Tuesday, January 24, 2012

My Letter to the NY Times re: An Effective Policy to Avoid War with Iran

From: patrickbarron@msn.com
To: letters@nytimes.com
Subject: An Efffective Policy for Iran that Will Avoid War
Date: Tue, 24 Jan 2012 10:28:18 -0500

Re: Bomb-Bomb-Bomb, Bomb-Bomb-Iran? by Bill Keller

Dear Sirs:
Mr. Keller nicely explains the situation and various options regarding a potentially nuclear-armed Iran. Although he portrays Ron Paul's position as "the let-Iran-be-Iran extreme", there is nothing extreme about it. In fact, Dr. Paul's policy is the only one that will avoid war. At the present time the U.S. and the E.U.'s harsh economic sanctions will force Iran either to accept a humbling defeat without a shot being fired (not very likely) or close the Straits of Hormuz, which would surely bring war. The West has two excellent options that avoid both scenarios--an explicit policy of nuclear retaliation should Iran use its nuclear arsenal on either the U.S. or our allies, and/or provide a missile shield to protect our forces and our allies. Secretary of State Clinton voiced the former option as a possibility over a year ago. Both policies are strictly defensive and have been proven effective in the Cold War and now in relation to North Korea. There is every reason to expect them to be just as efficacious with Iran.

Patrick Barron

Monday, January 23, 2012

My Letter to the NY Times re: Greeks Return to the Land

From: patrickbarron@msn.com
To: letters@nytimes.com
Subject: Greek Return to the Land
Date: Mon, 23 Jan 2012 13:36:25 -0500

Re: With Work Scarce in Athens, Greeks Go Back to the Land

Dear Sirs,
Your front page, above-the-fold article on January 9th about the Greeks returning to the land is not as sanguine as Ms. Donadio portrays it. A peoples' return to the land in large numbers is a sure sign of a regressing economy, one that is becoming less specialized, less productive, and less affluent. The myth of the happy yeoman farmer is just that--a myth. The industrial revolution broke the shackles of a large and impoverished agricultural class everywhere, releasing them to more productive and prosperous lives in the cities. The Roman Empire's final days were marked by starving city dwellers fleeing to the land in search of food. Greek citizens may not be that desperate...yet, but there is no reason to portray this development in any way except as what is really is: a horrible adverse consequence of decades' of disastrous economic policies.

Patrick Barron

Thursday, January 5, 2012

The Real Reason that College Students Demand More Goodies from Government

Although this college professor's experiment may be shocking, I do not find it surprising. The professor blames the public schools for not teaching the great ideas of liberty and personal responsibility in a democratic republic. I do not necessarily disagree, but I think the source of the problem is much deeper. Our federal government DOES have the technical ability to shower as much fiat money on selected citizens as it wishes. There does not appear to be any practical limitation to its money printing ability. In fact Fed Chairman Bernanke famously stated this very fact in a speech a few years ago. Therefore, why should any American NOT demand that the federal government give them money for anything that they wish? The list of government largess keeps growing and will continue to grow because there is no practical or theoretical limit...as long as the government has the ability to print money. If prices go up...well, just increase the budget. Since I doubt that REAL economics is taught in the public schools and the media certainly is not interested in the consequences of increasing the American people's dependency upon government, we can expect that the public will continue to demand more and more fiat money for the same and new programs until the dollar becomes worthless.


Tuesday, January 3, 2012

My Letter to National Review Magazine: Tyler Cowen Does Not Understand Money

From: patrickbarron@msn.com
To: letters@nationalreview.com
Subject: Tyler Cowen Does Not Understand Money
Date: Tue, 3 Jan 2012 09:27:35 -0500

Re: The Eternal Struggle, by Tyler Cowen

Dear Sirs:
In his review of Nicholas Wapshott's new book Keynes Hayek, Tyler Cowen serves as a very poor arbiter of the monetary debate. Consider just his statement that "Whether we like it or not, the Fed has to do something (Cowen's emphasis), and letting the money supply continue to fall, in down times, is one of the worst options." This statement is followed a few paragraphs later by this one: "In essence, the American government spent almost a trillion dollars to postpone our economic pain by the grand span of two years." Is this the something that Mr. Cowen has in mind? Mr. Cowen is enamored with the discredited theory, advocated by Irving Fisher and revived by Milton Friedman, that money should be manipulated by the central bank to maintain a "stable purchasing power". This is a complete misunderstanding of what money actually is, and once one understands money's nature, one understands that pursuing a stable purchasing power is not only undesirable but also impossible. So, what is money? Money is a medium of exchange only. It is part of the market economy and is the most marketable good in an economy. Its purchasing power must be free to reflect the ever-changing ratios between itself and the thousands of an economy's vendible goods and services. As an economy gets more productive, the purchasing power of money will rise. If an economy becomes less productive--due to war, natural disaster, or anti-business government interventions--the purchasing power of money will fall. These are the signals that market participants need. The reason the money supply falls during the bust is that it was allowed to rise during the central bank initiated boom. The banks create money out of thin air during the boom. Debt created money comes into existence when they lend via the fractional reserve rules established by the Fed. But their lending is not based upon a prior act of saving, so their loans will fail. When the loan is written off, the money supply shrinks. All the Fed has accomplished by its expansion of reserves that then become money via the banking system is to create a boom/bust business cycle that destroys capital.

National Review needs to call upon some modern monetary theorists other than the likes of Mr. Cowen. Professor Joseph Salerno of Pace University, NYC, would be a good choice.

Sunday, January 1, 2012

My Letter to National Review Magazine re: Repo Men, by Kevin D. Williamson

From: patrickbarron@msn.com
To: letters@nationalreview.com
Subject: Repo Men
Date: Fri, 30 Dec 2011 10:16:38 -0500

Re: "Repo Men" by Kevin D. Williamson


Dear Sirs:

Kevin D. Williamson is giving Mark Steyn a real run for his money as best phrase-turner at National Review. His recent shocking report of how the American economy (read "us rubes in the sticks") is being bled to death by the Wall Street-Washington Axis of Evil contains dozens of memorable phrases. But the guts of his report reminded me of a story often told by Lincoln: a horse had stepped on his foot...he said he was too big to cry, but it hurt too much to laugh.

How to prevent such abuses as described by Mr. Williamson? Create another regulatory agency? Increase staffing at existing ones? Uh...sorry to say that this would be like adding to the staff of the Nazi SS in order to regulate crimes against humanity. There are two reforms that would go a long way to curing the problem or at least mitigating it greatly. One, return to sound money. Throughout Mr. Williamson's fine (if disturbing) report, one reads how Washington pored hundreds of billions of dollars into politically connected firms on Wall Street. Where does Washington get this money? It prints it, of course. Two, eliminate special rules for investment bankers. Subject them to ordinary commercial and criminal law, which requires that government prosecute fraud wherever it may be found. Sound money would make it difficult for Washington to reward its favorite cronies with actual cash, and exposure to ordinary commercial and criminal law would soon land both Washington and Wall Street "Repo Men" (aren't they really one and the same people?) in the hoosegow where they belong.

There is only one politician who champions such real reform. Does National Review dare mention his name? Ron Paul.