Mask and vaccine mandates, liberty, order, etc.

So about 18-19 years ago I decided that my politics were libertarian. This was in the wake of the 9/11 attacks and everyone I knew and saw on TV were all gung-ho to lock this country down into a fortress America and go on all sorts of wars in the Middle East. “We need to turn the entire Middle East into a coffee table–made of glass!” was the kind of sentiment that was often e-mailed to me by friends and co-workers at the time. My own reaction was along the lines of, “look, everyone is understandably upset and concerned, but maybe we should take a deep breath and actually think about what would be the best response?” What “we” wanted made no difference, of course, as the Bush administration had already made up its collective mind. We now know that they were planning to invade Iraq from the time they first came into power.

Anyway, considering myself to be at least a centrist, moderate liberal Democrat at the time, I was skeptical as to what the US government was doing in response to the attacks under the leadership of the Bush administration. Wandering through the information highways and byways of the internets, I eventually came across not just libertarian thought, but “Austro-libertarian” thought–libertarianism grounded in the tradition of the “Austrian” school of economics. I decided that the “Austrians” were the sanest of any ideological group I had ever encountered, and I still consider myself a fairly plumbline Misesian-Rothbardian-Hoppean Austro-libertarian to this day.

If you had asked me ten years ago what my highest social and political value was, I would have said liberty, undoubtedly, with barely a second of thought. But in the light of events that have occurred in recent years, particularly in the last year and a half or so, I would now say that liberty is most certainly not my highest political ideal.

Now, a lot of people who just read the above paragraph may be jumping to the conclusion that I’m about to offer some kind of rationale for masking and vaccination mandates to counteract Covid-19, but no, I won’t. In fact, it’s because I so strongly oppose mask and vaccine mandates–either those issued by governments or private sector actors–that I now say that no, liberty is not my most highly ranking value. Nor should it be for any libertarian who really takes the time to think this stuff through.

If you venture a gander at the social media of people who consider themselves libertarians, including people who are quite well known within the movement (published authors and podcasters and such), you’ll see that a lot of them have been embroiled in some considerable debate about private businesses making vaccinations a condition for employment, restaurants making proof of vaccination or a negative test result a condition for being served by them, etc. Similarly, you’ll see a lot of debate about social media platforms censoring people and kicking them off due to expressing certain political views. Certain libertarians consistently make the argument that private actors in the marketplace can do whatever they want with their own property. If a company wants to make vaccination a condition of employment, they should be able to do that. If a restaurant wants to refuse you service unless you provide proof of vaccination or a negative Covid test result, then they have the right to do it. If Jack Dorsey doesn’t like your political views, then by God he should be allowed to ban you from using Twitter. And so forth.

In other words, what these libertarians essentially argue (though I grant them the benefit of the doubt that they don’t honestly see it this way, which I think is largely due to them simply not thinking things through), is that if enough people want to turn society into a large collective of neurotic, paranoid, fearful, and censorious authoritarian lunatics, led by delusional utopians, then that’s perfectly okay just so long as no actual force or coercion is being exercised, as long as no aggression is being initiated and all of the actions are completely voluntary and well within the bounds of private property rights.

Now, there are a lot of things to say about that argument–a whole lot–and I don’t have the time or the patience right now to elucidate even a fraction of them in a blog post, but it was after taking some time to consider that argument that I realized that I most certainly do not hold liberty as my foremost, highest ranking political ideal anymore–even though I refuse to surrender my libertarian card to anyone.

Now, what is it that I value more highly than liberty, you may ask? Living amongst people who are not neurotic, paranoid, fearful, censorious, delusional authoritarian lunatics, that’s what. So, to any libertarians who are perfectly OK with private actors attempting to micromanage everyone’s personal health and patrol their thoughts as long as they do it in such a way that avoids any obvious violations of the non-aggression principle, I have to say that we are not quite on the same page, my friends. We appear to be roughly in the same book, but we are most definitely not on the same page. Actually, no, now that I think about it, we are in a different book altogether, though perhaps one of us is in a revised edition or a new translation of the other one’s book. Or maybe one of us is in a companion volume that complements the other one’s book, I’m just not sure yet.

In any case, liberty is absolutely essential to my above stated goal, undoubtedly. But I’ve come to the realization that for me, it’s really a means to an end, not an end unto itself. And the end goal for me is a society that is free from the dominance of neurotic, paranoid, fearful, censorious, delusional authoritarian lunatics, as they are the enemies of social order and cohesion–yes, a society that is rational, sane, orderly, bourgeois, and family friendly, the very things that the aforementioned lunatics always seem hellbent on destroying.

But I certainly don’t want to force my ideal of a non-neurotic-paranoid-fearful-censorious-delusional-authoritarian society on anyone else. I only want to be in a society with those who are more or less already in line with the same ideal and are willing to live by the necessary ethics out of their own free choice. As the 19th century individualist anarchist Benjamin Tucker used to say before he turned into a nutso Wilsonian progressive, liberty is the mother, not the daughter, of order.

Which is why, to that end, I am fully on board with the right of secession and radical decentralization, as advocated by the classical liberals of the 19th century as part and parcel of their commitment to the right of self-determination for all peoples.

I don’t begrudge anyone their nonstop neurotic-paranoid-fearful-censorious-delusional-authoritarian struggle sessions and public shamings and “papers-please” checkpoints, whether it’s over Covid, political speech, critical race theory, toxic masculinity, the patriarchy, or anything else–if that’s what they really truly want–but can’t there please be alternatives for the rest of us who don’t want to be forced into those things? Who just want to live our lives like normal people without all the f***ing melodrama and ongoing social conflict? And moreover, who don’t believe that it’s Americans’ responsibility to convert the rest of the world to the same kind of lunacy?

Hm? Is that really so much to ask?

Will the Yield Curve Be Inverted?

There has been a bit of buzz of late about the notorious yield curve, that seemingly prophetic differential between the yields of long- and short-term debt instruments of what we are to assume to be of equal credit quality. It looks like it’s flattening–the yields on long-term bonds are lowering relative to those of short-term bonds. One would ordinarily expect the interest rates on long-term debt to be higher than those of short-term debt as they compensate investors for putting their money at risk over a longer time horizon, thus subjecting their investments to the market and economic

antique bills business cash
Here’s the obligatory stock photo of some coins for a blog post about the economy and such. Photo by Pixabay on Pexels.com

conditions of a future too distant to assess at the present time. If long-term yields are falling, it’s because investors are buying up more long-term bonds, thus bidding up the prices of those bonds and decreasing those yields. A big reason why investors would start increasing their purchases of long-term debt would be that they are attempting to lock in today’s rates for the long haul, as they assume that interest rates will soon be falling.

And why would they assume a decrease in interest rates at a time when the Fed has been incrementally raising them? One reason would be that they fear a seismically disruptive downturn in the markets. The times that those long-term yields have dipped below those of the short-term bonds in the past–when the yield curve has inverted–have been followed by severe market downturns and recessions. In fact, the Federal Reserve Bank of San Francisco says that an inverted yield curve has preceded every major recession of the past sixty years.

But now you may be asking why these investors are being so pessimistic, even with all this talk that the economy is going great guns like it hasn’t in over a decade or so. (Which is not to say that there haven’t been any naysayers.)

I’ve already mentioned the reason, about two paragraphs up–the Fed is raising interest rates.

You may recall–or maybe you don’t, it all seems like such a distant lifetime ago already–when everything melted down in September of 2008, what I like to call the Great Financial Sh*t-Show of 2008. There was this steep sell-off in the markets that folded companies and financial institutions like houses of cards, the sell-off being largely of debt securities creatively collateralized by mortgage obligations. The U.S. Congress passed a major bail-out package, the “Emergency Economic Stabilization Act of 2008,” which President George W. Bush signed within hours of its passage. The legislation had already been in the works for several months prior to the September ’08 crash, largely under the direction of then Treasury Secretary Henry Paulson, a former chairman and CEO of Goldman Sachs. Both major party presidential nominees at the time–then Senators Barack Obama and John McCain–bolted from the campaign trail and pretty much raced each other back to D.C. to vote for the bill, which created the $700 billion Troubled Assets Relief Program (TARP) to purchase the newly devalued assets clogging up Wall Street’s balance sheets. Of that $700 billion, $250 billion was spent on purchases of the preferred stock of financial institutions through what was called the Capital Purchase Program (CPP). But even before the passage of the bail-out bill, the Fed was already pumping liquidity into the markets through low-interest loans made through its discount window, and had put out more than $7.5 trillion by the spring of 2009.

To put it more succinctly, the Congress and the Fed created just about the greatest corporate welfare program in U.S. history. The American people were told that if they were not compelled to compensate for Wall Street’s losses, the Great Depression 2.0 would overcome the land, followed by a plague of locusts and a thousand years of darkness, turning us all into beggars thrust into tent cities on the streets for the rest of our lives.

What preceded that crash was a raising of interest rates by the Federal Reserve, after a considerable period of time during which they had kept interest rates pushed down. Take a step backwards from the inversion of the yield curve, and you notice this rather curious pattern:

True-Money-Supply-01-01-78-12-31-17
I lifted this snazzy little infographic from RealForecasts.com

The above charts the growth and reduction in the “True Money Supply” against periods of economic recession. This approach to getting a grip on the actual supply of money was formulated by the economists Joseph Salerno and the late Murray Rothbard, which in turn is largely based on the concept of “money in the broader sense” as it was developed by the Austrian school economist Ludwig von Mises.

It’s positively eerie how the Fed’s expansion and contraction of the money supply coincides with the periodic booms and busts of the economy. It almost makes you wonder if there’s some kind of inherent causal relationship.

America’s central bank has of late been selling off assets that it has been carrying on its balance sheet since the ’08 crisis. In selling off assets, they are therefore reducing the money supply, which is how they effectively implement interest rate hikes. So if the pattern I identified above continues to hold, what does this portend? Another massive sell-off and a crash, perhaps?

So, to sum up: Step 1), The Federal Reserve massively expands the money supply with asset purchases, lowering interest rates, and then, Step 2), eventually sells off those assets to raise interest rates again, which is usually followed by a crash, or a panic, or whatever you want to call it.

And in an attempt to remedy the crash, they then go back to step 1 and repeat the process all over again, leading to the same kinds of results as before.

It almost seems as if the very basis of our entire banking and financial system is inherently flawed, as though it naturally leads to unsustainable booms and busts. Who knows how much real wealth it destroys in such a process?

Nah, that can’t be right.

That’s crazy talk.