PEACE PRIZE, SMEACE PRIZE

HOW IS WEALTH CREATED?

Printed in Tribune-Star 12/7/09

Gentlemen, how is wealth created?



ISU’s Donald Richards disagrees much with the Tribune-Star’s Arthur Foulkes on economic issues. I would like to put a question to these two gentlemen. (We can invite Rose Hulman’s Kevin Christ to add his thoughts.)

How is wealth created?

I certainly tend to agree with Mr. Foulkes much more than “conventional” present-day economists. Mr. Foulkes and I lean much toward the Austrian School. I suspect we will come close to the answer of Murray Rothbard.

I hope Richards and Christ will answer differently than the mistaken thought of printing money and giving it to the state (Federal) government to spend. I consider that a silly answer. (Not to call the men silly. There is a distinction here which some seem to miss. The most admired people can support silly propositions.)

Gentlemen, please keep answers under 500 words.

How is wealth created?

— Ed Gluck

Terre Haute


Here is a great letter from 12/6/09:

Freedom, not government is the answer



A prophet is without honor in his own land … and the statists of the ISU economics department are sharpening their personal attacks on Arthur Foulkes and his advocacy of freedom.

The latest is a defense of Keynesian economics coupled with an ad hominem attack on Mr. Foulkes, by Mr. Richards of the aforementioned econ department. When a letter starts and ends with name-calling (“would-be expert”, “ersatz economic journalist”), it is likely that in between won’t be much of an improvement.

Week in and week out in his columns, Mr. Foulkes argues solidly for freedom, property rights and individual self-determination. These principles are the antithesis of Keynesian ideas that government knows best; that the state must step in when individuals, in Mr. Richards words, suffer from distorted “animal spirits.”

One doesn’t need a degree in economics, only common sense and thoughtfulness, to determine they should control their own life and not some politician or bureaucrat seeking some amorphous “common good,” macroeconomic or otherwise.

It is a non-partisan fact, which Mr. Richards blatantly disregards in his letter, that the government has nothing to spend except what it has confiscated, by force, from private citizens.

Nobel Laureate F.A. Hayek identifies what he describes as the fatal conceit; the notion that some government or academic pogue can know all that is necessary to direct and plan what is best for everyone else. They can’t know what each of us, as individuals, value when we decide on a course of action for our property or ourselves.

It is Keynesian economic ideas that drive the destructive government interventions we have been and are experiencing in our economic lives. Mr. Foulkes advocates freedom, not government, as the answer.

It would be interesting to know just what it is about freedom and liberty that some economists find so frightening.

— Ryan Cummins

Terre Haute

RON PAUL DEFENDING AUDIT OF FED

Killer McChrystal

Here is a letter soon to be in the Terre Haute Tribune-Star. There needs to be more written on this slime ball. I tend to lighten my opinions for MSM. Here is the unedited letter:



Do we need to surge now into " Afghanistan - Graveyard of Empires" or do we need to leave?

Here is my investigation.

Let's look at adviser Stanley McChrystal. First, who is advising McChrystal? From "The New American" magazine issue for November 9, 2009 in the article, "More U.S. Troops Going to Afghanistan " we read, "...The quote was by the Institute for the Study of War's Kimberly Kagan, who has advised General Stanley McChrystal, the commander of forces in Afghanistan.

"That number, Kagan said, would help fill in gaps around Kandahar in the southern part of the country where Taliban forces have amassed. But she warned that, eventually, troops would also be needed to tamp down the insurgency in other parts of the country."



Kimberly married into the Kagan clan, Neocon PNACers (involved with the Project for a New American Century) who I would describe as crazy un-American warmongers.



So, McChrystal is a Neocon drone. He can be steered to kill innocent civilians.



Experience? In “ Afghanistan – Graveyard of Empires” McChrystal was head spook (spy) and is best know for the killing of Pat Tillman. In Mary Tillman’s book, “Boots on the Ground by Dusk” McChrystal lies to cover the fact that Pat was shot by “friendly” fire. Then on investigation we see that the same person that ordered boots on the ground by dusk and splitting the troops – two mistakes warned against by an underling, also did the second autopsy on Pat. Later information was that a different General gave the order.



So we see that at best McChrystal is a liar and is an idiot for having very bad subordinates. (and no demotions)



My conclusion is that a lying Neocon drone whose actions suggest at best he is an idiot (my personal opinion is not that high), must not be trusted to give a reliable opinion on anything.



It is time to leave “ Afghanistan – Graveyard of Empires”.

Printed in T-S 11/23/09

Pat Tillman

Wrote this letter to the editor. Not printed.

Pat Tillman died in 2004. But the research by his family is still important. Stanley McCrystal was involved in the Tillman death cover up. He lied to a Senate committee recently. He now wants a "surge" in Afghanistan sold as "like in Iraq " but that is another lie.

Now we realize that Obama is just "Black Cheney". (We are in two illegal occupations, rendition continues perhaps to put a final end to Gitmo, writing statements continue, the Patriot Act is supported, and the worst leftovers from Bush remain - Gates, Hayden, and Bush golden boy McCrystal. Black Cheney has his own terrible appointments that can be summarized as lobbyists and money schemer insiders.)

Pat’s birthday is November 6. We should remember Pat every November. We should reprint the letter written by his brother Kevin in 2006.

FDIC Coverage Change

This letter was printed recently. Pithy. But with bank failures to continue we should be concerned:


Local banks display signs that the FDIC is temporarily raising insurance from $100,000 to $250,000 through December 31, 2013.

Hooray!

But wait a minute. With fractional banking and a chance of 100% failure of a fiat currency, the guy making $100 a week must pony up $900 a week to insure that money. The FDIC is and always has been, a fraud. To quote from a book on the subject, "'...Deposit insurance' is simply a fraudulent racket, and a cruel one at that, since it may plunder the life savings and the money stock of the entire public...."



Should we consider the once loved Federal Savings and Loan Insurance Corporation? It no longer exists.

So what happens January 1, 2014?

Republicans are bankrupt, in ethics and ideas, but not in Green, Greenscam is not just a past Fed Chair anymore!

Brad Ellsworth is a Traitor

Ellsworth may be stupid, a dupe, or paid off. These only describe WHY he is a TRAITOR. I leave the WHY for you to choose.

Gangster Government List of Shame
Bayh, Evan (D - IN) 202 224-5623 fax: 202-228-1377
Lugar, Richard G (R - IN) 202 224-4814
Donnelly, Joe (D)
Carson, Andre (D)
Ellsworth, Brad (D)
Hill, Baron P. (D)

Phil Schmitt is in this video. His email with Campaign for Liberty is: rephil513@gmail.com.

Let's hope he supports Libertarian John Cunningham
John Cunningham

RON PAUL on "The Daily Show"

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Ron Paul
www.thedailyshow.com
Daily Show Full Episodes Political Humor Ron Paul Interview

RON PAUL INTERVIEW WITH "RUSSIA TODAY"

Twelve minutes. Unbelievable!

FTC Disclaimer Requirement

Heard about this on MSM news. So I have to post this. I'll do it with a ditto to Mark Rutherford, past Chair LPIN, he posted this yesterday:

Tuesday, October 06, 2009

Federal Trade Commission Required Disclaimer

The Federal Trade Commission requires the following disclaimer on this blog site:

I occasionally get a free beer and stale barbecue potato chips from the Libertarian Party of Indiana, presumably because I usually spell its name correctly when I mention it in this blog.

Since there is some danger that a federal bureaucrat charged with regulating speech and ignoring the First Amendment to the US Constitution might investigate this site and discover this possible source of compensation, I felt that it was best to disclose it.

I thought about closing this blog down because of the chilling effect of the FTC edict, but decided against it because I like free beer and stale barbecue potato chips.

Posted by Mark W. Rutherford at 6:41 PM

Dr. Paul's "End The Fed" Exposes Lies

Sent this letter with P.S. to Max. Not in paper yet. Fed stories must bore Max.

Too bad I will send Max another letter connected to a Murray Rothbard book, The Case Against the Fed, which has a great page about Big Business and Big Intellectuals. Written in 1994, it needs to be read by all who think about voting.

Ed Gluck
235-0412

Dear Max,

On page 94 of Ron Paul's latest book, End The Fed, he contends, "...This depression will likely last and last. If the depression lasts a decade or more, its length cannot be blamed solely on Greenspan. That blame will be placed on the current Federal Reserve Board, Congress, the President, the Treasury, but above all on Keynesian economic policy, the same philosophy that gave us the Great Depression of the 1930's...." Dr. Paul is correct. The very wealthy mock the workers whose families once worked about forty hours per week but now work over 70 hours per week for a lower standard of living.

Hey, the World Is Flat! People are in a wage competition with starving folks around the world.

The earth is an oblate spheroid. The People have been fed a diet of lies. Paul mentions the reason we work twice as long for a lower standard of living. In August of 1971 the dollar was cut from its last connection with gold. Since then the Fed (Federal Reserve) has printed money (inflated the money supply) causing a rise in prices. It was doing this since 1913 but now it has no limits. Since 1970 the worker and saver have lost ground. The wealthy get their money first and the toilers (a word used by C.A. Lindbergh; Congressman, bank board member, and father of the famous pilot) blame unions, small entrepreneurs, and others for their troubles.

Fed Chair Bernanke has said the recession is about over. Why would he say this?

Bernanke said this because it will stop you from discovering the reason for the latest crisis and how to stop the stealing. The wealthy will drink their booze and mock you for believing the lies. So often has the Fed Chair been wrong, this lie will not hurt him in the least. Half of the college economic professors are paid by the Fed, and we see these paid liars or dupes printed in papers and on our television screens. They will be as wrong as often as the Fed.

We must believe the lies. Don't read the truth in Paul's End The Fed. The super rich need you for their entertainment and unlimited money supply.

In Liberty,

Ed Gluck
Terre Haute, IN


P.S.
That the super wealthy mock us is my assertion. The working hours and standard of living is my observation not Ron's. You can look up the working stats for yourself (the U.K. and U.S. work over 70 hours per week, France is limited to about 35 hrs per week per job) Hans Hoppe, a favorite economist of mine, notices the standard of living fall from the 1970s but blames it on divorce and behavior changes. Here is a quote of his:

A Quote by Hans-Hermann Hoppe on democracy, truth, justice, beauty, poliics, envy, and ignorance

What is true, just, and beautiful is not determined by popular vote. The masses everywhere are ignorant, short-sighted, motivated by envy, and easy to fool. Democratic politicians must appeal to these masses in order to be elected. Whoever is the best demagogue will win. Almost by necessity, then, democracy will lead to the perversion of truth, justice and beauty.

DAYBREAK: UNDOING THE IMPERIAL PRESIDENCY AND FORMING A MORE PERFECT UNION

Here is an excellent book telling much about Presidential abuse and the Congress that let it happen. It is full of facts and information about the Constitution. It has sources that readers of this blog may not be aware of.

Here is the letter (Review) I sent the local Terre Haute paper:

Ed Gluck

235-0412

9/7/09

Dear Max,

David Swanson, author of Daybreak: Undoing the Imperial Presidency and Forming a More Perfect Union, due out September 15, is a man in search of truth. Already a big seller, many think he found some.

An unabashed progressive, Swanson nevertheless mentions that rendition began under Clinton . Bush made it “extraordinary” by adding “for the purpose of torture.” Obama continues rendition, although not “extraordinary rendition.” Swanson explains that repeated abuse by different presidents leads to the acceptance of bad government. Abusive signing statements, obstruction of justice, illegal wars, and corporate welfare continue the list of presidential abuses.

Swanson criticizes House leader Pelosi for taking impeachment “off the table” and “holding back” until 2012 when census redistricting becomes law. She is putting party above country.

Swanson’s solutions are to change laws and change the Constitution through a convention. Perhaps more practical is a call for activism. He includes instructions on how to become an activist.

The New York Times did not report about government spying until James Risen was about to release his book State of War. Daybreak uncovers many facts and polls not seen in corporate media. Don’t expect the New York Times to inform you. Follow Swanson’s notes to find other sources.

Truth, however ugly, is needed at the base of everyone’s opinions. Accept or reject Swanson’s spin, but ignore truth at your and your country’s peril.

In Liberty ,

Ed Gluck

Terre Haute , IN

http://www.amazon.com/Daybreak-Undoing-Imperial-Presidency-Forming/dp/1583228888/ref=sr_1_1?ie=UTF8&s=books&qid=1252440928&sr=8-1

Glenn Beck's Common Sense

Glenn has some good information. He goes on about the trillions of dollars that posterity will have to pay back. He includes my favorite Samuel Adams quote which I haven't vetted yet but I have used it in an LTE to the Tribune-Star.

Quoting Beck, "Samuel Adams said that those who prefer the 'tranquility of servitude' had best be prepared to 'crouch down and lick the hands which feed you.' that advice is as relevant today as it was back then. And so are his closing words: 'May your chains sit lightly upon you, and may posterity forget that you were our countrymen!'"

He mentions the meltdown and expects hyperinflation. He notices that the tax code is a weapon and both Ds and Rs are the privileged class. He mentions that Specter is only interested in getting re-elected, party and principles be damned.

With Specter as an example of bad government, Glenn spouts some very good common sense. "Every time you vote 'against' someone rather than 'for' someone the two-party system wins and America loses."

"When we support or vote for candidates outside the two major political parties we are immediately lectured about wasting our vote or making it easier for the less desirable of the two major candidates to claim victory. These lies are repeated every election and they must be ignored."

"You never waste your vote if you vote your conscience. ...Common sense tells us that supporting the individual of our choice, after having studied his position on the issues, is never a waste. Are truth, honesty, and candor any less desirable in candidates that don't happen to be Republican or Democrats? Stop believing their lies!"

He tells these folks who do not study and whose chains may lay lightly upon them, expect the Specter in your future. Expect the cancer of progressivism and he explains how it has hurt for over a hundred years.

Government is eroding gun and property rights and we are the country that stole from American Japs in world war II. Beck says we need virtue, honesty, and character and Godly people. He mentions the "common good" of the progressive socialist way.

His closing chapter includes the following, bold is mine, italics are Beck's.
This revolution will be won when enough Americans rebel against the lies that are being told by those in power, lies such as the idea that we can't look at the past to learn about the future, that our founding principles are outdated, or that only those in power know what's best.
The tangible result of this rebellion, the way you can show everyone that your are serious, is to leave whatever political party you currently belong to. Stop donating to the faceless RNC or DNC and starting (sic) devoting your time, energy, and, if appropriate, your dollars to the people who stand for your values.

Good advice.

If I may digress, here is James Perloff writing in The New American: "Syndicated columnist Edith Kermit Roosevelt, granddaughter of Teddy Roosevelt, explained:
The word "Establishment" is a general term for the power elite in international finance, business, the professions and government, largely from the northeast, who wield most of the power regardless of who is in the White House. Most people are unaware of the existence of this 'legitimate Mafia.' Yet the power of the Establishment makes itself felt from the professor who seeks a foundation grant, to the candidate for a cabinet post or State Department job. It affects the nation's policies in almost every area."

"Roosevelt added that this group's goal is 'a One World Socialist state governed by 'experts' like themselves.'"

So is Glenn Beck a James Perloff yet? No. But he is doing good to make people think about their vote and how they have destroyed this country. (But enriched the establishment)

Beck is doing good to say what he says in Main Stream Media. (MSM) Attacked as a nut, he must be respected at the very least. He seems to be trying. I'm not recommending this yet.

You may have noticed that I am recommending The New American the magazine of the John Birch Society.

I found a person who explains things well. She is Shelly Roche. See her videos:

http://www.youtube.com/watch?v=UlXUFlQIUBA

The Fed is stealing your money

Notice today's date and the date of the Blog below. In September 2008 the take over started. It "looks" like the government is "saving" the property of the irresponsible. What is really going on is that responsible people will not be able to refinance and will lose their property. Watch this video closely. "The People" lost their property to the money changers (200 years before Christ exposed the scam). This was "solved" by assassinations of persons wanting to limit ownership of property to 500 acres. (Not a bad idea for today.)

After Caesar was killed, property was taken and taxes were raised, starting the dark ages.

(Please view this video!)

Saturday, November 03, 2007

Three and a half hours about the Federal Reserve - Every American needs to see this!

Posted by Vigo County LP Chair at 3.11.07 0 comments Links to this post

RON PAUL - Audit the Federal Reserve!!! - H.R. 1207

Paine on War and Taxes

Paine on War and Taxes

War is the common harvest of all those who participate in the division and expenditure of public money, in all countries. It is the art of conquering at home; the object of it is an increase of revenue; and as revenue cannot be increased without taxes, a pretence must be made for expenditure. In reviewing the history of the English Government, its wars and its taxes, a bystander, not blinded by prejudice nor warped by interest, would declare that taxes were not raised to carry on wars, but that wars were raised to carry on taxes.

--Thomas Paines, The Rights of Man

RAGE AGAINST BIG PHARMA - PRINTED IN T-S 5/24/09

Kristin (Nicoson) Merritt’s response to Dean May’s earlier letter shows some misconceptions held by much of the public. Describing Meth as “a POISON, a TOXIN, a KILLER.” and its effects on users and their families and neighbors, may well be true. But compared to “legal” drugs the effects are very similar to antidepressants, stimulants, tranquilizers and sleeping pills, antipsychotic drugs, and “mood stabilizers.”

Kristin mentions the dangers of recreational pharmacists. A free market for these drugs and those types listed above would bring safety and cost to the best possible position. (This appears to be the best of a bad situation.)

Kristin believes Mr. May is “… obsessed with the ‘artificially defined crime of the state.’” Well, one reason we have the highest percent imprisoned in the world is that a few solved drug cases look better on the resume than a solved crime case. Also many lives are wasted and fortunes made defending and prosecuting the accused. The prison industry is supported by these follies.

Before we finish, a look at the “legal” drug industry may prove educational. For drugs that kill, search Evelyn Pringle and add the word Vioxx or similar suspected drug.

For drugs that make people do crazy things, read Dr. Peter R. Breggin’s book, “Medication Madness.”

For unreasonable corporate actions against employees read “The Whistleblower” by Peter Rost MD known for his speaking out on drug reimportation. Within these two books you may notice that only drug companies see the danger of drug reimportation and the FDA has no study proving antidepressants work, only drug companies have such studies. (Antidepressants plus tranquilizers have some effectiveness, but some doctors view this combination as VERY DANGEROUS.)

Drug companies extend patents with Me Too drugs, changing doses and possibly glue for a “new” drug. (Seen with Cholesterol drugs) Saying the drug is now for children can give a patent three extra years. Perhaps you have heard of the new PMS drug. It is just Prozac but of course you do not pay the generic price. (I don’t know if the dosage is much different.) Marcia Angell discusses much of this in her 2004 book, “The Truth About the Drug Companies: How They Deceive Us and What to Do About It.” She goes into some detail on what passes these days as research and education. The pusher man has nothing on these guys. You may expect some of this knowing President H.W. Bush was on the board of Eli Lily.

Billions in fines for promoting unapproved uses for approved drugs. Yet I don’t see many of these law breakers behind bars.

Bottom line is, if your local meth folks had the billions of drug companies, their work may also be viewed as beneficial. This then, would be another misconception.

In Liberty ,

Ed Gluck

Peter Schiff Video

BIGGEST TAXER - THE FED

KELO CASE

Do you remember the Kelo case? Eminent domain was used to steal property from an individual to enrich the coffers of New London in Connecticut. A museum and other stuff was supposed to be put in. In this follow up it appears the city spent $78 million dollars to get less revenue but gain the right to steal property from individuals. New London was known to me as the place where the Sedition Act put a person in jail. See the video at the bottom of the article which may allow you to believe America might return.

KELO CASE


This still makes my blood boil.

Last letter printed today

In the series of letters below, my response to Jim was printed today, Feb. 15, 2009. The word ever was not italicized.

Series of Letters to the Editor

This first one is below:

Sunday, February 01, 2009

Letter to Editor - Science

Finally, I have a new article. This is a letter to the editor I sent but has not been printed yet.

Tribune-Star contributor, Saul Rosenthal, lent me a book critical of milk. It changed my mind on the "goodness" of dairy and meat products. Science backs this conclusion. Thanks Saul.

The Center for Disease Control, since 2006, wants to test the entire U.S. population for HIV. The false positive result for the HIV antibody tests (tests not approved by the FDA with the disclaimer, do not use results to diagnose AIDS) is very high. Healthy women in their third trimester and newborns will be mandated by state laws to take deadly drugs.

In 1990 I checked my Mechanical Engineer's Handbook for the energy contents of gasoline and ethanol. Ethanol has lower energy content. Testing my 1978 Aspen , my results gave over an eight percent advantage to gasoline. I asked my friend Scott to run the same test on his fleet of cars. Scott reported about a ten percent difference. Two years ago, Consumer Reports tested E-85 and the ethanol blend. They also reported about a ten percent disadvantage with the ethanol blend. (This would be an excellent project for children in elementary school - test mpg ethanol blend/mpg gasoline.)

Science needs to be questioned. The dairy and meat industries along with the medical profession, the pharmaceutical industry, and Big Oil have proved they cannot be trusted. Perhaps the worst secret learned is that education professionals do not have to disclose payment from companies whose products they are testing.

Here is a response from Jim Hughes:

Letter contained false statement

In a recent letter (Feb. 8, Tribune-Star), Ed Gluck stated “Perhaps the worst secret learned is that education professionals do not have to disclose payment from companies whose products they are testing.” Wrong, Ed.

“Education professionals” have to disclose affiliations at virtually every step. Universities require blanket disclosure statements. Disclosure statements are required before one can present at meetings. Disclosure statements are required before one can publish in most journals.

The primary journal in my area is Endocrinology. Every paper published in the journal is accompanied by a disclosure statement. Researchers report consultant activities, lecture fees, stock options, patents, royalties, and other affiliations. In addition, researchers report all grant support, including support from the government, because they must demonstrate what was accomplished with the money.

Perhaps the worst secret learned is that some statements in letters to the editor have no basis in fact.

— Jim Hughes

Terre Haute


Finally, my response not printed yet:

I appreciate Jim Hughes responding to my letter printed February 8. Before answering, I will explain my letter in which I related three shocking discoveries.

First, ethanol in gasoline acts as if it has an energy content of zero. We have all seen alcohol on fire or a flambeyd food and know it must have some energy. Readers may question Consumer Reports on their results.

Secondly, I mentioned the test for HIV has a very high false positive rate. (Now, I do not even believe there is an HIV virus but we all know the test "they" say "they" perform is for the HIV antibodies. They test for twenty proteins and if three are positive, "they" have a positive HIV test. That's U.S., in some European countries the criterion is four positive proteins. Four positive proteins needed would, I guess, produce less false positives.) To many readers it may be shocking to hear of state legislators forcing many healthy persons to take possibly harmful treatment.

A third discovery was that the exalted positions of dairy and meat were found to be sacred cows (yes, pun intended). More vegetables in our diet seem to be called for. This is shocking for some.

Mr. Hughes has problems with my stating perhaps a fourth shocking fact. This is that "...education professionals do not have to disclose payment from companies whose products they are testing." I do not dispute the assertions by Mr. Hughes that universities and his journal require disclosure statements. One source in the food question, T. Colin Campbell, author of The China Study, has found problems with research and disclosures. I believe Mr. Campbell is alive and retired.

If I implied education professionals don't ever have to disclose payment, I apologize.


I hope people understand why I wrote about these shocking facts.

Defense of libertarian newspaper guy

Here in Caps is my defense of Arthur Foulkes, a local newspaper guy who is accused of being a libertarian. Written in the Tribune-Star forum.


COMMENTS IN CAPS

Flashpoint: Foulkes’ libertarian perspective demands alternative view

In his recent opinion piece on the current state of the U.S. economy, Tribune-Star columnist Arthur Foulkes presents a limited and biased analysis. His extreme libertarian views obscure a balanced evaluation. Since most of us are affected by economic conditions, and since macroeconomics is mysterious to much of the public, a response to his essay is appropriate.

My purpose is to provide readers of the Tribune-Star a different perspective on the nation’s economy and the corrective policies under development.

Foulkes makes three essential points in his essay. First, the “spiral theory” of macroeconomics, on which the Obama and Federal Reserve policies are based, is fundamentally wrong. Second, economic recessions are a natural and necessary corrective tonic that serves to “wash away poor investments” … i.e., they destroy businesses that should never have been established in the first place. Third, macroeconomic expansions (“booms”) that are driven by either monetary or fiscal policies will inevitably lead to “a bust”, i.e. … We would all be better off if the government would just leave the economy alone and let it correct itself.

The “spiral theory” to which Foulkes refers was developed in the 1930s by J.M Keynes in his classic book, “The General Theory of Employment, Interest and Money”. A key concept in this theory is the spending multiplier, which works more or less as Foulkes described.

However, it is a gross distortion to speak of the multiplier effect as a “bottomless downward spiral.” No. Keynes’s essential idea was that declines in spending would be amplified and lead the economy to an equilibrium output below its potential, not a free-fall.

HE DID NOT SAY KEYNES WAS RESPONSIBLE FOR THE SPIRAL THEORY, THUGH THAT MAY WELL BE THE CASE.

Keynes also recognized that, with time, spending and output would recover, and production would be restored to the economy’s potential in the long run, even without any government intervention.

I BELIEVE FOULKES IS SAYING AS THE BAD INVESTMENTS ARE CORRECTED, ELIMINATED, THE ECONOMY WILL RECOVER.


The problem with waiting is that productive resources are wasted during the waiting period, which is characterized by high unemployment and low capacity utilization of installed plant and equipment.

THIS IS JUST MADE UP. FOULKES SAYS WE NEED REAL SAVINGS. THIS WOULD BE OPPOSED TO BORROWING FOR INVESTMENTS. SEE HIS EXAMPLE. SLEEPING MAY ALSO BE A WASTE OF RESOURCES BUT I WOULD LIKE TO SEE SOME PROOF.

Foulkes completely ignores this inefficiency, which corrective macroeconomic policies can address. (Keynes also noted that in the long run we’re all dead.)

IGNORES SOMETHING THAT IS PURE FABRICATION? SOUNDS LIKE A GOOD CHOICE.



Such counter-cyclical macroeconomic policies have been followed since the 1930s. Foulkes’s libertarian philosophy would replace these with the laissez-faire approach that prevailed in the 19th and early 20th centuries. A cursory look at business cycles over the past century shows clearly that their magnitude and frequency diminished after Keynesian macroeconomic policies were adopted. It seems odd to recommend that earlier approach as better.


IF ALL ELSE FAILS, LIE, LIE, LIE. THE GREAT DEPRESSION AND 1969 TO 1980'S RECESSION WERE THE TWO WORST ON RECORD. BANK FAILURES WERE COMMON. BEFORE THE FEDERAL RESERVE, BANK FAILURES WERE RARE. WHAT IS ODD IS THAT PEOPLE LIKE MR. LOTSPEICH DEFEND FAILURE.



Foulkes makes two more fallacious points about this theory. He writes that the “spiral theory” ignores that consumer goods must be produced. This is nonsense and simply not true. He also writes that the theory incorrectly assumes that systemic market failure initiates a downturn, when it is actually caused by a desirable recognition of poor investments.

There are two problems with this. First, the systemic market failure identified by Keynes was not the initiation of a recession, but rather the failure of a market system to maintain, or quickly return to, production at the economy’s potential. Any number of shocks to spending could initiate a downturn; they need not be market failures. Examples include reductions in exports, government spending and investment.

VERY DIFFICULT TO UNDERSTAND THIS. BUT THERE HE GOES AGAIN WITH MARKET POTENTIAL. REDUCTION IN EXPORTS IS A MARKET FAILURE TO SOMEONE WHO BELIEVES IN FREE MARKETS IF THE REDUCTIONS ARE DUE TO SOMETHING BEYOND THE FREE MARKET. GOVERNMENT SPENDING AND INVESTMENT IN THEMSELVES DON'T CREATE DOWNTURNS. 0 FOR 3 MR. LOTSPEICH.



Second, the recognition of investments as “poor” will not necessarily reduce aggregate spending and thus initiate a downturn. Poor investments are consequences of past spending. Future investment spending might be reduced as a result, but more likely it would simply be diverted to different kinds of projects. This is an appropriate correction that markets would promote, but it is not the cause of a downturn.

In short, the correction of investment mistakes that Foulkes asserts is the function of recessions can be accomplished without recessions, and it frequently is.

This is not to say that a recession has no role in sweeping away poor investment. Indeed the process of enterprise destruction is amplified in a recession. However, there will also be many businesses destroyed that are viable when the economy is operating at capacity. They are “poor investments” only during recessions, and their destruction reduces social prosperity. This collateral damage of downturns is selectively ignored by Foulkes.


I BELIEVE WE ARE TRYING TO COVER TOO MUCH HERE. IF TOO MUCH MONEY IS PUMPED INTO THE ECONOMY AND PEOPLE THINK THEY ARE DOING BETTER, TOO MANY RESTAURANTS MAY BE BUILT. DURING THE RECESSION THESE RESTAURANTS MAY DISAPPEAR AS "COLLATERAL DAMAGE" BUT FOULKES WAS CORRECT IN IGNORING THIS AS IT WOULD CONFUSE THE QUESTION.


Finally, it is simply not true that a recovery from recession that is engineered by the government must culminate in a new recession. This is an unsupported assertion. The U.S. has experienced extended periods of economic stability and growth following such recoveries.

THIS DEPRESSION WILL BE EXTENDED. THE GREAT DEPRESSION WAS EXTENDED WITH GOVERNMENT SPENDING. I CAN'T ARGUE THAT EXTENDED PERIODS OF ECONOMIC STABILITY AND GROWTH FOLLOWED SOME RECOVERIES. BUT OF COURSE THE RELATIVE GOVERNMENT SPENDING (STEALING OR TAXING) WAS LESS.


Moreover, government spending for infrastructure (“roads and bridges”) that Foulkes suggests is unwise, usually provides substantial public returns for both households and businesses. While true that we should not build bridges to nowhere, this does not mean all government bridge construction should cease.

I BELIEVE HE USED THE WORD MASSIVE AS IN spend massively on roads and bridges. ALSO, not necessary DOES NOT = SUGGESTS IS UNWISE.


— Richard Lotspeich

Department of Economics

Indiana State University


MR. FOULKES IS A GREAT ASSET TO THIS COMMUNITY. HE CERTAINLY HAS PROVOKED MUCH THOUGHT ABOUT ECONOMICS.

Jacob Hornberger writes about Tom Dilorenzo talking about Hamilton's Curse and other thoughts and writings HERE. This is a blog so it may be a ways down if you arrive after 2/3/09.

I wrote a letter to the editor about this book myself. Here it is:

Ed Gluck
235-0412
Terre Haute, IN



Dear Max,

During a Candidate's Forum in 2003, I mentioned that the Federalist Party did not believe in federalism but in nationalism. They believed in centralized government, big government, imperialism, and corporate welfare. I do not know if anyone understood what I was talking about although Professor Linda Maule seemed to know. (I believe Dr. Maule helped in my understanding of these facts.)

I believe my reason for mentioning this history was to label my two opponents as big government Federalists while I was a small government Jeffersonian. Now there is a new book, Hamilton's Curse by Thomas J. DiLorenzo, which explains the corrupt connection between the Federalists, Whigs, and Lincoln Republicans that brought us to the corrupt government of today.

Every voter should read Hamilton’s Curse and notice the silly or specious arguments of today which were used by Alexander Hamilton. DiLorenzo also advises how the U.S. can reverse this too big and too bad government.

Letter to Editor - Science

Finally, I have a new article. This is a letter to the editor I sent but has not been printed yet.

Tribune-Star contributor, Saul Rosenthal, lent me a book critical of milk. It changed my mind on the "goodness" of dairy and meat products. Science backs this conclusion. Thanks Saul.

The Center for Disease Control, since 2006, wants to test the entire U.S. population for HIV. The false positive result for the HIV antibody tests (tests not approved by the FDA with the disclaimer, do not use results to diagnose AIDS) is very high. Healthy women in their third trimester and newborns will be mandated by state laws to take deadly drugs.

In 1990 I checked my Mechanical Engineer's Handbook for the energy contents of gasoline and ethanol. Ethanol has lower energy content. Testing my 1978 Aspen , my results gave over an eight percent advantage to gasoline. I asked my friend Scott to run the same test on his fleet of cars. Scott reported about a ten percent difference. Two years ago, Consumer Reports tested E-85 and the ethanol blend. They also reported about a ten percent disadvantage with the ethanol blend. (This would be an excellent project for children in elementary school - test mpg ethanol blend/mpg gasoline.)

Science needs to be questioned. The dairy and meat industries along with the medical profession, the pharmaceutical industry, and Big Oil have proved they cannot be trusted. Perhaps the worst secret learned is that education professionals do not have to disclose payment from companies whose products they are testing.