The Pope's Warning

"The Vocation of the Catholic Blogger"

Read "The Vocation of the Catholic Blogger" here from Unam Sanctam Catholicam.

Why Can't Chuck Get His Business Off the Ground?

Why Can't Chuck Get His Business Off the Ground?

Why this Catholic family will NOT be donating to CCHD

This Catholic family will NOT be donating to the Catholic Campaign for Human Development. We refuse to give material aid to evil inside and outside the Church. Watch this video.



Here is a longer version with details.

So rather than the CCHD, we will donate to a school at St. Mary Catholic Church.

"Fear the Boom and Bust"

Brilliant video concerning an economics argument. I'm with Hayek as any Catholic should be.



An aside: Why won't the bishops defend our traditional Catholic scholastic economics? Spanish monks got economics praxeology correct hundreds of years ago; why do we pretend they never existed? Is there any field where the progressives (and pure social-justice types) haven't hijacked?

Tax Cuts Increase Liberty

See Dr. North's talk here

Health Insurance Field Report

This is a field report for Mr. and Mrs. Audentior Ito's health insurance. Specifically this note compares the 2010 and 2011 costs and benefits. We assume in-network medical expenses.

2010:
Deductible $3000
We pay 20% after deductible is met.
Out of pocket maximum: $2200 (plus deductible)
Cost:  $624


2011
Deductible $3200
We pay 20% after deductible is met.
Out of pocket maximum is $2500 (plus deductible)
Cost: $900

Our cost versus billed cost is plotted in the following figure for the three different health options.

Private Elephants?

Virtue

Phil Donohue: When you see around the globe the maldistribution of wealth, the desperate plight of millions of people in underdeveloped countries, when you see so few haves and so many have-nots, when you see the greed and the concentration of power, did you ever have a moment of doubt about capitalism? And whether greed is a good idea to run on?

Milton Friedman: Well first of all tell me, is there some society you know that doesn't run on greed? You think Russia doesn't run on greed? You think China doesn't run on greed? What is greed? Of course none of us are greedy. It's only the other fella that's greedy. The world runs on individuals pursuing their separate interests. The greatest achievements of civilization have not come from government bureaus. Einstein didn't construct his theory under order from a bureaucrat. Henry Ford didn't revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty that you are talking about, the only cases in recorded history are where they have had capitalism and largely free trade. If you want to know where the masses are worst off, it's exactly in the kind of societies that depart from that. So that the record of history is absolutely crystal clear, there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.

Phil Donohue: Seems to reward not virtue as much as the ability to manipulate the system.

Milton Friedman: And what does reward virtue? You think the Communist commissar rewards virtue? You think a Hitler rewards virtue? Do you think... American presidents reward virtue? Do they choose their appointees on the basis of the virtue of the people appointed or on the basis of political clout? Is it really true that political self-interest is nobler somehow than economic self-interest? You know I think you are taking a lot of things for granted. And just tell me where in the world you find these angels that are going to organize society for us? Well, I don't even trust you to do that.


Source: Phil Donohue interviews Milton Friedman, Feb. 11, 1979

The myth of science as a public good

Austrian Theory of the Trade Cycle | Roger W. Garrison

Return to the Truth

Our Wise Overlords Are Just Here to Serve Us

Our Wise Overlords Are Just Here to Serve Us
http://mises.org/media/5384

How Government is Unraveling Civilization by Force 

Yuri Maltsev: Traveling Down the Road to Serfdom: History of Socialism from Marx to Obama

"We Who Dared to Say No to War" by Tom Woods

Political Economy of War

Lecture:

Interview of Dr. Gary North

Interview of Dr. Gary North here about the future of higher education.

Brilliant

What a neat little video! I can't vouch for John Dennis's other qualifications, but he got this right.
The McCain-Feingold quip is priceless.

Pictures of the Socialistic Future

This week's reading is:
Pictures of the Socialistic Future by Eugen Richter
available here (1MB pdf).

Homeschooling? Here's one reason why.

An early advocate of public schooling Willliam James says in Habit,
"Habit is thus the enourmous fly-wheel of society, its most precious conservative agent. It alone is what keeps us all whithin the bounds of ordinance, and save the children of fortune from the envious uprisings of the poor.... It keeps different social strata from mixing."


Listen to an interesting interview of John Taylor Gatto here.

Chapter 1 of his book The Underground History of American Public Education is here.Chapter 4 is here.

Solution:
Defund public schools.
Don't send your kids to 12 years of genius-destroying jail.
The "old" Scholastic tradition founded by the Church actually works.

Nutnfancy's "Children of the Gun"

Part I (here)

Nutnfancy's Youtube site is here.

Art Interpretation and Appreciation

Wow! This is how to appreciate art. See here.

Like Martha, I regret not being exposed to this earlier. This is the Catholic education that we all yearn for.

The Lessons:
Even the math and science type can enjoy art.
Demand a Catholic education for your children.

Reponse to Five Proposals for Distributist Agricultural Reform: Part II

Campbell's fifth proposal is Interest-Free Loans for Equipment. This topic is addressed in Hazlitt's Economics in One Lesson available here (or buy a $12 hardcover version here).

Distributists often suggest interest free loans on the grounds that, as Campbell says, "One factor that keeps entrepreneurs from getting into agriculture is prohibitively large expenses up front." That is true, modern large-scale agriculture is expensive. His proposal is for direct or subsided government interest free loans "on the purchase of agricultural equipment, livestock or any of the implements needed for the management of a farm."

Let us turn from Chesterton to Hazlitt for a moment in his Credit Diverts Production chapter of Economics in One Lesson. (Emphasis is mine)

At first glance the case for this type of loan may seem a strong one. Here is a poor family, it will be said, with no means of livelihood. It is cruel and wasteful to put them on relief. Buy a farm for them; set them up in business; make productive and self-respecting citizens of them; let them add to the total national product and pay the loan off out of what they produce. Or here is a farmer struggling along with primitive methods of production because he has not the capital to buy himself a tractor. Lend him the money for one; let him increase his productivity; he can repay the loan out of the proceeds of his increased crops. In that way you not only enrich him and put him on his feet; you enrich the whole community by that much added output. And the loan, concludes the argument, costs the government and the taxpayers less than nothing, because it is "self-liquidating.

...

This argument will seem plausible only as long as we concentrate our attention on the particular borrowers whom the government supplies with funds, and overlook the people whom its plan deprives of funds. For what is really being lent is not money, which is merely the medium of exchange, but capital. (I have already put the reader on notice that we shall postpone to a later point the complications introduced by an inflationary expansion of credit.) What is really being lent, say, is the farm or the tractor itself. Now the number of farms in existence is limited, and so is the production of tractors (assuming, especially, that an economic surplus of tractors is not produced simply at the expense of other things). The farm or tractor that is lent to A cannot be lent to B. The real question is, therefore, whether A or B shall get the farm.

...

In any case the net result of government credit has not been to increase the amount of wealth produced by the community but to reduce it, because the available real capital (consisting of actual farms, tractors, etc.) has been placed in the hands of the less efficient borrowers rather than in the hands of the more efficient and trustworthy.

There we have it, interest-free loans take capital by force from one and deliver it to another. Does this meet the definition of theft?

Campbell clearly understands and is concerned about the poor state of US agriculture. I would suggest that the wealth destructive subsidies already distort the market. Why attempt to cure a disease with more disease?

I'm convinced that the hearts of distributists are good, even if their proposals and actions may not be. When (if?) distributists give up the threat of force for the responsibility of contracts, I suspect that they will find free market Austrians their only defenders. On economics, put Chesterton gently aside and pick up St. Thomas Aquinas and the Spanish Monks of Salamanca.

Solution:
Bring the free market back to agriculture. Eliminate the US farmer's addiction to government programs and credit.

Personal Note:
The subject of agriculture is dear to me as I grew up on a family farm. Even suggesting that farmers are welfare dependents are fighting words in that state and county. Our family never participated in the heavily advertised and "encouraged" programs ("just sign your soul away here"). That means they can't legally grow wheat even for non-grain animal consumption! I'll save the vitriolic words of my father for later.

Monks and Justice

"For our 1500 years, Benedictine Monks have been involved in free enterprise. We are men not only of prayer, but we are men who have also been know to be entrepreneurs making an honest living by the labor of our own hands. " Abbot Justin Brown of St. Joseph Abby.

 Pray for them.

Cash Dilemma

So my wife and I were shopping for a moderately expensive item. At one shop, I received an interesting quote: "X dollars now or X dollars of our money for 18 months at 0%." I asked if he had any preference for cash in hand. "No."


So in the middle of a recession/depression, my liquid savings are worth nothing over just-printed inflationary Dollars. What another clear in-field indication of a perverse incentive. I know that based on Austrian economics, this recession won't actually be over until interest rates rise dramatically higher than the Dollar inflation rate.

So here's the question, should I take the 18 month "loan" and use/save my cash for something else? Logically, of course! But is it worth the trouble?

Update:
I spent my time in a cycle of negotiating rather than licking and addressing 18 bills.

Interesting Interview

Interview of Andrew Napolitano

Cross of Paper

“We could not maintain the gold standard nor the silver standard. We could not maintain the copper standard, and now we cannot even maintain the zinc standard." Ron Paul referring to U.S. pennies.


See more here

The title Cross of Paper is a spin on the phrase Cross of Gold, which was used to attack and debase the gold standard in the early 20th century.  Systemic inflation is a relatively new phenomenon in our United States.

Consumer Price Index 1800-2005 (source)

Notice that older wars (1812, Civil War) correlate with an increase in CPI followed by deflation back to a nominal value. Later wars (WW1,WW2) inflate but then do not deflate. The Federal Reserve Central Bank was chartered in 1913 with the power to expand the money supply, which they promptly did. After 100 years, our 2010 dollar is only worth about 2 or 3 cents of your grandparents' dollar. Their savings were stolen; your savings are next.

Solution:
End the Federal Reserve's monopoly of money (legal tender laws) and allow competing currencies.

Reponse to Five Proposals for Distributist Agricultural Reform

H. L. Mencken said, "For every complex problem there is a solution that is simple neat and wrong."

This note conceptually responds to Phillip Campbell's "Five Proposals for Distributist Agricultural Reform" available here. This note seeks to reinforce one specific lesson: "The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. (Hazlitt)"  Each of Campbell's 5 proposals violates this lesson. Each proposal might border on violating the Catholic prohibition of theft. Each proposal takes us further down the road to serfdom that is lined with price controls, property restrictions, tariffs, tax equalization, work programs, interest-free loans, and government monopoly.

The issue is not in magnitude, contrary to what Campbell says, that "some will say that my proposals are too mild; some free-market capitalists would say they go too far." The issue is principles in that distributism takes an interventionist attitude towards the property of others. Campbell is incorrect in saying that "the beauty of Distributism is that it needs no violent revolution to establish it..." The mere fact that he proposes non-contractual intervention in each of his 5 steps betrays the eventual use of violence.

No, Campbell's article did not address the economic fundamentals creating the modern state of American agriculture. Traditional free-market Catholics and many others claim that the disease affecting modern agriculture has the same base cause as the disease affecting our entire economy. The primary failure is that a central bank sets and enforces their official interest rate. At heart, the interest rate is a market's indication of available funds (i.e. savings) and seeks to coordinate economic behaviors. For nearly 100 years, the American public had access to low interest rates and inflationary fractional reserve banking. Stealing from savers to give to borrowers does in fact create a perverse economic situation biased towards the short term. Yet, distributism seeks to fight a disease with still more disease.

Next time, I will comment on the specifics of Campbell's proposals.

Personal Note:
This is not meant to rebuke Mr. Campbell personally. In fact, I encourage you to visit his excellent blog Unam Sanctam Catholicam.

Disaster

Please keep this from happening again.

From a letter sent to the local Republican Party Chairman.

Harold R. Cummings

Vernon Republican Town Committee

32 Ravenscroft

Vernon, CT 06066

Dear Mr. Cummings:

Thank you for your letter welcoming me to the Vernon Republican Party. I wish to emphasize to future Republican candidates that the following topics are absolutely essential to my vote.

• Free Market Economics as given by the Austrian school of economics. Free-will and contracts are critical.

• Sound Money: Get rid of the Federal Reserve or at least eliminate the manipulative central bank specification of interest rates. Controlled interest rates lead to boom-bust cycles.

• All human life is sacred. Denying human dignity leads to further evils.

• Individual Responsibility: Fight the cult-of-the-state. Eliminate regulations. No paternalistic government, No police-state, No stimulus, No bailouts.

• Protect the Constitution and Individual Liberty: The Ninth and Tenth Amendments seems to be a forgotten relics. I am especially concerned with our natural right to keep and bear arms.

In short, I wish for an exit from our current Road to Serfdom. I hope that Republicans can promote and exhibit the ideals of Jefferson and the patient courage of Coolidge. Please let me know if I can be of assistance.

Sincerely,

[My Name]

I'm registered as a Republican. This is mainly to support certain candidates (Ron Paul in 2008 and Peter Schiff this year) in the primaries. The Road to Serfdom is a book by F. A. Hayak.

Frankly Incorrect

My local CT state senator Tony Guglielmo sent out his 2010 Legislative Report that discusses four topics: Budget, License Fees, Jobs, and Veterans.

The Budget section discusses the typical bankrupt state government. The License Fees section discusses why CT forces hunters and fishermen to buy permission from the state rather than the landowner.

In the Jobs section he says the following. My comments are in blue.

Getting people back to work is one of the most pressing issues facing our state. This year, the General Assembly passed a jobs bill [Not actual jobs, mind you.] that will do a number of things, but most importantly  [This is the most important action that the GA could come up with?] it will increase capital [nonsense] by providing up to $500,000 in loans and credit for small businesses and nonprofits so they can grow [Nonprofits grow?].

There is a fundamental law of economics here: Governments do not produce, they can only spend what they take by force. Senator Guglielmo, why you are promoting giving favored new businesses $500,000 by stealing from existing businesses and residents?

Another fundamental law of economics is: Growth requires savings, which is the deferred spending of profit. The entire definition of a nonprofit is to have zero profit; thus, nonprofits are by design not conductive to growth. Why support businesses that actively fail to save for the future?

Solution:
The solution is to keep the General Assembly out of jobs creation. Let the people save and build businesses on our own. We don't want your help.

Audentior Ito

Audentior Ito translated from latin meaning to proceed boldly. The words audentior ito comes from the phrase ne cede malis, seal contra audentior ito. The translation means "do not give in to evil but proceed boldly." The purpose of this blog is to discuss topics that interest a libertarian Catholic from the northeastern United States. We'll see how it goes.