I think I’m going to have to get a copy of Thomas E. Woods, Jr.’s new book, Meltdown. His recent article for American Conservative is excellent stuff on our economy, what got us into this mess, and why the stimulus package is more of the same.

Under fiat money, currency without commodity backing, the central bank can artificially lower interest rates by increasing the supply of money—and thus the funds banks have available to lend—through the banking system. This is supposed to stimulate the economy. What it actually does is mislead investors into embarking on investments that the artificially low rates seem to validate but that cannot be sustained under existing economic conditions. Unprofitable investments are made to seem profitable, and over time the result is the squandering of untold resources in lines of investment that should never have been begun.

If lower interest rates are the result of increased saving by the public, those greater saved resources provide the means with which to see the additional investment through to completion. But the situation is very different when lower interest rates result from the Fed’s creation of new money out of thin air. In that case, lower rates do not reflect an increase in the pool of savings from which investors can draw. Fed tinkering, in other words, does not increase the real stuff in the economy. The additional investment that the lower rates encourage therefore leads the economy down a path that is not sustainable.

That is how the Austrians knew the present bust was coming.

President Obama’s press conference last night was a disaster.  He came out swinging, and ended up as guilty as anyone he’s criticized for “playing politics.”  Let me summarize Obama message last night: “I’ll talk to anyone about the economy except libertarians.”  Libertarians – or Austrian, free-market economists – might be “sincere” (condescending, wasn’t it?), but Obama thinks our point of view on the economy – how we got into this mess, and how we’ll get out of it – is so patently absurd, it doesn’t even get to be on the table of options.

In the first place, Obama portrayed free-market economists as dogmatic idealogs, unable to realize that a philosophical disagreement about government intervention in the economy needs to be set aside, because the crisis is bad.  That’s silly.  Free-market economists are against this “stimulus” because we believe it’s only going to make the problem worse. Our concerns are just as practical.

Secondly, Obama basically went so far as to decide that anyone who is an Austrian economist isn’t really an economist.  Because he claimed quite plainly that almost all economists agree with the need to “do something.”  He’s quite wrong about this: Cato put together a list.  That’s a long list.

Why no one listens when he says stuff like this, I don’t understand.

Pat Buchanan has a helpful post at The American Conservative summarizing the last century of international relations on the economy, including Bretton Woods (1944) and the dropping of the gold standard (1971) and makes some predictions about how the U.S. might respond to European plans to renew a globalized economy (“screw you”).

Also, I’ve been meaning to link this – I’m trying (unsuccessfully so far) to work my way through The Bailout Reader at the Mises Institute.  The Mises folks are Austrian school, free market economists.  (And by “free,” I don’t mean, “sorta kinda free but not really, especially when the economy’s in the crapper”).

Update: Read iMonk’s Whine and Sheesh Party.  Excellent stuff, from someone unenthusiastically voting McCain.

Bob Barr is not a candidate to get excited about.  At least, I’m not excited.  I’m kinda lethargic about the whole thing.  I haven’t listened to his speeches, read his press releases, watched him on YouTube, or read the blog.  If something unexpected happens, preventing me from getting to the voting booth, I won’t cry about it.  But I’m certain I’ll get there, and I’m fairly certain I’ll be voting Bob Barr.

What I’m absolutely certain about is that I won’t be voting for John McCain.  Ready for something shocking?  Gun to my head, forced to vote for one of the two major parties, I’d vote Obama.  No, I don’t like his policies. I don’t think Obama with a hugely Democratic Congress is a good thing.  But there’s no way in hell I’m rewarding the party that’s supposed to be representing conservatism with my vote.  

And least of all for John McCain.

I can’t understand the reasons conservatives are contriving for supporting McCain.  I can’t.  I don’t get it. He is manifestly not a conservative, and the fact that some people have figured out ways to convince themselves that he is just shows how far the definition of “conservatism” has shifted.  

I mean, come on.  He complains about Obama’s economic policies.  Are you kidding me?  The man whines about socialism, redistribution, and earmarks, but he supports bailouts and the government buying up bad mortgages.  One blogger complained recently about Obama’s Kenyesianism, citing it as one of the reasons he’s voting for, you guessed it, John McCain.  I can respond with just three letters:   W.T.F.

Complaints from McCain supporters about Obama’s tax policies are equally shocking.  I mean, after all:

The Republican argument of the moment seems to be that the difference between capitalism and socialism corresponds to the difference between a top marginal income-tax rate of 35 per cent and a top marginal income-tax rate of 39.6 per cent.

Beyond his obvious silliness in trying to make some actual distinction between himself and Obama on domestic policy, his foreign policy is beyond frightening.  Should he win, I think we’ll see a Lieberman Secretary of State.  And then that dynamic duo, along with Palin who seems to think we’re already at war with Iran, we’ll be changing our national anthem to “Bomb Iran” and taking over the whole Middle East.

And speaking of Palin.  Come on, folks.  She’s … nevermind.  I’m not even going to start.  If you don’t get why this woman can’t ever be our president (including, but not limited to, her complete misunderstanding of the simplest part of the First Amendment), and why her selection by McCain was reckless and demonstrated terrible judgment, I’m not going to convince you with anything I write here.  Yes, the media has been biased and vicious toward her.  But still.  

John McCain is a man who served his country honorably, but who dove head-first into Rove-style politics as soon as he got the nomination.  He is bad for conservatism, even if I do believe his desire is to honorably serve his country.

So I’m voting for Bob Barr.  He isn’t a great candidate, but he’s the only one who’s close to what small-government conservatism actually looks like.  

And because the Republicans deserve an embarrassing defeat on Tuesday.  And I hope they get it.

A couple days ago, when the Obama “redistribution” audio clip came out, I braced myself, considered responding how I really want to respond, and withheld.  Look, Obama’s policies scare me.  But there’s nothing quite as disingenuous as McCain criticizing Obama on this point, or Bush-supporters doing the same.  Jacob Sullum of Reason goes ahead and says it:

…there’s no difference in principle on this issue between Obama and McCain. Both want to take money away from people who work for it and give it to people they believe deserve it. How else would you characterize McCain’s plan to rescue reckless lenders and borrowers by using taxpayer money to buy “bad home loan mortgages”? Medicare, Medicaid, progressive income taxation, and Social Security, to name just a few redistributive programs that both candidates support, also entail taking one group’s earnings and giving them to another group, and in some cases the beneficiaries are more affluent than the people compelled to subsidize them. McCain’s outrage over “redistribution of wealth” is awfully selective.

(Can you tell I’m a bit upset with conservatives?)

I called my Senators and Congressional Rep for the first time ever today.  I also signed up at No Cash for Trash and put a widget in the sidebar to the left.