Raico, Burns and Heller on Ayn Rand

Richard Ebeling emails:

Dear Bob,

I was away over the weekend -- delivering some lectures and talks for the Nassau Institute in the Bahamas -- and I only caught up a bit, including reading your blog.

I was delighted to see the commentary by Ralph Raico on Ayn Rand and her significance in the cause of liberty.

I have read both of these new biographies of Ayn Rand, "Goddess of the Market" by Jennifer Burns and "Ayn Rand and the World She Made" by Anne C. Heller.

As is usually the case with biographies (and perhaps inescapably to some extent) the authors focus on the details of her life and personality, more than an explanation and exposition of her ideas.

As a result, there is a tendency to judge the ideas of the person by the "eccentricities" of their life. Thus, biographies can easily become "ad hominems," i.e., evaluations of the person's ideas on the basis of an evaluation of the personality of the subject.

Both of the authors do this, though to different extents. Burns is clearly far more sympathetic to Rand's ideas, while Heller finds her a courageous women who had a strong will and determination to follow her conceptions of the role of reason and freedom. But Heller is not an advocate of the classical liberal/libertarian or Objectivist point-of-view.

And, indeed, at times Heller's narrative almost becomes a form of "psycho-babble" in that she traces Rand's ideas to the horror of her experience in Russia following the Bolshevik takeover (including the treatment of her father, who lost everything to the regime) and her ideal of the "heroic" and "ideal" man based upon an fictional adventure story Rand read when she was a small girl. Thus, the impression is created that Rand's ideas are intellectual "rationalizations" from emotional experiences from her youth.

Sometimes both authors get the facts wrong. Heller doesn't seem to know the history of the early communist years in Russia (including when Lenin's New Economic Policy started and ended), and Burns creates the impression that Rand had not read Aristotle until she was in America, when, in fact, (as Heller correctly explains) Rand studied Aristotle during her years at the university in Petrograd.

Both, to the point of ad nausium, focus on the "peculiarity" and details of Rand's relationship with Nathaniel Branden. The last chapter of Burns' book narrowly discusses Rand's "break" with her libertarian followers and makes it appear that it was "all about" limited government vs. anarchy. And Heller's concluding chapters merely narrate Rand's supposedly growing dogmatism and intolerance toward those who did not show absolute loyalty and agreement with her every word.

Indeed, Heller practically makes Rand seem like a victim of being a "second-hander" who fell into depression and anger because academia and the mainstream media refused to recognize her. Thus, Rand is presented as someone whose self-esteem was dependent upon how others viewed her. In other words, Ayn Rand as a type of Peter Keating in "The Fountainhead."

Heller's book, therefore, perhaps for the sensationalism, comes across as more in the genre of "kiss and tell." Burns' book fails both as a thorough biography or an acceptable presentation of Rand's ideas in the context of her life and times.

Ayn Rand was certainly not a "perfect person." Like the rest of us, she had her strengths and weaknesses. And she even had her "complexes." (Don't we all?)

But both books fail in different ways and at different levels to give Rand her due, and to really highlight the true extent to which it would be unimaginable to see how there would have been a classical liberal-like revival of the ideal of liberty in the post-World War II era without her writings.

I remember so well how I first read her books in the mid-1960s and what a revelation was. I have never thought about mind, man, and society the same way again. She clarified everything for a young man who was living through the "Fascist New Frontier" and the collectivism of LBJ's "Great Society." And through her writings I discovered much of the related literature of economic freedom (Frederic Bastiat, Ludwig von Mises, and Henry Hazlitt, for example), which rounded out and enriched my understanding of true liberalism and its eternal value and importance.

Ayn Rand was and remains one of the giants in the history and philosophy of freedom in the modern era. She waits a biographer who can do her full justice.


Dr. Richard Ebeling is currently a faculty member in the Economics department at Northwood University in Midland, MI.

Book Launch: Spread the Wealth

It's rare that you would find in one room William Russell Raiford, a retired West Point Board of Director, a Detroit television news reporter, Paula Tutman, the General Counsel-Washington for AT&T, Bruce Byrd, famed White House correspondent Helen Thomas and me.

But that was part of the group that was in attendance for the launching of David Breuhan's new book, Spread the Wealth.

Raiford came up to D.C. from Georgia to support Breuhan's launch of Spread the Wealth. He knows Breuhan's from his West Point days. Raiford has an autobiography out called Agonies Of Enjoyment. He told me that the book had to be cleared by military intelligence and a lot had to be removed, which is why he has just completed a second book, a book of "fiction," that explains the things he really did for his country, with appropriate names changed. He told me that he currently lives in Thomasville, Georgia and that one of the extra services he provided for the US explains why the Duke and Duchess of Windsor visited Thomasville, three times.

In addition to her role as an Emmy winning NBC reporter, Paula Tutman is an author, who also just completed a book, Deadline. The book, she told me, came about out of a real life experience of a killer who stalked her, during a period when she worked the police beat. In her book, not in real life she assured me, the killer becomes a serial killer because he realizes every time he kills, the reporter will show up at the crime scene and he gets to see her again. Tutman obviously has quite an imagination.

Tutman's mother was there and she told me that her daughter always had a vivid dreams. When Tutman was six years old she went to London with her parents. While there, Mrs. Tutman told her daughter they were going to Buckingham Palace. Paula was all excited. That is until they got to the Palace and Paula learned that they were not going to have tea with the Queen. She cried and cried, Mrs. Tutman told me. Afterall, why go to Buckingham Palace if you are not going to have tea with the Queen?

Bruce Byrd has no book out, and I assume has never cried over not having tea with the Queen of England, but in his favor, he has assured me that if I have any problem with my AT&T cell phone service I can call him direct and he will help get it resolved, which means I am thinking about getting his business card embossed and keeping it in my wallet.

Byrd also introduced Breuhan to the audience. It turns out that David Breuhan is a Bloomfield Hills, Michigan based money manager and his book, Spread the Wealth, is about returning the country back to its free market origins. During remarks at the book launch, Breuhan stated that Adam Smith was a major inspiration to his thinking on how an economy should work.

During Q&A, Helen Thomas got to ask the first question. Somewhere after, I followed and asked Breuhan if there were any other economists besides Smith that influenced his thinking. He rattled off Jean Baptiste Say, David Ricardo, Friedrich Hayek, Ludwig von Mises, Milton Friedman and the Physiocrats.

Breuhan made the observation during his remarks that he did not think most economists, who are concerned about trade deficits, understand accounting. He said it's as if they look at the first two or three lines of a balance sheet and see an imbalance and fail to look at the entire balance sheet, where it becomes clear every trade balances out, i.e, something is bought and it is paid for.
Breuhan gets it, which means we have another book aimed at the general public that will help people understand the economy. And with an audience that includes retired West Point board members, fiction writers and corporate lawyers, his book is spreading knowledge to new groups that will further help advance the understanding of what economics is and the benefits of a free market economy.

Here are some excerpts from Breuhan's book.

Book Review: Meltdown by Thomas E. Woods Jr.

It is a sad fact that most who graduate from college understand little if anything about the business cycle. It is even a sadder fact that most economists do not understand Austrian Business Cycle Theory (ABCT), even though the great economist Friedrich Hayek was specifically awarded the Nobel Prize in economics for the work he completed with regard to the theory.

Perhaps to some degree this poor understanding explains the confused reporting about the causes of the current economic crisis that regularly appear in mainstream media. If you are only getting your information about the current crisis through mainstream media reports, trust me, you aren't even getting half the story.

Meltdown by Thomas E. Woods Jr. is an antidote to this lack of understanding. Woods takes on the many fallacies that are now a part of the popular perception held about the current crisis. He does this by walking through, in timeline fashion, the start of the current crisis with the housing bubble, through the Wall Street bailouts and current government attempts to "battle" the downturn. At each step, he explodes the myths that currently exist and explains what the real causal factors are.

Woods then explains the business cycle itself, and the role of central bank manipulation of the money supply as the main culprit in creating the business cycle. This chapter alone is worth the price of the book.

From there, Woods reviews other booms and busts, including the Great Depression, and explains how they came about.

Woods concludes with an explanation of the role of money in an economy and then offers sound solutions to today's crisis that will bring the economy out of the current crisis and put it on sound footing.

There's a lot to learn from this book and there are a lot of people who should read it.

If you are simply curious about the world around you, or just a concerned citizen, this book will fill you in on how the world works from an economic perspective. If you are a businessman, an investor, or thinking about buying a house, this book will enlighten you as to the business cycle and help you make the important financial decisions in your life with much greater understanding of how the economy will impact you.

If you are a reporter, this book will put you miles ahead of your colleagues in understanding, and in your ability to provide important insights to your readers.

And, if you are President Barack Obama, you need to read this book and get a clue, because your current advisers are providing you with advise that will only result in you driving the economy off a cliff.

In short, anyone who reads this book and truly MASTERS it, will be in the top 1% of people who really understand what happened to cause the current crisis, and in the top fraction of 1% of the population who understand how the business cycle really works.

Pools of Oil and Money: An Object Lesson for Barack Obama

The recently released book Backstabbing for Beginners: My Crash Course in International Diplomacy by Michael Soussan is receiving little coverage by mainstream media. Could it be because the book provides an insiders look at the UN run Iraq oil-for-food operation and pulls no punches? The Paul Volcker lead investigation of the scandal found a scapegoat in Benon Sevon, and never went much further, despite indications that many others knew or benefited from the scam, including those close to the Bush Administration, then-UN Secretary General Kofi Annan and Condoleezza Rice.

Volcker, like Colin Powell, has what I call delusional integrity. You can always count on men like them to put on a good show about integrity. They both come across as straight shooting men of integrity, most likely because they are delusional and believe they are men of integrity. Yet, at the end of the day, the real insiders know that the Volcker types and the Powell types will deliver what the insiders want. Powell will deliver a bogus speech about Iraqi WMDs and Volcker will know when to stop his oil-for-food investigation. One of Volcker's top investigators resigned because he felt Volcker was protecting Annan in the oil-for-food investigation.

Soussan suffers no such delusions. It is clear from his book that he is a straight shooter and tells it like it is. He was literally at the center of the scandal and gives us a play-by-play of what went on, like few others could. In short, bureaucratic in-fighting put lives of UN workers at risk for no good reason and created huge opportunities for bribery and theft to the tune of billions of dollars. Saddam skimmed cash everywhere, had UN workers on the payroll and co-opted many countries including France and Russia through bribe after bribe. In this book, you learn the details of how he did it and how he got away with it. And you learn about the other players, across the spectrum, that pocketed skimmed cash.

Soussan does not take the lessons of the oil-for-food scandal beyond the scandal itself , and this is a good thing. But there is a lesson here far larger than just the oil-for-food scandal that the reader can extrapolate from the book. It is about bureaucracy and money. Fredrich Hayek in The Road To Serfdom titled a chapter Why the worst get on top. In the chapter, Hayek's basic conclusion is that the worst get on top because the ruthless will do anything it takes to gain power. A corollary could very well explain why the worst circled the oil-for-food scam, and likely will circle any huge bureaucratically created pool of money. The most evil will do what it takes to get at the money. The oil-for-food scandal, as detailed, is an object lesson in how that happens.

Given that President-elect Obama is about to create a huge new pool of "rescue the economy" bureaucratic money when he takes office, it would not be a bad idea for him to read this book to get a sense for how a bureaucracy can get away from its goals. "The rescue the economy" pool has some characterstics that are different from the oil-for-food scam, but it has the one key ingredient, the creation of a huge pool of bureaucratic of money. The vultures are most certainly already circling the pool.

Soussan is not John Le Carre nor Frederick Forsyth when it comes to weaving a tale, but he doesn't have to be. He has fact not fiction to guide him. His sense of humor, ability to create suspense and paint a picture are all more than passable. His powers of observation are superior. Only a great observer could write these words, for example:

Freedom may be a political concept, but it is first and foremost a feeling. A breath of fresh air. A smile on people's faces. The absence of fear in their eyes. The difference between the north and the south [of Iraq] was palpable.

I visited Germany a year before the wall came down, and spent time in both West Berlin and East Berlin. The difference between the two was striking. The difference between what I saw in East and West Berlin is exactly what Soussan observed in the difference between North and South Iraq and, in his writing, he was able to turn this observation into what I consider a great universal truth about freedom. Freedom is more than just a political concept, it becomes who people are and what happens to their lives

There's a lot of curious things that go on in this world, one of them is why this book is not getting more coverage. If you want a real life play-by-play explanation of how a bureaucracy can get out of control and lead to mass scamming, this book is must reading.

A Review of Ben Mezrich's UGLY AMERICANS

A Review of Ben Mezrich's
UGLY AMERICANS:
The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions

The first non-fiction book written by Ben Mezrich was Bringing Down The House: The True Story of Six MIT Kids who took Vegas for Millions. In that book, as the title clearly states, Mezrich detailed the activities of MIT whiz kids who took Vegas for millions. They did it by winning at the blackjack tables, thousands of dollars at a time.

In Ugly Americans: The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions, Mezrich is back detailing the exploits of big money winners. In this case though, the winnings aren�t thousands of dollars at a time, but millions at a time.

Mezrich tells the true story of a Princeton grad who ends up in Japan, without knowing a word of Japanese. He is brought there by a mysterious expatriate derivatives trader, who was then working for Kidder Peabody. The Princeton grad is only identified by the pseudonym John Malcolm. The derivatives trader is identified by the pseudonym Dean Carney.Through Carney, Malcolm, who thinks he is headed to Tokyo, ends up trading the Nikkei Index for Kidder Peabody in Osaka.

He does this until Joesph Jett�s infamous bond trading, at Kidder Peabody in New York, results in hundreds of millions of dollars in losses for the firm. This results in the closing of Kidder�s trading operations in Japan. Malcolm, out of a job, lands back on his feet in Osaka as a trading assistant for Nick Leeson. Leeson is, of course, the 26 year old rogue trader who lost nearly two billion dollars and brought down the oldest bank in England, Barings Bank, and which ultimately results in Malcolm being out of a job for a second time.

With these two adventures under his belt, the mysterious derivatives trader, Carney, brings Malcolm from Osaka to Tokyo, where Carney has started up a hedge fund.

It is while working directly for Carney that the money winnings get real big and Malcolm ultimately walks away with $50 million in his pocket.

The tale of how all this occurs is told in superb fashion by Mezrich. He is a storyteller that knows how to tell a tale with suspense and an observant eye. The reader of this tale will feel like he is part of the action and won�t want to put the book down. It�s a page turner.

Mezrich also knows how to pick the topics for his writing. In this tale the reader is not only exposed to high stakes trading, but also to Japan�s underground world of exotic women and Japan�s mafia, the Yakuza.

This book, in no stretch of the imagination, can be classified as an inside account of how hedge funds work. Anyone looking for a detailed explanation of how a hedge funds work will be disapointed by this book. This is a tale about an adventure set with the backdrop of the expatriate life of a bunch of traders in Japan. But, never the less, it does give a good taste, a snapshot if you will, of how the Carney hedge fund operated. Indeed, what we find particularly attractive about the Carney hedge fund, that Mezrich reports on, is that it tends to trade positions based on information advantage. This is a particular method of trading that, we believe, can be one of the most advantageous with limited pitfalls when done correctly. Do your homework. Understand a situation better than anyone else, and you can sometimes spot glaring inefficiencies in the market that can lead to huge profits. This is the big hidden lesson in this book and it is what makes this book a must read. As Mezrich quotes Carney, reporting on one of �Carney�s Rules,� �The key is to figure out the real, intrinsic value�and get it for much, much less.� This is a much better method of trading for hedge funds or individuals alike, versus the momentum, model building and trend following methods that many individuals and hedge funds use. It is trading based on model building that brought down Long Term Capital Management. And we believe that it will be model building methods, trend following methods and momentum trading methods that will result in huge losses in the not too distant future for many hedge funds and individual investors, when the trends change because of changes in Fed monetary policy. Trend followers, momentum traders and model builders, always miss the inflection points. Information traders, seeking information advantage, don�t necessarily get caught up in these problems.

You can read this book for its pure adrenaline packed adventure tale, but make sure you take to heart Carney�s Rules of Trading. The mysterious Dean Carney knows how to trade and of what he speaks.

The Soros New World Order: A Review of George Soros' "The Bubble of American Supremacy"

It is rare to come across an author who footnotes an earlier embarrassing prediction.

George Soros in his new book, The Bubble of American Supremacy, provides such a footnote when he reminds readers that earlier on he had predicted the collapse of the global capitalist system. Certainly not a minor prediction by any measure. "I ... made an unconditional prediction ..., in 1997, when I predicted the imminent collapse of the global capitalist system. Later I had to eat my words," Soros writes.

It is also rare to come across an author who has $5 billion, let alone an author who has spent $5 billion to save the world. Soros, by his own accounting, tells us he has spent such sums. Since $5 billion has not been enough to save the world, Soros has again put pen to paper and written a new book.

George Soros' book is an attack on the Bush Administration's military adventure into Iraq. Lest some mistake the Soros attack as an attack on nation building by the Bush Administration, Soros clearly sets things straight. "My particular concern is that the debacle in Iraq will prevent future efforts and nation building," Soros tells us.

Soros, in other words, is an international meddler. While he does spend some of his own vast fortune on his schemes and while he does not like the way George W. Bush meddles, he most certainly is a meddler himself and has no qualms about taxing the citizenry to add to his billions in an effort to save the world.

"Total international assistance amounted to $5.6 billion in 2002. This amount represents only 0.18% of global GDP...countries at the center of global capitalist system enjoy far too many advantages over countries at the periphery," Soros tells us.

It's easy to see where Soros is going with these comments. "..in 1992, I proposed that a $10 billion IMF program to Russia should be earmarked for the payment of social security and unemployment benefits,"Soros writes.

This is a curious comment given the state of social security in the United States and the fact that it is so close to the precipice of collapse that even Alan Greenspan warns that changes must be made. It becomes even more curious when one evaluates another comment written by Soros, "The dismantling of the welfare state is a relatively new phenomenon whose full effects have not yet been felt."

Soros cites the United States as a country that has dismantled its welfare state. One, of course, would get objections from many that the United States has in anyway dismantled its welfare progams, a country that has an ever expanding social security base, medicare base and unemployment insurance program. But, this is what Soros writes.

In other words, Soros is a very confused thinker. The book is chock full of such confusion. Clearly, Soros' vision of the world hasn't got much clearer since his embarrassing forecast of imminent collapse of the global capitalist system. Further, don't mistake Soros for an isolationist. For Soros military action and nation building is not out of the question, military action is, indeed, a last resort for Soros. George Soros is not against a New World Order. He simply wants it to be the Soros New World Order as opposed to the Bush New World Order.

THE SIMPLETON AND THE SECRETARY IN WASHINGTON: A review of "The Price of Loyalty"

In the Peter Sellers film classic, Being There, Sellers plays a simple-minded gardener. When Seller's character is asked his view on political subjects, his replies in the film are along the lines of "You need to water flowers in the
spring for them to blossom in the summer".

Sellers� simpleton answers are misinterpreted by the sophisticates around Sellers as being the casting of pearls of wisdom by Sellers, when in fact Sellers doesn't have a clue. In Ron Suskind's book The Price of Loyalty, a reporting on the experiences of Paul O'Neill while he was Treasury Secretary, one gets the sense that O'Neill at times wondered if he was dealing with a similar simpleton in the person of President George W. Bush.It�s clear in the book that O'Neill was obviously asking himself, "Does President Bush have a clue?"

Suskind writes:

There were a dozen questions O'Neill expected the president to ask...Bush didn't ask any. He looked at O'Neill not changing his expression..The
President said nothing. No change in expression.

"I wondered from the first, if the President didn't know the question to ask",O'Neill recalled, or did he know and just not to want to know the answers?
Or did his strategy somehow involve not showing what he thought? But you can ask questions, gather information, and not necessarily show your hand. It was strange.

O'Neill started to wonder about the President...The problem O'Neill felt,was that this President's lack of inquisitiveness or pertinent experience... meant he didn't know or really care about the position of the U. S. Government.

O'Neill was watching Bush closely. He threw out a few general phrases, a few nods, but there was virtually no engagement.

As for National Security Council meetings, Suskind writes that O'Neill reports that Bush allowed Condoleezza Rice to run them.

It is these observations alone, of Bush by O'Neill, that will make this an important book for historians studying this Bush Administration. But there is much more we learn from this book. We learn that the Bush Administration in its earliest days was very much focused on regime change in Iraq. Suskind reports:"O'Neill said...'From the start, we were building a case against Hussein and looking at how we could take him out and change Iraq into a new country...' "

And, of course, we learn about O'Neill. Indeed if one can picture George Bush as in someways the gardener in Being There, O'Neill can certainly be seen as a similar character. A character that just doesn't quite get the Big Picture or the nuances in the little things.

Time after time, O'Neill positions himself as the honest man, the get things done person, the thinking out of the box person, when in fact he bumbles along, misses the important points and finally ends up getting fired. O'Neill's bumbling adventure in Washington would be hilarious, if it wasn't for the seriousness of the topics at hand and the ramifications for America's future.

Some have already declared that George Bush is the worst president the United States has ever had. As O'Neill reveals himself in this book through Suskind, it is not a stretch to view this Treasury Secretary as among the worst to be Treasury Secretary in the history of the United States.

It is nothing short of alarming that a book of more than 300 pages revealing the thoughts of O'Neill when he was Treasury Secretary does not once address the topic of government spending. Indeed, the entire book contains the term federal spending just once. Yet through out the book on page after page, we are harangued about O'Neill's quite legitimate concerns of a growing deficit. But his solution is to battle Bush and advise against any tax cuts without ever mentioning, or even acknowledging, that there is indeed a second part to the equation, specifically spending cuts. Not once!

For O'Neill there is only one solution to growing budget deficits, more taxes. All government expenditures are simply assumed as a given. For a Treasury Secretary who prides himself on thinking out of the box and finding solutions to problems big and small, it is remarkable that he doesn't find even one dollar worth of government expenditures that should be eliminated.

Like O'Neill's curiosity about a president who shows no engagement, asks
no questions and seemingly doesn't get it, one must ask about O'Neill,
Does the man have a clue?

He simply doesn't engage, ask questions or seemingly care about government spending.

It is because of this that O'Neill has to be viewed as nothing more than a spend and tax big government advocate.

So where did O'Neill focus his time, while Treasury Secretary if not on spending cuts? On attempting to design regulations that limit carbon dioxide emissions! On a trip to Africa with rock star Bono, where he determines water wells are the answer.

Yes, the Treasury Secretary based on a murmur from Bush, helped the Environmental Protection Agency's chief Christine Whitman design a carbon dioxide policy that everyone else in the Administration including the President seemed to ignore. The plan was never implemented.

From there O�Neill's next big stand took place during his tour of Africa, where seemingly entirely missing the oppressive, socialistic nature of many of the African governments as a major cause of their poor economic situation, he calls for United States support in building water wells in parts of Africa. His call for water wells gained as much support as his carbon dioxide initiative. Zero.

In the book, we learn that O'Neill views Vice-president Dick Cheney as a significant influence in the Bush Administration. At one point, which can only be viewed as hilarious, O'Neill attempts to mimic the manner in which Cheney holds meetings, of course, with none of the success that Cheney has when he holds meetings.

In its proper context, this book must be viewed as a major embarrassment not only for the president but for O'Neill himself.

Indeed, while O'Neill trumpets his independence and forthrightness, we know through the book that O'Neill recognizes early on that there was no evidence of Weapons of Mass Destruction in Iraq. On this major issue though, the bumbler decided to go with the flow and instead of voicing his concerns publicly, he decided to take a tour of Africa with Bono.

Ron Suskind's book, thus, does a tremendous service in providing a glimpse into just exactly how some major players in this empire operate, with little that can be said positively about them in terms of integrity, principles or deep understanding.