Veritas et Libertas

My Journey to Discover Truth and Liberty

Mises University 2014

For those of you not aware of this…I am in Auburn, Alabama this week attending the Mises Institute’s Mises U. So far it has been just incredible, I am enjoying every moment of it. To follow the official posts, please visit the Mises blog. As time allows I am posting to my Instagram, Facebook, and Twitter, so you can check it out there as well. I am excited to share more details next week, but the schedule is pretty intense and I can’t make any guarantees about additional posts this week. Just listen to the lectures and and follow along online! : )

Concerns about the Vision Statements

In my last post I discussed the issues I have with the Shared Values of Transform Rockford. The leadership of Transform Rockford was very responsive to these concerns and when I get back from Mises University, we will be meeting so that they can better answer these questions. I’ll definitely be writing another post to update you on that situation. However, that post was really just a lead-in to my response about the Vision Rally itself. I have three primary aspects of concern with the vision statement and related statements announced at the Vision Rally.

I think it is easy for those who have been in Rockford for some years to becoe cynical about the possibility of change. But while cynicism will not contribute anything meaningful to the discussion, there is the need for rational and objective consideration. When I step back from the Vision Statement and look at it more critically, I see a series of statements that basically describe a utopia. Simply writing down what our dream city would look like doesn’t seem compelling. And as I commented after participating in a visioning session, the unique perspectives of the individuals are lost when all the ideas are merged. For example, my own statement had to do with promoting basic individual rights. I don’t see that idea reflected anywhere in this finished vision statement. Considering that the concept of libertarianism was drowned out by the end of the visioning session, I had no expectation it would somehow show up at the end of the process, but it was still a bit disappointing. The vision statements were so broad and generic that I was left wondering why it was necessary to get so much community input. If the vision statement and the rally itself was simply a diplomatic move to get people engaged, then it worked. But if the intention was to create a thoughtful platform for moving forward, I found the vision statements sadly lacking.

I am not saying that I was cynically watching the Vision Rally—I did get excited about it, but mostly because it was good to see so many people gathered together being excited about something. I mean, how often does that happen in Rockford? If we get together, isn’t it usually to protest or complain? But I honestly didn’t get any kind of thrill from the whole vision idea. It didn’t shake my world, it didn’t challenge my preconceptions, it didn’t necessarily inspire me onwards. It was simply the saying out loud of everything we have all thought before. The act of announcing these statements in a public context was interesting, but the content itself wasn’t overly impressive.

My next concern has to do with causation. It does very little good to say we want to get on the top 25 cities list without identifying why we got on the worst 25 cities list. What went wrong? What caused the situation we know now? Why did this happen? What are the factors involved with the high crime rate, high unemployment, and general depression of the region? What failed to work and to cause these things, and what measures possibly contributed to the decline? Hope for the future is meaningless without a deep understanding how we found ourselves in this situation. 

I do recognize that identifying causation would be controversial and problematic. There are many different interpretations of the mess we’re in right now, and everyone has their own opinion on it. It would not be an easy issue for Transform Rockford to tackle, and I honestly don’t even know where one would begin with trying to align the community on the why of our situation. But aside from the practical questions, I think that this discussion would be necessary to a solid plan for the future. I don’t know how it would happen, but I do think it is essential to successfully improving our community.  

This last objection is the one that troubles me the most. In the discussions from and about Transform Rockford, there seems to be an implicit assumption that a better future for Rockford can simply be engineered. It is as if we get enough people to attend the rally, if there are enough people planning and coordinating, if there are enough willing volunteers, then we can reach the ideal set forth. It reminds me of the Keynesian economists using metaphors of engines to describe the economy…if there are enough knowledgable technicians to “tweak” and “adjust” the engine, then we make it run beautifully. Speaking of the Keynesian and Chicago schools of economics, Christopher Westley writes,

“To both schools, the human person is a cog in an economic machine that must be coerced to act in ways that make their systems work.” (Mises Daily) 

And talking about John Maynard Keynes himself, Shawn Ritenour explains,   

“Keynes took the human out of “human action” and reduced the economic system to a machine. Man became a mere social unit, merely reacting to changed conditions according to economic instincts. Keynes’s focus on the management of economic aggregates fed the hubris of modern economists by justifying their role as the keepers of the keys to the economic kingdom.” (Mises Institute) 

But the economy, and society itself, isn’t a machine to be maintained, it is a complex ecosystem that cannot be controlled by any person or group.  Lew Rockwell writes,

“It is the conviction of the liberal intellectual tradition dating back to the Middle Ages that society contains within itself the capacity for internal self-management.” (Mises Institute)

We do not need the government to get itself cleaned up so that it can solve all of our city’s problems. We do not need to weed out corruption and implement a more efficient way for the government to work in Rockford. I offer Lew Rockwell’s words again,

“As lovers of liberty, it is essential that we constantly warn about the dangers presented by the state. But it is also our job to constantly say, in as many ways as we can, that it does not have to be this way. The state is not the foundation of society, it is not the source of our security, it does not bring about prosperity, and it does not protect us.” (Mises Institute)

Society will run itself, as we’ve seen through the ages. In the example of money, a government simply did not decree a common medium of exchange one day because they saw the inefficiency of barter. Money—a common medium of exchange—developed spontaneously in the market. The government wasn’t needed to create, control, or regulate the currency. In fact, the government’s intervention in the money supply has only led to harm over the centuries. 

So, moving from the abstract back to Transform Rockford, I am concerned with the implied need for anyone to “do” something in order to improve our community. It isn’t a matter of doing more—it is a matter of doing less, and simply letting society create spontaneous and free order. 

I realize it could be argued that Transform Rockford has said nothing about using the government to achieve these ends. But I think it is implied in much of the material. For example, one of the impact statements on Funding and Alignment states, “our local government and non-profits are impactful, properly supported and aligned with the community vision.” This definitely suggests that government will be used as part of the solution. And since the government is such an intrinsic part of society now that unless someone explicitly states that something will be done outside the purview of the state, you can assume that government will be involved. If a community wanted to explore non-government options, or wanted to remove the government from controlling it, this would take intention and purpose. I have seen nothing from Transform Rockford to make me think that voluntary solutions will be explored. Lastly, Transform Rockford would probably not hesitate to use government in order to enforce its changes. But the moment Transform Rockford uses “legal” force to make a person or a group of people do what they want, they have become an apparatus of the state.

In conclusion, I agree that there is a desperate need for change in the Rockford area. But Transform Rockford seems to lack the philosophical grounding to make a coherent and substantial difference. We are thinking beings with a worldview that drives our actions—whether we recognize it or not. Without intentionally developing and stating a position on the role of the government and the role of the individual, I am afraid Transform Rockford is in a position to be used for further state intervention—rather than encouraging the freedom necessary for true prosperity and growth. 

Shared Values: Upholding Virtue or Undermining Freedom?

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Downtown Rockford after the Vision Rally

I intended this to be a post specifically about the Vision Rally, but I realized that I have not yet written much about the Shared Values and decided that topic deserved its own post.

Transform Rockford has developed a list of nine statements that sum up the values which the movement holds to and promotes.  Here is the list:

Update: I had incorrectly stated there were seven. There are actually nine of these value statements. I copied this text from the Transform Rockford site and apparently missed the first two, inclusion and caring. 

- Inclusion: Cultivate and support an environment that fully engages our community’s differences and diversity to ensure that individuals and organizations are heard, valued and supported.

- Caring: Show concern for the welfare of each person and foster a community culture that thinks and acts as one interactive and interdependent region.

- Respect: Embrace the knowledge and experiences of others by being attentive, listening well, and celebrate diversity as a strength and source of shared learning.

- Transparency: Foster an open process for maximum participant input and access to all information to enhance understanding and community ownership.

- Trustworthiness: Strive for integrity and reliable communication. Become committed to the highest levels of honesty and truthfulness.

- Unity: Place the greater good of all parts of our region and its transformation ahead of self or organizational interests.

- Ideation: Balance our brainstorming and decision- making process with all points of view and measurable information.

- Responsibility: Pursue excellence and accountability of self and others by not shifting blame or taking improper credit. Participate to the fullest of our ability.

- Interconnectedness: Won’t compromise any jurisdiction’s or organization’s identity or decision authority, but rather look to partner and integrate shared values, goals and philosophies.

After thinking through each of these very carefully, I determined that I could support most of these values. But there are a couple of them that concern me, so I will share my objections here.

The first one that bothers me is unity, wherein we should, “place the greater good of all parts of our region and its transformation ahead of self or organizational interests.” I am concerned by the idea that we ought to place the interest of the collective over the interest of the individual. I think this shows some confusion about what it means to have self interest. We all act to achieve our own personal ends. This is the human action axiom. And, as Hans-Hermann Hoppe pointed out in Economic Science and the Austrian Method, this axiom is irrefutable. If a person argues against this axiom, they are acting to achieve an end, which in this case would be the refutation of this statement as an axiom. So there is no way to avoid self-interest. It defines us human beings. However, self interest does not necessarily equal selfish behavior. Take the case of a philanthropist. This person receives satisfaction from knowing they have helped others. They place a high value on charity towards others. So they act, by giving away money, to achieve their end of feeling satisfied that they have helped someone else. In the case of Transform Rockford, many people are involved because they want to make a difference in the community. They want to leave the world a better place. That is their end, or their goal. So they are involved with Transform Rockford to pursue their own personal goal. It is the beauty of voluntary interaction that our self-centered goals become directed outward towards benefiting the rest of the world. 

Additionally, the wording of this statement is so ambiguous, it could easily be used for less than desirable goals. There is potential for this statement to be used by a communist movement to justify the denial of individual rights. I am in no way equating Transform Rockford with a communist movement, but the implications of this statement, if taken to the extreme, would be nothing less than communism. As Lenin famously said, “a few eggs must be broken to make an omelet.” There is no contrasting statement of individual rights in the Shared Values to help safeguard against this development, which leaves me quite concerned. 

The other concept that I am not sure about is interconnectedness, which means we “won’t compromise any jurisdiction’s or organization’s identity or decision authority, but rather look to partner and integrate shared values, goals and philosophies.” Again, this sounds great, but how would this actually work out? What happens when two organizations claim to have ultimate decision authority over the same group of people? What about when groups have inherently contradictory goals and philosophies? How will two organizations be integrated when their goals point in the opposite directions? And if you begin removing the contradictions until you get down to the fundamental shared values (because we can always reduce it to, “we are human beings,” or “we all want to be happy”), then there will be difference between anyone and any individual’s or group’s own identity will be lost. This whole sentence is full of logically problematic statements. 

So those are the two Shared Values which most concern me and I can basically get behind the rest of them. But I am also troubled by what is lacking in the Shared Values. There is no commitment to individual rights. The issues I have with the two value statements above could be resolved by affirming the individual’s right to life, liberty, and property. However, that could be a whole blog post in and of itself.

My last point about the Shared Values is that alignment with them is voluntary. As long as it stays that way, I have no problem with the idea of Shared Values. After the Vision Rally on Wednesday, I filled out a volunteer card. I was specifically interested in being on one of the “red teams” which gets to critique and challenge the drafts presented by each group. That sounds like the perfect thing for me. to do. Anyways, as I was filling it out, there was a checkbox for me to state if I agreed with the Shared Values. I thought about it for a few seconds and then skipped it, with a sense of relief. No one came up to me and said, “check that box, or else you’ll be arrested!” No one forced me to agree at gunpoint. Now, if I am not allowed to volunteer for Transform Rockford because I can’t fully support all the Shared Values, that’s fine. Any organization has the right to determine who can be involved. But Transform Rockford can’t come knocking at my door and demand that I sign my name to the Shared Values. So, as long as everything about Transform Rockford is voluntary, I will not object to the movement as a whole. There are aspects which concern me, but if participation is voluntary, I can raise no objections to the fundamental concept of Transform Rockford. 

In my next post I’ll get down to actually talking about my reaction to the Vision Rally and the information shared at that event.

Report on Transform Rockford Vision Rally 2014

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Last night was the much-anticipated Transform Rockford Vision Rally, held at the Coronado PAC. From the reports I saw online, the event drew over 1,400 attendees.  To recap what has been going on, Transform  Rockford has a 6 step process for changing the greater Rockford area. The stages are:

1) Analysis and case for change: Alignment on why

2) Develop the vision: Articulate our future

3) Define the strategy: Show the path to our vision

 

4) Develop the implementation plan: Assignment of work

5) Implement Initiatives & Measure: Achieve our vision

6) Review and Update: Update to Reflect Process/Change

The movement is currently in stage two, which can be broken down into these steps: 

a. Community Input

b. Vision Drafting

c. Community Feedback 

The community visioning sessions ended a few months ago, and since then the leaders of Transform Rockford have been drafting the vision. This vision was revealed last night, and now there will be a time of feedback and interaction with the community. After a final draft has been decided on, they will move into state three, defining the strategy. 

So, what was this vision statement announced last night? There are three parts to it, the summary vision intro, the vision statement, and twelve impact statements that cover different areas of improvement in the community. 

The vision intro is, “We are a top 25 community where our people are engaged, inspired and are leading successful and fulfilling lives.” 

(Side note: It really bothers me that the statement is missing the Oxford comma. I know this is a controversial topic, but I am definitely pro-Oxford, and so can’t help but cringe every time I look at the sentence.) 

The impact statements cover these facets of our community: 

Safety

Healthy lifestyles

Education

Economy and jobs

Planning 

Funding and Alignment

Quality

Physical Infrastructure 

Families & Neighborhoods 

Leadership and Youth

Arts and Recreation

Unity, pride, and culture

For each of these statements there is a brief summary of what the vision is, such as for Planning, “We take a purposeful, transparent, and results-oriented approach to planning for growth and renovation.” Or for Arts & Recreation, “Our community is unified, celebrates its achievements and diversity, takes pride in individual and collective achievement, and lives its shared values.” 

The two-paragraph vision statement takes this list and melds them into a comprehensive vision for the community.

After presenting the vision, the strategy for tackling these issues was explained. Improvement for each of these impact statement areas will be led by three members of the community, someone from business, a member from the public sector, and a leader from a religious or non-profit group. They will oversee the drafting a strategy for tackling their specific area. Their proposed plan will be reviewed by a “red team” which will challenge and critique the draft. After the plan has been strengthened through this dialogue and debate, it will be presented to the public for review and feedback. This is the process for each of the twelve facets listed above. 

So…what was the vision rally like? 

There was a definite vibe of excitement as I approached the Coronado. People of all ages and backgrounds were gathering outside the building to hear the lovely live music being played. I was quite early, but since I wanted to get a good seat and have time to set up my live-blogging, I headed straight inside. But the beautiful weather, good music, and the glamorous atmosphere of the Coronado tempted me to just chill outside for the extra 20 minutes. 

I’ll confess, I was pretty skeptical about the turnout for this. I was afraid it’d be one of those small events held in an awkwardly large facility. I guess I wasn’t considering that the turnout in November had been about 1,500, so it was realistic to plan on at least an equally large attendance for the Vision Rally. 

The excitement felt as we were waiting only escalated after the rally began. I found it amusing that each time someone was introduced on stage, the crowd felt compelled to give an enthusiastic round of applause. I can understand applause if 1) the person is extremely famous, or 2) if the person’s accomplishments have just been announced. But it is like a speaker says, “and joining me today is John Smith, who is…” but is then interrupted by uncontrolled applause over the sheer excitement of having a random, mostly unknown person on the stage. But the energy of the crowd was definitely a neat thing to experience, so I won’t complain about their need to express that through indiscriminate applause. 

Despite trying to maintain my neutral perspective on the whole event, I couldn’t help but be emotionally moved by some of the personal stories shared at the end. Of course, being the girl who cries over every sad video I see online, this was to be expected. 

After the rally ended and everyone began filing out, the introvert in me started to get overwhelmed by the sheer number of people there. But I mostly overcame that and instead talked to a few people about the event and their take on Transform Rockford. 

One of the volunteers who has been involved with quite a few of the visioning sessions said she enjoyed seeing how individual frustrations and dreams about the Rockford area were transformed into a community goal. 

Someone else was telling me how the rally made him realize the long-term scope of this project. It isn’t something that can be changed overnight, and it will require a lot of work and effort from many people. But Al, who moved here for work a few years ago, said that attending the rally made him want to become more involved with Transform Rockford. He saw the vision that was presented and wants to do his part to make it happen. When asked if there’s a particular part of the vision statement that makes him most excited, Al said he just wants to see a community that is prospering. And I was struck by his use of this word and how it does truly encompass everything else. 

Upon talking to another volunteer and finding that she was at the November rally, I asked how she would contrast the two events. Jill, a life-long resident of Rockford, described the November one as being “sobering” and having a funeral-like atmosphere. (As background, at that event, all the statistics and data on Rockford’s plight was presented. This was the first step in uniting the community in the recognition that something needs to change.) But in contrast to that bleak reality, the rally last night offered hope and was a reminder that we can make the future a better place. Having also helped at many visioning sessions across the community, Jill commented that it was interesting to see the diversity of our city. But after hearing from so many people, she realized that despite the differences, “we all really want the same thing.” 

So this has been a pretty positive and uplifting report. But of course, the cynic (or maybe just rationalist) in me has doubts. This post was focusing on the actual information shared by Transform Rockford, along with giving a sense of what it was like to attend the rally. In my next post, I’ll be sharing some thoughts on the viability of Transform Rockford.  I’ve tried to mostly present the facts of the movement so far, but I know that you all want to hear what I think of it all…so stay tuned!

Transform Rockford Visioning Rally

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Well…my live-blogging plan was foiled by my internet issues. My smartphone hotspot was supposed to work perfectly, but instead I had to resort to some brief Twitter posts. I’ll eventually master this whole live-blogging thing! Look out for a post tomorrow with a more detailed report and reflection on the Vision Rally. I had the pleasure of talking to several attendees and volunteers, so I’ll be sharing some of their comments also!

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First impact statement: Safety

In other words…people want to feel safe wherever they are in the city.

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Vision Intro Statement: “We are a top 25 community where our people are engaged, inspired, and are leading successful and fulfilling lives.”

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“Vision”… a preferred picture of the future

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Strengths of the Transform Rockford movement: 

High level of engagement across this community

Careful and consistent use of a proven process

Commitment as a community to the shared values

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Agenda for Evening: 

Outline of what’s happened so far

Review of shared values

Draft of vision and impact statements

Next step in the transformation process

Personal stories about participation in the transformation of Rockford

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Four minutes left…waiting…

 

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Live music performed outside as people gather at the Coronado. And indoors they’re playing American Authors. This is pretty awesome!

Book Blogging: The Odyssey, Book II – V

We had left off in Book I with Telemachus (Odysseus’ son) being challenged by Athena to leave his childhood behind and grow into a hero worthy of his father. So, appropriately, Book II is titled, “A Hero’s Son Awakens.” Telemachus carries out a well-intentioned but doomed attempt to intimidate the suitors who are literally eating his family out of house and home. Lacking their respect and having no “bite” to his “bark” they are not scared by his threats but instead pity his childish outburst of temper. Athena intervenes again and counsels Telemachus to go on a trip to visit some of his father’s friends. She arranges for supplies and a crew to accompany him.

Book III opens with Telemachus reaching Nestor’s home and asking him about news of his father. Nestor tells the story of Orestes, the son of Agamemnon who avenges his father’s death, which seems to be a strong hint to Telemachus that he is not to sit back and let outrages happen. A hero takes action and does his best to end a bad situation.

In Book IV Telemachus travels on to see Menelaos and Helen. Menelaos tells the story of his return from the war, and tells Telemachus the latest news he had of Odyssey from the gods,

“Laertes’ son, whose home is Ithaca.
I saw him weeping, weeping on an island.
The nymph Kalypso has him, in her hall.
No means of faring home are left him now;
no ship with oars, and no ship’s company
to pull him on the broad back of the sea.”

While Telemachus is being entertained by Menelaos and Helen—the most beautiful woman on earth—back in Ithaca the suitors discovered that Telemachus has struck out on his own. And they are not happy.

“A bad business. Telemachus had the gall
to make that crossing, though we said he could not.
So the young cub rounds up a first rate crew
in spite of all our crow, and puts to sea.
What devilment will he be up to next time?—
Zeus blast the life out of him before he’s grown!”

They concoct a plot to intercept Telemachus on his way home and kill him before he reaches Ithaca’s shore again. But, of course, Athena is aware of their plans and won’t let the evil schemes come to fruition.

It isn’t until Book V that we actually hear directly about Odysseus. This book opens with Athena before Zeus. She tells him of all the obstacles in Odysseus’ path. Zeus then orders Hermes to visit Calypso, the nymph who is keeping Odysseus on her island, and tell her that Odysseus must be freed. Calypso reluctantly agrees—who can argue with Zeus? And there’s this amusing exchange between Calypso and Odysseus. She tells Odysseus that he is now free to go home, but questions his unfailing devotion to his wife waiting at home for him.

“‘Can I be less desirable than she is?
Less interesting? Less beautiful? Can mortals
compare with goddesses in grace and form?’

To this the strategist Odysseus answered:

‘My lady goddess, here is no cause for anger.
My quiet Penelope—how well I know—
would seem a shade before your majesty,
death and old age being unknown to you,
while she must die. Yet, it is true, each day
I long for home, long for the sight of home.’”

Odysseus is often praised for his cleverness, and this is one of the first examples. He loves Penelope and wants to leave the island of Calypso, but he doesn’t dare anger this sea nymph. So he nimbly answers her questions by saying that though Penelope is not as beautiful, she is his wife and he is homesick. Some Greek heroes, such as Agamemnon, were known for their physical skill, but while Odysseus has great strength, he has a quick mind and a talent for subterfuge that allows him to scheme his way out of many difficult situations. So, Calypso’s jealousy is placated, and she gives him an axe. Now, it is interesting to note that she doesn’t provide a boat for him, but simply a tool. With this axe, he is able to fell enough trees to build himself a raft. This is also a characteristic of a hero. He is very handy with any materials at hand. With a simple tool he has the knowledge and skill to construct a way of escape for himself.

After his raft is finished, he sets off across the seas. Not long into his journey, he finds himself in the midst of a brutal sea storm. A sea goddess, Ino, notices his plight, and gives him her veil, saying that he should wrap the veil around himself and swim to the nearest island. She says the veil will protect him and bring him safely to shore. He hesitates, but as his raft is pulled apart by the waves, he decides it is his only chance. Book V ends with Odysseus crawling onto the beach of an unknown island.

 

Reviving the Rust Belt: What’s the Answer?

Last Thursday I attended an event hosted by Transform Rockford which was part of their Community Learning series. At this event there were two economists from the Chicago Fed who spoke about a recent study they conducted on cities in the “rust belt” or, the postindustrial Northeast and Midwest regions. The goal of this study, the Industrial Cities Initiative (ICI), is to “identify policies and programs that promote (or inhibit) economic growth and vitality in industrial cities.” While Rockford was not included in this study, the results are of relevance to this city which, like cities across the Midwest, has grappled with the decline of manufacturing since the 70′s.

Cities researched during the study include Green Bay, Racine,  Aurora, Joliet, Gary, Grand Rapids, Pontiac, Fort Wayne, Waterloo, and Cedar Rapids. As criterion for selecting cities, industrial cities were “defined as cities that in 1960 had a population of at least 50,000, with manufacturing accounting for at least 25 percent of total employment.” The primary question was, how does loss of manufacturing employment effect total unemployment, loss of population, and median family income?

You can read the working paper here to see the graphs and data collected. Rather than simply restating the findings, I am going to highlight some of the benefits I saw from the study and then raise a few questions about it. One cannot be a good Austrian economist without giving at least some criticisms of anything from the Federal Reserve : )

- I appreciated Susan Longworth’s emphasis that there is no “one size fits all” answer to the problems faced by industrial cities. She underscored the unique situation of each city and said the best approach is one that seeks to find the city’s specific strengths and weaknesses and build a strategy around that recognition.

- I also liked the point made about job creation itself not being enough to revitalize a city. There is more to a strong and healthy economy than simply having an abundance of jobs. “Make work” schemes don’t help a community in the long-term, they only hinder its true recovery.

Some questions I would have liked to see addressed:

- Briefly mentioned at the start of the lecture was the fact that this study was being conducted so the Fed could better understand community development and have make better monetary policy decisions. Of course, being a Fed study, it would not have considered the possibility that the Fed should not be making monetary decisions at all, but this was the glaring issue from my perspective. The role of the Fed (and the oft-cited Community Reinvestment Act) in the economic downturns that impacted these cities so dramatically was, of course, not discussed.

- In most of the graphs shown, Rockford’s data was compared to the numbers for the United States as a whole. I think this is misleading. I think it denies the natural ebb and flow of the economy throughout the nation. Each city should not be expected to have the same ratio of manufacturing work, skilled workers, employees with higher educations, etc…because these are variances that make some cities good for some things and other cities good for other types of production.

- Also, it seems a weak assumption that these industrial cities should regain the manufacturing jobs lost over the years. This point was hinted at, but not explored as it deserved to be. Susan Longworth noted that when manufacturing has returned to these communities, it requires fewer, but more skilled, employees as it used to. This points to an improvement of the capital structure—less-skilled workers have been replaced with capital, such as better machinery or production techniques.  There is nothing to be decried here. It is a beautiful example of how the economy develops. I think it was Henry Hazlitt (though I could be wrong) who gave the example of unemployed carriage-makers at the beginning of the 20th century. No one in their right mind would bemoan the invention of automobiles, simply so these carriage-makers could maintain their familiar occupations. Of course the upheaval of their market was difficult, and it took time for them to find and adjust to new employment, but this invention offered long-term benefits. The automobile made the world a better place, and freed the carriage-makers to use their time for a more highly valued end.

- It would have been interesting to see the correlations between increased minimum wage, higher taxes, increased regulations, protectionist policies, and the loss of manufacturing in these cities. I wanted to ask questions about these causes, but since they were not included in the study, it would have been to no purpose. But rather than studying the common number of community leaders in each city (how many people held leadership positions in multiple organizations), I would have liked to see some data on how the government’s intervention has harmed these communities. But I wasn’t expecting this kind of presentation from the Fed anyways, so I wasn’t very disappointed.

Overall, the faulty assumptions made about why these cities have experienced a decline made it difficult to find useful application from the data collected. And the emphasis on data as a source of knowledge for decision-making made me grateful, once again, for the solid axioms held by the Austrian school because these irrefutable truths about people and the economy leave us with no doubt as to the ideal path of recovery.

For more reading…

Index for the ICI study 

On the Community Reinvestment Act and the Housing Crisis

On the Austrian Business Cycle Theory 

Book Blogging: The Odyssey, Book I

I’ve always had a fascination with Greek literature, and it seems that my interest is never satisfied. Even after doing a MOOC from Harvard last year on “The Greek Hero” I was excited to see another MOOC from University of Pennsylvania on Greek and Roman Mythology. So far—two weeks into the course—it has been amazing!

The first book assigned to read for the class was The Odyssey. However, the reading is split up into three weeks, so for each week I’ll be reading 8 of the 24 books (aka chapters) of The Odyssey.

You know you’re into Greek lit when you have a very strong opinion about which translator you prefer. While the professor of this course recommends Fagles, I really love the Fitzgerald translation, so that’s the version I’ll be quoting from here.

So…what’s The Odyssey all about? It can be seen as a sequel to The Illiad—after all the fighting is over, the heroes have to make their way home. For some, that journey is easy, for some it takes a few years, for some the return  home means tragic death (Agamemnon) and for some, the journey goes on for 10 years. That’s Odysseus, the hero of this story. When the story opens, he’s been trying to get home for 10 years. But…he was shipwrecked on the island of Calypso, a sea nymph, who had detained him for several years and continues her attempts to make him happy as her lover. But Odysseus, while he has no means to get off the island, has never settled for staying there for the rest of his life.

Actually, the story doesn’t open with Odysseus on the island of Calypso. The story opens in the heavens, where Athena speaks to Zeus and intercedes for Odysseus, saying,

“But my own heart is broken for Odysseus,
the master mind of war, so long a castaway
upon an island in the running sea;
a wooded island, in the sea’s middle,
and there’s a goddess in the place, the daughter
of one who baleful mind knows all the deeps
of the blue sea—Atlas, who holds the columns
that bear from land the great thrust of the sky.
His daughter will not let Odysseus go,
poor mournful man; she keeps on coaxing him
with her beguiling talk, to turn his mind
from Ithaka. But such desire is in him
merely to see the hearthsmoke leaping upward
from his own island, that he longs to die.
Are you not moved by this, Lord of Olympos?”

Much of Odysseus’ trouble was due to Poseidon, god of the seas, being angry at him for killing his son. But Zeus basically says, “okay…Poseidon has had his revenge, he can’t stay angry at Odysseus forever.” To which Athena shares her plan for getting Odysseus home, and then,

“Flashing down from Olympos’ height, she went
to stand in Ithaka, before the manor.”

And from here we discover the condition of Odysseus’ home. While he’s been fighting and enduring a multitude of trials, a number of men have set their sights on marrying his faithful wife, Penelope. These suitors have invaded Odysseus’ house and basically party while waiting for Penelope to make a decision about which one she will marry. This is the context of the famous story about how she promises to marry after weaving a beautiful cloth, but then secretly unravels the cloth every night. Athena sees this outrage,

“Before her eyes she found the lusty suitors
casting dice inside the gate, at ease
on hides of oxen—oxen they had killed.”

But she doesn’t have long to contemplate this, because Telemachus—Odysseus’ son—sees her. Now, she had disguised herself as a friend of the family, Mentor, which is the most common disguise she takes through the story. She talks to Telemachus, and he essentially blames the gods for the mess that’s been created in his home. Telemachus is about 20 years old, but as Athena quickly realizes, he has some maturing to do. His father, and any other hero, would have taken action to make the situation better. But Telemachus spends his days wishing his father (presumed dead) would suddenly appear and make everything right again. As Athena tells him, those daydreams are fine for children, but not for men. So the story of Odysseus will not only be about his restoration as a hero but also also about his son’s growth as a hero. Telemachus, lacking the his father’s example, now has Athena (in the form of Mentor) to guide him and give him counsel as a maturing young man.

I had planned to get through Books I – VIII, but this was mostly just Book I…so I guess I’ll be doing more posts than I had thought!

A Girl and Her Chai Tea Latte

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In the hopes of increasing my productivity, I decided to spend the afternoon at a local café. By the time I got there, it was the middle of lunch rush. I stood in line hoping that there’d be a open table in a quiet corner—preferably with an outlet nearby. Since I’d had plenty of coffee already, I ordered a chai tea latte. After ordering and getting a number for my table, I went in search of a table. I found a good table, sat down, put in my earbuds, and began my afternoon reading. A few minutes passed and I briefly wondered why my drink wasn’t done. Seeing the place was packed, and knowing I’d be there for several hours, I just went on reading. About 20 minutes later a waitress came to my table and asked if I had ordered a chai latte. I responded and after finding that I had not received it yet, she apologized profusely. I assured her it wasn’t a big deal, but she quickly assured me that she’d have it out to me right away. Sure enough, about 3 minutes later another waitress brought it out—and again apologized for the delay. She asked if I remembered who had taken my order. I am the worst person when it comes to details, so I had no idea who taken my order. I told her that I was in no hurry and it was okay. She apologized again and left. I resumed my reading, but shortly a waiter came out to my table. I realized that he had been the one to take my order. He apologized, explained how it was that he didn’t have my order done on time, and apologized again. The whole time I was saying, “oh, don’t worry about it.” After apologizing for what he thought was a sufficient amount of time, he left and I returned to my reading. While I wasn’t the least upset about my delayed drink, I was struck by the concern over my potential irritation. Once it was recognized that I had been given less than ideal service, a lot of extra effort was put into making sure that I was satisfied. And isn’t this really how the market works?

While sipping my chai latte I reflected on experiences I’ve had—and heard about—with government agencies. You go to the DMV and wait in line for hours and there’s never an apology. Inordinate waiting isn’t the exception, it is the norm. We’ve come to expect delays and inconveniences as part of dealing with the government. This might happen occasionally in the free market, but it is quickly rectified. It doesn’t happen day after day. Why? Because if you have a dissatisfied customer, they probably won’t be your customer for long. There’s something called competition in the market. If you don’t like a company, you simply go somewhere else. And that’s disastrous for a business that depends solely on making their customer happy. This is why the free market will always be better at providing goods and services. The government faces no threat. When we’re forced to use their services, there’s no risk that they’ll lose their customers. And so it doesn’t matter if we walk away as satisfied customers or irate citizens. We’ll have to walk back into the DMV again and go through the same unpleasant experience. For the government relies on the gun that’s always there, whether we recognize it or not. The market relies providing goods and services that other people value. And that’s why the state will always bring destruction and waste while the free market will always be the source of that which is good and beneficial to the world.

 

Book Blogging: The Case Against the Fed

In the last few weeks I’ve been thinking about what to do with my site. It has undergone a lot of transformations over the years. My site is a reflection of me, and like I’ve changed and evolved from my young high school self, this site has developed too. To reflect my reading projects and enjoyment of writing as a way to process what I learn, I am going to start doing something new, what I’m calling, “book blogging.” Up till now I’ve tried to write about books only after I read them completely through. But now I am going to be blogging my way through books. This will look different for each book, but it will be a way to capture my thoughts in real-time versus waiting until I’m done. Having said all that, my first book will be a lot like a book review because I did indeed finish reading it, but only about an hour ago.

The Case Against the Fed by Murray Rothbard is on the list of required reading for Mises University. I’ve read it several times before, but I wanted to refresh my mind on the details. It is so much broader than the title suggests. Rather than being a tirade against the Federal Reserve alone, it is really an historical and theoretical demolishment of central banking.

The first few chapters deal with monetary theory, how a common medium of exchange develops, and addresses that ubiquitous question, “what is the optimum supply of money?” Rothbard also makes a brilliant and crucial distinction between loan banking and deposit banking. Confusion between the two very different roles of banks has led to much of the monetary mess we face today. He shows how fractional reserve banking came out of these different banking types and is an attempt to keep the facade of deposit banking while actually being a loan bank. He then goes on to deal with the implications and problems that are caused by fractional reserve banking and how this creates a perfect situation for the emergence of a central bank.

But this isn’t a pure theory book—his arguments are rooted in history and go much farther back than 1913. He traces the development of banking in England and the situation which brought about the Bank of England. Recognizing that America has always been strongly influenced by England, this serves as a good lead-up to the story of banking in the United States. Rothbard is never satisfied with the established story, he digs deep into American history to show who was behind the major financial changes since the American Revolution and demonstrates that a central bank has nothing to do with creating market stability and everything to do with guaranteeing that inflation will not collapse the economy. He traces the dark history of the Fed from the last 19th century through the passing of the Federal Reserve Act in 1913. But he goes on to show the internal struggle between the different elite bank families and how this impacted the country. For example, in the first few years of its existence, the Morgan family had maintained ultimate control of the Fed. But this was not to last, for,  “The New Deal constituted a concerted bringing down and displacement of Morgan dominance, a coalition of opposition financial out-groups combined in the New Deal to topple it from power.” This coalition was formed by families and banks such as the Rockefellers, Lehman Brothers, Goldman Sachs, and the Kennedys.

The overall message of The Case Against the Fed is that, despite all the propaganda, the Fed essentially exists to prop up an unstable economic system based on pyramid inflation. In a free market, the fraud would be quickly discovered, but a central bank will artificially “save” the market from collapse through increased inflation (which caused the instability to begin with) and the cycle is perpetuated. The astute reader will quickly see how Rothbard’s explanation of our monetary system is seen in our current situation. Nothing has really changed since 1913. We have new words to describe our financial problems, but there is the same cause and the same ineffectual answer. Nothing will change until we recognize the true role the Federal Reserve plays in our recessions. It is no “savior” to the economy but rather the market’s greatest nemesis.

 

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