In a few recent blog posts, Paul Krugman
used bar graphs and tables to (allegedly) prove the superiority of his views
over those of the Austrians. Yet, as I'll show in this article, I can use
Krugman's own data to demonstrate the exact opposite.
Krugman on the Fed and Banking Panics
Perhaps spurred by his Bloomberg debate
with Ron Paul, Krugman posted the following regarding financial panics and the
US central bank:
There's a very widespread belief on the
right that banking crises only happen because either the Fed or Barney Frank
cause them; go back to a gold standard, and there would be no need for
financial regulation or anything like that.
This is, of course, nonsense; Walter
Bagehot knew all about financial crises, which have been a constant feature of
modern economies since at least the early 19th century. Just to drive the point
home, I thought it might be worth posting Gary Gorton's chart
of "panics" before the Fed went into operation:
Panics will happen; the question is how
they are contained. (emphasis added)
Now although Krugman doesn't explicitly
say "Ron Paul" or "Austrian economists," I think he has to
have them in mind here. After all, before the Austrians rose in popularity,
hardly anybody talked about the gold standard, let alone abolishing the central
bank. It was the Austrians, and most notably Ron Paul, who put those ideas back
into the limelight so that Paul Krugman feels the need to address the issue.
In that light, Krugman is simply making
stuff up when he says such people think banking panics never happened before
the Fed. Murray Rothbard's doctoral dissertation was The Panic of 1819, and
Rothbard also wrote on the history of the Fed, so I'm pretty sure he wouldn't
be shocked by Krugman's table.
But besides the cheap debating ploy —
setting up his opponents as believing something obviously ridiculous — Krugman
leaves open the door to his own demise in his final sentence, after the chart,
when he writes, "Panics will happen; the question is how they are
contained."
Fortunately, Krugman himself provides
the answer in a… (Read more)
WASHINGTON – Sara Margalit Aviel was
confirmed by the United States Senate yesterday to serve as the Alternate
Executive Director to the International Bank for Reconstruction and Development
(the World Bank).In this capacity,
Aviel will work with the Executive Director to represent the United States on
the Board of Directors, which makes decisions about loan and investment
proposals, reviews the policy issues that guide the general operations of the
Bank, and provides broad oversight of, and guidance to, the Bank’s senior
management.
Aviel has served as Director of
International Economic Affairs at the National Security Council and the
National Economic Council since 2011.She has also served as a Senior Advisor to Treasury Secretary Tim
Geithner.
“I have seen firsthand the depth of
Sara’s personal dedication and drive in all she does. Sara’s rich experience in
international development issues will be a valuable asset to the United States
and the World Bank in this new role,” said Secretary Geithner.
Prior to joining Treasury, Aviel served
on the leadership team of Root Capital, a social investment fund.Aviel previously spent time at Mercy Corps,
CARE Afghanistan, and as a lecturer at Yale University.
Aviel received a B.A. and M.A. in
Political Science from Yale University and a Master’s in Business
Administration from the Yale School of Management.
Earlier today, I received word that
Audit the Fed (H.R. 459) is now scheduled for a vote this July in the U.S.
House of Representatives!
This historic moment is only possible
thanks to your relentless pressure. Now
we must turn up the heat to secure victory – first in the House and then in
Harry Reid’s U.S. Senate.
That's why I hope you'll read this note from Senator Rand Paul and us and take immediate action.
WASHINGTON – The U.S. Department of the
Treasury today released the Semi-Annual Report to Congress on International
Economic and Exchange Rate Policies that is required under Sections 3004 and
3005 of the Omnibus Trade and Competitiveness Act of 1988.The Report covers international economic and
foreign exchange developments in the second half of 2011.Where pertinent and available, data and
developments through mid-May 2012 are included.
The Report highlights that conditions in
Europe continue to pose a risk to the U.S. recovery, that global growth has
been hindered by insufficient demand rebalancing, and that greater exchange
rate flexibility is needed – most notably in China.Based on the appreciation of the RMB against
the dollar since June 2010, the decline in China's current account surplus, and
China's commitments in the G-20 and the U.S.-China Strategic & Economic
Dialogue to move more rapidly to a more market-determined exchange rate system,
Treasury has concluded that the standards identified in Section 3004 of the Act
during the period covered in this Report have not been met with respect to
China.Nonetheless, the available
evidence suggest the RMB remains significantly undervalued, and we believe
further appreciation of the RMB against the dollar and other major currencies
is warranted. Treasury will continue to closely monitor the pace of RMB
appreciation and press for policy changes that yield greater exchange rate
flexibility, a level playing field, and a sustained shift to domestic demand-led
growth.
The Report, along with past Reports, can
be found at
http://www.treasury.gov/resource-center/international/exchange-rate-policies/Pages/index.aspx.
Darth
Plagueis was a dark lord of the Sith so powerful and so wise, he could… even
keep the ones he cared about from dying…The dark side of the Force is a pathway to many abilities, some
considered to be unnatural.He became so
powerful, the only thing he was afraid of was losing his power.
After much disappointment expressed by
the public over the quality and substance of the Prequel Trilogy—grudgingly
accepted by diehard fans—comes a novel to save the day and save the prequels,
especially Episodes I and II.James
Luceno’s Darth Plagueis excellently
brings together the seemingly scattered events of the prequels to not only tie
up loose ends, but also offers greater understanding of these films and a
greater appreciation of the Star Wars storyline.Better yet, Darth Plagueis is a novel that could speak volumes on behalf of the
Austrian School!
Let it be clear that this is unlike most
Star Wars novels.It isn’t
action-packed, but rather philosophical, explaining the teachings of the Sith,
the logic for and against the Rule of Two, and the Grand Plan for the revenge
of the Sith.Much like The Count of Monte Christo, Darth
Plagueis uses politics, deception, and intrigue to move the plot forward over a
chronological span of several decades.
The novel also answers some pressing
questions, including why Darth Maul was killed by a padawan and not a Jedi
Master.Another is how and where Count
Dooku came into the picture, his frustrations with the weakening Republic, how
he would have become a Sith Lord, and why Dark Jedi are leaping out of every
nook and cranny while the Rule of Two is still in effect.Some of the glimpses of the growing military
industrial complex give insights on the development of the technology used by
the Trade Federation, the Intergalactic Banking Clan, and the Techno Union
which not only would make the droid army possible, but also the cyborg
technology used to revive General Grievous and eventually Darth Vader.The novel even covers the open ends made in The Clone Wars series, including Darth
Maul having a brother and a psycho godmother.
Rest assured that this article contains
some major spoilers, but critical for the brief analysis that must be included
in this book review.Darth Plagueis,
known to his business associates as Hego Damask, is a seldom-known figure who
mostly operates and does his transactions behind closed doors and out of the
limelight, yet is one of the most powerful beings in the galaxy.He is personally responsible for setting in
motion the chain of events that would lead to the rise of the Empire under
Palpatine.
Damask, Majister (both CEO and head of
state) of the clandestine financial group Damask Holdings, follows the Muun species’
tradition of banking, finance, and acquisition of as much power as possible
through the purchasing or seizure of assets, from accounts and properties to
big businesses and even whole planets.
Damask is a secret ally of the
Intergalactic Banking Clan (the Star Wars version of the Federal Reserve),
responsible not only for growing the military industrial complex, instigating the
breakup of the Republic and the rise of the Empire, but also for selling
weapons and financing both sides in the Clone Wars.One of the members of Damask Holdings, Larsh
Hill, is Chairman of the IBC and will eventually be succeeded by his son San
(seen in Episodes II and III as IBC Chairman and influential leader in Dooku’s
Confederacy of Independent Systems).After Larsh’s death, San Hill would be personally mentored by Hego
Damask.
Wookieepedia—now recognized as a
reliable authority by StarWars.com—says the following about Damask Holdings:[2]
Damask Holdings was a clandestine
financial group closely allied to the Intergalactic Banking Clan, which also
acted as a lobbying and political pressure organization that involved itself in
the affairs of many planets, both to exploit local resources—such as plasma—for
financial gain, and to gain influence on a galactic scale as part of the secret
Sith Grand Plan to topple the Galactic Republic. It also operated as a secret
society, bringing together the galaxy's most influential beings for the yearly
gatherings on Sojourn, and also presiding over the steering committee.
Case closed!If Hego Damask can be compared to J.P.
Morgan, then the Hills are the Rockefellers, the world Sojourn being Jekyll
Island[3]
and Damask Holdings being the first Federal Reserve Board, using the IBC and
satellite firms like the Trade Federation to tighten their hold over the
Republic, secure a future for the military industrial complex, and maintain
their full monopoly on the control of trade, finance, and unbalanced government
regulations.
Damask, however, is much shrewder in his
schemes and dealings than J.P. Morgan, though Morgan’s co-founding of the Fed
and agitation to involve the United States in the First World War (to protect
his European investments) makes him no amateur thug.Damask recruits as his Sith apprentice an
ambitious young man from Naboo named Palpatine, simultaneously training him in
the ways of the dark side of the Force and grooming him to become an
influential Galactic Senator.Their
methods are to acquire all the power necessary for undermining the Republic,
Damask’s grand plan involving Palpatine acquiring political power and the reins
of government, meanwhile himself acquiring increasing economic power through
Damask Holdings and the IBC.Furthermore, Damask obsessively studies the nature of life, the Force,
and Midi-chlorians in the hopes of achieving immortality so that Plagueis and
Sidious may forever reign as emperors.
This example is part of why your author
respectfully disagrees with the neo-Rothbardian view that government is evil
and everything that is good lies in privatization.(No, this is not because Rothbard hated Star
Wars…)After all, it’s possible for
thugs to control whole sections of the private sector and rule as dictators in
an anarcho-capitalist society just like the public sector in a socialistic
society, whereas in a Constitutional society with minimal, localized government
and abundant, decentralized privatization there lies far less opportunity for
the stripping of rights and increase of corruption through monopolies and
absolute power.
Nonetheless, we live in a world where
the same group of thugs seem to rule large sections of both the public and
private sectors, just as the Order of the Sith Lords secretly does during the
final years of the Republic.The
worldview of the Sith Lords is not different at all from the one held by contemporary
policy makers in America, from the Federal Reserve Board of Governors to the U.S.
Congress and the Executive Branch, their thoughts and actions completely
antithetical to the ideals and principles of the Constitution, the free market,
and individual liberty.During training
Plagueis says to Sidious, “With the Republic [the Jedi] are like indulgent
parents, allowing their offspring to experiment with choices without
consequence, and supporting wrong-headedness merely for the sake of maintaining
family unity… When instead they should be claiming: We know what’s best for you.”[4]
Video used via standard YouTube distribution license. Image is the
property of Random House Publishing Group and Lucasfilm but used via
Wookieepedia according to the fair use provision of U.S. copyright law.
[3] Rothbard, Murray N.The Origins of the Federal Reserve. The
Ludwig von Mises Institute. 2009. p. 93.
<http://mises.org/document/6119/The-Origins-of-the-Federal-Reserve>
[4] Luceno, James. Star Wars: Darth
Plaqueis. Del Rey, Random House Publishing Group. 2012. pp. 166-67.
By Robert P. Murphy
