaps the definitive explanation of America as a defender of its own liberty but not an exporter of liberty to others in this speech:

America, in the assembly of nations, since her admission among them, has invariably, though often fruitlessly, held forth to them the hand of honest friendship, of equal freedom, of generous reciprocity. She has uniformly spoken among them, though often to heedless and often to disdainful ears, the language of equal liberty, of equal justice, and of equal rights. She has, in the lapse of nearly half a century, without a single exception, respected the independence of other nations while asserting and maintaining her own. She has abstained from interference in the concerns of others, even when conflict has been for principles to which she clings, as to the last vital drop that visits the heart. She has seen that probably for centuries to come, all the contests of that Aceldama the European world, will be contests of inveterate power, and emerging right. Wherever the standard of freedom and Independence has been or shall be unfurled, there will her heart, her benedictions and her prayers be. But she goes not abroad, in search of monsters to destroy. She is the well-wisher to the freedom and independence of all. She is the champion and vindicator only of her own. She will commend the general cause by the countenance of her voice, and the benignant sympathy of her example. She well knows that by once enlisting under other banners than her own, were they even the banners of foreign independence, she would involve herself beyond the power of extrication, in all the wars of interest and intrigue, of individual avarice, envy, and ambition, which assume the colors and usurp the standard of freedom. The fundamental maxims of her policy would insensibly change from liberty to force. The frontlet on her brows would no longer beam with the ineffable splendor of freedom and independence; but in its stead would soon be substituted an imperial diadem, flashing in false and tarnished lustre the murky radiance of dominion and power. She might become the dictatress of the world; she would be no longer the ruler of her own spirit.... Her glory is not dominion, but liberty. Her march is the march of the mind.

JOHN QUINCY ADAMS, address to U.S. House of Representatives, Jul. 4, 1821

Sunday, February 19, 2012

My Letter to the NY Times re: Central Bankers' Plan to Destroy Capital

Dear Sirs:
On Thursday, February 16, 2012 Binyamin Appelbaum reports that...

"The Fed has held rates near zero since late 2008, seeking to spur economic activity by punishing savers and rewarding borrowers."

No doubt Mr. Appelbaum is correct, but here is the great error: there can be no borrowing without a prior act of saving. Yet the Fed wants to punish savers. One can borrow only what someone else previous saved. Capital accumulation can occur only from prior savings, not from consumption. Yet central bankers everywhere pretend as if the fiat money that they produce out of thin air IS capital.

In a related article on the same day Julia Werdigier reports that...

"The Bank of England said Wednesday that it was prepared to inject even more capital into the economy through its asset purchasing program, if needed."

Again, fiat money production is NOT capital.

The European Central Bank is not to be left out of this madness either. On the same page as the Bank of England report Jack Ewing and David Jolly report that...

"A European fiscal compact agreed to in December and a move by the European Central Bank to allow banks to borrow almost unlimited sums at 1 percent for three years have helped to ease the sense of crisis in the bloc."

There will be no recovery without capital accumulation, yet central bankers everywhere are determined to consume capital out of the fallacious assumption that it is consumption that produces prosperity.

Patrick Barron

Saturday, February 18, 2012

My Letter to National Review Magazine re: Money Bawl by Ramesh Ponnuru

Re: Money Bawl, by Ramesh Ponnuru

Dear Sirs:
Kevin D. Williamson needs to hold a few more classes in Austrian School Economics at National Review. For example, Ramesh Ponnuru gives a fine synopsis of the essentials of Austrian business cycle theory as caused by bank credit expansion, yet he still has confidence that some bank credit expansion is warranted under certain circumstances. He makes the same great mistake as that of Irving Fisher, noted early 20th century American economist, who advocated price level stability rather than money supply stability. Fisher considered the 1920s credit induced expansion as benign, since productivity increases offset money supply expansion (due primarily to bank fractional reserve lending), creating a fairly stable price level. The crash of 1929 came as such a surprise that he lost his considerable personal fortune in the mistaken belief that more money pumping by the Fed would cure all ills. Mr. Ponnuru also considers an increase in the demand for money to be a threat to recovery and prosperity. It is no such thing. An increase in the demand for holding money merely reduces the price level, which cures the very demand for which people hold money; i.e., an expectation of lower prices and a greater money-holding to price-level ratio which occurs in times of uncertainty. Why attempt to thwart the people's desire to become more liquid? Holding more money does not reduce investment, as long as people's time preference remains unchanged. What does reduce investment is consumer spending, for that which is spent cannot be saved and invested. Thusly, the government's stimulus programs spur the very thing that prevents capital accumulation--savings.

Patrick Barron

My Letter to the NY Times re: What the Euro Has Wrought

Re: Germany Vs. the Rest of Europe

Dear Sirs:
The misconstructed euro indeed has incentivized its members to plunge themselves into unsustainable debt. Dr. Philipp Bagus has explained this phenomenon in The Tragedy of the Euro, a highly readable book for the general public as well as academics and policymakers. Dr. Bagus explains that the euro's structure allows the still extant national banks to print euros in a roundabout fashion, in effect setting the stage for seventeen counterfeiters to vie with one another to determine who can print money the fastest. This tragedy must be ended before Europe reverts to ancient animosities, trade wars, and violence. It is monstrous that, as an alternative to fixing the underlying problem of the euro's construction, demagogues call on Germany to place all of Europe on the backs of its hardworking citizens. German Chancellor Merkel aids and abets this animosity by attempting to strip Greece and others of their sovereignty. Neither unending bailouts or loss of sovereignty is the solution. The nations of Europe must abandon the euro as quickly as possible and revert to national currencies, but not succumb to beggar-thy-neighbor/race-to-the-bottom devaluations. They must reach an agreement to link their national currencies to gold or silver. Better yet, allow competing currencies, even private ones, to compete in the market.

Patrick Barron
20 McMullan Farm Lane
West Chester, PA 19382

Thursday, February 9, 2012

My Letter to the NY Times re: Living Under a Delusion

Subject: Living under a Delusion
Date: Thu, 9 Feb 2012 10:02:46 -0500

Re: Obama Imposes Freeze on Iran Property in US

Dear Sirs:
I do not know how America's action to freeze Iranian property and threaten even our allies' financial institutions with sanctions can be considered anything other than an act of war. Those who support this measure live under the delusion that Iran and our allies will humbly submit to whatever we demand, in effect demonstrating to the world that they are not sovereign nations. Iran will choose war, if it does not find another way out, and we will lose all of our allies.

Patrick Barron

Wednesday, February 8, 2012

My Letter to the Wall Street Journal re: Economic Ignorance

Re: US Lays Out Plan to Curb Overseas Tax Dodges

Dear Sirs:
The only means of increasing prosperity is to apply more capital goods to the production process. Taxing capital away makes us poorer than we would otherwise become. The US government is ignorant of this basic law of economic science, choosing instead to kill the goose that lays the golden egg in the name of...what? isn't a more prosperous future.

Patrick Barron

My Letter to the Wall Street Journal re: Maybe That's an Oncoming Train

Subject: Maybe That's an Oncoming Train
Date: Wed, 8 Feb 2012 13:01:05 -0500

Re: US Market Shines Brighter

Dear Sirs:
Perhaps that light at the end of the tunnel is an oncoming train. There is another interpretation to the report that some US companies are "bringing business home". It is that the worldwide economy is shrinking and is shedding layers of specialization as a result. Austrian business cycle and capital theory explains that an expanding economy--which, of course, does not recognize political borders--requires the establishment of new, more specialized stages of production, which can only be financed with new, real capital. If you became poorer and could no longer afford to pay the neighbor kid to mow your lawn, would you consider it a good thing that you were repatriating this toil to yourself?


Patrick Barron

Saturday, February 4, 2012

My Letter to National Review Magazine re: Why Is Everyone at National Review Anti-Ron Paul?

Subject: Why Is Everyone at National Review Anti-Ron Paul?
Date: Sat, 4 Feb 2012 09:37:12 -0500

Dear Sirs:
I just read the third anti-Ron Paul diatribe in your magazine in two days; this one by Mark Steyn, titled "Paul the Parochial". This follows Kevin Williamson's "Courting the Cranks" and Rob Long's insultingly titled "The Constitution and the Coot". It pains me very much to read these articles, especially since I find nothing in them to justify such an editorial policy. Frankly, when I saw Mark Steyn's piece I thought that perhaps I really was blind to something about Dr. Paul and/or his campaign that I should reconsider. But I found nothing. Instead I found this:

After criticizing the waste and futility of our endless wars, Mr. Steyn writes, "...if I truly mean what I wrote in the paragraph above, then Paul's my man." But, of course, Dr. Paul isn't his man.

Then he criticizes Dr. Paul for being hesitant to exact nuclear vengeance when he writes, "Does that sound like a president who'd drop the big one on Kandahar, never mind Beijing?" Well, I certainly hope our president is hesitant!

Mr. Steyn follows this by asserting that Dr. Paul's promise to end the wars will not really save the U.S. much money, that such a policy is isolationist, and we will be blamed for things we have nothing to do with just like the British are blamed decades after they intervened in these regions. Apparently Mr. Steyn's rationale is if we're going to be blamed anyway we might as well continue intervening.

I looked in vain for a consistent thread of logic or some overlooked trait that would be a deal killer for my support of Dr. Paul. Instead I found this confusing ending, which I quote:

"I wish I could like Ron Paul more, really I do. But libertarian narcissism is as banal as any other strain. Ten years of desultory, inconclusive, transnationally constrained warmongering is certainly a problem. But know-nothing parochial delusion is not the solution."

Now, if anyone can explain the thread of logic in such an ending statement, I'm all ears.

Patrick Barron

Wednesday, February 1, 2012

My Letter to National Review re: Damning Ron Paul for his supporters' beliefs

Subject: Damning Ron Paul for his supporters' beliefs
Date: Wed, 1 Feb 2012 11:54:53 -0500

Re: "Courting the Cranks", by Kevin D. Williamson

Dear Sirs:
Kevin D. Williamson unfairly tars Dr. Ron Paul for the opinions of some of his followers. In "Courting the Cranks"--an assessment of Murray N. Rothbard, an anarcho-libertarian who has been dead for twenty years--Mr. Williamson somehow gets around to attacking Dr. Paul, apparently because both Rothbard and Paul adhered to the Austrian School of Economics, which advocates a return to the principles of our Founding Fathers. Mr. Williamson admits that "Ron Paul promises to restore the American constitutional order". Yet in the same sentence he blames Dr. Paul for what he claims are the unconstitutional beliefs of his "most energetic partisans". How many, Mr. Williamson? Have you conducted a professional survey? Are any on his personal staff? I am a partisan, yet I do not hold unconstitutional beliefs. And, even if I did, how in the world can my thoughts be blamed on Dr. Paul? Further in his essay Mr. Williamson recounts the discovery of decades' old racist pamphlets that were disseminated under Dr. Paul's name and claims that they were written by Lew Rockwell, founder of the highly regarded Ludwig von Mises Institute. Dr. Paul disowns any knowledge of these pamphlets, and Mr. Rockwell denies writing them, yet both are condemned as guilty by Mr. Williamson. How can either man prove a negative? This is highly unfair.


Patrick Barron