Lens of Liberty

This morning, Steve Chapman at Reason defends Fed Chairman Ben Bernanke from the attacks of GOP Presidential candidates. While I don’t agree with Chapman’s argument in this article, right now I’m not going to argue about the merits of his case. What I find interesting is who’s name isn’t mentioned in the article.

In Tuesday’s debate, former House Speaker Newt Gingrich pronounced him “disastrous.” Former Massachusetts Gov. Mitt Romney charges that he has “over-inflated the amount of currency.” Texas Gov. Rick Perry warned Bernanke against pursuing a monetary policy that would be “treasonous.”

Gingrich, Romney, and Perry. Hmmm…are those the first names you think of when it comes to criticizing the Federal Reserve. Or, how about this guy.

Ron Paul supporters are quick to point out that their candidate seems to be overlooked by the MSM in this campaign, but I think even MSNBC would manage to work in his name in an article about the candidates positions on the Federal Reserve. I suppose Chapman only wanted to include A-list candidates, like Newt Gingrich.

Now, to completely reverse direction.

The comments on Facebook for this article are largely negative. Understandable, since defending the Fed is a rather unorthodox position for libertarians. However, I have to take issue with those who question why Reason Magazine would allow Steve Chapman to spew such heresy on their pages.

Come on Reason…Stop publishing big government non-libertarian viewpoints from Steve Chapman at the Chicago Tribune. I mean are you going to be a Libertarian source for opinion or not? The FED has no place in a free market and neither does forced vaccinations( which Mr. Chapman wrote an article praising), so this man’s opinion flies in the face of your mission statement.(emphasis added)

The magazine’s mantra “Free Minds and Free Markets” doesn’t conjure up images of lock step adherence to any particular set of opinions.

I happen to think Chapman is wrong on this one, but is it really so terrible to read an article with a point of view contrary to your own?

I stated earlier that I was concerned that the tea party movement would be largely ineffective if it focused too much on phone calls and letters to representatives to achieve it’s goals. I still think that danger exists, but having now spent more time with one of the groups involved with our local tea party, I’m more optimistic. For that reason I want to spend some more time thinking through where the movement should go from here. The two cornerstones moving forward need to be education and outreach.

A sober appraisal of the state of economic knowledge, or lack there of, among voters is needed. Those of us who wish to see free markets instead of government control must be cautious when using the words ‘common sense’. Many of the ideas we support should indeed be common sense, but not all of them. Some ideas require basic economic knowledge many do not possess while others are simply counter-intuitive. How lower tax rates can increase revenue, why fiat money is dangerous, why we should allow weak businesses to fail, these are all ideas we can not assume are obvious to everyone. This is why one of the primary functions must be education. Sharing books, magazine articles, interviews and the like with friends and coworkers as well as countering the many fallacies we hear everyday is every bit as important as protests, letter writing, and phone calls. A small group of dedicated individuals may be able to make an impact on how our representatives vote from time to time, but what is really needed is an electorate that is better informed so that the rhetorical games currently played by candidates are replaced by real debate over the role government should play in our lives.

There are two things that every American needs to understand. We will not be able to reverse the trend of greater government control until voters understand these two facts and use that knowledge when the enter the voting booth.

First, government can not spend a dollar without first taking it from someone. It’s an obvious point, perhaps, but apparently most voters don’t consider this when deciding who to vote for. Even less realize that most of the time it is themselves who are paying. When a candidate tells you that he is going to pay for your kids to go to college, what he is really saying is that he is going to force your neighbor to pay for your kids to go to college, and you to pay for your neighbor’s kid. Perhaps that dollar is not being taken directly from you, it may be coming from your boss, your customers, or the store where you buy food. In each case you are paying. Which leads to the next point:

Taxes are inherently regressive, but you have to look beyond that number you see on April 15th every year. You have to look at all the taxes government collects. There’s been much discussion about the new cigarette tax which disproportionately comes from the wallets of lower income groups. State sales taxes are also a clearly regressive tax, as are gas taxes. Those are easy to explain, but it takes a little more to show how corporate taxes hurt the poor. Wal-mart and McDonald’s do not pay taxes, their customers and\or their employees bear that burden in the form of higher prices, lower wages, and less jobs. When the corporate tax rate is high, the U.S. has the second highest in the world, you give corporations an incentive to move operations out of the country, which also hurts the poor and middle classes disproportionately.

The income tax, with its progressively structured tax brackets appears to be an exception, but think again. Small businesses are a huge percentage of our economy. Half of all non-government employees work for small businesses. Many of these small business owners claim their profits on their individual tax returns. So higher personal income taxes have the same effect that higher corporate taxes have, higher prices, lower wages, fewer jobs for those who can least afford it.

The worst tax of all, of course, is inflation. A rise in prices is felt most significantly by those whose discretionary income is small. Inflation is a hidden tax imposed by the government when their thirst to buy votes outgrows their stomach to tax you to pay for it. Instead of increasing revenue, they increase the money supply. So the next time you hear a politician promise you other people’s money, think for a moment where that money is really coming from. It isn’t coming from the much maligned, wealthiest 1%, Washington spent their money already. It is being created out of thin air by the government and the Federal Reserve. Every dollar they print means the dollars that you and I have are worth less.

When voters understand the basic principle that there’s no such thing as a free lunch, they will stop buying into the nanny state politicians who promise they’ll take care of your every need.