Hollering For Liberty

Just checked my 401(k) and was looking at investment performance over my funds … good thing I’m (relatively) young.

This post is just awesome! When this question was asked at the debate I was thinking something similar but couldn’t have articulated it this well. For those too lazy to follow links, I’m going to copy and paste it in full, but be sure to check out the blog because at a glance it looks quite interesting.
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From the Wikipedia entry on “Subjective theory of value”:

The subjective theory of value (or theory of subjective value) is an economic theory of value that holds that “to possess value an object must be both useful and scarce,”[1] with the extent of that value dependent upon the ability of an object to satisfy the wants of any given individual. “Value” here refers to exchange value or price. The theory recognizes that one thing may be more useful in satisfying the wants of one person than another, or of no use to one person and of use to another.[2]

1. Moser, John. The Origins of the Austrian School of Economics
2. Menger, Carl. Principles of Economics

For instance, Starbucks coffee has a price of about $2 a cup. Doesn’t that mean the value of a cup of Starbucks is $2? Well, not exactly. You see, if I choose to buy the coffee for the $2 price, then it is worth more than $2 for me at the time. But say I’m low on cash — I only have $25 and I have to pick up formula for the baby before I get home. In that case, the $2 is worth more to me than a cup of coffee. So the value of something is dependent upon the circumstances for the individual considering engaging in an exchange.

I will add that in any exchange, the determining factors may include intangible factors as well. For instance, a person might exchange something of greater value to himself for something of lesser value if that person might expect to gain something intangible from the exchange as well. For example, I might trade a meal I ordered with one my wife ordered if she does not find her meal satisfactory. The meals are not the only factors in the exchange; the satisfaction I gain from pleasing my wife also factors into the equation.

The other factor involved in an exchange is time preference. One obvious example here is a mortgage transaction. The person taking out the mortgage would rather have a sum of money now that a greater sum of money later, because they need it to buy a house. The bank, however, has money sitting around (well, unless they take big risks because they are expecting the government to bail them out if they get into trouble) and would rather invest it in the hopes of getting more money back in exchange later.

Enter Wendy’s, who was gracious enough to provide this wonderful example of subjective value theory.

Note: Please disregard the partial religulous commercial before the clip.

The moral of the story is this: if the all the bad debt Washington bureaucrats are wanting to buy as part of the bailout package had any value to anyone, the current owners could sell them and improve their capital positions. Instead, the government is going to buy them on behalf of the people, with the assumption that all the greedy, intelligent investors in the world are missing out on an opportunity to make some money when the market recovers. To illustrate the point, check out this site. And the Senate acted despite the people because they think they are smarter than that guy in the Wendy’s commercial.

This is your government!

There is so much I could post about all the bailout issues and all the hype and events of the last week.  If you’re interested in my opinion, it is concisely and brilliantly articuled by Martin Masse here, Jeffrey Miron here, and Pete Boettke here.  Also, any of the dozens of Ron Paul videos or articles readily available to anyone looking will sum it up too, but perhaps a little less clearly since Paul tends to be a little more abstract in interview due to the amount of information he has to get out quickly.

My basic view, without going into details, is that any action taken by any government institution must first ask and answer the following questions.

1) What is the problem, and what is its scope?
2) What caused the problem?
3) How do we fix any systemic causes of the problem? Or put another way, how do we treat the disease?
4) Lastly, how do we treat the symptoms of the problem?

Our leaders never took the time to get the right answer to the second question.  The problem is an inherent flaw in the Federal Reserve system that drives economic bubbles.  If the Congress were a doctor, it would be sending home a patient dying of cancer with a bottle of Tylenol, because it never took the time to try to figure out what caused the pain.
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In commemoration of your birthday, a victory for the people against government intervention in a crisis.  You dedicated your life to showing that the market works when government gets out of the way, and it is finally starting to pay off.

Government has always had a socialist foot in the door of American capitalism.  Today it tried to kick the door open.  But it was met by ‘we the people’, armed with the strength of the knowledge that you and your students provided us, who slammed it back on that fascist foot.  And it is your knowledge that, God willing, will let us shut and lock the door on that specter one day.

No matter what happens from here, rest assured that the remnant will not relent.

I grew up with Pink Floyd, and always loved them. My recent political views have brought new light to a lot of old music, and Floyd is no exception. One song that has touched me differently as of late is “Us and Them” from Dark Side of the Moon, although I always knew it from The Delicate Sound of Thunder. Yesterday saw the departure of Richard Wright, Floyd’s keyboardist and sometimes vocalist, who wrote the music to “Us and Them”, as well as many other great songs.

Us and Them
And after all we’re only ordinary men
Me, and you
God only knows it’s not what we would choose to do
Forward he cried from the rear
and the front rank died
And the General sat, and the lines on the map
moved from side to side

Black and Blue
And who knows which is which and who is who
Up and Down
And in the end it’s only round and round and round
Haven’t you heard it’s a battle of words
the poster bearer cried
Listen son, said the man with the gun
There’s room for you inside

Down and Out
It can’t be helped but there’s a lot of it about
With, without
And who’ll deny that’s what the fightings all about
Get out of the way, it’s a busy day
And I’ve got things on my mind
For want of the price of tea and a slice
The old man died

I love this guy (Penn Gillette - though Beck’s okay in my book, too). Great interview. I don’t really understand the hesitancy of Beck to support the rally. He is, after all, supporting many of the same causes every night on his show. A few crazy people shouldn’t stop him from putting his stamp of approval on the event that will hopefully serve as the major catalyst for the advancement of the cause of liberty in our time.

And you and I get to pay for it.

Ron Paul was on his game yesterday (Wednesday - 7/16).  He appeared first on C-SPAN where he confronted Fed chairman Ben Bernanke in the most stunning 6-minute indictment of the Federal Reserve using summarized Austrian economics.  At one point, he calls Bernanke and the Fed the biggest taxers in the nation — to his face!  Bernanke’s response?  He agrees!…in a round-about way.  Then he explains that all he can do is work toward aggregate price stability.  This little 7-minute segment is so laden with ideological overtones that it is hard to express its importance without diving into discussion about the difference between the monetarists (tempered Keynesians) and the Austrians when it comes to their views on the central bank.   Hopefully I can find the time to come back to this and discuss some of the theory behind the soundbites and the some of the implications of Bernanke’s reactions.  For now, here is the clip.

Then, he [Paul] goes on Kudlow & Company on CNBC, where nearly everyone expresses their agreement. I’m not going to post those but you can get to them from the Campaign for Liberty post here.
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Time Magazine is running an article titled ‘Libertarians: A (Not So) Lunatic Fringe’. While the article misrepresents libertarianism out of ignorance on a handful of occasions, it is great to see the movement getting some press from the mainstream media. Rather than produce a lot of unique thoughts on this subject, I’m going to link to the best write-up of the article that I’ve seen floating around the blogosphere. To the Western Standard blog you go!

For those of you who are relatively new to the libertarian movement (while I’ve considered myself a libertarian for a long time, I myself am new to the movement), hopefully someday soon I’ll be able to write something intelligent about the different sects of libertarianism that exist (as referenced in the Western Standard blog post)…for instance the differences between organizations like Reason and The Cato Institute versus those like LewRockwell.com (LRC) and The Mises Institute. For now, if you think you might have some small libertarian streak in you, go to any or all of them.