In a recent meeting with German Chancellor Angela Merkel, President Obama “…pledged to cooperate fully in working through these issues, both on a bilateral basis but also through international and financial institutions like the IMF.” The US should stay out of Greece’s financial problems, for several reasons.

First, the US is running budget deficits along the same magnitude as Greece.  True, the US debt problem is not as big right now, but that’s because Greece got a head start.  We’re working on catching up and putting ourselves in Greece’s situation.  (President Obama has only been in office two and a half years.)  We should be working on solving our own financial problems, not worrying about the financial issues of other countries.

Second, it is clear that any short-term solution to the Greek problem is going to involve placing restrictions on Greece’s fiscal policy.  We are already the world’s bully, and we should avoid any appearance of bullying Greece in this case.  It makes no sense to offer aid without conditions and restrictions, and it would be bad policy for the US to try to impose restrictions on Greece.  The EU is in a better position to give aid with conditions, because Greece is a part of the EU.

Third, in joining the EU, Greece agreed to limits on their deficits and their debt, and they violated that agreement.  (Other countries did too.)  Now, it appears that the EU and the US are saying, “You made an agreement and you violated it, so we are going to reward you by bailing you out.”  Countries that violate agreements like this should deal with the consequences themselves.  To do otherwise is to remove the force behind any other international agreements, past or future.  What does an agreement mean if those who fail to keep it  reap rewards as a result?

Fourth, any offer of aid to Greece, from the US, the EU, or anyone else, will not solve the Greek fiscal crisis, it will only prolong it.  If Greece had no other way out but to default on the obligations they cannot meet, some parties would bear short-term costs, but the crisis would then pass.  As it is, talk about restructuring the debt, extending the payment schedule, and so forth, just means the crisis will linger on longer.

President Obama said the US is ready to help Greece through its fiscal problems, but he didn’t say how the US would help.  In this case, I am hoping the president is all talk and no action.

Fed Chairman Ben Bernanke is troubled by the unemployment rate that has crept back upwards, and the “frustratingly slow” economic recovery. And so what does he propose? More of the same, of course. More liquidity and a base interest rate kept near zero.

You see, this is practically the only tool he has: monetary stimulus, which is another word for inflation, if we define this in terms of a rising money supply rather than rising prices, the latter of which is properly seen as a natural consequence of the former. Everyday Americans would be forgiven if they believe we already have price inflation. Surely all sorts of goods—gas, other energy-related products, food, gold, silver—have been priced at overall higher levels in the last few years. At least it appears that way. The dollar does seem to buy less than it used to, and when Americans are having trouble finding work or seeing their incomes cut, one could reasonably argue that the problem is not insufficient little monetary “stimulus.” Bernanke assures us—or is that warns us?—that “the upward impetus to overall price inflation will wane” soon enough, that inflation is not “broad-based or ingrained in our economy.”

In late 2008 and early 2009, there were calls by establishment economists, politicians, commentators, and others to “do something” to make the recession stop, fast. Robert Higgs spoke in behalf of many of those of us who believe in the free market more than the wisdom of politicians, especially whose only remedy to these kinds of problems involves pumping more money into the economy one way or another—a cure that seemed awfully like the cause of the disease. Higgs argued that instead of a monetary stimulus—or a fiscal one, for that matter—the power elite should simply do nothing and let the market handle it. Those of us who thought economic correction was necessary and perhaps the government and Fed had already done enough were brushed aside as being unrealistic or cruel. Why, if the central planners did nothing, we would be facing 9% unemployment, we were warned.

Two and a half years later, we still have such high unemployment. The economy is “recovering” “slowly,” even according to the same folks who predicted a speedy improvement once the allegedly (but in reality not at all) laissez-faire Bush Republicans were replaced by the activist Obama Democrats. Coupled with Obama’s fiscal stimulus, Bernanke’s monetary stimulus would finally lead the way to our economic salvation.

Unfortunately, in political life, those who favor more state power over the economy virtually never concede they were wrong. When they do, the lesson learned is always the reverse of what would seem to be appropriate. Bernanke famously said to Milton Friedman of the Great Depression: “You’re right, we [the Fed] did it. We’re very sorry. But thanks to you, we won’t do it again.” That is to say, now we know better—in particular, now we know that the Fed of the 1920s and 30s was supposedly so “tight” in its monetary shenanigans, leading to insufficient liquidity, and so in the future we won’t make that mistake again but will instead prime the money and credit pump relentlessly until the bust reverts back to boom. In the case of his predecessor, Alan Greenspan, the supposed admission of humility was also an inference that we need more central planning after all, not less: Greenspan admitted to having “found a flaw” in free market thinking,” to having “made a mistake in presuming that the self-interest of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.” This last statement resonated through the liberal media in late 2008 and is seen as all we need to know that free markets are folly, for if even Alan Greenspan, supposed champion of free enterprise, concedes that the government has more of a role to play, it must be true—putting aside his having been the chief bureaucrat in charge of monetary central planning, mind you.

This is of course akin to the idea that the problem with the Vietnam war was “we cut and run,” and  the problem with the first Gulf War was “we pulled out.” It is never a problem that the government gets so involved in the first place, messing things up inevitably because it is institutionally incapable of doing anything else. No, no, no.

Nevertheless, Bernanke now realizes that the economy is still in a slump, and thank goodness he knows what the solution is: More central bank inflation. That is, after all, what he was hired to do. It is convenient for him that without his wisdom, not only would the economy be in even worse shape than it is, but there would be no hope of it coming back to life in full force. Indeed, it is good for him that he has this important job that he is so well positioned and qualified to fulfill, for, as I hear, the job market isn’t so hot these days, and we all know how degrading it is for a political master of his own universe to stoop to the level of the rest of us and compete in the private sector.

If a buzzard were to fly about three miles to the southwest from my home in rural St. Tammany Parish, Louisiana, he would come to St. Joseph Abbey and Seminary College, a monastery and seminary maintained by Benedictine monks. When he arrived, however, he would find other vultures already hovering over the abbey.

These vultures are funeral directors whose cartel privileges are legally enforced by the Louisiana Board of Embalmers and Funeral Directors, one of the countless predatory bodies the state legislatures have seen fit to create during the past century and a half in order to protect unscrupulous sellers from honest competition and, along the way, to grease the palms of the co-conspiring politicos, all at the expense of consumers.

A few years ago, seeking a new means of supporting the abbey and themselves, the monks began to produce and sell simple yet entirely serviceable wooden caskets. Where’s the crime in their doing so? Well, some people are willing to take any despicable action whatsoever to suppress competing sellers. One such despicable party was Boyd L. Mothe, Jr., vice president of Mothe Funeral Homes, who brought a formal complaint against the abbey’s casket sales in 2008, based on the state’s restriction of the trade.

On Monday, June 6, a trial will take place in U.S. District Court in regard to the abbey’s plea for declaratory and injunctive relief from the state’s enforcement of its law that only licensed funeral directors may sell “funeral merchandise.” The monks are being represented pro bono by the Institute for Justice.

Let us pray that the court sees fit—if only to do something out of the ordinary—to reach a just decision in this case. The monks surely deserve relief from the menacing presence of the vultures hovering over their beautiful monastery.

This week, a “God blogger” published a Wall Street Journal column highlighting the “circumcision wars” in California. The “intactivists” opposed to circumcision are up against Jews and Muslims (among others) in San Francisco. I’m betting with the latter groups. I think circumcision is barbaric and demeaning to men but it doesn’t rise to the level of suttee or honor killing. So let them cut away!

Normally, secular folks howl at Christians because their beliefs supposedly contradict “mainstream science.” If Christians, Muslims or others say “God commanded us to do ‘x’ or believe ‘y,'” then those people of faith are put down as Neanderthal know-nothings. This is an old script in the West, although the academy and media now bow to death threats from radical Muslims and will never, ever offend with cartoons, satire, or other disrespect the personage of you-know-who from Mecca. Not even hidden in a bear suit (ask South Park creators). That simply wouldn’t be kosher.

So, now, circumcision, which removes some of the most pleasure-dense nerves of the, er, male organ, is under attack from San Francisco Nanny State liberals. (To call them “liberal” is a misnomer since they are profoundly authoritarian but the American lexicon for politics is upside down).

Nanny Staters in San Francisco weren’t pleased when Jon Stewart merrily mocked their measure banning Happy Meals.

Stewart happens to be Jewish. Hmmm. Perhaps this is payback time?

Are Jews, Muslims going to join Jehovah Witnesses and others in having their religious practice scrubbed because it is “unscientific”?

Will we see “back alley” mohels?

Did Obama issue a double entendre when he said he would use a “scalpel” on the budget? After all, where did he say that some Americans “cling to their guns and religion”?

San Francisco.

The plot thickens!

The penis wars continue.

Next up: commentary from Congressman Wiener on the issue. Can a Jewish congressman support a federal ban on circumcision? Would he respect such a ban? Inquiring minds want to know.

***

For more on religious freedom from the State, read:

Wendy McElroy, “The Origin of Religious Tolerance: Voltaire”

Bruce Murray, Religious Liberty in America: The First Amendment in Historical and Contemporary Perspective

David Theroux, “C.S. Lewis on Mere Liberty and the Evils of Statism”

In a Bloomberg report today, “Economic Recovery Is Languishing as Americans Await Signal of Better Times,” Peter Coy casts about for explanations for why the economy is not in recovery, and ends with this offer:

A Nobel prize goes to whoever can end this routine and get America growing again.

OK, Mr. Coy, send the Nobel to Robert Higgs. Your story is a case-study outline of the phenomenon Dr. Higgs dubbed “Regime Uncertainty”. The prescription is straight-forward: get rid of the rash of thousand-page legislation being passed, containing no one knows what or at what cost (e.g., ObamaCare), and stop all bail-outs, “stimulus,” and further diversions of resources from the private sector to the public.

As Dr. Higgs outlines in his post “The Great Divergence: Private Investment and Government Power in the Present Crisis,” here,

A government growing in so many different directions at once, with many additional initiatives — such as higher tax rates, new taxes on energy use, and new restrictions on financial service providers — still awaiting enactment or regulatory specification, creates tremendous uncertainty for anyone contemplating a long-term investment: who knows what the contours of future government exactions, restrictions, and requirements will be, and hence whether a particular investment will prove to be profitable or not?

“Ending this routine” would have results similar to the last time such a “routine” was ended—the wake of World War II, when, with FDR dead, his New Deal policies were abandoned and government spending dropped 40%. Despite all Keynesian predictions to the contrary, and 10 million newly “unemployed” (i.e., conscripted soldiers) being suddenly dumped into the workplace, America got growing again at unprecedented rates:

The year 1946, when civilian output increased by about 30 percent, was the most glorious single year in the entire history of the U.S. economy. By 1948, real output was back on its long-run growth trend, and during the decades that followed, the economy was spared the sort of deep and long debacle that a congeries of wrongheaded government policies had caused during the 1930s.

As Dr. Higgs documents in his great book, Depression, War, and Cold War:

In 1945, the death of Roosevelt and the succession of Truman and his administration completed the shift from a political regime that investors perceived as full of uncertainty to one in which they felt much more confident about the security of their private property rights. Sufficiently sanguine for the first time since 1929, and finally freed from government restraints on private investment for civilian purposes, investors set in motion the postwar investment boom that powered the economy’s return to sustained prosperity, notwithstanding the drastic reduction of federal government spending from its extraordinarily elevated wartime levels.

One implication of the sluggish economic recovery is that state governments have seen sluggish revenue growth.  Different states have met those challenges different ways.  Texas has been getting some publicity for its fiscal conservatism under the leadership of Governor Rick Perry, at least in part because Perry has hinted he might be a 2012 presidential candidate.  But Florida’s fiscal conservatism also is worth a mention.

Florida’s state government budget peaked in the 2006-07 fiscal year at $73.9 billion, not coincidentally just prior to the bursting of the real estate bubble.  Since then the Florida legislature’s leaders have (mostly) held the line on taxes and cut spending to match the reduction in revenues.

This year, Florida’s Governor Rick Scott, in his first year in office, and in his first year holding an elective office of any kind, responded to Florida’s weak revenue inflows by promising not only to hold the line on taxes, but to cut them.  The legislature didn’t quite come up with the level of tax cuts Governor Scott wanted, but did pass a budget Governor Scott recently signed of $69.7 billion, down from the previous year’s $70.5 billion budget.

It is possible to hold the line on taxes and government spending when revenue declines.  Florida’s budget this year is a bit more than 1% lower than last year’s, and more than 5% lower than its peak in 2006-07.

The state has one tool to play with – violence (and the threat of violence). The US government is not special in this regard, although as the world empire, it does tend to rely particularly on military force. Now the Pentagon declares that foreign cyberattacks will be responded to militarily. This might seem somewhat reasonable when we listen to the officials talk about the many civilian casualties such attacks can unleash. But how are they going to know where attacks come from? Sounds like a call for an even more invasive surveillance state, and the end of internet privacy. How do we trust the US government about these “threats” when it exaggerates and concocts most other threats that it latches onto as excuses for war? Would a cyber-9/11 be met with a more rational response than the real deal from ten years ago? I don’t believe we can be so confident. Oh well. The next USS Maine, Pearl Harbor, Gulf of Tonkin, specter of Weapons of Mass Destruction or impending civilian massacre that sweeps us all into war may be a matter of ones and zeros. Can we trust the government that made such a mess of tracking down the origins of the Anthrax attacks to do much better with digital viruses than it did with organic bacteria?

Via Per Bylund. Presumably photoshopped, but still funny.

Immigration is often a contentious public policy issue and there are legitimate hard questions that surround the issue.  Unfortunately, all too often, public debate is centered around a few economic misconceptions people have about immigration instead of focusing on the tougher issues.  Immigrants are not a drag on the economy, they don’t steal jobs on net, and they don’t systematically depress wages.  Alex Tabarrok and I explained that to Lou Dobbs a few years ago and he just called us names rather than making an argument.  Here’s a new short video I recently recorded explaining why the above fears are unfounded. 

Let’s have reasoned arguments here rather than name calling… then let’s move on to the tougher issues.  See the second half of here for my take on those.

A self-described former climate alarmist, now skeptic, Dr. David Evans served as a full-time consultant for the Australian Greenhouse Office (now the Department of Climate Change) from 1999 to 2005, and part-time from 2008 to 2010, modelling Australia’s carbon. He is a mathematician and engineer, with six university degrees, including a Ph.D. from Stanford University in electrical engineering.

Dr. Evans recently proclaimed:

The debate about global warming has reached ridiculous proportions and is full of micro-thin half-truths and misunderstandings.

Among other questions Dr. Evans poses: “Why does official science track only the surface thermometer results and not mention the satellite results?”

As the work of Independent Institute Research Fellow Dr. S. Fred Singer also shows, Dr. Evans notes that it’s to conceal the truth of actual change in global temperatures:

One way they conceal is in the way they measure temperature.

The official thermometers are often located in the warm exhaust of air conditioning outlets, over hot tarmac at airports where they get blasts of hot air from jet engines, at waste-water plants where they get warmth from decomposing sewage, or in hot cities choked with cars and buildings.

Further:

The whole idea that carbon dioxide is the main cause of the recent global warming is based on a guess that was proved false by empirical evidence during the 1990s. But the gravy train was too big, with too many jobs, industries, trading profits, political careers, and the possibility of world government and total control riding on the outcome. So rather than admit they were wrong, the governments, and their tame climate scientists, now outrageously maintain the fiction that carbon dioxide is a dangerous pollutant.

When the carbon dioxide theory was posited in 1980, scientists guessed that every bit of warming caused by increased levels of carbon dioxide would be “multiplied” up to three times by creating extra moist air. Yet although this “multiplier effect” has been proven as flawed as the Keynesian multiplier, neither theory apparently will die.

Why?

At this point, official “climate science” stopped being a science. In science, empirical evidence always trumps theory, no matter how much you are in love with the theory. If theory and evidence disagree, real scientists scrap the theory. But official climate science ignored the crucial weather balloon evidence, and other subsequent evidence that backs it up, and instead clung to their carbon dioxide theory — that just happens to keep them in well-paying jobs with lavish research grants, and gives great political power to their government masters.

Read his full commentary, here. Bottom line:

Finally, to those who still believe the planet is in danger from our carbon dioxide emissions: Sorry, but you’ve been had. Yes, carbon dioxide is a cause of global warming, but it’s so minor it’s not worth doing much about.