Thursday, August 26, 2010


Hayek’s three-volume work Law, Legislation, and Liberty, I will single out the first chapter of the first volume of L,L, & L. That chapter is entitled “Reason and Evolution.” Here are some selections:

This ‘rationalist’ approach, however, meant in effect a relapse into earlier, anthropomorphic models of thinking. It produced a renewed propensity to ascribe the origin of all institutions of culture to invention or design. Morals, religion and law, language and writing, money and the market, were thought of as having been deliberately constructed by somebody, or at least as owing whatever perfection they possessed to such design. This intentionalist or pragmatic account of history found its fullest expression in the conception of the formation of society by a social contract, first in Hobbes and then in Rousseau, who in many respects was a direct follower of Descartes [p. 10].

The fact of our irremediable ignorance of most of the particular facts which determine the processes of society is, however, the reason why most social institutions have taken the form they actually have…. [M]ost of the rules of conduct which govern our actions, and most of the institutions which arise out of this regularity, are adaptations to the impossibility of anyone taking conscious account of all the particular facts which enter into the order of society. We shall see [in Vol. 2], in particular, that the possibility of justice rests on this necessary limitation of our factual knowledge, and that insight into the nature of justice is therefore denied to all those constructivists who habitually argue on the assumption of omniscience [p. 13].

Yet it is the utilization of much more knowledge than anyone can possess, and therefore the fact that each moves within a coherent structure most of whose determinants are unknown to him, that constitutes the distinctive feature of all advanced civilizations.

In civilized society it is indeed not so much the greater knowledge that the individual can acquire, as the greater benefit he receives from the knowledge possessed by others, which is the cause of his ability to pursue and infinitely wider range of ends than merely the satisfaction of his most pressing physical needs [p. 14].

We shall find too that such current notions as that society ‘acts’ or that it ‘treats’, ‘rewards’, or ‘remunerates’ persons, or that it ‘values’ or ‘owns’ or ‘controls’ objects or services, or is ‘responsible for’ or ‘guilty of’ something, or that it has a ‘will’ or ‘purpose’, can be ‘just’ or ‘unjust’, or that the economy ‘distributes’ or ‘allocates’ resources, all suggest a false intentionalist or constructivist interpretation of words which might have been used without such connotation, but which almost invariably lead the user to illegitimate conclusions. We shall see that such confusions are at the root of the basic conceptions of highly influential schools of thought which have wholly succumbed to the belief that all rules or laws must have been invented or explicitly agreed upon by somebody. Only when it is wrongly assumed that all rules of just conduct have deliberately been made by somebody do such sophisms become plausible as that all power of making laws must be arbitrary, or that there must always exist an ultimate ‘sovereign’ source of power from which all law derives [p. 28].

Reason is merely a discipline, an insight into the limitations of the possibilities of successful action, which often will tell us only what not to do. This discipline is necessary precisely because our intellect is not capable of grasping reality in all its complexity [p. 32].

Sunday, August 15, 2010


“ Let the children pay” is the new theme of the Obama administration. Most Americans have seen through the hypocrisy of politicians intoning ‘for the children’ as the justification for each and every new law that strips freedom ands adds to our national debt. Refreshingly, Obama’s administration is finally being honest on the subject. “Let the children pay” for TARP, bank bailouts, seized auto companies, runaway government benefits, crony handouts and, the mother of all monstrosities, Obamacare. Those in cradles, diapers and school can pay for the extravagances of politicians intent on grabbing power, spreading the wealth to their cronies and making their mark on history. Obama hoped history would see him as FDR and JFK rolled into one but every day he looks more like Jimmy Carter, the most incompetent President in history.

The International Monetary Fund recent report states that the “United States is committing suicide by debt.” Day by day Obama adds trillions to the debt with new programs, bailouts and giveaways that will be paid for by the children. Political power now, children pay later. Yet Obama crushes one industry after another: oil is evil, coal is an abomination, autos are for unions not customers, unprofitable ‘green shoots’ supplant profitable businesses, agriculture must controlled, and so on into all phases of production. When the nation is a wasteland of rusting factories, how will the children pay for what Obama spent today?

At the grass roots level, citizens are demanding accountability. Citizen inspired movements, such as the TEA (Taxed Enough Already) Party, are reasserting the basic principle of our Constitution that government is the servant of the people and not the master. The overwhelming will of the people in California and Arizona about the definition of marriage and enforcement of illegal immigration laws, has been rejected by the elite who state emphatically they know better than the unwashed masses. In the New York mosque controversy, the mayor, governor and the President lecture the unsophisticated people that they are racists and should shut up. The Tea Party and millions of Americans say, ‘the day of government abuse of citizens is over.’ People will march, rally and vote in November. What fear this strikes in the hearts of politicians who expect a flock of sheeple.

But fear breeds desperation. The political elites and their enablers - unions, academics, the media, and the charlatan carpetbaggers and scallywags, are even now blanketing the nation with misinformation, lies and distortions about all citizen grass roots movements. They want a fearful ignorant citizenry willingly following the siren calls of silly phrases, like Hope and Change, or lining up by the 1,000's for applications for a Section 8 Housing vouchers. Lies for your own good are proposed by Obama media sycophants. Matt Yglesis said on TV: “Fighting dishonesty with dishonesty is sometimes the right thing for advocates to do, yes.” Am I wrong to think that the media should not be shills for Obama?
If you can’t tell the truth find a noble euphemism to obscure the facts. “Hope and Change” fooled a lot of people in 2008 but even now many Democrats are realizing that they were hoodwinked by a progressive in Democrat clothing. Several months ago, Obama realizing that ‘hope’ was gone and ‘change’ is coming in November convened a group of professors and historians in the White House to restore belief in magic spells from Washington. As The New Republic reported: “Obama had hit on the phrase the New Foundation. He tried it out with Presidential historians at a private dinner in the White House. Doris Kearns Goodwin nixed it. She said it sounded ‘like a woman’s girdle.’ Goodwin was right. But it underscores the complete vacuity of a public policy built on word smithing. The administration was trying on words like a courtier at Versailles might try on a hat or a dress thinking it would make a difference.” Now when the polls show an impending bloodbath for the Democrats in November, they’re still spending their money on pollsters, spin-doctors, PR men, media mouthpieces, talking points memos and the whole clanking apparatus of political witchcraft. What is the new phrase? What is the new buzzword? Is anyone else disturbed that academics and historians are called in to help fabricate and spin the policies that government pushes and citizen reject?

The people want to know, “Why are you selling my children into bondage?” Obama and the elites in Congress, statehouses and courthouses are deaf to the cries of the people. The Tea Party has arrived in Fayette County to help give voice to the citizens will.

Remember the line in the Bible when Jesus says, “Suffer the little children to come unto to me.” Remember the line was spoken by our savior not by big government handing out insufferable IOU’s to the children.

Wednesday, August 04, 2010


In the Progressive worldview even when you lose money it can be counted as a gain if enough smoke and mirrors are used. When the Stimulus spends more cash than the activities it promotes produce a normal person would say “ What a dumb idea “ but apologists for the Obama administration laud the outcome as a great progressive accomplishment. Obama apologists Prof. Blinder and Prof. Zandi put the Obama spin on bad news.

You see, Alan Blinder (Princeton Univ.) and Mark Zandi (Moody’s Economy), recently released a report titled “How US Policy Ended the Great Recession.” While a few articles have criticized the report, by and large the media reporting has looked like Ezra Klein’s “Zandi: Financial rescue and stimulus responsible for saving or creating 8.5 million jobs” article. Lots of cheerleading and high fives over the success of the stimulus and the immense wisdom of the Obama administration.
That’s a nice spin, but if you read the report, does it truly say that the “financial rescue and stimulus” were responsible for “saving or creating 8.5 million jobs?” Not really. The report actually places most of the credit on the changes in financial policy & TARP.
And in fact, though the authors wax enthusiastically over the ARRA stimulus, the calculations in the report show that the stimulus package was hugely inefficient and wasteful. I backed out some numbers from the report – numbers that Blinder & Zandi didn’t see fit to present. I’m using their numbers to compare the situation as it is (“Stimulus+Policy”) with the prediction for financial reform+TARP but no stimulus (“Just Policy”) Take a look at what I found:

Stimulus+Policy Just Policy

GDP (1Q09 – 2Q10)
$19,558 Billion $19,218 Billion

GDP Boost From Stimulus
$340 Billion
ARRA Stimulus Spent
(1Q09 – 2Q10)
$391 Billion

That’s right. According to Blinder & Zandi, we’ve spent $391 billion in stimulus money in “now” dollars, to get a GDP increase of $340 billion (in 2005 dollars), so we lost $51 billion. Lost $51 billion. If you adjust for inflation, it only cost us about $10 billion, but the point is that rather than spending the money in a way that has a big economic multiplier, it’s been spent with a economic multiplier less than 1.
They also tell us that their modeling predicts that the stimulus itself was responsible for 2.5 million jobs. If you simply take that at face value, and divide it into the $391 billion spent thus far, you find that each job cost us more than $150K. Yep – each job over that 18 month period cost us $100K/yr.
Reality has little chance against Progressive spin.