Today’s NRO-column from John Tamny is probably the most error-filled since at least Paul Krugman’s Toyota column.
First he claims that somehow the west have become dramatically less socialist than it was in the 1940s. Somehow he seems to have missed the fact that in every western country since then the welfare state have been greatly expanded. In Sweden for example government spending have increased from 20% of GDP to 55%, with other Western European countries increasing almost as much. In the United States, the increase have been less drastic, but it have nevertheless been very large, with programs like Medicare and Medicaid being introduced, with the former being recently been expanded by Tamny’s man, Bush. And unlike in the 1960s when Barry Goldwater and many other Republicans challenged the welfare state, today’s Republicans are all to eager to expand the welfare state.While Tamny does concede that “both parties regularly pass bills that are anti-market” he goes on to assert that “neither would embrace the socialist ideology.”
But for that to be true he would have to define “socialism” as communism or at least Scandinavian levels of welfare spending, but then it would certainly not be accurate to describe the 1940s as socialist as the welfare state were smaller then than now.
He also says that the current top 35% federal income tax is only 10%:points above the 20th century low of 25% under Calvin Coolidge. Actually the 20th century low was the 0% that America had before the 1913 passage of the 16th amendment.
His assertion that “In Germany, both candidates for chancellor decry the welfare and wage systems that keep the German economy stagnant” is simply not true. Both have pledged to defend Germany’s “social model” and will only implement modest market reforms at best.
His description of British Finance Minister and likely succesor to Tony Blair, Gordon Brown, as “a proponent of Adam Smith” is just ludicrous. The Labour government have greatly expanded the welfare state and introduced a minimum wage and similar labor legislations and Gordon Brown have been leading in pushing these changes. Brown is in fact generally considered to be more left-wing than Blair.
What was then the point that Tamny tried to make with his false assertion that the west pursues free market policies? It was to point out the true observation that in the monetary area , central planning is being pursued.
But even here he goes wrong. Because what Tamny advocates is not the Misesian view that central banking should be abolished. He wants the supply-side “price rule” to guide the Fed. But trying to implement such a “price rule” would be no less central planning than the current system. Any central banking is central planning.
He also decries Greenspan’s recent concerns about the housing bubble by saying “Leaving aside the Fed chairman’s major role in a housing boom that he apparently now laments, not to mention whether or not a a public employee should comment at all about private investments.”
While the first part about Greenspan’s role in the housing bubble is correct, he apparently does not realize that this refutes his second point, that he shouldn’t do anything about “private investments”. The problem is that these “private investments” have been financed by money created in the centrally planned monetary system, so being negative about these are certainly not a case of interfering with market forces.
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As the author of the piece that was slammed, I figured I should respond. First off, I agree with just about everything Karlsson said.
The purpose of my piece was to say at least relative to the 1940s, rhetoric has improved. On my desk is a copy of Human Action that is filled with notes – the nonsense Von Mises had to debate was worse than today’s nonsense.
I agree that government has grown in ridiculous ways, and think it an abomination. Far from being Bush’s man, I think most of what he’s done as president is totally rebukable. Again, the purpose of my piece was to point out how at least rhetoric has improved. And oh by the way, since facts are so important to Karlsson, he should be aware (or at least inform his readers) that Goldwater was against lowering the 91% top tax rate in the ’60s…..
As for the tax rate, I made it clear that I think it too high. We’re talking baby steps here. I’d like to abolish it too; my only point that relative to what it’s been 35% is an improvement. Is it what I want? No way.
Regarding Germany, we’re talking about something really bad there. That Merkel’s presumptive finance minister advocates a flat tax is pretty good progress. Remember what I said about rhetoric???
Brown is an Adam Smith advocate. He celebrated him recently in Kirkaldy. Did I say he acts on it? No. Rhetoric sir.
I’d love to abolish the Fed. My sense is that private money would be gold based money and that would be great. But, given the system in place, a huge step forward would be to stop the nonsensical notion that the Fed should manage the economy.
So, I’ve spoken my piece. Be easy on me. I’m with you. The purpose was to show how odd commentary relating to the Fed is. The notion (and we can all agree on this) that any man or any collection of men could know how to pull the levers of the economy is absurd.
John Tamny
Thank you John for your feedback.
I apologize for mistakingly assuming you’re a Bush supporter, but given the fact that this is the party line on the web page you were writing for and given the context of how you praised just how non-socialist American politicians have become, I think that it was a understandable mistake.
As for Barry Goldwater, I agree that he was wrong to oppose the Kennedy tax cuts and he had of course some other shortcomings as well-particularly his warmongering. But he was still in principle opposed to the welfare state and for limited government. As you know his opposition to the tax cuts was not based on a desire to spend more but a somewhat misguided belief that it would create a budget deficit-which is why he opposed the Kennedy spending increases as well.
And while you are right that some of the fallacies widespread in the 1940s are no longer popular, some other policies particularly government spending have gotten far worse.
I am also glad to see you writing that you are more radical than you appear to be from your writings and I understand that NRO probably wouldn’t have published any more radical pieces. But it would have been better to write then that
your proposed monetary reform would have been a improvement rather than being a free market system, which it isn’t.
merkel, is like casesar, even though the left in the gferman election won over 51% of the bvote, apparently the right which won only 45% should have the chancellor, tyhis is the sort of weimar attitude, that far left people whould be kept out of government at all costs,s but hard right and nazis, accepted after only a few years of having many votes that brought the nazis to power, if 20% of the german people votes commie, the media, and merkel, would say their votes do noty count, if 20% vote nazi, jaider, and hitler are given power straign t away, happily the nazi meida, also sufferm, as they will be the people, bombved by the ussr in teh world war three they are creating just as much as communists will be,.
Mr. Karlsson:
Thanks for your reply. Clearly we agree far more than we disagree. I should have made my initial piece more clear. What’s presently happening is not pleasing in any way, but in some kind of rhetorical sense, things are better.
But let’s see what happens in the aftermath of Hurricane Katrina. I really fear market liberal historians 75 years from now will say this is when the US took a major turn for the worse. All the spending, backsliding on taxes, all the government. And stocks clearly aren’t fooled.
John
Merkel is like hitler the way she thinks she should lead germany even though the left won more votes than the right, unless you exclude the pds, just like how the nazis, did ,and weimara germany did, but within 5 years of a paretry against democtracy getting some high votes they let them in straights waway, just klike austria, she is like bush in 2000, he won less votes than gore, but preteneded that that meant that gore was a joke, for thinking he could be ptres, nazi members of the republicanm press, njust claimed teh idea gore should wion, or that all votwes in florida should be counted, was fancuiful, so they were not, and evilly bish was undemocraticly given the jobm, and so the dems, have become teh wekaest left wing party in thwe western world, as they desrvdedly became, they belived the lie that america would crumble if they held out for victory the right would never do this, they would fighht on, like how they do in australia, stealing labour leaders in ww1, and the 1930s, they never surrender, neither should we,
no, i dissagree the reps, and right and royal families, do surredner, biuit only to nazis, and other evil people never to the decent
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