How to save the economy the Austrian way

A socialist’s refutation of a recent article where the author was asking the Obama administration to basically leave everything to the Free Market.

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Everytime a article happens to fall into my field of vision, I am usually either stunned by the idiocy displayed or I simply burst our laughing at the absurdity and this latest one which even claims to be watered down in order not to be considered “unserious” by the current US Administration, is no break from this rule.

So after the introduction which attempts to claim the high ground of consistency and morality, we get an attempt at an analogy, which of course is made to showcase the Austrians as the rational good guys

If an allergic man has been stung by a bee, I don’t know what to do except rush him to the hospital and maybe scour the cupboards looking for Benadryl. But I’m pretty sure drawing blood from his leg, in order to inject it into his arm and thus “stimulate his immune system,” is a bad idea on numerous accounts

Unfortunately this analogy can easily be turned around to put the Government in the place of the hospital and whoever you don’t like in the place of the crazy ad-hoc injection doctor. If anything, one would see how this analogy would be to the detriment of the Austrians, as one could imagine that their reaction in this case would not be to do fucking nothing. After all, you shouldn’t be helping someone who took such risks and his death would imrpove the gene pool.

But hey, as long as the author is so proud of his metaphors, who am I to complain. Moving right along to his actual (*shudder*) recommendations.

After the mandatory fault blaming on the Gov’ment and declaration of his undying faith that were the state to go away everything would turn into pink bunnies and unicorns by the magic of the free markets, we get to the “serious” proposals:

Eliminate the personal and corporate income tax

And just to show everyone that he’s not joking around, he complements this with his very modest proposal to “blow up the IRS building”. ‘Cause that’s how he rolls, dawg!

Aside from the silliness of blowing up buildings, he doesn’t really explain to us why that is a good idea. I suppose that we need to take him as his word that it’s all in our best interests and it will not simply lead to public resources being wasted since there would be no money to repair them. No, the free market would find a way.

Also look forward however to the rise of epidemics of easily preventable diseases through vaccination. But hey, as long as the rich are protected, let the rabble die. It would certainly thin out the labour supply and increase their minimum wage (more on that below) so it’s all good eh ?

Unfortunately, dismantling the Social Security system will have to wait

Not that would do much good without any funding behind it. We’re going to go back to the good ol’ days where being poor means staying poor and you’ll be lacking any means to get back on your feet. Look forward to no security at an old age, no matter how hard you’ve worked the rest of your life. All wonderful stuff that people were struggling to fix a century ago but nowadays, they have become obsolete for the Austrians through the free market.

The author continues

The loss of some $1.5 trillion in annual tax receipts sounds absurd, but the actual figure would be lower, because of “supply-side” effects.

What could be better than supply side economics. This wonderful myth that has proven to not work anywhere but is still touted around on faith. But yeah, apparently removing tax incomes would provide a “stimulus to the economy”, as with the money injection to the banks I guess. Ah faith. What a wonderful thing.

Auction off all government assets progressively

Because we all know that private owners always do things better for the public than the government. Just look at Enron and General Motors. And privatizing things like water has always turned out for the best right?

At this point, I am starting to get quite annoyed at the author simply proposing random “free market” moves (Very similar to the ones the US has been taking for the last 30 years) and asserting that it will be for the best, at which point you think that we are supposed to trust him or be already convinced of the Austrian theory’s validity.

Eliminate the DEA and the SEC.

The author cites as an example Madoff who was not caught by the regulations and thus this proves that they are worthless. Nevermind that their powers to regulate Wall Street have been frowned upon, reduced and/or taken away by the US neoliberal politics. Basically the author is saying “The Agencies that we had to prevent this kind of thing failed after we limited their ability to do so, so the best thing to do now is to remove them altogether.”

Of course the continued existense of Madoff and the rest of the Wall Street implosion pretty much proves that the self-regulation of the markets is nothing more than a fairy tale. Expect the Madoffs to multiply in the future once there is not fear of being caught at all.

It is especially funny to see his proposal about drugs. Although I am one of those who would say to dismiss the war on drugs because it is counter-productive, restricts freedoms and it’s main purpose is to simply increase the prison slave labour, the author’s argument is that simply a stern talk and a watching of Requiem for a Dream will make people “just say no”, and even if they don’t, well, who cares.

Cut the Pentagon budget in half.

Finally, one of the few things that I think he’s not going far enough. Of course the military/imperialist budget is not necessary but not because it’s more than enough to protect US Americans from “Iranian Tanks” as the author uses as an argument, but because the reason for the budget is simply to enrich the war lobby. Which incidentally is privately owned, so where’s this trickle down effect I’ve been hearing so much of? His arguments once again display the authors half-assed understanding of how the world works.

Eliminate the Department of Education

Oh just brilliant. Because what we need right now is more unskilled workers. We can never have enough MacDonald servers afterall and having so many of them will certainly help keep the wages high..oh wait. No it won’t. If there’s one thing that will happen through the destruction of education opportunities is another descent into mysticism and religion and the destruction of the high level job market.

The authors argument is that not everyone deserves a higher education (only the born rich I guess) and hey, we’re saving money in the short term aren’t we? When has the short term been a worse investment than the long term?

Cancel all the pending “stimulus” and other bailout packages

Although I agree that the current “solution” implemented is wrong, the author presents this act for all the wrong reasons. He simply wants to “wipe the state clean” and let everything rebuild. He does nothing more than take the stand the liberals had as the Great Depression struck and they refused to save the banks. That of course turned out just dandy in the long term and only the banks suffered, right?

Of course the authors greatest failing is that he simply considers the bank itself, not the people who have their money saved in it. The folding of the major banks would mean that millions would lose all their life’s savings, loans would grind to a halt (even moreso than now) and a long period of rebuilding would happen while the economy reconstructed. Untold suffering for millions is what the author’s proposal is promising but as long as we stick to free market principles, I guess it’s worth it.

Allow unrestricted immigration

Hey, one thing I agree with. Oh wait, it was too good to be true…

So long as the incoming folks had a secure job in which the employer (a) paid three years in advance on any state and local taxes that would accrue from the employment and (b) bought at least a $100,000 house for the immigrant and his or her family.

Aaaahahahaha. Right. So basically the point is moot from the get go, as such wealthy or prestigious immigrants are probably allowed in now anyway. But hey, as long as it helps to “sell the package somehow”…

Abolish the minimum wage.

Wait, you need to read the whole quote

That — coupled with the elimination of the income tax — will take care of unemployment within 6 months.

If your goal is simply to “take care of unemployment” then this might be true but if you goal is to have people employed with a wage they can live a decent life instead of 3rd world situations, then you’re probably going to fail. Sure, you’ll get more employment but it’s going to be the employment of a bare subsistence wage, if that at all.

And with that the author finishes his proposal. Of course all of this is generally the kind of delusion the Austrians promote, that somehow anything can change by pleading with the Government to implement their “moderate proposals” which are generally watered down versions of their positions. Centuries of the same thing have proven more than enough already that nothing changes through such requests, especially not when the State is there to protect and support those at the top.

Watered down Socialism becomes Social Democracy and watered down Austrianism becomes Neoliberalism. Both in the end don’t achieve what they set out to do but rather betray their principles in order to retain their positions. You cannot reason with a system who’s continued existence relies on being “unreasonable” to your ideas.

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