One of my favorite commentators is the attorney Robert Barnes, who I wrote about Barnes here and here. I have been a member of his Locals channel since its inception. I have also provided monetary support to his 1776 Law Center, which does great work providing legal counsel for “the little guy.” I even pray for his legal success.
Virtually all of the political labels I know of have been misused and abused.
Knowledge And Decisions
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Barnes, a self-described populist, has been criticizing libertarianism (including Austrian economics). My self-described label is reactionary-libertarian. I have learned a tremendous amount from the Mises Institute and have been a contributor to LRC for over twenty years. Thus, I feel compelled to respond to Robert’s critiques of libertarianism, Rand Paul, Thomas Massie, anti-tariffs, the Big Beautiful Bill, and government deficits.
This post is a “bar stool rebuttal,” that is, how I might discuss these topics sitting at the bar with friends (see here). Thus, these are more generally stated positions, few links or references providing evidence to specific points. First I will give a short statement of Robert’s positions (in bold and I hope accurately as I listen to hours of his content every week), and then I will provide my rebuttal as I would make it to him while imbibing our favorite beverages and taking into account his own stated beliefs in smaller government.
Tariffs don’t raise prices, are totally benign, and are necessary to protect American workers.
First and foremost keep in mind that tariffs are taxes. They also give power to the government in picking winners and losers. Perhaps in this instance some of the winners will be some American workers some of the time. Perhaps also there will be cases where the foreign provider will not be able to pass along the cost of the tariff so the price of a particular product would not rise. But if the ultimate goal of the tariff policy is to drive the low cost foreign option out of the market wouldn’t that leave only a higher priced domestic option available to the consumer? This process will eventually hurt all workers as they are all consumers. The basic position of libertarians against tariffs follows their position against taxes and against increases in government power. These are positions consistent with what you have stated for yourself. I would like to add, there is much more that could and should be done for American workers in the opposite sense of removing government interference in the market.
The Big Beautiful Bill is critical for the success of the Trump administration and the country by avoiding tax increases and paying for border control. If it does increase the federal deficit, history shows that deficits don’t matter. Thus, Libertarians fighting for a “perfect” bill are utopian, such that Rand Paul and Thomas Massie are wasting their limited political leverage in voting against it.
After sweeping the elections shouldn’t we at least see an effort to stop the Congressional logrolling that has been a source of so much mismanagement of the country. At a minimum, call it the Big Ugly Bill! Even though this is redundant because all big bills are ugly. Certainly I agree with you that tax increases should be avoided and I hope the border is now under control.
You have said deficits don’t matter (in agreement with Dick Cheney, which should make you squirm). Why do I think deficits matter? Certainly, you agree that deficits matter for individuals, private enterprises and even for other countries. I take your point that it seems that deficits have not mattered for the US since the explosion of the deficit during the last decades. As you have said, this is because we have the reserve currency that can be created at will with no apparent consequences. There is much that can be said that there will be clear economic consequences eventually. But I think there already have been grave consequences. Deficits allow the government to continue to grow, including the empire, without the clear signal to the people of raising taxes. You better than most have seen the reality that the working and middle classes have become poorer and poorer, while the technocratic managerial class, those in control of those deficits, have grown wealthier and more powerful.
The stance of Senator Paul and Congressman Massie is clearly following their model Ron Paul. He might have always lost but were his votes wasted? Millions of people were with you Robert, on Covid and other topics because they learned from Dr. Paul’s principled stands on so many issues. Perhaps it is not Paul and Massie wasting political capital, it is Trump. He should now be in a full battle against the neocon Rinos. That is where the fate of the country and the world resides. Only in his speech in Saudi Arabia did he exhibit his potential for fighting this crucial battle. Furthermore, you have said that Trump needs feedback. You criticize the administration yourself on several counts when you believe they are taking the wrong direction.
Austrian economics is a poor predictor.
When in the Course of ...
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This is a large topic that I can only touch on here. My first reading of Austrian economics was the magnum opus Human Action by Ludwig von Mises. One of the key messages that I perceived from this book is that economics is not a science like physics. Human activity is too complex to model with equations determined by studying quantitative statistical “history.” As an engineer reading economics for the first time in particular to learn about the disastrous record of economic modeling, this was a breath of fresh air. In the Austrian economic approach we always say “all else being equal” (often in latin “Ceteris paribus”) if you do this, then that will happen. But there are no controlled experiments and the real information, not government statistical data, is complex beyond the scope of any mind or computer. Timing is intentionally not part of the analysis. Thus, even if people who call themselves Austrian economists make predictions, it is not using Austrian economics that they do so.
Austrian economics teaches that creating money is not creating real wealth (e.g., houses, cars, food, everything real). Thus, when we do see real wealth accumulation among a select few (i.e., Washington Beltway, Wall Street, Silicon Valley) through these kinds of financial machinations (deficits and money creation) you can know real wealth is being taken from others. For me Austrian economics is a scholarly approach akin to the little boy pointing to the emperor’s new clothes. That is why all powerful entities in society try to discredit it. Austrian economics should be the theoretical economic artillery of populists like you.
We will need several more rounds of drinks to understand how and why Austrian economics has been so important for freedom loving people around the world to understand how and why they are under attack. There is also much to be said about Peter Schiff, Eurodollars, central banking, etc. that you bring up in your online presentations. I am ready and will buy the next round.
