I am with Rockwell on this, 100%.

There are thousands of things you can do to make it less safe to drive, and we are all guilty of them at some time. It is precisely the fact that we know them to be hazardous that teaches us to take extra care.

Not just texting, but playing loud music so that you can't hear the engine or surrounding cars well, driving when sleepy, driving after a large meal, having an animated conversation, driving when emotionally upset, driving when you have a headache or fever, driving when sneezing or coughing, batting a mosquito or spider who lands on you, driving when the car is too hot or too cold, and so on and so forth.

Give the government the right to snoop on texting drivers, and it will soon snoop on everyone's activities, inside the car and out. That is the path to the Police State.

There is another reason why it is stupendously silly to fine people in an effort to make them drive more safely. Unsafe driving can kill you; it can leave you paraplegic. If corporal and capital punishment won't deter people, what chance has a fine?

Another point. The statistics from seat belts in countries in which they have been made compulsory show the same incidence of injuries and fatalities before and after their introduction. Why? People take more risks when wearing a belt because an accident is likely to be less serious for them.

Similarly, a ban in texting may actually cause accidents. A man may speed to an appointment because he is not allowed to text that he is running late.

There are two ways to get people to drive or act safely. One is for the all-powerful state to micromanage their behavior, to breathe down their neck nonstop. The other is to give them complete freedom, but to make them pay full recompense for any mistake they make which injures others.

"While proclaiming her love of free markets, she would immediately follow up with something about the federal government solving some problems. She never saw the contradiction in the two."

When you read the speeches of GWB and BHO you will find the same internal self-contradiction. The American Party (no point pretending there's anything other than a single party) has a stock speech in which the politician praises free markets (if Republican) or denies being a socialist (if Democratic) and then spends the remainder of the speech reading a long shopping list of new and expanded government interventions they wish to implement.

If it makes you feel any better, in other places like Canada and Europe they don't even dare to praise free markets or deny being socialist. To do so would be political suicide.

Don't worry, after about 900 years civilization will rebuild itself. Hopefully this time there won't be a state to drag it back down, though I won't hold my breath.

yeah, the flight is UA93, and we've realized the flight path is not the one we anticipated. maybe the austrians are like those passengers who did figure what was going on, and resisted. whilst their end must have seemed inevitable, there weren't passive in the face of almost certain defeat.

Certainly assets such as housing are experiencing deflation, as they should, and many predicted this as a result of the housing bubble bursting. But when I see or hear someone speak of "price inflation", and correct me if I'm wrong, they usually seem to be referring to things we consume in every-day life such as groceries, energy or toilet paper. I mean, have any of you taken a trip to the grocery store lately??

That's what is causing and is going to cause the most harm to the majority of people.

O_Brien says: "socialistic universal health care would be beneficial for his business at this point"

I take it by your "at this point" that you understand this, but: this man either intuitively or explicitly understands Bastiat and the things that "are not seen." For one thing, he probably knows damn well what will happen to his specialty/luxury business when his customers are ravaged by this abomination of a bill looming over us (maybe the worst abomination yet).

Mr. Tucker, you guys have to deal with the publishers to put online books such as "Anarchy and the law", David Beito's work, Long&Machan's work, libertarian movement needs it!

I went to this store today. The service was super friendly and the selection was amazing. The number of people in line belied any concerns about how this business is weathering the recession.

Another take on Government "providing us with jobs" can be found at:

http://www.prudentbear.com/index.php/guestcommentaryview?art_id=10299

Haha, that's actually quite funny, Russ, sincerely. We geezers in the know have to take our pleasures however we can find them.

He talks about big government but funny thing is socialistic universal health care would be beneficial for his business at this point. He probably pays big premiums for himself and his employers probably don't have insurance at all.

Great news , i was wondering why it wasn´t in the mises library but i found the german version on the net. :)

@Core:

I know exactly what you mean. Reading articles here and on LewRockwell.com is like being on an airplane. There is a old man sitting next to you who is regaling you with how unsafe airplanes are. Then, when the airplane does start uncontrollably losing altitude, the old man starts laughing and says "See, I told you so!", taking great joy in the fact that he was proved right, and seemingly oblivious to the fact that he is on the same airplane that you are.

I try to avoid politics as much as possible, but I couldn't avoid looking at Sarah Palin when she was on TV, and while looking at her I couldn't help but hear some of what she was saying. While proclaiming her love of free markets, she would immediately follow up with something about the federal government solving some problems. She never saw the contradiction in the two. So I got to listening a little more to other Republican candidates (not McCain because he never pretended to be pro free market) and they all make the same mistake. They honestly can't see that having the state solve everyone's problems is totally incompatible with freedom.

Jack, how is the price of orange juice set? What about that computer you're typing your comment from?

The price of money(*) would be determined by the supply of loanable funds vs the demand for such loans, same as orange juice.

(*) really, it's the price of time, but who's counting?

While the right does use the supposed "enemy" as a reason to put off the "return" to laissez-faire, it's both sides of the political spectrum that create and use these enemies (i.e. the Democrats, Roosevelt, and the Japanese/Germans and the "threat of invasion").

Sounds like Rand had sex with more assholes than Tom Palmer. (Of course, in Palmer's case, this is meant literally.)

Ganesh -- you made me laugh -- thank you:

When the man has seizures from the repeated pounding, a medic (coincidently named Bernanke) screams gleefully "Hurray, he's moving."

That's some doctor all right --- our Dr. Ben Bernanke!
He reminds me of the almost giddy-gleeful Dr. Riviera on the Simpsons:
http://en.wikipedia.org/wiki/Nick_Riviera

I am optimistic by nature.
But when it comes to the Money System, I am with Ganesh Rathnam. There may be a few inconsistencies or even errors in Mr. Rathnam's article, but he knows more than does our famous Dr. Ben about what really ails us.

That is, this Crash-Fest is only just starting. Mind you, very few of us will be cheering like we might at the Indy 500.

What a witches' mixture of causes to make for a real Devil's Brew:

Fiat 'paper-money' Currencies and
Fractional Reserve Banking and
Mixed-Up Central Banking and
Political meddling in many things, just one example being the setting of market Interest Rates = Price of Money.

We cannot save ourselves on the 'back of China'. That is "Wishful Non-Thinking".
China has made the same mistakes that everyone else has.

In a world where all governments and their agencies meddle with currencies, the Money Systems will take years to return to normal. This will cause any return to normality for our economies and financial systems to be likewise delayed.

We cannot expect a Fractional Reserve Banking System that is required to hold less than 10% in reserves to restrain itself from creating massive amounts of Debt. It is in the nature of any private business sector to maximise profits within the mandated Rules of Market Engagement.

Currently, one person's deferred consumption (savings deposited into the retail banking system) gets multiplied into Debt by a staggering 10-fold as banks create money "from thin air".

IMO Fractional Reserve Banking can work, but only when reserves are at a level of at least 50% or deposits. Not because of any worry about runs on the retail banks --- after all we are so 'sophisticated' that our Central Banks can always backstop those runs and depletions of money by just 'printing' more paper money --- but BECAUSE with much higher reserves, the banking system will be constrained from creating so much new Debt in the future!

Our current policies are insane, and that is one reason our Money Systems are in an Insane State.

This will take years to unfold. It is because it will take years to liquidate the Debt.

The years of Ever Expanding Debt were 'miraculous'. Likewise the years of seemingly Ever Contracting Debt will seem tragic.

It's a fine mess we have created.

And it is not just the amount of Debt in absolute terms that is an issue. It is what that Debt has wrought. It is what that Debt was used for or more likely misused for.

When our Money Systems interact with countries having so-called Dirty Floats for their home currencies, we end up having our Political Systems indirectly direct where our consumption and use of our resources go.

That can be very harmful socio-economically because it is not the TRUE COST of money that is helping entrepreneurs and investors decide where to focus their efforts. In fact as the Austrian School of Economics teaches these investments very often end up as so-called malinvestments. When True Lies lead to misallocation we all suffer. No one knows how to estimate likely returns from given expenditures. And now The FED is blowing up another Asset Bubble. Some recovery. Some elixir. Some drug this OPM, as Patrick Barron reminds us in his contribution.

Ask "Why is our Central Bank even setting our prevailing interest rates?".

As "Why should we not let the market set the interest rates without artificial intervention?"

Ask "Do we let the market decide the price of bananas or do we have a Central Banana Board that does that for us?"

And where such Central Marketing Boards exist, ask "Is our Central Marketing Board’s management of the supply and price of (for eg.) Automobile Tires or Eggs and Milk a good thing?"

Maybe it would be during a World War, but I would submit it is not at all other times.

Another whole area of problems is created by the inefficient functioning of our Public Sectors.

No government operation needs to be accountable to a simple test each year like the private sector has to meet. No government agency will ever go bankrupt because Expenses exceed Revenue year after year.

We are part of this problem. We simply expect our governments to do TOO MUCH for us.

Is there any logical reason why a school or hospital cannot be operated as a profit-making operation.

Sure, if you need to give access to those right-to-life-and-health resources for people of limited means, do so as a matter of public policy with vouchers or with subsidies --- even though your government is using ‘progressive’ taxation to reap the required funding resources from the private sector. OPM = opium = Other People’s Money --- it is so easy. Just reap the rewards of others’ work. But how long will they keep working for your benefit?

Why are there so many activities in the public realm that could be better done in the private? And better done because of the discipline of the market.

Those future days are far off (if ever) simply because thanks to prior government intervention we are likely to go through some really desperate times. These coming times will have us all clamouring for even more government ‘safety nets’ than ever before.

Socialism Here We Come!
Roosevelt "wasted his opportunity".

This time I am afraid that the Democrats have resolved not to waste their opportunity. Or even if they have not done so consciously, they may very well unwittingly slip-slide us into a Statist Socialist 'paradise'. It is just the nature of the times, the nature of this particular disaster.

"We have met the enemy, and it is us."

America implode like the U.S.S.R.? Who would have ever given that idea any credence until now. It is a remote possibility though today IMO.

But whether it comes from more 'crashes' or just a slow slide into a lower standard of living, the real danger is that we will never restore the wealth-creating engine that America once was.

One day we might well see that we have been living off of our capital for a long time, and we never knew until all of our seed corn was gone.

"Meanwhile, for reasons detailed below, the money supply will constantly increase. We then have the textbook case of more money chasing fewer goods, leading to rampant price escalation."

This quote says it all with respect to the author's understanding of the most fundamental law of economic science, the law of marginal uitility, he is completely ignorant of it! Mises definitely would have labelled him a monetary crank. Of course he is not alone in this neo pop austrian movement of the last few years.

Unfortunately for the author, and his whole case for "runaway" inflation, that "textbook" example only exists in the "economics" of Milton Friedman. A quantity of money, even an increasing quantity, does not necessarily lead to its price falling. Similarly, an increasing quantity of beer does not necessarily lead to a fall in the price of beer. This is what makes the author and his ilk monetary cranks, they have one theory for the determination of the price of money, and another for the price of other goods.

Just in case anyone thinks that I am being too strict in my crtiticism, or that in general it's alright to say that increasing money supply leads to increasing prices, needs to appreciate two things: 1) The "runaway/hyper inflationists' " entire case is built on this foundational assumption that when actually scrutinized turns out to be in error. This utterly betrays the fact that they are NOT austrians, they have rejected the truth that it is subjective marginal utility that determines prices! 2) People need to realize, as well, that these inflationist cranks were completely blind sided by 2008. Remember, the prominent members of this new, so called austrian, movement are generally in the financial services/investment advisory fields. As a result, they allegedly had investment strategies to protect their clients from this scenario. They failed to predict this collapse because their theories are fundamentally flawed. Similarly they cannot explain why gold fell from $850 to $250 between1980 and 2001. This fact alone refutes their mass inflation/buy gold, because the Fed is loose, conclusion.

People need to wake up. These prominent so called austrians all work in the financial industry, in one way or another they are looking to make money (apparently soon to be worthless fiat money) by selling fear. This pop austrianism, whose leading proponents do not even understand/accept the law of marginal utility, are an embarrassment to the Mises Institute.

I

Alan King (kingaj@us.ibm.com):

Robert Blumen leaves out the capital markets, so in this sense he is arguing about a barter system.

Not so. Go back and re-read my post, above, focusing on the passages starting with "in the stock market" and "concerning producer goods". Financial assets are claims on capital goods. They provide an alternate means to purchasing producer goods directly. And any statement I made concerning "goods" can apply equally well to producer and consumer goods.

"Deflationary spiral" occurs when overvalued assets on bank balance sheets need to be sold. The selling of these assets further erodes bank capital, and so forth.

Yes, this is true, if you have a fractional reserve banking system. But the process is finite. Once the banks are bankrupt, their new owners take over the assets and continue. And I must emphasize again, this process does not imperil the productive activities in the economy as such. As a result of this process, the phony credit created by the fractional reserve system is wiped off the books and the prices of bank assets are brought more in line with the amount of volunary savings.

Keynes was a solid thinker who was trying to understand why 25% unemployment coincided with so many unmet needs.

There have been a number of Austrian writers who have addressed this - Thomas Woods, Bob Murphy and Robert Higgs come to mind. The unemployment came about because of rigidities in the labor markets. Hoover's policy of encouraging above-market wages and above-market prices prevented markets from clearing.