Wednesday, December 8, 2010

Libertarians VIII Conclusion 97

Libertarianism is a quarrelsome philosophy. They tend to disagree with each other often and over nearly everything.  This bickering strongly indicates that the philosophical homework hasn't been done; it's impossible to see the Libertarian "philosophy" as have been rigorous enough to pass stern analysis from logicians within the discipline of formal philosophy.
The libertarians are interested in politics and law, but they  are not effective in stopping the lobbyists from manipulating them! In so failing to understand and oppose “over the counter” derivatives, a huge and growing problem was created. The man who could have stopped it, Alan Greenspan, thought it was impossible for bankers to act against their own interests, and therefore the situation did not need regulation. This shows a colossal stupidity about fraud and the sorts of environments that incubate fraud. A lack of understanding of risk is also obvious, here. Repeated iterations of computerized data are not lab results, not true outside data.

The cunning of the U.S. Chamber of Commerce and the Olin Foundation is laying the academic and intellectual framework for the respectable references to support unregulated banking of highly volatile instruments was remarkable and effective. This represents chillingly brilliant lobbying.

Of course, a shill or front man is needed. Congressman, and later Senator, Phil Gramm filled this bill nicely as a PhD economist. He appeared to be an expert. He sounded like he knew what he was talking about. But he had to be bluffing, because the instruments themselves were changing and morphing so fast.

Gramm-Leach-Bliley, the repeal of the Glass Steagall Act separating banking from insurance and brokerage, passed the Senate by a 90-8 vote. So the stupidity was bi-partisan. Claims by Democrats to be acting as safeguards for small investors and stable banking are false.

Texas Congressman Ron Paul did vote against Gramm-Leach Bliley, although he gave a speech against continuing the Glass-Steagall act four days before the replacement was signed into law.

Libertarians have supported bank-underwritten off-market derivatives, bets which are also quasi-insurance contracts devoid of reserves. As a certified public accountant, I assure that that this is a crazy position abhorrent to common sense and centuries of good business practice. Libertarians, as a group, utterly fail to preserve Quiddity. Perhaps it's an even harder flunk than the Christian right.

The One True Prophet Worth Following

The “winner” or wise man in all of this fiasco is already-dead Austrian philosopher and economist F. A. von Hayek (1899 to 1992). One blog says of him:

“Wikipedia had this to say about Hayek’s book [The Constitution of Liberty]:
Margaret Thatcher, the Conservative British prime minister from 1979 to 1990, was an outspoken dévotée of Hayek’s writings. Shortly after Thatcher became Leader of the party, she “reached into her briefcase and took out a book. It was Friedrich von Hayek’s The Constitution of Liberty. Interrupting [the speaker], she held the book up for all of us to see. ‘This’, she said sternly, ‘is what we believe’, and banged Hayek down on the table.”
“Hayek, I believe makes the most comprehensive case against statism in all its forms, and the choice we have between liberty and tyranny. (I hear that Levin’s new book by that title, Liberty and Tyranny, is also a good read.) Hayek always favored institutions that had evolved over time, such as capitalism and common law, as opposed to institutions that were designed by a small, elite cabal. The latter he considered hubris, because more wisdom is contained in the trial and error of the ages than a small group of so-called “enlightened” individuals could ever possess. In Hayek’s view, this is why capitalism worked; because it was impossible for a small group of state planners in a command economy to possess enough information to effectively run an economy; it was always preferable to let individuals make their own economic decisions.
“He wrote the following:
“Those who believe that all useful institutions are deliberate contrivances and who cannot conceive of anything serving a human purpose that has not been consciously designed are almost of necessity enemies of human freedom. For them freedom means chaos.” The Constitution of Liberty, 1959, p. 61

It was Hayek, not Ayn Rand, not Alan Greenspan, not Fox news, not the National Review, not the Republican Party, who brought down socialism.

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