Steve Bannon Abandons Fiscal Responsibility for Pork; Austrian Economics Explain

Source: RedState | November 19, 2016 | Patterico

Steve Bannon Abandons Fiscal Responsibility for Pork; Austrian Economics Explains Why He and Trump Are Wrong

A couple of days ago I read with interest this 2014 talk by Steve Bannon, Trump’s right-hand man. And I found myself agreeing with much of what he had to say — in particular this:

Now, with that, we are strong capitalists. And we believe in the benefits of capitalism. And, particularly, the harder-nosed the capitalism, the better. However, like I said, there’s two strands of capitalism that we’re quite concerned about.

….

The tea party in the United States’ biggest fight is with the the Republican establishment, which is really a collection of crony capitalists that feel that they have a different set of rules of how they’re going to comport themselves and how they’re going to run things. And, quite frankly, it’s the reason that the United States’ financial situation is so dire, particularly our balance sheet. We have virtually a hundred trillion dollars of unfunded liabilities. That is all because you’ve had this kind of crony capitalism in Washington, DC. The rise of Breitbart is directly tied to being the voice of that center-right opposition. And, quite frankly, we’re winning many, many victories.

That was then. This is now. In an interview with the Hollywood Reporter published Friday, it became clear that, to his shame, Bannon had changed his tune utterly when it comes to fiscal responsibility:

“Like [Andrew] Jackson’s populism, we’re going to build an entirely new political movement,” he says. “It’s everything related to jobs. The conservatives are going to go crazy. I’m the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. Ship yards, iron works, get them all jacked up. We’re just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution — conservatives, plus populists, in an economic nationalist movement.”

….

I could simply note the blatant contradictions here — and the casual discarding of any semblance of fiscal responsibility. I could do that, dust off my hands, and walk away . . . patting myself on the back for a post well done.

Yes, I could do that. But I won’t stop there. You’re going to get more. In fact, you’re going to get:

A RANT ON AUSTRIAN ECONOMICS AND THE BOOM-BUST CYCLE: Bannon’s more recent statements show a staggering and disappointing ignorance of the theory of the boom-bust cycle, as explained by Austrian economists Friedrich Hayek and Ludwig von Mises.

The Austrian theory of the business cycle was explained by Hayek (whom you may know as the author of The Road to Serfdom), and his teacher Mises (perhaps the pre-eminent scholar in the field of Austrian economics, or as I call it, “economics”). I have discussed the concept at greater length here, but here’s the “too long; didn’t read” version:

Interest rates, which are prices for credit, should not be set by central planners — much like prices of goods should not be set by central planners.

The End.

…..

And the problem is worst in government, which doesn’t respond to market forces anyway. Government taxes citizens — by which I mean to say it seizes money from citizens at gunpoint — and then it spends the money it grabbed. There’s no market involved in any of that. It’s economic “expansion” by fiat. (Sound familiar?)

So when someone like Bannon says “hey, with these low interest rates, it’s a great time to expand!” . . . well, that just shows a blatant ignorance of the work of Hayek and Mises. It’s a policy that is designed to exacerbate the boom, which will inevitably lead to the bust.

And when they want to take your money through taxation (or the money of your children through borrowing), and spend it on projects that the market cannot justify . . . that’s even worse.

And when they have made comments in the past about “the United States’ financial situation” being “so dire” — referencing in particular our almost “hundred trillion dollars of unfunded liabilities” . . . well. They can claim ignorance of business cycle theory — but they can’t rely on a claim ignorance of the fiscal problem we face.

Not their own ignorance, that is. But maybe they’re relying on the ignorance of the population at large.

You can do better. It’s time to learn about real economics, and resist this awful change that is coming. Stand up for the free market. As the car heads towards the cliff, help me grab that wheel and steer it before it’s too late.

…..

Tagged: ,

Viewing 1 post (of 1 total)
Viewing 1 post (of 1 total)

You must be logged in to reply to this topic.