The Koch-funded Cato Institute has gone completely mad if their recent Monetary Conference is any indication of what is going on at the Institute, where the great economist Murray Rothbard was a founding member.
Under the direction of the billionaire Koch brothers, the institute appears to have drifted so far from its roots that it is barely recognizable as the libertarian institution it once was.
Now, monetary conferences are held where no one, that is no one, discusses business cycle theory from an Austrian School perspective, where no one discusses the madness of Federal Reserve money manipulation.
To be sure, there is nothing wrong with having a conference where many different views are discussed, but for an institution founded on the basis of scholarship and study of such great economists as Ludwig von Mises and sound money, to host a conference of money cranks without opposing views, signals the collapse of an Institution that, to paraphrase the words of Marlon Brando, an Institute that could have been an intellectual heavyweight libertarian contender, Charlie.
Rothbard was, of course, anti-Fed and anti-central bank. He correctly viewed central banking to be the creator of the vicious boom-bust cycles that the economy regularly experiences.
Judging by this year's conference, that anti-Fed spirit has completely been evicted from the Cato conference premises.
Tom Clougherty has summarized the discussions at this year's gathering and it is clear the conference discussions were more about alternative means to keep the bankster created Federal Reserve serving bankster money needs, then it was about ending the money printing that distorts the economy.
As Clougherty noted, the conference "covered topics ranging from the rights and wrongs of monetary rules, to the ins and outs of the Fed’s long-awaited 'exit strategy' from quantitative easing and near-zero interest rates."
In other words, the themes were "How should we feed money to the banksters, by rule or whim?' And "What do we do if we have stuffed more money into the coffers of the banksters than they can manage given the current regulatory environment?'
Incredibly, featured at the conference were some Fed money printers themselves. Clougherty reported:
St. Louis Fed president James Bullard...kicked things off with the keynote address, noting that while he favors policy normalization — that is, a return to the kind of monetary policy (and Fed balance sheet) that prevailed between 1984 and 2007 — there is a risk that we’ll get stuck at “Permazero” if the economy fails to take off, or suffers new negative shocks.Rothbard would have choked at hearing this kind of Keynesian nonsense. As if the Fed wasn't responsible for the crisis in the first place and as if Fed money printing "normalization" or "Permazero" money printing is a sound solution rather than getting the Fed completely out of the money printing economic distortion
Next up, Richmond Fed money printer Jeffrey Lacker made an appearance on a panel. Clougherty again:
There was a broad consensus among the panelists — the Richmond Fed's Jeffrey Lacker, the Bank of Mexico’s Manuel Sanchez, and George Tavlas of the Bank of Greece — that monetary policy should focus on price stability, while steering clear of objectives it is less suited to, like boosting growth, guaranteeing financial stability, or pricking asset bubbles.As if price stability was a worthy goal, when there is a natural tendency for prices to fall, like they even do now, despite Fed money printing, in the computer, cell phone and television sectors.
The Fedsters were followed by a team of monetary economists, including a Catoite, who favored money printing by equation:
Monetary rules were the focus of the next panel, which featured John Taylor (he of the eponymous rule), former Philadelphia Fed president Charles Plosser, the Mercatus Center’s Scott Sumner, and our very own George Selgin. Although all four panelists favored a shift towards rule-based monetary policy, each took a different approach.Then a Catoite managed, after lunch, to distort Hayek's thinking, as though Hayek would be in favor of a central bank money printing:
The monetary conference’s third panel discussion focused on Hayek’s knowledge problem in the context of monetary policy. Cato senior fellow Gerald O’Driscoll suggested that the knowledge problem explains why rule-based monetary policy is superior to central bank discretion — we don’t know enough to design an an optimal monetary policy, so we’re better off using rules to create a monetary order and anchor expectationsHow about, we don't have any clue what money equations will work either, since there aren't any? And why do we need central bank money printing in the first place?
There were others in attendance calling for different methods of Fed money printing:
David Malpass of Encima Global LLC added his voice to calls for monetary policy normalization, arguing that the Fed’s zero-interest rate policy is actually weighing down economic growth.There were a few other speakers, but not one raised the question of whether the Fed should be manipulating the money supply at all?
The Cato monetary conference, in other words, has turned into a meeting of money printing madmen and mad advisors to the madmen. This is nothing but mainstrean nonsesne propoganda that can be found on the pages of The New York Times or at any other mainstream media outlet or Keynsian controlled economics department.
Robert Wenzel is Editor & Publisher at EconomicPolicyJournal.com and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics
This doesn't have much to add with what you wrote Robert, but it seems to me that the Libertarian Austrians need to try and do something Americans understand.
ReplyDeleteMake money. Lots of it.
When you got a $billion or 2, seems pretty easy to make your agenda known.
Trump would be laughed off the stage if he wasn't "worth" $7 billion or whatever he claims.
I'm just saying, it doesn't spread the message well, when a libertarian tells someone "I knew this was going to happen cause I'm a libertarian Austrian" while he is standing in the bread line with everyone else.
Granted, I know most of these rich folks got there from some sort of government backed monopoly.
I know there May be a couple,but it
just seems like we should have billionaire libertarians.
Why don't we?
Phenomenal question, outstanding observation, and vitally important line of reasoning. I've had many similar thoughts. Shouldn't we be the undisputed masters of capitalism and wealth creation? Not just the smartest, but also the richest people in the room? Found our own business school that is world renowned and have multiple billionaires on our side since we alone actually understand economics? For Pete's sake.
DeleteSure, cronyism and government make innovation, efficiency, and competitiveness secondary considerations. If your business competitor is, through multiple chains of indirection, using a gun, your odds of beating him are low no matter how amazing you are at business.
But even then, 98% of libertarians I've met are not very accomplished or talented at business. They make terrible investment decisions with their time and productive energies. Which baffles and troubles me to no end. Are libertarians just a bunch of whiners using excuses?
Most of the successful business people in the mainstream economy have pretty decent business skills underlying their skill at cronyism. While it's the latter that's most responsible for making them successful, the fact libertarians don't even have the former is highly troubling.
I think part of the problem is libertarian morality inhibits them from "doing what needs to be done" to succeed in a cronyist business environment. They may die with pristine hands, but they will die as paupers with no voice. I swear there must be a way to thread the needle and achieve the material success necessary to acquire the means and the public standing to advance the movement but not sacrifice the cause in the process as the Koch brothers seem to have done.
Unfortunately, all the 'natural' libertarians I know, who are successful business people are just to busy to learn 'academic' libertarianism. Like most of the good guys in 'shrugged'.
Delete@Capn Mike
DeleteProblem is these "natural" libertarians lack clear understanding of their own philosophical principles so get suckered into such traps as conservatism aka nationalism and cronyism. They want to vote for Trump because he can run government like a business, etc. etc.
Proper libertarians need to have both the academic principles of freedom down cold so they can't be bamboozled and also have the practical statist business environment survival techniques down cold.
Communication of libertarian ideas is a different skill set from that of a businessman. Also, it is extremely difficult to become a wealthy businessman and maintain public advocacy of libertarian principles. (See the Koch brothers). You just have too many assets to protect. Not that it can't be done but it is extremely difficult. It would take a very unique character and not just any libertarian that becomes super rich.
DeleteThe same problem occurs in elitist academia. It is extremely difficult to stay hardcore libertarian in such an environment when all the rewards are skewed to moving away from hardcore libertarian positions. Again, it's not impossible, but a very extreme likelihood.
Most libertarians coming out of elitist academia have been corrupted, as have libertarian billionaires.
@sonepatchworth
DeleteIt has nothing to do with "libertarian morality." There are plenty of ways to make money, lots of it, without violating the non aggression principle. Second, just becasue one understands the type of society that will best raise overall living standards and make most feel comfortable, doesn't mean such people will be great entrepreneurs. Again, it is a different skill set.
There are many, many doctors that could explain, much better than, Michael Jordan, the muscles he used to jump to the rim when he played basketball for the Chicago Bulls, but not one of them could come close to jumping the way Jordan did. Understanding and implementing a skill set are to different things.
This discussion re-posted at Target Liberty
Delete@RW
DeleteVivid metaphor, but the key difference is we are all basketball players. We all are compelled by the nature of reality to engage in competitive, capitalistic, business-like activity to sustain and grow our lives.
Unlike doctors and basketball players, we cannot specialize and trade to permit us to ignore the minutia of optimally investing our personal time, energy, and money into maximally enriching ourselves. We are all CEO's and COO's of our own lives whether we are good at that or not.
Sure, on average, some will be naturally better than others in random distribution across libertarians and non-libertarians alike. However, given libertarians "understand the muscles" of business and how to best develop and use them I would have expected the libertarian population would evidence a higher percentage of people excelling at business than the rest of the population that remains woefully ignorant of even basic principles of capitalism and economics.
Gary North has made a similar point to Josh on his site.
DeletePeople pay attention to results. Then they work backwards from that.
@Jim
DeleteDo you have the link to that Gary North commentary? Thanks.
@Joshua Bennet
DeleteAs Bob himself noted, Charles Koch founded the institute with Murray Rothbard. It's easy to keep your principles when it won't cost you the fortune you've built. The free market favors new and better ideas over old and tired ones. Entrepreneurship has a tendency to replace people in the upper echelons. The Kochs simply have too much to lose, as would any other billionaire libertarian. They'll continue to lobby for things that protect them, which are by their nature anti-liberty.
How deeply tragic. What a waste of resources. What's the point of holding such a farce.
ReplyDeleteA lot of libertarians are young, having come across the concepts in the current post-crisis world of today. Give it time, and we may see some extraordinarily wealthy libertarians in the future. It's a shame all of those who bought into Bitcoin didn't become fabulousy wealthy like they dreamed :P
ReplyDelete