America divided

Over the weekend, one of the hot media stories was that Obama's popularity is rising in the midst of scandals. See, there's no problem. America has been effectively politicized and divided, and this is good news to media and the political class. Progressive  have criticized those who promote limited government and a free market because they are focused on economics. The political class accuses the Austrian types of assigning economic motives to everyone.

Mises, the main Austrian economist, never made this claim. What Mises claimed is in stark contrast to what his critics say he claimed. Mises said economics is the study of human action. In a free market, individuals interact in many diverse ways, with cooperation being the main link that makes it all work. Like the human body with all its diverse parts, it's the cooperation between the parts that makes the body work as it does. When there is no meddling, a free society whose rights are protected by the rule of law works together, makes progress and solves problems which cause friction. I'm simplifying for the purpose of a blog post to make a point. Read Mises' Human Action.

In our statist system, government meddling breaks society apart, dividing the country in two politically. Government interventions are creating high unemployment, but the State is satisfied giving food stamps and unemployment checks, or giving disability benefits. Unemployment harms those who want to be a part of, want to produce and be active. Those working below their abilities feel demeaned. Those who work part time are worried about their jobs, especially as government interventions in healthcare cause small business layoffs or closings.

Government is meddling in energy production and the money supply, causing high gas prices. The artificial suppression of interest rates hurts those who wish to save. Government meddling hurts Americans in thousands of different ways, but mainly through interference in cooperation between individuals. This is not a new problem. Government interference in the economy has been going on for close to a hundred years, but now the accumulated consequences are threatening the existence of the nation. America's people were so good at cooperating and producing, it took a long time to finally break enough bonds to cripple the nation.  Another empire is about to collapse.

But what does media and the political class discuss? They discuss popularity polls, and they look to a stock market manipulated by the Federal Reserve to the benefit of government cronies and say that all is well. Yes, as long Obama is popular and the stock market is rising, who cares about Americans out of work, the lack of cooperative production/innovation/creativity or all broken ties in society?

What next?

http://mises.org/daily/6275/Regime-Uncertainty-Some-Clarifications

At Mises Robert Higgs writes about what he calls regime uncertainty. The length of our present economic downturn in reminiscent of the Great Depression, mainly because investors are uncertain what will come next from government. Obama supporters who think this reflects directly on Obama dismiss this idea and state that demand is the problem, thus government has to take up the investment slack, or the Fed has to pump money into the economy to keep it going.

When investors watch the news and witness the attacks on Romney, Bain Capital and Wall Street in general, they wonder what's going on. Big Businesses which are connected with government don't worry, because they always win, but there are many, many business people who aren't politically connected. They also see an obsession in DC with raising taxes. Investors, entrepreneurs and business owners can do a little math and realize that raising tax rates to 39% or so will not put much of a dent in the deficit, so they know the President and congress will be back for more.

On top of the taxes and extra costs associated with the ACA, there are environmental regulations and a generally negative atttitude coming from the political class toward wealth creators. None of this is new, and that's the problem. After decades of statist control over many economic matters, the control has expanded and reached a tipping point -- there is regime uncertainty, and nothing will get better until investors feel confident enough to invest once again to an extent that will create real, sustainable economic growth and new wealth creation.

Healthcare education

http://mises.org/daily/3737/Why-ObamaCare-Will-Fail-A-Reading-List

I'm passing this along because it will be important to know what's happening and how it came about when healthcare/Obamacare unravels at a faster pace and costs skyrocket.

Ralph Raico -- Keeping history alive

http://mises.org/daily/5855/Marxist-Dreams-and-Soviet-Realities

Ralph Raico is required reading for anyone who's concerned with preserving our liberal history and principles. I'm talking about actual liberalism, not the social democracy that passes for liberalism today. And, although the Left rightly rejects a direct comparison between modern liberalism and Soviet style socialism/communism, we have to understand the influence of Marx on the Left if we are to understand the growing conflict between statists and anti-statists -- it's far more serious than the superficial differences bandied about by "conservatives" and "liberals".

Santorum pandering and looking foolish

Rick Santorum is helping the Left avoid talking about the legitimate problems surrounding President Obama and the progressive agenda/ideology. It's unintelligent to make broad, sweeping proclamations about education, what Obama has said about education and the liberal nature of universities. And it's not intelligent to call the President a snob. There are so many ways to show how progressivism and statism have failed, Republicans have a goldmine of topics to discuss which can establish a distinction between free market principles and statism -- but they just don't understand.

Santorum, like most Republican candidates, except Paul, doesn't have the ability to explain free market, limited government principles in contrast with government intervention. I don't think Santorum believes in free markets and limited government without facilely applying the modern conditions that are accepted as conventional wisdom. Santorum is the type who will talk in generalities about the need for "smart" government oversight, but not too much, blah, blah, blah, without ever understanding what he's saying or why he's syaing it. Santorum has accepted the status quo statist system in DC, and when he acts like a limited government conservative, he's only saying that government should intervene less and in different ways than Democrats.

Santorum has never read and studied the classical liberal literature which is the foundation for limited government/free market positions -- I'm sure Santorum has never heard of Frank Chodorov or Roy Childs or Albert Jay Nock -- I doubt Santorum has read anything written by Hayek, Mises or Thomas E. Woods. The problem with Republican leaders is that they don't understand or really embrace the political philosophy they claim to uphold. So Santorum makes wild claims about Obama as if no one will look up the facts and challenge him on the hyperbole. Santorum thinks he can sling populist red meat to the crowds and ride a wave of emotion to the nomination. No, Rick -- you have to be smarter than Obama, and you have to understand the issues, and you just don't cut it.