David Frum's Critique Is Far From Sound

In his weekly CNN column, David Frum argues that "Ron Paul's money plan is far from golden," but makes a lot of mistakes in his analysis.

He uses the same tired, old, and refuted Keynesian argument that a free monetary system based on gold currency is too inflexible. He argues the Great Depression happened because the gold standard prevented the government from being able to expand the monetary supply to get us out of the economic recession.

His prescription for avoiding the Great Depression is the Keynesian idea that the Federal Reserve should print up money out of nothing to extend credit to the government (by purchasing Treasury bonds), and that the government could then ramp up spending to stimulate the economy. Frum argues that this could not occur in 1929 because of the gold standard, and the economic contraction slipped into a full-blown depression without government stimulus.

Frum believes, like the defunct Keynes, that a government-sponsored central banking system can ease busts by expanding the money supply, and then take the excess money back out during booms when the growing economy can safely absorb the monetary contraction. This necessarily assumes that you won't have high inflation during an economic recession.

Update from Indiana: Tom Woods Rejected AGAIN on a 2nd Lame Excuse

I've posted here before about Indiana University-Bloomington's ridiculous rejection of Dr. Tom Woods on the excuse that he lacked "sufficient academic credibility" -- despite his degrees from Harvard and Columbia, authorship of NYT bestsellers, and position as a senior scholar at the Mises Institute.

Since then, YAL at IU-B has been working hard to raise the funds necessary to bring Woods to campus on their own.  For a while, it looked as if the university might be backing down.  Not anymore.  As the club's president, Sam Spaiser, now explains, the lectures board denied a second request on the grounds that the club was "too prepared":

The fact that we came prepared, had already contacted Woods and secured a date, proposed a schedule for the event, and selected (although not booked) a room, this caused the Lectures Committee to feel left out of the process.

Too well prepared?  Talk about perverse incentives.  At any rate, YAL at IU-B is still committed to bringing Tom Woods to campus.  And you can help!  Sam continued, "With all of your help and dedication, we've already raised $2225. However, we need $4000 to make this event a reality. Young Americans For Liberty at IUB needs YOUR help. Indiana University needs YOUR help. The message of liberty needs YOUR help. Please make a contribution HERE to help bring Tom Woods to IU Bloomington."

Click here for Sam's full update, and please donate even a small sum if you are able!  IU students clearly need to hear Tom Woods' free market message -- because the university certainly has no intention of sharing it.

The free market in...Botswana?

This short article was submitted to me by Will Carson, a member of YAL at St. Cloud State.  As he explained in his email to me, "After re-reading Ron Paul's first book I wrote an article for class responding to Dr. Paul's mentioning of Botswana as one of the freest economies in the world."  This is that article:

When one thinks of individual freedom and unrestricted economic opportunities, a country in Africa might not be top the list.

However, Botswana has emerged as one of the most successful countries to come out of colonial rule in all of Africa. Regarded as a leader in economic freedom and boasting a healthy, competitive business environment, this southern African country has not only a rapidly developing free market economy, but also the lowest tax rates in the region. In fact, according to World Bank statistics, Botswana has outpaced "Asian Tiger" countries in economic growth, with an impressive average of 9% annually since 1966.

Congressional Hearing Review: FY 2011

Congress’s Foreign Affairs Committee held a hearing today about “U.S. Policies and Programs for Global Development: USAID and the FY 2011 Budget Request.” Needless to say, USAID did not have a budget to request, which was mentioned in Congresswoman Ros-Lehtinen’s opening statement. I have come to learn that Washington, D.C. is more of circus entertainment, rather than a conglomeration of competent individuals who actually have to serve the public’s needs and interests.

So, without an actual budget to base the hearing on, the questions were vague, long-winded, and uninformative. Nevertheless, Dr. Shah, Administrator of USAID, stated that “investments for future peace and prosperity” are directly related to “national security.” Seeming as if government uses “national security” as a crutch to explain all of its fiscal bastardization, Chairman Berman reaffirmed that “diplomacy and development” were key attributed to the transforming foreign policy of the new administration. Although the American people have to see this actual transformation, it’s a step somewhere, to say the least.