The newest posting at Libertarianism.org is a 1979 speech by Nathaniel Branden, from the largest-ever convention of the Libertarian Party, titled “What Happens When the Libertarian Movement Begins to Succeed?” Alas, it’s audio-only, unlike all the classic videos at Libertarianism.org. But it’s still vintage Branden, and quite interesting. The site’s multimedia editor, Evan Banks, drew my attention to this part of the speech (starting around 22:22) that I think has a lot of relevance to the work we do at Cato and the attempts at persuasion by libertarians generally:
So it becomes very interesting to ask ourselves – and obviously I don’t wish to imply this applies to all of us, it doesn’t – but these are trends to watch for in ourselves and in our colleagues. So it becomes interesting to ask ourselves: Okay, suppose that I or my friends or my colleagues, while genuinely believing in these ideals, at the same time have this unrecognized negative self-concept of which Branden speaks. That means that my self-sabotaging behavior wouldn’t happen on a conscious level, but it would happen. How would it happen? What kinds of mistakes might we make?Well, for example, suppose that you’re talking with people that don’t already share your views, and yet you believe your views have evidence and reason to support them. Now, if you really believe that you’re in this to win; to see your ideas prevail, then you give a lot of thought to how to become a good communicator, how to reach human minds, how to appeal to human intelligence. What do you do if you’re really in it to keep proving that you’re a heroic–but doomed–martyr? What do you do if your deepest belief [about people that don’t already share your views] is, “You’re never going to get it. You’re hopelessly corrupt. I may be one of the two or three last moral people on Earth. What am I doing at this party anyway?”[laughter]You engage in a lot of flaming rhetoric – you talk about statists, you talk about looters, you talk about parasites in contexts where you KNOW this language is Greek to your listener. Why should you care, your dialogue isn’t directed to him anyway – it’s directed to the spectator – you watching you being a hero. HE knows what you mean – don’t get confused over the fact that your listeners don’t, the show isn’t for them anyway.
So, one of the signs that we want to look out for, and one of the most important signs, happens in how we approach communication. Are we really out to reach human beings? Are we really out to build a bridge to somebody whose context may be very different from our own? Do we still remember that a lot of what we now regard as self-evident once upon a time wasn’t self-evident? Or do we walk into a conversation on the premise: I’ll give you one chance, after which you’re irredeemably evil?[laughter]You see, that could be called a communication problem, but I think it would be too superficial to describe it in that manner. I would call it a “phony image” problem: you’re not in it to win, you’re not in it to persuade, you’re not in it to convince, you’re not in it to reach out and touch another human mind; you’re out to make yourself out as the lowly unappreciated misunderstood heroic martyr you always knew you were, ever since your mother gave more attention to your brother.[laughter]Perhaps communication is one of the chief areas where this problem manifests. Another example in the area of communication, it occurs to me, is libertarians who cannot seem to come off the level of extreme generality. Once they have made up their mind that – for example – welfare programs are inappropriate or improper, and ultimately immoral, that’s the end of the conversation. They’re not interested in dealing with the perfectly natural questions that perfectly civilized decent people are going to ask next about the very real problems of people in our particular world. They don’t think in terms of responsible answers, they don’t think in terms of voluntary solutions, they don’t think in terms of developing highly concrete, highly specific libertarian alternatives.Why don’t they? Because they never believed they could persuade anyway. To invest that much thinking you have to really think you could make a difference. To do your homework, to master the subject, to know how to argue beyond the very general level you have to really believe you can make a difference.What if you don’t, BUT you want to play in the game? You climb up on your white horse, confine [yourself] to generalities, and curse those who aren’t convinced.
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Once a member of Ayn Rand’s inner circle, Nathaniel Branden has played a prominent role in spreading the ideas of Objectivism, including founding the Nathaniel Branden Institute. He is also a prominent psychotherapist and is well-known for his work establishing the self-esteem movement in psychology.
In this audio-only lecture from the 1979 Libertarian Party Presidential Nominating Convention, Nathaniel Branden talks about “how self-concept determines destiny” and shares his own thoughts on coming challenges to the libertarian movement. He also takes questions from the audience.
View full post on Libertarianism.org
Is the coming financial collapse going to be inflationary or deflationary? Are we headed for rampant inflation or crippling deflation? This is a subject that is hotly debated by economists all over the country. Some insist that the wild money printing that the Federal Reserve is doing combined with out of control government spending will eventually result in hyperinflation. Others point to all of the deflationary factors in our economy and argue that we will experience tremendous deflation when the bubble economy that we are currently living in bursts. So what is the truth? Well, for the reasons listed below, I believe that we will see both. The next major financial panic will cause a substantial deflationary wave first, and after that we will see unprecedented inflation as the central bankers and our politicians respond to the financial crisis. This will happen so quickly that many will get “financial whiplash” as they try to figure out what to do with their money. We are moving toward a time of extreme financial instability, and different strategies will be called for at different times.
So why will we see deflation first? The following are some of the major deflationary forces that are affecting our economy right now…
The Velocity Of Money Is At A 50 Year Low
The rate at which money circulates in our economy is the lowest that it has been in more than 50 years. It has been steadily falling since the late 1990s, and this is a clear sign that economic activity is slowing down. The shaded areas in the chart represent recessions, and as you can see, the velocity of money always slows down during a recession. But even though the government is telling us that we are not in a recession right now, the velocity of money continues to drop like a rock. This is one of the factors that is putting a tremendous amount of deflationary pressure on our economy…
The Trade Deficit
Even single month, far more money leaves this country than comes into it. In fact, the amount going out exceeds the amount coming in by about half a trillion dollars each year. This is extremely deflationary. Our system is constantly bleeding cash, and this is one of the reasons why the federal government has felt a need to run such huge budget deficits and why the Federal Reserve has felt a need to print so much money. They are trying to pump money back into a system that is constantly bleeding massive amounts of cash. Since 1975, the amount of money leaving the United States has exceeded the amount of money coming into the country by more than 8 trillion dollars. The trade deficit is one of our biggest economic problems, and yet most Americans do not even understand what it is. As you can see below, our trade deficit really started getting bad in the late 1990s…
Wages And Salaries As A Percentage Of GDP
One of the primary drivers of inflation is consumer spending. But consumers cannot spend money if they do not have it. And right now, wages and salaries as a percentage of GDP are near a record low. This is a very deflationary state of affairs. The percentage of low paying jobs in the U.S. economy continues to increase, and we have witnessed an explosion in the ranks of the “working poor” in recent years. For consumer prices to rise significantly, more money is going to have to get into the hands of average American consumers first…
When The Debt Bubble Bursts
Right now, we are living in the greatest debt bubble in the history of the world. When a debt bubble bursts, fear and panic typically cause the flow of money and the flow of credit to really tighten up. We saw that happen at the beginning of the Great Depression of the 1930s, we saw that happen back in 2008, and we will see it happen again. Deleveraging is deflationary by nature, and it can cause economic activity to grind to a standstill very rapidly.
During the next major wave of the economic collapse, there will be times when it will seem like hardly anyone has any money. The “easy credit” of the past will be long gone, and large numbers of individuals and small businesses will find it very difficult to get loans.
When the debt bubble bursts, cash will be king – at least for a short period of time. Those that do not have any savings at all will really be hurting.
And some of the financial elite seem to be positioning themselves for what is coming. For example, even though he has been making public statements about how great stocks are right now, the truth is that Warren Buffett is currently sitting on $49 billion in cash. That is the most that he has ever had sitting in cash.
Does he know something?
Of course there will be a tremendous amount of pressure on the U.S. government and the Federal Reserve to do something once a financial crash happens. The response by the federal government and the Federal Reserve will likely be extremely inflationary as they try to resuscitate the system. It will probably be far more dramatic than anything we have seen so far.
So cash will not be king for long. In fact, eventually cash will be trash. The actions of the U.S. government and the Federal Reserve in response to the coming financial crisis will greatly upset much of the rest of the world and cause the death of the U.S. dollar.
That is why gold, silver and other hard assets are going to be so good to have in the long-term. In the short-term they will experience wild swings in price, but if you can handle the ride you will be smiling in the end.
In the coming years, we are going to experience both inflation and deflation, and neither one will be pleasant at all.
Get prepared while you still can, because time is running out.
View full post on The Economic Collapse
Steve H. Hanke
Iran’s Guardian Council announced yesterday that former president Ali Akbar Hashemi Rafsanjani has been barred from Iran’s presidency poll—reportedly due to his old age and debilitating health. In recent weeks, speculation over a Rafsanjani comeback bid had spurred some optimism among Iranians who recognize that their broken economy desperately needed a jolt. Some Iranian voters have described him as a “master of the economy” and the solution to their economic woes. However, a closer look at Iran’s misery index shows just how fatally flawed this perception is.
There is little doubt that the economic policies of current president Mahmoud Ahmadenijad have been a disaster. Even before the United States and European Union imposed economic sanctions over Iran’s nuclear program, Iran’s economy was hardly in good shape.
For decades, the Iranian economy has been cobbled together by a coalition of conservative clerics and Revolutionary Guard commanders. The resulting bureaucratic monstrosity has employed mandates, regulations, price controls, subsidies, a great deal of red tape, and a wide variety of other interventionist devices. Not surprisingly, Iran ranks near the bottom—145th out of 183 countries—in the World Bank’s Doing Business 2013 Ranking, which measures the vitality of free markets and the ease of doing business.
You might wonder, with all this sand in the gears, how has the Iranian economy been able to sustain itself and grow (until recently)? The answer is—you guessed it—oil.
Returning to Rafsanjani—the so-called master of the economy—the record, as revealed by the Iranian misery index, suggests that he would not have been able to fix Iran’s current economic mess. His time in office was, simply put, an economic failure.
So, just what is the Iranian misery index? The index is the sum of the inflation, interest and unemployment rates, minus the annual percentage change in per capita GDP. Iran’s misery index for the 1991-2012 period is presented in the accompanying chart:
It must be stressed that Iran’s true inflation, interest, and unemployment rates are all probably higher than those reported by the government. In consequence, the true level of the misery index is probably much higher than the one reflected in the chart. That said, the pattern of “ups” and “downs” in the index is reliable.
Clearly, the Rafsanjani years were a bit of a rollercoaster ride, with a dramatic increase followed by a sharp reduction, and then a final up-tick in the level of economic “misery.” By the end of his term, Rafsanjani had actually raised the misery index score from an initial 34.41 to 48.28—in short, during the Rafsanjani years, economic misery increased. Indeed, high inflation rates and slow economic growth were the defining characteristics of his tenure in office.
Although current president Ahmadinejad has undoubtedly left the Iranian economy in shambles, Rafsanjani’s presidency was, in economic terms, hardly anything to write home about.
Even before the brief spell of hyperinflation in October 2012, the Iranian economy was nearly crippled by high unemployment rates and economic recession. It is little wonder, then, that the Iranian people want a “master of the economy” for their next president. Yet, it is not a “master of the economy,” but an economic liberator that the Iranian people should be searching for. Until Iran pares back its Soviet-style command economy, it is doubtful that anyone will be able to “master” the Iranian economy.
View full post on Cato @ Liberty
Lanworth cautious over world wheat prospects
Lanworth re-opened doubts over the Black Sea grains harvest, and stoked concerns over Australia too, as it cautioned that the world wheat harvest would narrowly fail to cover demand in 2013-14.
The analysis group, which uses satellite imagery to a large extent in its forecast, pegged the world wheat crop at 694.3m tonnes, a sharp rise on last year’s harvest, but nearly 7m tonnes below the US Department of Agriculture’s initial estimate, revealed last week.
It would also fall marginally below demand, fostering a small drop in world stocks over 2012-13 rather than the rise to 186.4m tonnes that Washington foresees.
Lanworth was more upbeat than the USDA on the harvest in the former Soviet Union state of Kazakhstan, upgrading its estimate by 700,000 tonnes to 17.4m tonnes thanks to "recent above-average precipitation and cool temperatures" which have boosted hopes in major producing regions.
However, on most other major producers it was more downbeat, including on Kazakh’s regional peers, Russia and Ukraine, which investors have increasingly focused on thanks to dry weather in some important grain-growing areas.
‘Much lower soil moisture’
Recent rains had been seen by many observers as improving crop prospects, with consultancy Ikar earlier this week raising its forecast for Russia’s wheat crop by 1.3m tonnes to 53.8m tonnes, while the Russian Grains Union lifting its range estimate for the overall grains harvest to 90m-100m tonnes, from 90m-95m tonnes.
But Lanworth kept its forecast for the Russian crop at 50.8m tonnes, flagging soil moisture levels which are "much lower than last year" in the Southern district, a key source of the country’s wheat exports.
For Ukraine, Lanworth cut its wheat harvest forecast by 1.6m tonnes to 20.3m tonnes, "based on expected warm conditions" and flagging "dry conditions that occurred from April through the first half of May".
The downgraded forecast is in line with an estimate from UkrAgroConsult of 20.2m tonnes, but below the USDA figure of 22.0m tonnes.
‘Approaching crunch time’
Separately, at broker RJ O’Brien, Richard Feltes said: "We are approaching crunch time on former Soviet Union rains, so keep your eye on rains across Ukraine and Russia," flagging talk that Russia has dropped wheat offers for October onwards in what would be seen as a sign of declining confidence in the crop.
Agritel, the Paris-based consultancy, which has a Ukraine office, said that in Russia’s South, "the water deficit should have an impact on the yields of the spring crops.
"If the situation does not improve in the coming days, winter crops could be impacted too."
FCStone said it "would like to see additional rains in dry impacted areas of the Russian wheat belt" before backing the ideas of upgraded crops.
Lanworth also reduced its forecast for Australia’s wheat harvest by 200,000 tonnes to 24.1m tonnes, even amid rains which some commentators believe have improved prospects for the sowing season.
"Though recently updated weather outlooks indicate a return to normal precipitation during the second half of May, Lanworth notes a 15% probability of extreme low production due to dry conditions during wheat planting and yield formation," the group said.
"Since 2000, wheat harvested area has declined from Abares’ initial projections as precipitation during and after May has fallen below average."
Abares, the official Australian commodities bureau, has pegged domestic wheat area at 13.83m hectares, a rise of 4.5%year on year.
Lanworth estimated the Canadian crop at 28.1m tonnes, below Washington and Toronto forecasts.
Statistics: Posted by yoda — Wed May 22, 2013 1:41 pm
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Since the dollar continues to be the world reserve currency, and since the mega banks float like clouds over the entire planet paying little attention to borders, we shouldn’t be surprised. But that the Fed has essentially given away $1 trillion to non-American banks is pretty amazing . (Not that American banks are any better than the foreign ones of course.)
What happens when the global banks don’t get their sugar? QE, despite what some may argue (though rarely in public) can’t go on forever. It will have to end at some point.
A few days ago I heard something about Bernanke and company trying to engineer a “soft landing” post QE. When I hear talk of “soft landings” my blood pressure usually lifts a bit as soft landings rarely occur, and are even more rarely “engineered.”
If the entire world is addicted to what the Fed is pushing (and we have long known that it is) the whole world is going to feel a coordinated withdrawal too as QE “ends.”
View full post on AgainstCronyCapitalism.org
Seeking to draw attention to their…uh…“plight,” the U.S. sugar lobby took to Congress this week to protect their interests and defend against an amendment to the Senate farm bill that would roll back the wasteful and corrupt U.S. sugar program. But in so doing, Big Sugar has used a tactic that would be more appropriately used by their pro-reform opponents. According to a Congressional Quarterly article today [$],
…the American Sugar Alliance, a trade group for the sugar industry, is taking no chances. In a statement, the group said it delivered replicas of 1940s, World War II-era sugar rationing coupons to Senate offices.
Rationing happened because the United States was dependent on foreign sugar at the time, the group said. Changes like those proposed by Toomey and Shaheen could once again lead to a flood of imported sugar and the loss of the domestic industry, said Ryan Weston, the Sugar Alliance’s chairman. [emphasis mine]
Actually, sugar is already rationed already in this country. The USDA tightly controls the domestic supply of sugar through “marketing allotments” and sugar imports through a system of tariff-rate quotas. These interventions cost American sugar consumers and sugar-using industries billions of dollars a year through higher-than-world-average sugar prices. As my colleague David Boaz blogged recently, it really is a sweet deal for the sugar growers. Nothing rational (sorry) about it.
View full post on Cato @ Liberty
Big conferences can be enervating, especially when large panels are populated with establishment political figures spouting the conventional wisdom. However, the Doha Forum, which I have been attending in Doha (surprise!), Qatar, sported a burst of spontaneity at a workshop on the role of Islamists in the Middle East.
While competing discussions of economics and technology were sparsely attended, the Islamist workshop overflowed. Islamists from Bahrain, Egypt, and Tunisia made the case that Muslim fundamentalists in those countries were dedicated to democracy and intended to be inclusive of all within their societies.
Most in attendance—at least those who asked questions (or made comments in the guise of asking questions)—were skeptical. The audience included many Westerners, but fellow Arabs led the attack. Attendees from Jordan and Kuwait, which have been at the periphery of the Arab Spring, were particularly critical. A Gulf journalist complained about Islamists who said one thing for his broadcasts but behaved differently in power (no American politicians have ever behaved that way!). A young female professional complained about the treatment of women, who helped overthrow authoritarian regimes but then faced increased discrimination.
The panelists stood their ground, but they didn’t seem to win many converts. So many people wanted to comment that the session went overtime a half hour. Both sides wanted to keep going, but the translators insisted that they needed a break before the next session.
While the tension between Islamic fundamentalism and revolutionary democracy has challenged U.S. policy, it even more directly affects those who live in the Middle East. It’s one thing to toss overboard archaic monarchies if the result will be liberal societies with democratic political systems. Revolution is quite another matter if the consequence will be fundamentalist societies ruled by authoritarian democracies.
The session reached no conclusion. But it highlighted a debate that will only intensify as the Arab Spring continues to reverberate throughout the region.
View full post on Cato @ Liberty