Tuesday, August 18, 2020

Poor Understanding of Monetary Theory Leads to Disastrous Government Policies


Austrian School economists know that unsound money has been at the heart of disastrous government policies since time immemorial. The greater the ignorance of money the greater the monetary debasement in order to fund government's latest folly.


Monetary debasement always ends badly, but end it will. Robert L. Shuettinger and Eamon Butler, co-founder and director of the Adam Smith Institute, wrote Forty Centuries of Wage and Price Controls: How not to fight inflation, a very readable short book that covers a vast expanse of time.  In The Ethics of Money Production Jorg Guido Hulsmann outlined all the various schemes used over the millennia by those in government to counterfeit the lifeblood of the economy for their own purposes. But Professor Hulsmann, who wrote the book in 2010 probably could not have predicted the scale of today's money expansion. What is the point of all this?


Well, the point is that the ignorant public and the tyrants who rule them apparently believe that all that is wanting to achieve some great goal is the lack of money. And, since government can conjure all the money that it desires out of thin air, government ought to do so. It's really as simple as that.


Fiat Money Makes Keynesian Economics Appear to Be Possible


Along the way some almost universally accepted economic principles have had to be shunted aside. John Maynard Keynes, author of The General Theory of Employment, Interest, and Money, and who is considered to be the father of modern macroeconomics, managed to concoct a new economic school of thought that completely ignored Say's Law. No longer was money an indirect medium of exchange to facilitate the transfer of real goods and services for other real goods and services, what Professor Frank Shostak calls the exchange of "something for something". No. Now money itself could be conjured out of thin air and used to confiscate real goods and services. No longer would government be forced to convince its constituents that its latest spending proposal was so necessary that it could justify an increase in taxes and/or a reduction or elimination of some other spending programs. Barring the failure of those two funding options, it would no longer be forced, as it had in the past, to convince savers that its credit was good. In other words, spending is completely unshackled from the reality of uncertainty and scarcity.


Fiat Money Hides the Consequences of Lockdowns


The coronavirus pandemic has exposed the hollowness of what is called Modern Monetary Theory (MMT). The horrible consequences of government shutdowns throughout the country have been truly "papered over" with trillions of dollars of fiat money through so-called "stimulus checks", handouts to politically connected businesses, and boosts in unemployment payments. Real money would have revealed the damage to the world economy long ago, and I am in no doubt that shutdowns as a tool for controlling the virus would have been over quickly. As it is, the shutdowns linger in many parts of the world because the consequences are not yet fully seen.


The End of the Credit Cycle


Yet the coronavirus-inspired shutdowns and helicopter money to placate a frightened populace are merely the latest example of foolish government policies made possible only by the government's ability to conjure money out of thin air. The broader background of weakening bank balance sheets has ensured a recession and possibly a depression through bank credit expansion funded not by an increase in real savings but central banks. In his latest warning that the end of the latest credit cycle is nigh, Alasdair Macleod of Goldmoney.com paints a bleak picture of the weakness of the "Globally Systemically Important Banks" (G-SIBs).


...the elephant in the room is systemic risk — visible to all but simply ignored. This is partly due to everyone in government and central banks, as well as their epigones in the investment industry and mainstream media, believing our economic problems are only a matter of Covid-19.


Governments have introduced emergency plans. The US Government is distributing money by metaphorical helicopters, and Britain has a furlough scheme and tax deferments. But they do little to alleviate the concerns of highly leveraged commercial bankers, facing the prospects of soaring bad debts. Bank balance sheet asset values to market capitalisation  ratios strongly suggest the banking system cannot cope with what is ahead.




There is NOTHING that government can do to help the economy other than remove barriers to wealth creation and preservation that it itself created and allowing the people the freedom to pursue their own ends. Since government creates nothing itself, all interventions interfere with what the people themselves desire and are nothing more than transfers of wealth for the benefit of some and destruction of wealth for all. Yet wealth destruction may not be the worst thing that can happen. A nation can lose its freedom entirely, when government doubles down and doubles down time and again in the pursuit of phantom fixes with ever increasing amounts of fiat money conjured out of thin air. It happened in Rome (Inflation and the Fall of Rome, a speech by Joseph R. Peden). It happened in Weimar Germany (When Money Dies, by Adam Fergusson). It certainly can happen here and now.


Sunday, August 16, 2020

My letter to the Wall Street Journal re: Gold Mining Is Not the Same as Owning Gold

 Patrick Barron

Sunday, August 16, 2020

Re: Gold Is Flying High, But Getting Harder to Mine

Dear Sirs:
This caption below the picture associated with Mr. Macdonald's article about the difficulty of mining gold illustrates the mistaken belief that the difficulty of mining for gold somehow makes gold unsuitable as a medium of exchange:

"The price of gold is going haywire, driving a frenzy of investment that’s calling into question the metal’s reputation as a safe-haven during times of economic uncertainty."

Gold mining is an industry and no one should expect that investing in this industry should be more profitable than investing in any other industry. A higher price of gold certainly will make it profitable to cover the increased expense associated with extracting gold from marginal deposits. This is no different from any extraction industry. Known oil deposits are opened and closed as the price of oil goes up and down. Gold mining over time is no more or less profitable as any other industry. Gold mining should not be confused with the inherent qualities of gold as a monetary medium, one of which is the difficulty and expense of bringing more gold to market through mining.

Patrick Barron
20 McMullan Farm Lane
West Chester, PA 19382

Tuesday, July 21, 2020

My Letter to CBS Sports

Sunday, July 19, 2020

Sean McManus, CEO
CBS Sports
1401 W. Cypress Creek Road
Fort Lauderdale, FL 33309

Dear Sir:
Thank you and CBS Sports for broadcasting Jack Nicklaus' Memorial Golf Tournament this week. I thoroughly enjoyed the coverage. Well, let me say that I WAS thoroughly enjoying the coverage until accosted by former Pittsburgh Steelers coach Bill Cowher for...well, I'm not really sure why he was accosting me. He yelled angrily into the camera that I must "open my eyes" to the BLM movement.

According to reliable sources, Mr. Cower makes "at least" four million dollars per year as a paid sports commentator for CBS Sports and perhaps ESPN, too. Good for him. Nevertheless, by what presumption does he--with your approval, I'm sure--feel qualified to question my personal ethics and those of all the other viewers of this great golfing event?

My reaction was much the same as if Mr. Cowher or some other lout accosted me face-to-face. I turned off the TV and walked away. I did not watch the conclusion of the tournament.

Patrick Barron
20 McMullan Farm Lane
West Chester, PA 19382

Kirt Walker, CEO, Nationwide Insurance
One Nationwide Plaza, Columbus, OH 43215-2220

Jack Nicklaus, Jr., CEO, Nicklaus Foundation
Golden Bear Plaza, East Tower
11770 U.S. Highway One, Suite 308, North Palm Beach, FL 33408

James Pitaro, CEO, ESPN
935 Middle Street, Bristol, CT 06010

Jay Monahan, CEO, PGA Tour
100 PGA Tour Blvd., Ponte Verde, FL 32082

Wednesday, June 17, 2020

The Great Lie of All Tyrants: Your Liberties Are a Threat to Others and Even to Yourselves

The forces of totalitarianism have been chiseling away feverishly at our liberties for many years now. Their efforts have taken the guise of radical equalitarianism (income redistribution), radical diversity (whom one may hire or accept into a position normally reserved for those of the greatest merit), radical environmentalism (what one may buy, sell, or freely use), and political correctness (a blatant attack on free speech). Like all totalitarian movements these forces co-opt the language of true liberty, notably "progressivism" and "liberalism". George Orwell warned us of the power of "Newspeak" in his dystopian novel Nineteen Eighty-Four.

But these forces now are taking on a new tactic, seizing the power to restrict our liberties to move about freely, peacefully associate with others, and to earn a living from peaceful, social cooperation. I refer, of course, to the lockdowns imposed in response to the coronavirus. George Orwell would recognize these tactics and, I hope, be appalled at how complacently populations all over the world have not only complied with these diktats but many have actively supported them to the point of proselytizing others for non-compliance.

The Lockdowns Violate Ethics

Principles are important. Without them a society has nothing more than arbitrary rule. That is why even dictatorships such as the now thankfully defunct Soviet Union had detailed constitutions. Constitutions outline the limits of government. Constitutional conventions are serious events and may take months. But even constitutions must be based upon an ethical foundation. Two unsurpassed explanations of the limits to which government may legitimately rule have been penned by Immanuel Kant and Frederic Bastiat.

Immanuel Kant's Humanity Formula, penned in the middle of the eighteen century, exhaustively explains that man is an end in himself and may not be used as a means to an end. In other words, due to man's inherent humanity, no man may have his liberties or property curtailed in any way in order to benefit others. A simple example will suffice. Mr. Smith is a very wealthy man, and Mr. Jones is very poor. Mr. Jones' son needs an expensive operation to save his life. He goes to Mr. Smith and asks for his financial assistance. Mr. Smith refuses. Mr. Jones does not have the right to take Mr. Smith's money in order to save his son's life. Kant would point out that taking Mr. Smith's money would be using Mr. Smith as a means to another's end, a violation of the Humanity Principle.

Frederic Bastiat wrote The Law in 1850. In this short book Bastiat explains the difference between just law and unjust law. Posted on June 11, 2020 on the Mises Wire, Lee Friday applied Bastiat's principles of just and unjust law to the current lockdown diktats: Bastiat Leads the Way on the Morality of Forced Lockdowns. Every man has a God given right to life, liberty, and property. No man nor any collective of men (government) may deprive any man of this God given right. Any law that purports to do so is unjust.

Do Your Liberties Threaten Others and Yourselves?

So much for ethics, but what about the claim that a man at liberty is acting irresponsibly by opening his business or traveling freely; that liberty does not apply to those who are a threat to others; plus, you yourself are too ill informed or just plain bloody minded to be allowed to exercise your liberties? Furthermore, to do so would mean that you are taxing the healthcare system unnecessarily and denying its resources to others who are more worthy. Or so the argument goes. Note that this is NOT an ethical argument but a practical one by which supporters of the lockdown wish to end all further debate. The argument sometimes is enhanced with the claim that one cannot place a value on human life, so sacrifices must be made, etc. Of course, this argument violates Kant's Humanity Formula, but what about meeting it on its supposed merits? Are people who open their businesses or travel freely threatening others? If so, how?

I have asked supporters of this claim to explain how one can "catch the virus" if he self isolates--i.e., does not patronize businesses or travel freely himself--or wears a mask, gloves, etc in his few necessary excursions to public places . The usual answer is that such "irresponsible people" have a greater chance of catching the virus and spreading it. But why is this a concern, whether scientifically valid or not? Do not those who do not self isolate tacitly accept the increased risk? Naturally, some people are more risk averse than others, so are we to force everyone into forced isolation until the most risk averse among us are no longer fearful of their fellow men? The most risk averse among us have the right to self isolate but they have no right to force others to do so.

No Logical Criteria for What Is Excessive Risk and Should Be Prohibited

There is no logical criteria to guide the state in what risky activities, willingly pursued, should be prohibited. Many risky vocations (lumberjacks, high iron workers, test pilots, commercial fishermen, etc.) plus many avocations (mountain climbing, sky diving, scuba diving, hang gliding, etc.) undoubtedly would be at the top of the any radical risk averse prohibited activities list. As for taxing the healthcare system unnecessarily, end socialized medicine and let the market place a price on those who engage in risky pursuits. The insurance industry already does this where not prohibited by statute law. Your automobile insurance premium will increase if you have an accident. If you live in an area of the country with severe weather, such as tornadoes, your home owners insurance premium will reflect that risk. Some insurance companies will not write life insurance for those in very risky professions. I experienced this myself in my younger days in the Air Force.

In Conclusion: More of the Same in Our Future

In conclusion, it has become clear that officeholders in our once constitutionally limited government have exceeded their bounds of authority and, once these officeholders have tasted unlimited power, it is very unlikely that this power will be relinquished voluntarily. The pronouncements of which businesses may reopen and under what kinds of restrictions would be comical if they were not so tyrannical. (One is not allowed to touch the flagstick on a golf course. One is not allowed to touch someone else's tennis balls. Park playground equipment not only was cordoned off but in some cases actually made unusable: a basketball court in a park near my son's house was sabotaged by township workers.) Now that government has found that it has unlimited powers to prohibit and regulate personal liberties that once were constitutionally protected we can expect more of the same in the future. I fear that the genie is out of the bottle and we'll have a hard time getting him back in. A so-called "second wave" of the coronavirus will be instructive. If government locks down the economy again, I personally doubt that the public will comply...and that would be a very good thing.

Sunday, June 14, 2020

No Such Thing as "The Paradox of Thrift"

My letter to "The Ethicist" at the NY Times:

Dear Sir:
Kim of Washington Township, NJ asked some guidance in curtailing spending and philanthropy when her own income was greatly reduced during the coronavirus inspired lock downs. She was concerned about others who have lost their jobs and/or depend upon charity in some way. You stated the following:

"But like most Americans, you're caught up in a version of what economists call the paradox of thrift. While cutting back on your spending may be individually prudent, it's collectively harmful."

On the contrary, what is good for you is also good for the economy. Your savings does not lie idle but is funneled mainly through the banking system into longer term production. The society that saves more prospers more through both replenishing the inevitable wear and tear of current capital goods but also the founding of new businesses. The spending does not vanish; it moves from final consumption to intermediate and long-term production.

Monday, May 25, 2020

My letter to the NY Times re: Exaggerated Monetary Consensus

From: Patrick Barron
Sent: Monday, May 25, 2020 10:29 AM
To: NY Times
Subject: Exaggerated Monetary Consensus

Dear Sirs:
In his May 17 article titled (print edition) "A Giant Deficit, Once Dreaded, Is Now Desired" Mr. Tankersley claims that "A legion of economists, Federal Reserve officials and even some of the most outspoken proponents of deficit reduction in recent years are now urging Congress and President Trump to continue spending trillions of dollars to prevent a long-term collapse in business activity and prolonged joblessness."

Really? Just who are these economists? Turns out that Mr. Tankersley drags out the usual suspects--two Harvard economists and an economic advisor to socialist Bernie Sanders. He did find a couple very mild quotes by semi-sound money economists who otherwise are critics of deficits. They support the fallacious idea that government should spend during recessions. Left unsaid is that these same economists recommend running budget surpluses during the good times. Of course, the spend-until-you-drop economists are much loved by the political class, because they tell politicians exactly what is manna to their ears; i.e., you do not have to economize...just spend! On what? Lord Keynes, much loved by the political class, famously advised that people be paid to dig holes in the ground and then other people be paid to fill the holes back up. Yes, he really did say this!

Well, Mr. Tankersley, there is a "legion of economists" who know that budget deficits MUST BE PAID in some fashion. We the people are paying for it now with a diminution of the purchasing power of existing dollars. There is no other possible outcome to printing money out of thin air. Please, Mr. Tankersley, look beyond the Keynesian dogma and read Mises, Hayek, and Rothbard. Why there is even a real economist right there in Manhattan: Professor Joe Salerno of Pace University. Take him to lunch sometime and have the scales removed from your eyes. You will be a better man for it.

Patrick Barron

Sunday, May 17, 2020

My letter to "The Ethicist" at the NY Times re: Popular Delusions

From: Patrick Barron
Sent: Sunday, May 17, 2020 9:32 AM
To: ethicist@nytimes.com
Subject: Popular Delusions
Dear Judge Hodgman,
In reference to your response to a college professor who is troubled by a colleague who "spouted bizarre conspiracy theories and generally denied the severity of this (coronavirus) virus", you recommended students read Charles Mackay's 1841 classic "Memoirs of Popular Delusions". Yes! By all means, recommend this book! May I also suggest that students read "Damned Lies and Statistics" by Joel Best. Both will open one's eyes to how public opinion can be manipulated.


Patrick Barron
20 McMullan Farm Lane
West Chester, PA 19382
Phone: 610-793-3605

Judge Hodgman has a "Dear Abby" or "Ann Landers" type column in the Sunday NY Times. Frankly I find his answers not up to par with Abby and Ann. In this case, he had severely ridiculed the college professor who refused to toe the government and main stream media line about the coronavirus. I wonder if he will recognize my jibe that at the present time we really don't know which side is delusional.

Pat Barron

Friday, April 17, 2020

Crisis Resolution Through Methodological Individualism

From 2009 to 2012 I taught an introductory course in Austrian Economics at the University of Iowa. On the first day of class I would tell my students that Austrian economics would change the way they looked at the world, not just from an economic perspective but from an overall life perspective. Nothing would ever appear to be the same again. They would learn to think for themselves and would not fall prey to all the propaganda from government, the mainstream news media, and poorly thought out opinions of friends and acquaintances. Of course, that does not make one the most popular person at a cocktail party!

Methodological Individualism vs. Collectivism

I would explain that economic science falls within the overall science of human action. All action is individual, subjective, and purposeful. Ludwig von Mises used the phrase Methodological Individualism to explain the basis of what can be known about economics in particular and human action in general. It is the individual, and not the group, that attempts to achieve a higher level of satisfaction as he perceives it at this point in time. Of course, these "preferences" are subjective for the individual, meaning that they undoubtedly are different for different people and are subject to constant change within the individual himself. (Consider the subjective desire for a glass of water after mowing the lawn on a hot day. At that point in time a cool glass of water ranks very high on a person's individual preference scale, but once satisfied drops down the scale. Others may not be satisfied with a glass of water; perhaps only a cold beer or a lemonade will do.)

There is no such thing as "group" human action, such as Americans chose to sell stock last week, Frenchmen like to go to the Riviera in August, or Germany declared war on America on December 11, 1941. Some individual Americans may have sold stock last week, and some individual Frenchmen go to the Riviera each August, and certain people controlling the German  government passed a resolution declaring war on America on December 11, 1941.  Aggregates do not act; only individuals act. Ludwig von Mises explained the fallacy of collective action. At first this seems strange, but upon further reflection it becomes self evident and many bogus statements are dethroned. For example, the mainstream media is noted for headlines such as "Americans are fearful of the coronavirus". This is a meaningless statement, since there is no such entity as Americans, only individual people who live in America. The fear of catching the coronavirus that is attributable to Americans in general ranges individually from so afraid that one will not leave one's home to hardly any fear at all.

Government Restrictions are Collective and Illogical

Since all action is individual, purposeful, and subjective, in the case of a crisis it is impossible for government to take collective action that would not be coercive to almost everyone. The coronavirus is a case in point. At the present time (April 16, 2020) forty-one of the fifty US states have declared some form of what is called a "lockdown". Non-life saving businesses must remain closed and there are various restrictions on the movement and interaction of the populace. The stated purpose in all cases is to "stop the spread" of the virus.

But Austrian economists and students of human action in general dispute the very basis of these government coercions. If all action is individual, the individual himself must decide what action he will take or not take in order to both prevent catching the disease AND satisfy his other preferences, such as keeping a roof over his head and feeding his family. If it were the preference of all people to isolate themselves, close their businesses, not patronize businesses, refuse to show up for work, or refuse to socialize with their friends and neighbors, then the government would not need to implement any of these measures. The only conclusion to be drawn is that the state-imposed restrictions are violations of the preferences of many individuals. Since it is only the individual who acts purposefully and not groups, then government restrictions upon these individuals are illogical and cannot be justified.

Man is an End and Never a Means to an End

Suppressing the spread or lethality of the virus is a result of individual human action and is not an end in itself that justifies using man as a means. Immanuel Kant expressed it best in his Humanity Principle; i.e., that man is an end and must never be treated as a means to an end. Individuals have different preferences and only the individual may determine what is and is not in his own best interest. An individual who desires to keep his business open will deal only with others who individually desire to patronize his business. The business owner and his customers may take whatever protective actions that they deem mutually appropriate. No one is forced to patronize a business that he believes is not taking appropriate safety measures, and business owners may require customers to take some sort of protective action in order to obtain the business owner's goods or services. All individuals have expressed their preferences as only each may determine for himself. This is fully consistent with Kant's Humanity Principle and the recognition of Austrian economic science that society advances through social cooperation via the division of labor. In other words, there can be no such thing as a collective goal as set by government. Government is composed only of individuals expressing their own preferences. But each individual expresses his own preference through cooperative interaction with other individuals. No one, not even government, may ethically force people to act against their preferences. This is a violation of Kant's Categorical Imperative that each person should act only as if his action should be a universal law. In other words, everyone should always and everywhere obey the Golden Rule.


Stopping the spread of the coronavirus is NOT a proper role of government. Government should restrict its actions to protecting those three inalienable rights as expressed in America's Declaration of Independence: Life, Liberty, and the Pursuit of Happiness. Lockdowns explicitly violate the latter two inalienable rights and probably the first through psychological harm from police enforced house arrest and even the prohibition that the seriously ill and injured in hospitals be kept in isolation from loved ones. This is monstrously cruel and undoubtedly has resulted in depressing the spirit-to-live in many. All of us are children of God and may not be used as means to the ends of others. No one may deign to choose what is best for us; only we can do this individually, because we all have different subjective preferences which we have the moral right to pursue as long as they are in line with the Golden Rule. Even in this age of the coronavirus, social cooperation through the division of labor will result in the best outcome as defined by each of us individually.

Wednesday, April 8, 2020

Government Shutdowns are Unconstitutional, Ineffective, and Immensely Destructive

The Shutdowns Are Unconstitutional

Our Constitution guarantees us certain rights that may not be abridged. The many government shutdown orders violate these rights. For this reason alone, the shutdown orders should be rescinded immediately. Furthermore, federal prosecutors should indict state governors for abuse of power for, in effect, creating a police state within their boundaries.

The first amendment to the Constitution[1] prohibits government from abridging the right of the people peaceably to assemble. Therefore, all actions to limit people from gathering together in whatever number and wherever they may choose are specifically prohibited by the Constitution, the Supreme Law of the Land.

The fifth amendment[2] prohibits government from depriving a person of his property without due process of law. All pronouncements by state governors forcing certain types of businesses to close were not conducted in anything resembling due process; therefore, these actions are specifically prohibited by the Constitution, the Supreme Law of the Land.

The fourteenth amendment[3] assures citizens that the protections of the Constitution, including amendments, are applicable to state and municipal governments; therefore, state governors may not claim that the above two amendments prohibiting them from abridging their citizens right to peaceable assembly and depriving them of life, liberty, or property without due process of law apply only to the federal government and not apply to them. Yet today state governors are violating both the first and fifth amendments. For example, Pennsylvania Governor Tom Wolf issued an executive order[4] on March 6, 2020 restricting Pennsylvania citizens' rights to assemble and depriving them of their property through blanket closure orders. His proclamation cited several sections of the Pennsylvania statute law, authorizing him to prevent citizens from entering disaster areas. He cited no section of the Pennsylvania Constitution giving him power to close down businesses, yet that is exactly what he did. His proclamation initially applied to six counties in southeast Pennsylvania, subsequently expanded to the entire state. It is obvious that the statutes were meant to be applied to restricting the public's access to areas suffering from floods, tornadoes, hurricanes, fires, etc. Governor Wolf's interpretation of expanded powers would mean that he can become a dictator whenever he himself deems it necessary. This is at odds with the US Constitution and, if unchallenged, would mean the end of that founding document as the Supreme Law of the Land.

The Shutdowns Are Ineffective

There is no objective evidence that government shutdowns and restrictions of civil liberties are working to restrict the spread of the coronavirus. In fact no government has even attempted to do so. Governments simply assume that lockdowns will work. It is clear that governments understand little about the virus and its ability to spread. If the shutdowns cannot prevent the Prince of Wales and British Prime Minister Boris Johnson from catching the virus, then citizens everywhere have been deprived of basic freedoms for nothing. There's a good reason why no government claims to have a criteria for success or failure. There is no criteria and there can be no criteria. There simply is too little understanding of how the virus originates, the manner and how fast it spreads, or the proper mitigation remedies. Even fear-monger-in chief, director of the National Institute for Allergy and Infectious Diseases Dr. Anthony Fauci, admitted that “I’ve looked at all the models. I’ve spent a lot of time on the models. They don’t tell you anything. You can’t really rely upon models.” In fact a government shutdown order is an admission of this fact. If government knew more it would do less, if it decided to do anything.  Americans especially seem to be seeking solace or reaffirmation of governments' wisdom in statistical data, models, and accurate projections that simply do not exist. The models have too many unknown variables.

Universal shutdowns defy logic. Since so much is unknown, the government should not pretend to know the best course of action. Radical decentralization of decision making is best, a policy recommended by Nobel Laureate Richard Feynman. Let every person decide for himself the best course of action based upon his personal circumstances, experiences, and knowledge. Of course, one's personal experience includes considering what is reported as happening to others and the recommended courses of action by health care experts. Radical decentralization will result in many diverse protective and preventative actions taken by many different individuals. Shutting down ALL business and social activities not only prevents the wide gathering of knowledge from many diverse people, but it exposes an entire population to what may later be determined to be completely ineffective or even counter-effective actions. Businesses such as grocery stores that have been allowed to remain open have adopted impressive virus thwarting protections for their customers and employees. Customers are accepting these impressive preventive measures with great calm, courtesy, and patience. Government coercion definitely is not required. One can expect that these private actions will continue to evolve and improve. In short, government blanket shutdown orders are not necessary.

A further logical fallacy is that government knows exactly how much risk each person should be allowed to take in reacting to the coronavirus crisis. Some people are more risk averse to catching the virus than others. If we all were one hundred percent risk averse, no one would get out of bed in the morning. But risk is part and parcel of life. We take risks just driving our cars (38,000 traffic deaths per year), swimming in pools (3,500 drownings per year), not to mention accepting the risks of smoking, drinking, consuming fatty foods, flying private airplanes, bungee jumping, etc. There is risk in taking a shower or bath (over 100,000 injuries per year), walking up and down stairs (one million injuries and 12,000 deaths)...the examples truly are endless. Why not allow all businesses to adopt whatever measures they deem appropriate and that their customers will accept and allow individuals to accept whatever risk they find appropriate individually?

The Shutdowns Are Immensely Destructive

On March 30, 2020 the Federal Reserve Bank of St. Louis, well known in banking and financial circles as the Fed system's premier statistical arm, projected that government mandated shutdowns would result in over 47 million unemployed in America, for an unemployment rate of over 32 percent. During the Great Depression of the 1930's, unemployment in America peaked at around 25 percent. Government has not even attempted to identify much less quantify the mental and physical health and cultural risks of forcing citizens to remain alienated from one another. How about the cost of bankrupting millions of people? Incalculable! We assume that life will return to normal as soon as the shutdown is lifted. It will not do so and may never do so. Any new business venture must calculate the possibility that it may be shut down for almost any reason. Remember, so far the coronavirus has not surpassed the lethality of many previous flu's, and no one ever suspected that governments would react this way. Now businessmen must calculate the probably unknowable risk of seeing one's life savings destroyed for some now unknown so-called crisis in the future. Finally (or maybe not finally) we just cannot calculate the damage done to the international division of labor. Our standard of living, which includes our ability to protect ourselves from unknown risks, depends upon our wealth. Destroying world trade will make us all much less secure from many of life's challenges.


The long term adverse effects of the coronavirus crisis will be two fold. One, our leaders claim that our very freedoms and liberties were barriers to dealing effectively with the crisis and, therefore, it was right and proper that government at all levels take actions to rescind our Constitutionally protected liberties. Two, that free trade, globalization, and capitalism caused and exacerbated the crisis. Free trade made the US too dependent upon foreigners for critical medical supplies and, therefore, trade restrictions need to be expanded. Both of these claims are false; nevertheless, our freedoms and our standard of living will suffer greatly. Unfortunately it appears that the public generally agrees with these false narratives and are willing to sacrifice their freedoms and the freedoms of others for the questionable promise of greater security. If so, then it is likely that government has only whetted its insatiable appetite for further restrictions of our liberties in the future for so-called crises that it itself claims exit.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Section 1.
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

COMMONWEALTH OF PENNSYLVANIA OFFICE OF THE GOVERNOR ORDER OF THE GOVERNOR OF THE COMMONWEALTH OF PENNSYLVANIA REGARDING THE CLOSURE OF ALL BUSINESSES THAT ARE NOT LIFE SUSTAINING WHEREAS, the World Health Organization and the Centers for Disease Control and Prevention (“CDC”) have declared a novel coronavirus (“COVID-19”) a “public health emergency of international concern,” and the U.S. Department of Health and Human Services (“HHS”) Secretary has declared that COVID-19 creates a public health emergency; and WHEREAS, as of March 6, 2020, I proclaimed the existence of a disaster emergency throughout the Commonwealth pursuant to 35 Pa. C.S. § 7301(c); and WHEREAS, I am charged with the responsibility to address dangers facing the Commonwealth of Pennsylvania that result from disasters. 35 Pa. C.S. § 7301(a); and WHEREAS, in addition to general powers, during a disaster emergency I am authorized specifically to control ingress and egress to and from a disaster area and the movement of persons within it and the occupancy of premises therein; and suspend or limit the sale, dispensing, or transportation of alcoholic beverages, firearms, and combustibles. 35 Pa. C.S. § 7301(f); and WHEREAS, in executing the extraordinary powers outlined above, I am further authorized during a disaster emergency to issue, amend and rescind executive orders, proclamations and regulations and those directives shall have the force and effect of law. 35 Pa. C.S. § 7301(b); and WHEREAS, in addition to my authority, my Secretary of Health has the authority to determine and employ the most efficient and practical means for the prevention and suppression of disease. 71 P.S. § 532(a), 71 P.S. 1403(a); and WHEREAS, these means include isolation, quarantine, and any other control measure needed. 35 P.S. § 521.5. NOW THEREFORE, pursuant to the authority vested in me and my Administration by the laws of the Commonwealth of Pennsylvania, I do hereby ORDER and PROCLAIM as follows: Section 1: Prohibition on Operation of Businesses that are not Life Sustaining All prior orders and guidance regarding business closures are hereby superseded. No person or entity shall operate a place of business in the Commonwealth that is not a life sustaining business regardless of whether the business is open to members of the public. This prohibition does not apply to virtual or telework operations (e.g., work from home), so long as social distancing and other mitigation measures are followed in such operations. Life sustaining businesses may remain open, but they must follow, at a minimum, the social distancing practices and other mitigation measures defined by the Centers for Disease Control to protect workers and patrons. A list of life sustaining businesses that may remain open is attached to and incorporated into this Order. Enforcement actions will be taken against non-life sustaining businesses that are out of compliance effective March 21, 2020, at 12:01 a.m. Section 2: Prohibition on Dine-In Facilities including Restaurants and Bars All restaurants and bars previously have been ordered to close their dine-in facilities to help stop the spread of COVID-19. Businesses that offer carry-out, delivery, and drive-through food and beverage service may continue, so long as social distancing and other mitigation measures are employed to protect workers and patrons. Enforcement actions will be taken against businesses that are out of compliance effective March 19, 2020, at 8 p.m. Section 3: Effective Date and Duration This order is effective immediately and will remain in effect until further notice. GIVEN under my hand and the Seal of the Governor, at the city of Harrisburg, on this nineteenth day of March two thousand twenty, the year of the commonwealth the two hundred and forty-fourth. TOM WOLF Governor