BEN WEINGARTEN

Reader. Writer. Thinker. Commentator. Truth Seeker.

Tag: Monetary Policy

My Interview with Lord Conrad Black on Trump and Populism

Check out my Encounter Books Podcast interview with the always provocative Lord Conrad Black on the history of American populism and President Donald Trump’s place in it, an assessment of Trump’s populist political agenda, the poisonous legacy of Watergate, The Resistance, the 2018 midterm elections and much more.

I thought the below exchange towards the end of our conversation was particularly compelling:

Ben Weingarten: The ultimate goal of the litany of charges against the President, as we all know, but which is left unsaid frequently, is to, as you said, undermine his legitimacy, and ultimately, from the Democratic perspective, to try to remove him from office — to create, kind of build the case, real or imagined, and then be able to apply high crimes and misdemeanors, and seek to impeach him. All of the signs look fairly ominous for what will happen at the very least in the House, in the midterm elections, for the Republican Party. What do you anticipate happening if Republicans do, in fact, lose the House?

Lord Conrad Black: Well, I agree. I think they’re trying to either remove him…First of all, sort of taint him and plant this generalized view that there’s something illegitimate about him, and therefore, he shouldn’t receive the respect normally offered to a [president]…Secondly, if they can’t push him out altogether, to distract him so much that he can’t perform properly, so they can then accuse him of being a do-nothing president and a mere controversialist, and have him as a sort of…immobilized president sitting in the White House, awaiting the end of his term.

On your specific question, if the Democrats got control of the House of Representatives, certainly there would be a much greater danger that they would try and put an impeachment bill through. I doubt that…On anything we can see at this point, there would be no really serious reason to do it, other than their own partisanship. And there are some sane people in that party and in their House of Representatives delegation. I think Trump would have to do something that the media could successfully represent as really seriously outrageous before they could get a positive vote. I don’t think they…unless Trump actually committed a crime, which he’s not going to do, has not done and will not do, but unless he did that, they would have less chance of actually getting a vote to remove him in the Senate, a two-thirds vote, than the Republicans had when they tried it with Clinton.

So I think the price we paid essentially for the terrible overreaction to Watergate, accompanied by the fact that Mr. Nixon didn’t handle the investigation properly — I don’t think there is any evidence even now that Nixon himself committed illegalities in Watergate, but some people in his entourage did — but the price we paid for that is the routinization of the criminalization of policy differences. “I don’t agree with this person. We’re imaginative and adaptive Americans. Let’s see if we can avoid this policy option we don’t like, and as a bonus, get rid of this President we don’t like ’cause he’s in the other party” — like accusing him of crimes, as if it was just a confidence vote in a parliamentary system like Britain or Canada. And that is not what the authors of the Constitution intended.

Mr. Nixon was a patriotic man who, in fact, was convinced himself that he did not commit crimes; and if he was judged fairly, would be judged not to have committed crimes. But as a patriot, since impeachment had not been mentioned in the presidential context for over a century, for a president, he just didn’t want to put the country to such a demeaning process. And Bill Clinton had no such reservations, but he did achieve something by showing that it wasn’t a process that would necessarily be very successful. They had not even got that far with Reagan and the Iran-Contra nonsense.

But what should happen at some point soon is both parties, and the powers that be politically in the country generally, should realize that impeachment of a president is something that should be regarded as an absolutely extreme measure, as it was intended to be, in the case of utterly profoundly unconstitutional conduct. It was really designed to prevent a domestic George III coming in. Not that he was that bad a king either, but…he wasn’t. He wasn’t that good either. And he was mad half the time, but he was not a madman…I mean, a mad despot, an autocrat, as he was accused of being. But again, that’s beside the point.

But if the United States — and Alan Dershowitz speaks very well about this, he’s a liberal Democrat who supported Clinton — if the U.S. is going to criminalize in an accelerated and unjust way, or purport to criminalize the conduct of people who are just doing what they said they would do when they ran for election, and then psychiatrize them too, and claim that they’re mentally unbalanced and so forth, you’re going to get chaos in the country. The whole system will break down.

What should happen as a result of all this talk is, have an all-party, nonpartisan resolution and agreement, not legislation, but just a state of mind that is agreed upon, that discussion of the impeachment or removal from office of a president should only be entertained in the event of high crimes and misdemeanors on which there’s real evidence, and not in a routine and frivolous and dangerously irresponsible way, which is what we’ve got now.

[Additionally] I don’t think the Democrats will win the House. I think what will happen is that the President will carefully assemble his healthcare reform that the Republican Party is pretty much agreed upon, and an immigration reform that it’s pretty much agreed upon, put those out very firmly to the voters, stand on his high economic growth and continuing excellent economic numbers, and order the release by the Justice Department, relatively close to the midterm elections, of everything to do with the collusion investigation, to reveal in its ghastly infirmity the absolute vacuity of that argument, the falsity, the malice and the defamatory destructiveness of the entire argument that he or anyone closely associated with him ever colluded with a foreign power to rig an American election. Just administer a bone-crushing defeat to the Democrats, and their echo chamber in the national media. And do it right…just coming into the midterm election campaign. And I think he will gain seats in both the House and the Senate.

Apparently ISIS Doesn’t Realize What The Fed Has Done to the Dollar

I grant that ISIS may be more knowledgeable about the “enslaving, imperialist dollar” than it appears, given that they feature a clip from former Rep. Ron Paul in their latest propaganda video about bringing down our currency and replacing it with ISIS’ gold money, but one gets the sense that the jihadists are unaware of The Fed’s historical record.

Namely, since its founding in 1913, The Fed has utterly debauched the dollar.

Had ISIS consulted the handy US Inflation Calculator, they would have learned that it takes roughly $2,400 today to purchase what would have cost $100 at the inception of the Fed. 

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7 Minutes With Jim Grant Tells You All You Need to Know About World Markets Today

A must-watch interview with the publisher of the great Grant’s Interest Rate Observer conducted by Reason’s Matt Welch:

For a much deeper dive with Jim Grant from several months back, check out my interview with him on the insightful and ever-relevant The Forgotten Depression.

I spoke about it with TheBlaze’s Mike Opelka starting at 21:43 below:

 

Featured Image Source: YouTube screengrab/Reason.

21 Thoughts About The Fed, China, Markets and #BlackMonday 2015

First, if we really are entering a global bear market worldwide, this must be said up front:

The Fatal Conceit aside, here are my 2 Bitcoins worth of thoughts in the wake of today’s market convulsions:

1) People ought to stop thinking The Federal Reserve can drop manna from the heavens.

The Fed is not G-d. It is a group of very mortal central planners who control the cost of money. Unfortunately now, they control so much more, in an attempt to manipulate the prices of financial assets and prop up whole industries.

We should pray for a world in which people’s lives do not hinge on transcripts of Fed minutes.

2) The Fed has zero incentive to raise rates and extricate itself from financial markets.

It will always find an excuse (turbulence in the markets, tepid growth, political uncertainty) to follow the path of least resistance (in this case keeping the Fed Funds rate at 0% ad infinitum). What political reason could it possibly have to allow interest rates and prices to normalize?

Peter Schiff agrees:

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John Tamny on George Gilder on Information Theory and the Gold Standard

John Tamny is one of the most Hazlitt-ian writers of the modern era — a true treasure when it comes to elucidating free market principles, and in particular making the case for sound money simple. As a brief aside, I had the chance to speak with the RealClear Markets editor and Forbes Political Economy editor about his “Popular Economicshere, a conversation I relished.

So it should could as no surprise that Tamny’s review of prolific writer, futurist and Reagan’s most quoted living economist George Gilder’s new monograph, The 21st Century Case for Gold: A New Information Theory of Money, would contain a wealth of insight.

(Image Source: American Principles Project)

Gilder’s revolutionary application of information theory to economics was presented comprehensively in a 2013 title that deserves more attention than it has received to date, Knowledge and Power. Here’s a handy listicle I published that provides a substantive overview of Gilder’s work.

At its most simple, Gilder argues that information is the key to all economic growth. If it has a clean medium in which to be disseminated — namely an environment in which private property rights are protected, taxes are low and money is sound — we will flourish.

Here is how Gilder puts it:

Entropy is a measure of surprise, disorder, randomness, noise, disequilibrium, and complexity. It is a measure of freedom of choice. Its economic fruits are creativity and profit. Its opposites are predictability, order, low complexity, determinism, equilibrium, and tyranny. Predictability and order are not spontaneous and cannot be left to an invisible hand. It takes a low-entropy carrier (no surprises) to bear high-entropy information (full of surprisal). In capitalism, the predictable carriers are the rule of law, the maintenance of order, the defense of property rights, the reliability and restraint of regulation, the transparency of accounts, the stability of money, the discipline and futurity of family life, and a level of taxation commensurate with a modest and predictable role of government. These low-entropy carriers do not emerge spontaneously. They are the effects of political leadership and sacrifice, prudence and forbearance, wisdom and courage. Sometimes they must be defended by military force. They originated historically in a religious faith in the transcendent order of the universe. They embody a hierarchic principle. It is these low-entropy carriers that enable the high-entropy creations of successful capitalism.

And a bit more:

Economic growth springs not chiefly from incentives—carrots and sticks, rewards and punishments for workers and entrepreneurs. The incentive theory of capitalism allows its critics to depict it as an inhumane scheme of clever manipulation of human needs and hungers scarcely superior to the more benign forms of slavery. Wealth actually springs from the expansion of information and learning, profits and creativity that enhance the human qualities of its beneficiaries as it enriches them. Workers’ learning increasingly compensates for their labor, which imparts knowledge as it extracts work. Joining knowledge and power, capitalism focuses on the entropy of human minds and the benefits of freedom. Thus it is the most humane of all economic systems. [Emphasis mine]

In his RealClearMarkets review of Gilder’s new book on money, Tamny makes four critical points in particular:

1) On the “seen and the unseen” of currency speculation attributable to centrally planned money

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Venezuela Isn’t Cooking The Books Under Mass Inflation. It’s Lighting Them On Fire.

America’s government has gradually watered down its economic data over time, thereby painting a rosier picture of conditions on the ground than actually exists. Consulting economist John Williams has dedicated his life in fact to exposing its manipulation of economic data and backing into the real numbers.

But you will know when America has really hit full on panic mode when the feds stop printing figures altogether, and the only way to measure price inflation is through tracking the daily price increase of say, cronuts, or some other confection.

This is the position sadly but all-too-predictably in which Venezuela finds itself today. Writes the Wall Street Journal:

On monthly trips to his native Venezuela, Miguel Octavio heads to the same restaurant for the cornmeal cakes he enjoyed as a boy known as arepas, which are a staple here. The price, however, is never the same.

Over nine months, the Miami-based financial analyst and blogger has recorded a fourfold increase in what he calls his Hyperinflated Arepa Index, a yardstick he created to trace soaring consumer prices in this economically crippled country.

President Nicolás Maduro’s government stopped publishing monthly inflation data last December when the level hit 68% annually, the world’s highest. With the Venezuelan economy worsening and the ruling party facing tough congressional elections this December, the central bank hasn’t reported inflation, balance-of-payments or gross-domestic-product figures all year.

That has prompted economists and analysts like Mr. Octavio to compile their own indicators, basing calculations on everything from anecdotal evidence to federal tax revenue to banking-sector loans.

We know that central planning fails, but in Venezuela the not-so-benevolent dictators must have done so on an epic scale if they are no longer cooking the books but rather lighting them on fire.

Why has Venezuela’s economic decline been so sharp?

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