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.

Patrick Barron

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My letter to “The Ethicist” at the NY Times re: There is no such thing as a paradox of thrift

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 lockdowns. 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.
Patrick Barron
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My letter to the NY Times re: Exaggerated Monetary Consensus

From: Patrick Barron
Sent: Monday, May 25, 2020 10:29 AM
To: NY Times <letters@nytimes.com>
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
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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 <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.
Sincerely,
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
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Government Shutdowns: 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.

 

Conclusion

 

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.

Patrick Barron

 

[1] AMENDMENT I

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.

 

[2] AMENDMENT V

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.

 

[3] AMENDMENT XIV

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.

 

[4] Pennsylvania Governor Tom Wolf’s Shutdown Order

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

 

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Lincoln Predicted How Americans Would Lose Their Freedoms

In 1839 Abraham Lincoln, a young twenty-eight year old lawyer, was asked by the Young Men’s Lyceum of Springfield, Illinois to address the group on “The Perpetuation of Our Political Institutions”. The result elevated Lincoln’s stature in the growing community and, according to his future law partner William Herndon, made him known for the first time in a much wider area. Lincoln scholars generally consider it to be Lincoln’s first “great” speech. Lincoln’s warning is appropriate to our times of unprecedented powers assumed by different levels of government in the US, especially state governments, in addressing the coronavirus crisis.

 

In his opening remarks, Lincoln charged his generation with transmitting to the next the civil and religious liberties bequeathed to them by the Founding Fathers. His generation inherited liberties hard won by others. The same can be said of our current generation; i.e., we inherited the benefits of liberty; we did not secure them ourselves. Therefore, Lincoln’s warning of threats to our liberties is as apt today as it was almost two hundred years ago.

 

In an early stirring paragraph Lincoln said that America could not be conquered militarily in a thousand years. The threat to our political institutions would come, if it did come, from within ourselves. There are two potential sources of this threat. One is mob rule; i.e., the people resorting to acts of violence to redress what they believe to be threats too great to be remedied by the slowly grinding process of legal procedure.

 

The second threat, and one which Lincoln considered to be a successor to mob rule, was that ambitious men would seize the weakened respect for law as a platform for satisfying their outsized egos. Not content with the daily process of protecting what has already been bequeathed by others, they would promise to make the country anew. According to Lincoln, there is no place in government for the overly ambitious man who desires that his name be transmitted to future generations as were those of the Founding Fathers. America’s political institutions had been gained at huge cost, and all honor should naturally be accorded those who gained them. The maintenance of that hard won and costly legacy afforded no such honors to future generations. Their task was one of maintenance of our liberties. But mob rule weakened respect for the law and opened the door for such dangerous men.

 

Thus we arrive at America in the year of the coronavirus. Ambitious men seem little bothered and probably are mightily thrilled by the prospect of “combating” the virus and going down in history as heroes. Thus, they have grasped upon the wildly suspect predictions of experts that millions will died worldwide and many hundreds of thousands in the US alone unless our civil liberties are suspended. Ah, what ambitious man could not feel the hand of fate upon his shoulder, beckoning him to assume sweeping powers to close private businesses, restrict public gatherings, prohibit travel, even forbidding citizens from venturing from their own homes? Hang the Constitution! Hang the Bill of Rights! Hand me my special pen to assume sweeping powers over others!

 

Sadly the people have accepted this infringement of their liberties with few complaints, leading to the conclusion that the US has passed Lincoln’s first stage on the road to permanent loss of our freedoms–disrespect for the law. One cannot point to outbreaks of mob rule, so what has happened to weaken the public’s respect for liberty and due process?

 

Fifty years ago the US went off the final, weakened link of the dollar to gold, which had limited government’s ability to spend. New projects could be funded only by increasing taxes, cutting some current spending, or increasing borrowing. All three methods had adverse consequences for the public. No one wants his taxes increased. No one wants his current federal boon to end. And increasing debt must always lead to higher interest rates, which would ultimately have a recessionary effect on the economy.

 

Ending the link to gold appeared to remove these natural barriers to government overspending. Now the government could print dollars out of thin air. The adverse consequences of doing so, higher prices and robbing savers of their retirement dollars’ purchasing power, are masked for some time. When these consequences can no longer be ignored, government lackeys blame others–greedy capitalists, foreign governments, etc.–and government spending continues to grow. Over the years the federal government’s role in the economy has increased immensely both in terms of spending and in terms of regulation. The public, especially the young, has grown to believe that government, and not their own personal efforts, has responsibility and capability for providing a certain quality of life, from universal healthcare to free higher education. The link between personal responsibility and the achievement of one’s goals and dreams has been weakened year by year. In the past several months we have witnessed one presidential candidate after another making outlandish promises to shower the electorate with free (fill in the blank) and even a guaranteed annual income.

 

The public, especially the so-called millennial generation, fails to understand that money is a medium of exchange that links hard work to economic rewards. Production must precede consumption. Consumption cannot continue for very long without prior production. What appears to be free goods can only be consumption of previously saved production that now forms the capital base of the economy or robbing some of the fruits of their current labors. Do not for one minute believe that any economy can function efficiently for long by following this model, which has grown like a cancer after delinking money to gold.

 

Last week the government passed a $2.2 trillion “stimulus” bill, which will shower helicopter money on American citizens and certain businesses. As of the end of February 2020, the monetary base was $3.5 trillion. So this massive spending bill will increase the monetary base by sixty-three percent to $5.7 trillion. No one in government understands that printed money does NOT represent real goods and services. Millions of Americans are coercively prevented from working. Allowing them to go back to work is the only stimulus that America needs or that will work. The loss suffered by the coercively mandated shutdowns is a dead weight loss, meaning that it can never be regained. It especially cannot be regained by printing money, which will only cause higher prices and complete disruption of the structure of production within our very complex economy. It may cause our trading partners, who currently hold $5.5 trillion of long term treasury debt to shed themselves of all treasury debt, which could cause hyperinflation along the lines of post WWI Germany.

 

My friends, Lincoln’s prediction has come true. I end with an exact quote from early in Lincoln’s speech. The emphasis on the last three words is mine.

 

As a nation of freemen, we must live through all time, or die by suicide.”

Patrick Barron

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Two Distinctly Different Approaches to Crisis Resolution

There are two very distinct approaches to crisis resolution. One is the socialist approach, adopted by most governments of the world in the latest coronavirus crisis. The other is the individualistic approach, used by few if any of the world’s major nations.

 

The Socialist Approach

 

Here are some of the main elements of the socialist approach:

 

  • Centralized decision making to which all must comply
  • Temporary loss of civil liberties
  • Suspension of property rights
  • Large, perhaps even totalitarian, government
  • Reliance on data and statistical models
  • Reliance on expert opinions and recommendations

 

The Decentralized/Individualistic Approach

 

Here are some of the main elements of the individualistic approach:

 

  • Radical decentralized decision making even to the individual level
  • Defense of all civil liberties
  • Defense of property rights
  • Limited government
  • Skepticism of data and statistical models, especially early in the crisis
  • Skepticism of experts, especially early in the crisis

 

The Look of the Two Different Approaches

 

We know what the socialist approach looks like, since it has been adopted by all the world’s major nations during what is called the coronavirus crisis. The president closed our borders to international travelers (but not goods). Many state governors have restricted the people’s right to assemble, the right to work, the right to open their businesses as normal, and even the right to leave their own homes except for “permitted purposes”. The financial and personal cost of these measures is beyond calculation. Government justifies these measures by reliance on expert advice that to allow citizens to go about their lives as they see fit will cause a medical catastrophe. These experts rely upon data and statistical models to justify their recommendations. One of the problems with reliance upon experts who, in turn, rely upon data and models, is that the data and the models constantly change and may even become suspect. For example, the Foundation for Economic Education (FEE) reported on March 25, 2020 that the Oxford-based Our World in Data had stopped using World Health Organization data for the coronavirus reporting, citing errors. Another problem is assessing when the data and expert advice should trigger the suspension of civil and property rights, if ever. Is it not interesting that the Center for Disease Control and Prevention (CDC) predicts that 12,000 will die of the “normal” flu this year in the US and that 61,000 died in the 2017/2018 flu season? Yet the US has taken draconian action only this year in reaction to the 804 who have died with the coronavirus as of March 25, 2020. (Note the qualifying preposition “with”.) What changed to warrant such action and are we to expect similar draconian responses in the future?

 

The individualistic approach is well known. It is the approach taken heretofore following other major flu-type outbreaks in the fairly recent past. But let us pursue a thought experiment somewhat. What action might individuals and businesses take on their own in response to this media hyperbole? We know that some people with medical conditions or those who simply don’t want to take a chance are self-quarantining themselves or venturing out in public much less than normal. Furthermore, some stores are open and people seem to be taking precautions. They are maintaining a safe distance from one another in public. Hand sanitizers are being used in some stores to clean public shopping baskets and for customer use. Some stores are asking customers not to use cash. My local Ace Hardware Store has blocked off a six foot distance between the customer and checkout clerks. These are just some common sense actions taken by a self reliant people. But what might be the response if  businesses who were forcibly shutdown were allowed to open? I’ll use my local dental office for a thought experiment.

 

My dental office has been forced to close, but what if it were not? It could close voluntarily anyway, of course. That would be my dentist’s decision. But if she closed and others remained open, she might lose many customers permanently. Or she could remain open. Then customers could decide whether to see her for their regular checkups, etc. or not. If some did go, they might assess what steps the dentist was taking to protect herself and her patients. If they were not comfortable with her measures, they might try another dentist, in which case my dentist would risk losing a customer permanently if the other dentist adopted better protective measures. We could go on and on about the choices that both my dentist and her customers might take, but the point is that there are lots of options available to both my dentist and her customers. Individuals and businesses may rely on data somewhat, but the data is just one input to guide their action.

 

Conclusion

 

The Austrian school of economics explains that humans are guided by preferences, and preferences are NOT quantifiable. They are subjective. They differ from one person to another and change often within the same person. It is impossible for government to draft rules and restrictions that can satisfy the subjective preferences of ALL people all the time on how to respond to a crisis. Pretending that it knows what’s good for over three hundred million people is ludicrous. Better to adopt the individualistic approach and let each of us decide for himself.

Patrick Barron

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My letter to the NY Times re: Government money and banking policies con hapless borrowers

Re: The Great Wall Street Housing Grab, by Francesca Mari
Dear Sirs:
Ms. Mari’s long and very detailed report of the role played by Wall Street property firms following the great 2008 real estate crisis fails to explain the underlying source of the crisis that ruined the dreams of so many. The 2008 crisis was fueled by massive government money printing–in order to drive down the interest rate–and unprecedented interventions into direct lending through its captive lenders Fannie Mae and Freddie Mac. Ms. Mari notes early in her report that one borrower put down only $15,000 as a down payment on a $840,000 property, for a down payment ratio of under two percent! No responsible, privately owned bank would make such a loan and stay in business for long. Yet this irresponsible loan does not rate a further mention as the foundation of all the sorrow that followed. Unfortunately Ms. Mari focuses the rest of her report on how Wall Street real estate investment sharks took advantage of government’s sloppy and amateurish practices. No one should be surprised that Wall Street firms, whose principals could legally earn millions, ran circles around overworked government bureaucrats. The important lesson here is to understand that the government purposely encouraged hapless thousands to take on debt that neither they nor their bankers would have considered under a sound and private money and banking culture. The final tragedy is that nothing has changed.
Patrick Barron
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My letter to the NY Times re: Another True Believer

Dear Sirs:
After World War Two blue-collar philosopher Eric Hoffer tried to make sense of the mass movements that had led to the deaths of hundreds of millions of people. In The True Believer he identified the “misfit”, (Hoffer’s own word), who seeks to submerse himself in some movement that he considers greater than himself and to which he can pledge complete allegiance and cease all critical thinking. We have a new true believer in James Traub, who seeks to pledge his allegiance to the cause of radical environmentalism. Pardon me if I continue to express my skeptism that giving government the power to tell me how many times I may fly and how many real hamburgers I may consume will fix or delay anything that may or may not be happening. But I am certain that such a policy will open the floodgates to true totalitarian government. Furthermore, it seems to me that Mr. Traub has set the bar rather low in picking an all-knowing leader in teenager Greta Thunberg. Ms. Thunberg may not be anyone’s idea of a threat to our liberties, but the jackbooted boys surely are waiting in the wings to carry out her juvenile flights of fancy.
One more thing…Mr. Traub dismisses John Stuart Mill’s “no harm” principle, because the great philosopher/economist lived in an era without socialized medicine. I have no doubt that Mill would never have supported socialized medicine or any other form of socialism. Unlike Mr. Traub, Mill understood the dangerous power of Moral Hazard and The Tragedy of the Commons.
Patrick Barron
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My letter to the NY Times re: Review of Dark Tower (a book about Deutsche Bank)

Re: What Broke Deutsche Bank, by David Enrich, reviewed by Roger Lowenstein
Dear Sirs:
Roger Lowenstein’s review of David Enrich’s book about Deutsche Bank’s descent from a pillar of sound banking to one of the most reckless banks on the planet fails to mention the most important event in German post war banking history; i.e., that Germany gave up its own currency, the Deutsche Mark, for the euro on January 1, 1999. The Deutsche Mark was the soundest currency in the entire world, with the possible exception of the Swiss Franc. The euro has proven to be one of the least sound currencies. The fact that Deutsche Bank embarked on a path of reckless, but apparently perfectly legal, lending and trading after the conversion cannot be passed off as a mere coincidence. Both Mr. Enrich and Mr. Lowenstein need to dig deeper than recounting the personal character flaws of Deutsche Bank’s leadership to understand the real forces at work.
Patrick Barron
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