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Advancing Austrian Economics, Liberty, and Peace

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Making Economic Sense
by Murray Rothbard
(Contents by Publication Date)

Chapter 3
Discussing The "Issues"

Depending on your temperament, a presidential election year is a time for either depression or amusement. One befuddling aspect of campaign time is the way the Respectable Media redefine our language. Orwell wrote a half-century ago that he who controls the language wields the power, and the media have certainly shown that they have learned this lesson. For example, the Respectable Media have presumed to declare what "the issues" are in any campaign. If Candidate X finds his Opponent Y's hand in the till, the media rush up to exclaim: "That's irrelevant. Why don't you talk about The Issues?"

In the Bush-Dukakis race, the media anointed The Economy as the only worthwhile topic; anything else was only a smokescreen designed to "detract" from the "real issues." One would think that such a focus would gladden the heart of any economist, but if you thought so, you're not reckoning with the semantics experts in the Establishment media. For the Economy can only be approached in certain, narrow, allowable grooves. Any other approach is brusquely read out of court.

The media focus, quite legitimately, on The Recession, but again, only in certain narrowly permissible ways. Because of the recession, Unemployment has soared (a "lack of jobs"); Affordable Housing has dwindled (the Homeless); Affordable Health Care is diminishing because of increased health costs, and, in addition to these particular sectors, deficits have soared to $400 billion a year.

In short: there is a lack of jobs, health care, housing and other goodies, and it follows, either implicitly or explicitly, that the federal government must expand its spending by an enormous amount, as part of its alleged Responsibility to supply such goods and services, or to see to it that they are supplied. Anyone who may presume to rise up and say, "Whoa, it is not the responsibility of the federal government to supply these goodies," is, of course, accused by the ever-vigilant Respectable Media of Evading and not discussing The Issues.

In media lingo, in short, "discussing" the issues means accepting the media's statist premises, and solemnly haggling over minute technicalities within those premises. If, for example, you say that national health insurance is tantamount to socialized medicine you are accused of using "scare words" and of not discussing The Issues. Anyone who thinks that socialism or collectivism is an important issue is quickly swept aside.

But how then is the federal government to spend hundreds of billions more and yet Do Something about the deficit? Ahh, the  cure-all, of course: huge increases in taxation. It is only a myth that anyone who proposes tax cuts is lionized while those who urge tax increases are ostracized. While the general public may still feel a vestigial admiration for tax cuts, they are usually overwhelmed by the intellectual and media elites who trumpet the precise opposite message: that proposing big tax increases "faces The Issues," is courageous and responsible, and on and on.

Narrow-gauge discussions also have the advantage of bringing in the ubiquitous Washington "policy wonks," the supposedly value-free "experts" who are ready to trot out computerized analyses of the alleged quantitative results of every proposed tax increase or of any other program. And so we have this unedifying spectacle: Candidate A proposes a tax increase; his opponent B charges that A's plan will cost middle-income taxpayers x-hun-dred billion dollars; A accuses B of "lying," while B does the same to A's different proposal for tax increases.

Most irritating of all is the media's current penchant for making their alleged "correction," in which a paper or network's own policy wonk claims that the "facts are" that B's increase will cost taxpayers Y-hundred billion instead. The media's "correction" is most annoying because everyone realizes that each candidate and his supporters will put the best possible spin on his own programs and the worst on his opponents'; but the media's own bias masquerades as objective truth and expertise.

For the point is that no one actually knows how much is going to be paid by which group under any of these programs. The numbers that are tossed around as gospel truth, as "facts," in an America that has always worshiped numbers, all depend on various fallacious assumptions. They all assume, for example, that quantitative relations between different variables in the economy will continue to be what they have been in the last several years. But the whole point is that these relations change and in unpredictable ways.

How is it that not a single computerized economist or policy wonk predicted the current recession? That not a single one predicted its great length and depth? Precisely because this recession, like all recessions, is quantitatively unique; if there hadn't been some sudden change in the various numbers, there wouldn't have been a recession, and we'd still be enjoying a seemingly untroubled boom. As former German banker Kurt Richebacher pointed out in his Currency and Credit Markets newsletter, in contrast to the 1920s and 1930s, economists don't think anymore; they just plug in obsolescent numbers, and then wonder why their forecasts all go blooey.

Here is a suggested Discussion of The Issues that will never make the media hit parade: Yes, the deficit is a grave problem, but the way to cut it is never to increase taxes (certainly not during a recession!) but instead to slash government expenditures. In contrast to the conventional media wisdom, increasing taxes is not, except strictly arithmetically, equivalent to cutting expenditures. Increasing taxes or expenditures aggravates the dangerous parasitic burden of the unproductive public sector and its clients, upon the increasingly impoverished but productive private sector; while cutting taxes or expenditures serves to lighten the chains of the productive private sector.

In the long run, as we have seen under communism, the parasitic sector destroys the private productive sector and harms even the parasites in the process. But it is ironic that left-liberals who affect to be so concerned about the state of "the environment" or of Mother Earth five thousand years from now, should adopt such a short-sighted perspective on the economy that only imme diate problems count, and who cares about savers, investors, and entrepreneurs?

Where to cut the government budget? The simplest way is the best: just pass a law, overriding all existing ones, that no agency of the federal government is allowed to spend more, next year, that it did in some previous year the earlier the year the better, but for openers how about the penultimate Carter year of 1979, when the federal government spent $504 billion? Just decree that no agency can spend more than whatever it spent in 1979; agencies that didn't exist in 1979 could just subsist from then on, if they so desire, on zero funding.

But of course, this proposal would be both too simple and too radical for the Establishment policy wonks. By definition, it cannot come under the official rubric of "discussing The Issues." 

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