Author Archives: Tom Mullen

Conservatives Make a Weak Case for Christianity

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The American Red Guards are after Christianity now, like their comrades in previous communist revolutions.

Conservatives will lament this, but they make a weak case for Christianity because they only seem to hear half of Jesus’ message.

Yes, Jesus told us we are wicked, sinners, and hypocrites. And he was right.

But he also said we are the light of the world and the salt of the earth. And he was right about that, too.

The whole conservative philosophy is based on the first half of Jesus’ message alone. It assumes human beings are so wicked that all their natural inclinations must be crushed by authoritarian rule. Hobbes said it and Burke agreed with him.

Libertarians – even the atheists – implicitly agree with all of Jesus’ view of humanity. Every one of us has the capacity to be both a murderer, thief, or liar and a hero, philanthropist, or good neighbor.

The non-aggression principle proceeds directly from this view of humanity, allowing force only in defense of legitimate property rights (property being our lives, liberties, and “stuff”) and otherwise leaving each other free to allow the light of the world to shine.

In addition to overreaching government, the conservative view also results in conservatives tending to separate the world into good and bad people, rather than good and bad actions. This makes Christianity a tough sell, especially since it contradicts another key plank of Jesus’ message: that sincere repentance will be rewarded with the forgiveness of sins.

If conservatives truly want to preserve Western Civilization, previously known as “Christendom,” they ought to consider viewing humanity the way Jesus did and libertarians do and let that guide their policies.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

What will our Ozymandias say to the future?

ozymandias-percy-shelley-with-poem-34054575160_c4cc6a68e0_bI’ve often wondered what historians of the future will think about us and our demise while sifting through the rubble of our civilization. There are many volumes on the reasons for the fall of Rome. We know what happened to the Spanish, French and British Empires. The Mayan collapse is still somewhat mysterious, although there are theories.

But when it comes to us, this mighty civilization that rose out of the Age of Reason and accomplished wonders in 400 years that eclipsed those of the previous 4,000, what will they conclude?

That, ironically, after surviving the bubonic plague, cholera, several world wars, and many natural disasters, we were finally done in by mass hysteria over a virus that, compared to the great epidemics of history, was rather unremarkable.

And round the decay of our colossal wreck, boundless and bare, the lone and level sands will stretch far away.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Resisting the Nitwits: Strategies

Simpsons-Mob homer runningSo, I’ve been giving some thought to approaches we could take to free ourselves of the Nitwits. Again, I didn’t start this group because I thought I had any answers, but rather to ask the question of any who see the problem the same way I do.

I thought it might be worthwhile to break down approaches into general categories and people could add to them in the comments (I’ll amend the OP). Below are the first I’ve thought of off the top of my head, along with the results of any already tried and/or foreseeable challenges. Please add and comment.

For those employing any of these means, I ask in advance to control the urge to be defensive about any challenges I suggest. We’re all here because we recognize one thing: nothing so far has worked or we wouldn’t be here in the first place. However, there may be ways to innovate/improve within the general categories listed below:

  1. Political action. This seems like the most obvious failure. Could anyone have done better taking the message to the Nitwits than Ron Paul or Harry Browne? And no, Ron’s campaign didn’t fail because the media blacked it out. Ron got way MORE exposure than his votes warranted. The Nitwits just didn’t want to hear about less government. I don’t see how this avenue could be exploited significantly better than it has been. The Nitwits will make zero effort to understand the message, no matter how well it’s presented. They’re still answering polls about whether the U.S. should have a third party as if third, fourth, fifth, sixth, etc. parties didn’t already exist. This seems hopeless to me.
  1. Free State Project. This was an admirable effort and certainly creative. But the most optimistic thing one could say about it is it has yielded no fruit so far in terms of affecting New Hampshire politics. As proof, I’d point to the last U.S. senator elected in 2016 – a Biden/Clinton-style Democrat, just like the other elected in 2008. I am open to why this isn’t true, but let’s please refrain from holding up that one position any Republican or Democrat holds that might be slightly libertarian as if it’s helping. You can find those all over the establishment. Yet, we have the system we have.

I think the problem with the Free State Project model is it requires such an uprooting of one’s life and uncertainty about making a living, etc. Not everyone is built to live in NH. I wasn’t built to live in FL. I moved back to NY after 10 years, knowing how much more statist it was here (they’ve upped the ante since I moved back – sheesh).

  1. Free Country Project. This is a variation based on what Doug Casey has been saying to individuals for a long time: find a backwards, poor country that presents opportunities and become a big fish in that little pond. It’s conceivable that a bunch of libertarians could try to do this in a small country somewhere and become the so-called “elite” there. But it has the same challenge as the Free State Project times ten.
  1. Free City Project. The same strategy, but in a smaller geographical area/population. This is probably the most realistic, although to some extent we can observe the results now. No, there aren’t pockets of libertarian communities anywhere, but my little rural community in New York, for example, is decidedly pro-Trump. But the residents here do not live any more a Trumpist life than anyone else in deep blue New York State. The county, state and federal governments control so much of daily life that whatever differences a contrary political view make (and I can point to zero here in my town) are minor at best.

Now, if a community my size were taken over by libertarians, instead of Trumpists, what differences could they really make? Maybe get rid of some zoning laws, maybe not. Every county has an urban center and I’d bet it would be hard to change much here without the “permission” of those in the City of Niagara Falls where all the population lives. That’s not even to mention something truly libertarian like privatizing the water utility, police force, or garbage pickup (and I mean really make it private, with free entry into the market, not the way some of these are “privatized” right now).

  1. Civil Disobedience including Agorism. I know people do this now and have some measure of success. But let’s be realistic: the success avoiding taxes and regulations is based solely on flying under the radar. In other words, not doing enough business or acquiring enough wealth for it to be worth the state taking an interest in confiscating it. Were there a way to get a significant number of people to do this en masse, I believe the Nitwits would immediately call in their keepers out of sheer envy, but certainly it might be worth a try.

The problem again is geography. The people doing this would have to be in the same geographical area to make the movement rise above what it is: a few, relatively poor rebels eking out a subsistence or barely above subsistence living too small for the state to care about. It’s analogous to convicts trading contraband inside a prison.

  1. Promoting Homeschooling. The homeschooling population has grown tremendously out of necessity during the Coronasteria. Even before it, the population had approximately doubled in the past twenty years to 2 million. Apart from still being barely more than a rounding error compared to the whole population, I can say from firsthand experience libertarians make up no more a percentage of this subset than they do the general population. My experience has been the most prevalent category are mothers who don’t think their child(ren) would do well in school because of some medical challenge (extreme allergies, autism, etc.). There is also a large contingent of people who object to school merely because they do not teach the Bible as a history and science text. Some of these are conservatives, which means they aren’t libertarians. My wife and I are the only people I personally have met who homeschool for the purposes of providing a libertarian-friendly education.

It is an open question whether there is an opportunity to promote home schooling very hard right now to at least get a larger chunk of the child population out of the public school system. No matter what their parents believe, not having them literally marching back and forth to bells and buzzers can’t but help. But we need to approach this with open eyes.

  1. Armed rebellion. I mention this only because I’m sure someone will bring it up. I don’t think this is a realistic option, not for the reasons the Nitwits give that the state has superior armaments (“because you can’t fight a government army with only rifles and small arms against planes, missiles, etc.”). Obviously, the Afghans have disproven that. But armed rebellion is a bad idea for three reasons:

A) We’re completely outnumbered. Unlike the Afghans, there is no significant portion of the population who would support this. We’d all end up dead and held up as nutcase militia types and leave no freer a world behind us.

B) The history of armed rebellions has not shown them to yield more freedom. I know someone will bring up the American Revolution, but I submit that was much more an example of a population expelling a foreign invader than it was an armed rebellion against the existing political structure. The colonists’ objection was that Parliament was changing the political structure by acquiring new powers. And like the Taliban, the domestic population included a significant percentage (1/3 at least) that supported the revolution. This is not the case here.

Besides the American Revolution, what was the other armed rebellion(s) that resulted in a freer society? I’ll hang up and listen.

C) War is destructive and miserable. If the rebellion had any success, which it won’t, it would destroy all sorts of infrastructure and private property, not to mention innocent lives. War is the means of the state. It is humanity at its nadir. Surely, we non-Nitwits can think of a better idea than resorting to this, can’t we?

This blog will be updated with new approaches as they are suggested.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

No, government isn’t the problem. It’s the Nitwit Mob.

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Thirty-nine years ago, Ronald Reagan said during his first inaugural address, “In this present crisis, government is not the solution to our problem; government is the problem.” It had Conservative, Inc. atwitter for decades, even long after everyone knew the federal government doubled in size under The Gipper.

Both proponents and opponents still talk about Reagan as if he shrank the government when he did precisely the opposite. That’s understandable coming from political operatives or media (but I repeat myself) who have some stake in people believing it. What is intolerable is the tens of millions of nitwits – there really is no other word for them – who believe it themselves, contrary to easily verifiable data.

Thus, this libertarian is led to what some might consider an extraordinary conclusion. Government is not, in fact, the problem.

Contrary to what we in the so-called “liberty movement” would like to think, there is not a large percentage of the population yearning to break free from an oppressive government.

In reality, all those polls showing single digit approval ratings for Congress result from people being angry the government isn’t doing more. I wish I could tell you what you want to hear. But I can’t.

Hundreds of years ago there was a moment when the American population was somewhat suspicious of government, respectful of property rights (the only real rights) and devoted to personal liberty. That sentiment began eroding almost immediately upon the thirteen colonies gaining their independence. It died completely generations ago, but for a few contrarians.

We now live in as close to a pure democracy as any society this size could possibly achieve. By “pure democracy,” I do not mean the overrated distinction between democracy and republic. I mean a system in which the will of the majority is unchecked by any institutional restraint.

When you consider half the population has, by definition, IQs under 100, then you can see why it isn’t difficult for a small, interested minority to combine with that population segment to impose whatever they want upon the rest of us. All they need do is promise safety from some terrifying threat, real or imagined, and the cowardly, obsequious, statist-to-the-core majority will not only accept the plan but demand it.

We are ruled by the Nitwit Mob. Democracy is their means, comfortable slavery their end. Participation is mandatory.

How does one know the members of this mob, you ask? Identifying non-members would make for a shorter answer, but here is an incomplete list of some tell-tale characteristics:

  • Mindlessly repeating talking points they hear on state propaganda broadcasts like The Today Show as if the talking points are their own, well considered opinions.
  • Changing their profile pics to some symbol in politically correct vogue at the moment. Can one say any more emphatically, “I have no identify of my own?”
  • “Thanking the troops” for their freedom – or for anything else for that matter. Thanking is only appropriate when a benefit is conferred. And no American taxpayer has benefited from the troops invading Afghanistan, Iraq, Viet Nam, Somalia, Korea…
  • Starting any sentence with the words, “You need to….” Yes, this is a personal pet peeve, but think about the thought process behind this ubiquitous expression. It’s a passive-aggressive way of ordering someone to do something, often to fall in line with some politically correct or otherwise state-directed behavior.

The appropriate response is something like, “No, I need to do no such thing. If you would like me to do thus and so, I suggest you ask politely, employing the word, ‘please.’ I make no guarantees.”

Or, if time is short, simply, “Fuck you.”

  • Using the word “we” when advancing a political agenda. “We need, we must, we can,” etc. are all words employed by two groups of people: those who wish to control or plunder you and the Nitwits who enable them.

What is the solution to rule by the Nitwit Mob? I don’t know.  But I can tell you what the solution isn’t: trying to reason with them.

We can write all the essays we want, teach all the economics we want, cite all the great thinkers in the libertarian tradition we want. It’s not going to work because the Nitwit Mob doesn’t want to be reasoned with. They don’t want to consider your point of view. No, they don’t find that information you “shared” interesting.

The Nitwits are impervious to these efforts because they are emotionally invested in statism. They want an all-powerful state to care for them like they are livestock and they demand you take your place in the stable next to them (not to mention pay for the stable). Any suggestion this might be immoral, impractical or even detrimental to their own interests might as well be made to a donkey.

In substance abuse programs, it is often said the first step in solving your problem is admitting you have one.  We must admit we have a Nitwit problem compared to which the state pales in comparison. Let’s stop operating under the assumption that if we could just bring them the information evil forces have kept from them, they’d join our cause. They won’t.

As my kung fu Sifu once said, “Well, what you’re doing obviously isn’t working. So, whatever you decide to do, don’t keep doing that.” Consider this a request for proposals. How do we free ourselves from the Nitwits who are too stupid to persuade and too numerous to fight?

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

What proof is there that Covid-19 lockdowns prevent more cases than they cause?

2013-updated_scientific-method-steps_v6_noheaderAs the economic pain from shelter in place orders manifests itself, protests are erupting in many states against what I previously called the absurd proposition of Covid-19 lockdowns. Indeed, as the knock-on effects of these severe disruptions begin to emerge, tensions are going to go much higher.

Supporters of reopening the economy make many arguments, including that the threat of Covid-19 is overstated and that the government “cure” will be worse than the disease. Their opponents smear them as “anti-science,” ignorant rubes. But that begs the question: where is the science supporting the theory these lockdowns have prevented more infections than they caused? I don’t see it; nor do I expect I will.

To be clear, the pro-lockdown crowd, which includes politicians, public health officials, and much of the media, have not necessarily said there will be less cases overall because of the lockdowns. They have said the lockdowns will “flatten the curve,” meaning not as many people will get a severe illness from the virus at the same time. This, they argue, will prevent hospitals being overwhelmed with more cases than there are beds at the peak of the infection cycle.

This is certainly a plausible theory, but that is all it is. One can also construct a plausible theory that the lockdowns have caused more cases during their durations than if they hadn’t been ordered at all or if they only applied to high risk people (elderly, people with underlying conditions, etc.).

How? Well, the CDC says that prolonged exposure to the virus increases one’s chance of contracting it. Therefore, anyone ordered to stay in their homes with people already infected had a much higher chance of being infected than if they or the people they were confined with went to work every day as usual.

We now know the virus was present in at least two people who died as far back as early February, long before the first shelter in place order in any state. We also have strong evidence that far more asymptomatic people have already been infected with the disease than previously thought.

A study by Stanford University concluded there may be as many as 81,000 cases  in that county, with only 1,094 reported. A separate study of 397 residents of a Boston, MA homeless shelter showed a similar result. 146 of the 397 tested positive for the virus. 100% of them were asymptomatic.

The pro-lockdown crowd has interpreted these facts predictably – lockdowns must remain in place because people who don’t even know they have the virus may spread it.

But there is another, glaringly obvious conclusion to be drawn from these studies and the knowledge the virus has been here since at least early February. Lockdowns are forcing uninfected people to have prolonged exposure to infected people.

That’s not to say the lockdowns don’t prevent more infections than they cause. There must be some number of people who have avoided infection by staying in their homes and not going to restaurants, bars, work, etc. But there is just as surely some number of people who became infected because of the lockdowns. Evaluating the lockdown policy depends at least in part upon which of those numbers is larger, as well as the damage done by secondary negative effects of the lockdowns.

Here is the problem. No politician or public health official is interested in that second number. They’ve made their decisions and there is zero incentive for them to have any intellectual curiosity about their validity. On the contrary, they would face public lynching, literally or figuratively, if it turned out their policies not only wrecked the economy but achieved the opposite public health results they intended.

Yet, anyone who believes in science should be demanding rigorous proof that these lockdowns didn’t cause more infections than they prevented while they were in place. And anyone who believes in individual liberty must put the burden of proof on those who would infringe upon it, not on those who merely seek to exercise their inalienable rights.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

The absurd proposition of Covid-19 lockdowns

brand-quarantine-coronavirus-CONTENT-2020

Among the most glaring deficiencies of cherished ideals like democracy and “the rule of law” is they allow the dumbest policies to be enacted with the consent of but a tiny percentage of people with IQs above 100. And most of that tiny percentage have ulterior motives.

Boy, are we ever feeling that pain now.

Somehow the American public has accepted without question the bizarre proposition that asymptomatic people must prove they don’t have a disease before exercising most of their rights. That is the reasoning behind locking down all of society until widespread testing or a vaccine is available.

Liberty is dead until this evil notion is banished.

On the contrary, it is the responsibility of people at high risk of being seriously affected by this virus to protect themselves or be protected by their loved ones. They don’t have a right to lock up the rest of the world in a futile attempt to avoid all risk.

Not possessing this power individually, they can’t possibly delegate it to a government, even if you believe in that hogwash popularly known as representative government.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

The government can’t make realities like scarcity go away

magicWhenever I point out the predictable (and often predicted) negative consequences of a particular government intervention, someone will invariably come back with, “Oh yeah, what’s YOUR solution, smartypants!”

Like that’s some sort of zinger.

In almost every case, the inquisitor is looking for me to propose an alternative government solution, when the obvious recommendation implicit in my post was, “Stop letting the government…”

No matter how high the past failures mount up (drug war, education, health care, war on “terror”), they’re always ready to call in the government again.

It’s almost as if they can’t confront the reality that, as the great John Bender put it, “The world is an imperfect place; screws fall out all the time.” They are constantly looking for someone, usually a politician, to wave a magic wand and make realities like scarcity go away.

How many examples will it take? How many thousands of repetitions do they require before every day isn’t their first day?

What would it take for people like this to acknowledge:

1. Some problems can’t be solved. We just have to learn to live with them.

2. In a world of scarce resources, the voluntary cooperation of the market always produces the best outcomes.

3. In that same world, the government always produces the worst outcomes.

Freedom is impossible without confronting reality.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

When the Coronavirus Shutdown is over, will anyone blame their governments for the economic devastation they caused?

The Dow and S&P 500 were both down nearly eight percent, the largest drop since 1931 according to data from LPL Research. FULL CREDIT: Fotosearch/Archive Photos/Getty Images

The expectation that governments (local, state, federal) allowing people to go back to work in a few weeks or a month will mean the economy will immediately be just like it was in January is delusional.

Long-term and permanent damage is being done. Some businesses will close. Some will never rehire all the staff they once employed.

Risk aversion will skyrocket because there is no reason to believe governments won’t do this again in the future, perhaps perennially over less and less significant threats.

Would you put your life savings into a business knowing the government might close it down indefinitely next flu season?

Will anyone bother to track the increased suicide and drug overdose rates caused by massive unemployment?

Will anyone bother to track the increased mortality rates of other illnesses untreated, either during the shutdown or because of the government-inflicted economic depression after it?

Will anyone question the wisdom of previously allowing the FDA to limit competition in drugs and medical supplies (face masks, ventilators, etc.) resulting in shortages when we needed them most?

Will anyone point to these and other obvious negative consequences of government policies and not ask for more government to address them?

In other words, is there any chance we emerge from this epidemic bearing any resemblance to a relatively free and prosperous society?

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

‘Inflation is low’: The Federal Reserve’s Scam of the Century

MW-HG082_jay_po_20190321070916_ZQIn the wake of the federal government’s $2 trillion fiscal monstrosity and the Federal Reserve’s even more monstrous promise to create new money and credit with no limit whatsoever, it is a good time to reiterate a point I’ve made before: the claim that “inflation” has been low over the past ten years is a scam.

No, I’m not talking about the real definition of “inflation” being the creation of new money and credit, rather than the resulting rise in prices. Nor am I merely claiming the inflation rate is underreported due to all the tricks played with the numbers (hedonic adjustments, substitution, etc.).

I’m saying the claim that prices are not higher because of all the previous quantitative easing is a bald-faced lie. It represents perhaps the biggest gaslighting of an entire population in human history. And because it’s been so successful, the Fed is about to do it again.

The Fed reports the consumer price inflation rate over the past ten years as ranging from about 1.5% to 2.4%, not counting a few outlying years. The average from 2010 – 2019 was 1.77%. The Fed then tells us that low number proves its massive inflation of the currency during the last decade “hasn’t resulted in inflation,” by which they mean a rise in the price of consumer goods. But it has.

The key to this deception is its false premise: that one should compare the prices of goods and services this year to what they were last year. That’s the wrong comparison.

The correct comparison would be between what prices are today vs. what they would be without quantitative easing. Perhaps they wouldn’t be higher at all. Perhaps they would be lower.

Perhaps they should be lower.

Obviously, we don’t get to do a controlled experiment where we relive the past ten years with the Fed’s printing press shut down. But we can look at other factors influencing prices and draw some reasonable conclusions.

One major factor is automation. Donald Trump got elected largely based on his claim that unfair trade deals have destroyed American manufacturing, sending manufacturing jobs overseas. This may play well with unemployed Rust Belters, but there is one problem: American manufacturing hit its all time high in 2007, long after NAFTA and long before Trump got into politics.

It wasn’t trade deals that took away the jobs; it was automation. That means the American economy is producing far more manufactured goods with far fewer people. And this trend isn’t limited to the manufacturing sector. It is ubiquitous across the economy, from robots in warehouses to automated kiosk ordering in fast food restaurants.

So dramatic has been this trend that another presidential candidate, Andrew Yang, campaigned on the idea that we need a “universal basic income” because of all the jobs being eliminated.

Yang’s argument rests upon an old fallacy, but one thing is certain: Automation represents a huge deflationary force on consumer goods prices, as does a host of other trends like ever more powerful computing capabilities, web retail replacing brick and mortar stores, etc.

For these reasons and others, GDP has continued to rise, albeit modestly, during the mass retirements of the baby boomers. So, the increase in total goods produced combined with the decreased demand represented by retiring baby boomers should result in falling consumer prices.

Instead, the Fed’s QE and other monetary inflation interventions – injecting massive amounts of new dollars into the economy – have overcome massive price deflationary forces to make consumer prices rise modestly when they should have been falling.

Falling prices raise real wages, even when nominal wages don’t rise. To put it in topical terms, if the price of toilet paper falls from $2 per roll to $1 dollar per roll, you can buy twice as much toilet paper without getting a raise. Ditto consumer goods in general.

The Fed has a whole story about why falling prices would be catastrophic. But falling prices are what naturally happens as society produces more per capita.

Don’t believe me? Take another look at the Fed’s inflation table, this time from 1800 – 1899, most of which time the U.S. was on a gold standard.

If you make a spreadsheet multiplying a basket of goods costing $100 in 1800 by the inflation rate each year, you’ll see something quite startling.

Nevermind, I did it for you.

That’s right. Prices fell dramatically over the course of the 19th century. A basket of goods that cost $100 in 1800 cost only $48.94 in 1899. That means one could buy twice as much with the same wages in 1899 as one could in 1800.

Falling prices are the natural result of a more productive economy. But as the Fed’s inflation table also shows, it has always overcome this natural tendency and made prices rise (the Fed was created in 1913). That same basket of goods that fell from $100 in 1800 to $48.94 in 1899 cost $1,498.45 in 2019. It should have cost something like $24.00, or even less considering accelerating innovation.

Yes, monetary inflation eventually raises wages, too, but always more slowly than it raises consumer goods, making wage earners poorer while the beneficiaries of inflation – mostly in the financial sector – get richer.

Get it yet? You’re being ripped off on a massive scale. You’ve been ripped off by the monetary system your whole life as automation and other innovations allowing society as a whole to produce more goods and services should have made prices fall even faster than usual.

You’ve been had. And now the Fed is going to use its disinformation about consumer prices to take you again.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

The Government Declares War on Market Prices Just When We Need Them Most

Price Gouging Summed UpMarket prices are the foundation of civilization. They are the signal that tells producers how much of any one thing to produce. They tell consumers how much to consume or whether to consume a product at all. The reason retailers don’t normally throw away eighty percent of their stock is because market prices tell them how much to have on hand at any one time to meet current demand.

When they miscalculate and buy a little too much, they still don’t typically waste their stock. They put it on sale and meet the demand at a lower price.

To the extent the market is allowed to set prices, producers generally produce what consumers want to buy in the quantities they want to buy. When all supply is consumed and large amounts of consumers are not left with unmet demand, it is referred to as the market “clearing.”

The government is always and everywhere at war with market prices. Regulations creating barriers to entry limit supply, artificially inflating prices. Price controls, including “anti-price gouging” laws override market prices, creating shortages. Subsidies to producers (farm subsidies, for example), allow producers to limit supply, artificially inflating the price.

Federal Reserve monetary inflation juices up demand, both on the consumer side and the producer side, creating overconsumption, low savings rates, malinvestment and imprudent debt. This ongoing war on the market price of money, a.k.a. “the rate of interest” does all sorts of damage in the real economy. It directs companies to borrow money to expand production of products for which there is no real demand. That in turn sends workers into these zombie industries.

Even without an external problem like the coronavirus (and the much more harmful government response to the coronavirus), bubbles created by monetary inflation eventually pop. Then all the malinvestment is exposed, the imprudent debt defaults, and the workers employed in unprofitable ventures get laid off. This is the market telling everyone where the mistakes were made.

Right now, we have two economic crises at once. We have state governments literally ordering people to stop producing goods and services in an attempt to combat the spread of the virus. Whether that is the best course of action is a subject for a different time. That it is doing massive economic damage is indisputable.

That damage has caused a second crisis: it has popped the economic bubble blown up by the Federal Reserve over the past twelve years. The market is responding by trying to adjust prices to their market levels. It is lowering the artificially high prices of stocks. It will lower the artificially high price of real estate. The price of oil has fallen both because of the anticipated reduced demand and the increased supply from Russia and OPEC increasing their oil production.

But not all prices are falling. Given the surge in demand, the market is trying to raise the price of items like toilet paper, certain medical supplies and other essential items.

All these price adjustments by the market are essential for our well-being. They are the cure for the economic disease caused by the government response to the virus and the previous twelve years of monetary inflation and artificially low interest rates.

What is the government doing in response? It is escalating its usual, conventional war on market prices to a nuclear war. It is punishing suppliers of essential goods for raising prices. It is ramping up monetary inflation to historic levels to keep stock prices artificially high and unprofitable businesses alive to go on producing products for which there is no demand. At a time when market prices are more essential to our survival than ever, the government is doing more to override them than ever.

This is not an academic theory that only works on a graph in a classroom. This plays out before our very eyes in the form of essential goods not available to us at any price.

Why is there no toilet paper available? Ask most people and they will say it is because of “hoarders.” These are people who bought far more than they needed in anticipation of future shortages. The people who arrived at the store after the toilet paper is sold out vilify them. Others might just call them prudent.

The same people who vilify hoarders also vilify “price gougers.” They don’t seem to grasp the obvious cause/effect relationship here. If it weren’t for artificial limits on price, i.e., “anti-price gouging” laws, the price of toilet paper would rise dramatically with the surge in demand and the so-called hoarders would not be able to buy nearly as much. That would leave far more for everyone else. The toilet paper market would find the optimal price level where the greatest number of people could get what they need.

We may be able to laugh off the shortage of toilet paper, but when it comes to food, water, medical supplies and other important items, shortages are no laughing matter. Why are there not enough ventilators right now? Because government regulation raises the price of entry into the market and lengthens the lead time for new production. If not for these artificial barriers, hundreds of new ventilator producers would seize the opportunity to enter the market and sell ventilators.

Instead, the government is considering ordering companies who make related items to make ventilators instead. That will only result in less efficient production of ventilators and shortages in the products those manufacturers would otherwise produce.

This is only the tip of the iceberg in terms of the government overriding market prices. Every economic policy the government undertakes is at its root an attempt to do so. Every single one makes us poorer than we would be if the government did nothing.

The free market doesn’t produce perfect outcomes. It’s an imperfect world. But a free market produces the best possible outcomes in the real world of scarcity and occasional disasters. Prices are the lifeblood of the free market. They are what make it produce the best outcomes. Every time the government overrides market prices, it makes things worse – in most cases, unfortunately, to thunderous applause.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.