Search Results for: moral hazard

Paul Krugman and Emperor Diocletian: Two Peas In a Pod

Of Krugman and Diocletian

06/08/2012 Peter C. Earle

Several weeks ago, a most intriguing exchange occurred on Bloomberg News wherein presidential candidate Ron Paul, the foremost voice for Austrian School economic policies, faced off against Paul Krugman, New York Times economic columnist and recent winner of the Nobel Prize for economics. While the entire debate is noteworthy, one particular portion of the exchange stands out:

Paul Krugman: “I am not a defender of the economic policies of the emperor Diocletian. Let’s just make that clear.”

Ron Paul: “Well, you are. In a way, you are. That’s exactly what you’re defending.”

Fortunately, this is an easy assertion to test given Krugman’s copious writings and the fairly extensive historical information available regarding the Roman emperor Diocletian. A look at Krugman’s New York Times blog and op-ed pieces allows for a fairly easy summation of his positions: on January 8, 2009, he disparaged President Obama’s proposed “stimulus package” of $775 billion as “not enough”; on April 19, 2009, he called for a “credible” commitment to higher inflation; and on October 7, 2010, he cited such programs as the Hoover Dam, the Erie Canal, and the Interstate Highway System as examples of the type of projects required to revitalize the moribund economy. More recently — including during his April 30, 2012, debate with Dr. Paul — Krugman has strenuously expressed the view that the continuing slump owes largely to insufficiently interventionist monetary and fiscal measures undertaken by the government and the Federal Reserve. But while the ongoing stagnation of the US economy — now in its fifth year — has been wrenching, the Roman Empire facing Emperor Diocletian in the 3rd century CE was dwindling rapidly; a shadow of its former might.

Decade after decade of uncontrolled spending, a substantial part of which went to purchase the military’s loyalty, finally resulted in runaway inflation and then spiraled into hyperinflation. Between 235 and 284 CE, no less than 20 different figureheads, from politicians to generals, seized the throne; each transition typically starting and ending in violence. Capitalizing on the upheaval, neighboring Germanic tribes grew bolder, launching invasions as far into the empire as Italy proper. Other neighboring powers, including the massive Sassanid Persian Empire loomed, hungrily eyeing Rome’s decline.

This was a Roman Empire far from the glorious days of Augustus and the Pax Romana; fear and ruin were now the order of the day. With prices rocketing up and the economy awash in valueless coins, barter became the basis for transactions, further increasing hardship. Many Roman citizens fled the cities to claim lands in the countryside or to enter into tenant-farming relationships with landowners; in either case, choosing to eke out a subsistence-level existence. Many small businesses, productive trades and craft skills were abandoned in the wake of exodus. And finally, in an eschatological capstone, a virulent plague spread throughout portions of the empire, killing untold numbers. By 259 CE, the empire splintered into three separate states.

Aurelian, emperor from 270 to 275 CE, undertook a series of reforms intended to reverse the slide. First he took military action: he defeated several of the encroaching German tribes in a series of campaigns that pushed them back from the borders, built walls and defensive works, and forcibly reintegrated the secessionist regions.

Next, he sought to address the monetary collapse in a novel way: instead of further degrading the metal content of the coins (which by this time were simply dipped in silver or copper), he reminted new versions of older, trifling coins and proclaimed their value: confidence being his chosen vehicle for resuscitating the monetary system. While the coins varied from one to the next in actual metal content, it was decreed that several denominations of the new coins, called antoniniani, would add up to one predebasement denarius.

This was only a psychological tactic to stabilize the monetary system, of course, but it worked to some degree and as coin values stabilized, prices leveled off as well. But in a theme that would return to badger his successor, many of the successful measures he undertook simultaneously undermined others, crippling the Roman economy still further. An example is Aurelian’s strategy to keep the urban workforce in the cities, which anticipates both the implementation and unintended consequences of the modern welfare state:

In the year 274 AD Emperor Aurelian, wishing to provide cradle-to-grave care for the citizenry, declared the right to relief to be hereditary. Those whose parents received government benefits were entitled as a matter of right to benefits as well. And, Aurelian gave welfare recipients government-baked bread (instead of the old practice of giving them wheat and letting them bake their own bread) and added free salt, pork, and olive oil. Not surprisingly, the ranks of the unproductive grew fatter, and the ranks of the productive grew thinner.[1]

With the Roman economy temporarily stable but precariously balanced, the stage was set for the ascendance of Gaius Aurelis Valerius Diocletianus Augustus. From a simple upbringing in modern day Croatia, Diocletian rose through the military ranks to become a general and emerge amid the tumult of the end of the 3rd century as emperor in 284 CE.

He sprang into action.

First and foremost, the Roman state needed plunder to accomplish its ends, and Diocletian found the imperial coffers inadequately stocked even after Aurelian’s stopgap measures.

So his first major undertaking was, in modern terms, to “rationalize” the then-haphazard internal-revenue apparatus.

First, he assessed the need to increase the effectiveness of tax collecting with the eye of a military logistician, and he did so by systematizing the state’s knowledge about the population’s wealth and resources. He did this using a police-state measure familiar to us today: the census. Second, with that data, legions of newly hired government accountants and collection agents set about calculating exactly how much — directly, in currency or in kind — a given individual or community would be required to pay: capitatio, roughly translating to “tax liability.” The principle was absolutist to its core, with the Roman state asserting the right to take as much as it needed from the populace to pursue its self-determined mandates. Tax assessments and collections were now bureaucratized. And finally, the heartland of the empire — present-day Italy — lost its long-coveted tax exemption.

It is important to return, here, to the Krugman’s assertion that he doesn’t advocate policies akin to Diocletian’s. In fact, on January 19, 2012, Krugman wrote that “The main reason [that] the rich pay so little [in taxes] is that most of their income takes the form of capital gains, which are taxed at a maximum rate of 15 percent, far below the maximum on wages and salaries,” going on to say that “claims [that low capital gains tax promote both economic growth and job creation] are false.” In suggesting that taxes on these forms of investments — financial instruments, ownership in corporate entities, property, and the like, not to mention carried interest on alternative investments — be raised dramatically, and considering the often-illiquid nature of such holdings, Krugman is essentially touting a modern payment-in-kind tax code directed at the wealthy.

With the machinery of mass appropriation codified and staffed, Diocletian turned his attention toward the other pressing issues of the era: maintaining the military’s loyalty and working to arrest social upheaval by building on Aurelian’s economic ballasts. His next enactment, in 286 CE, was to issue a nearly pure gold coin, a new aureus, struck at 60 to 1 pound of gold. It was only used, however, to pay generals and high-level administrators, as gold was in very short supply. As per Gresham, gold had disappeared from circulation during the ravages of the recent hyperinflation — buried, melted into plates, or molded into jewelry and ornaments. Soldiers were still largely paid in goods, which had to be collected (or seized) from the broad population, so further monetary innovations were necessary; paying the military was of utmost importance for Diocletian to remain in control.

The silver content of the common denarius was improved, adding real economic value to Aurelian’s confidence-building measures. Throughout the empire, however, prices began to rise yet again. What Diocletian may not have known (and, if he did know it, it might not have given him pause, as the ancient Romans had few economic theories) is that his fiscal policies were sabotaging his attempts at currency improvement. The state mints were pouring vast quantities of the new coins into circulation to pay for his other programs. And those programs, a wave of vast public-work projects, resulted in the Roman government outbidding private entities, running prices back up in the process. “By no means,” wrote C.E. Van Sickle of Franklin College, are “the least of Diocletian’s claims to pre-eminence among the Roman emperors to be found in his energy … as [a] builder.”[2] From Gaul to Africa, roads, bridges, aqueducts, baths, and temples — not least of which were three huge armories in Damascus, Antioch, and Emesa — were either built anew or, where repairs had lapsed, were fixed.

But at least one contemporary critic saw the infrastructural projects as “reckless extravagance in the expenditure of public funds,” chastising the effort:

Here public halls, there a circus, here a mint, and there a factory for warlike stores; in one place a habitation for his wife, and in another place one for his daughter.

To manage the newly revamped tax system, the hyperactive mints, multitudes of public-work projects and the affairs of the nascent Tetrarchy — Diocletian’s division of the empire into four separately managed regions — the Roman bureaucracy exploded.

He … created so many boards, commissions, and bureaus that every Roman with any pretensions to political pull had a government job, while his less fortunate fellow-citizens were fast being taxed to death for the support of a benevolent bureaucracy.[3]

Summarily flooding an economy with money inevitably brings the forces of inflation to bear, and before long soldiers and civilians were again unable to afford the staples of life due to rapidly escalating costs of living.

With a despotic tax ministry at work and having observed a brief respite from soaring prices, the return of rampant inflation must undoubtedly have frustrated and confused Diocletian. He turned to the last realm of free and voluntary discourse: the markets.

It’s true that Krugman doesn’t “defend” Diocletian’s economic policies; those advocated by him match Diocletian’s almost precisely.

The subsequent attempt to control prices was the most sweeping in Rome’s history, but not the first: two centuries earlier, Gracchus issued the Lex Sempronia Frumentaria, which imposed a below-market price on grain designated for public consumption. Diocletian’s initiative came in the form of his Edict on Maximum Prices (Edictum De Pretiis Rerum Venalium), published and promulgated in 301CE.

It was most ambitious, setting price ceilings for over 900 commodities, 130 labor wages, and freight charges and published broadly throughout the empire in both Greek and Latin. In addition, the preamble of the edict informs a demagogic armamentarium that continues to serve politicians to this day. It begins by appealing to divine selection and militarism, evoking the indispensability of the empire:

We may thank the good fortune of our state, as well as the immortal gods, on remembering the wars we have waged successfully … [and] by supernatural forces’ benevolent support … will secure [economic stability] … with the reinforcements Justice deserves.

It continues by appealing to plebian envy (“Greed raves and burns and sets no limit on itself … in ripping up the fortunes of all.”), rising to a crescendo of inflammatory class warfare (the wealthy “wallow in the greatest riches, with which nations could have been satisfied … day after day … carry[ing] off so much [that] they don’t even know [what] they have!”), and ultimately offering sating promises for swift retribution (“Toward remedies, therefore … we spring into action. We care not for complaints.”).

It goes on to characterize aspects of business as incomprehensible, conflating complexity with deception (“[T]he human tongue’s reckoning cannot untangle … all the accounting and the deed[s.]”), threatens speculators (“Nor will he be … exempt from injury … the sort who supposes that he [will] hold back necessary kinds of food or service when he has them … the punishment ought to be even more serious for someone who initiates a scarcity”) and generally excoriates the price system: “[s]ome people … are [so] eager to turn a profit … [that] they seize the abundance of general prosperity and strangle it.”

While it is true that there was an economic crisis afoot, it is likely that Diocletian was much less interested in protecting the common Roman citizen than he was in maintaining the readiness and favor of his last line of defense: the military. “[A]n inspection of the items [listed in the] edict … reveal[s] that a majority of the maximum prices ordered refer to articles that enter largely into military stores.” Soldiers may have already been rebelling against the inflationary prices and confiscating food from civilians, as the 6th century writings of Malalas report that at around this time “warehouses for the storage of grain [were established] … so that no retailer should be cheated by the soldiery.”

Not long after the edict was published, and despite explicit prohibitions against hoarding, shops began to close and goods began to disappear from Roman markets. Civil disturbances over the availability of food broke out. With mints continuing to churn out tidal waves of coins and the infrastructural work continuing unabated, the edict led to more social upheaval:

For merest trifles, blood was shed and, out of fear, nothing was offered for sale and the scarcity grew much worse until, after the death of many persons, the [Edict on Maximum Prices] was repealed.[4]

If the edict is revealing, the academic criticism that follows it is equally so. One scholar blames the failure of the edict on its incompleteness; whether the historian believes that the list should have included even more prices or more draconian efforts should have been used to catch and execute incorrigibles (or both) is left to the reader’s mind.

But there is a difference between rescinding a law and not enforcing it, and the regulatory burden of the edict seems to have survived, albeit unenforced, in some places:

The government continued to demand declarations of prices from the corporation of dealers in various commodities for decades afterward … [some research] show[s] that the practice continued at least as late as 359. Moreover a group of fifth-century papyri show that the data from these declarations were at that time still compiled at the provincial level.

Whatever the case, the Romans learned a lesson that wouldn’t be repeated again for almost 1600 years: that attempting to control inflation through price controls is like attempting to control obesity by wearing tight clothing: the results are generally frustrating, often painful, and sometimes deeply embarrassing.

To Krugman, again: while it is true that he has not, as yet, advocated for a capping of consumer or capital-goods prices, he has vociferously defended the existence of central banks and endorsed their mission to set the present price of future money via interest-rate targeting. And while this does not constitute price fixing, it indisputably constitutes price control through an Edict-like monetary-policy contrivance.

We may also view the impact of Diocletian’s reforms in the rise of a new but deeply significant feature in the lives of the Roman people: walls. They reflect not only new architectural sensibilities but social and economic concerns as well. Archeologically, it is at around the time of the continuing economic crisis and the publication of the Edict on Maximum Prices that walls — higher, thicker, and more plentiful than before — begin to appear, crisscrossing civilian neighborhoods. To no small extent, this reflects the breakdown of civility, the disengagement from economic life, and the reaction to the systematic replacement of moral law by state-imposed codes and regulations.

Despite the failure of his attempt to impose a command economy, Diocletian retired peacefully to an estate after over two decades of rule. The political zeitgeist of intervention and coercion was alive when he took office but under him it grew and evolved far beyond attempting to influence the availability of comestibles or reducing the freedom of Roman citizens to negotiate prices: Diocletian’s “attempt … resulted in complete regimentation under a totalitarian state.” Over subsequent decades, despite the limited currency reforms of Constantine, taxes were incrementally increased and the vague semblance of private enterprise progressively crushed.

Compared alongside American political icons, Diocletian seems the ur–Franklin Delano Roosevelt. Immersed from the very start of his reign in exigent economic circumstances, and forced to choose between the constrictive moorings of repression and the dangerous, expansive seas of greater liberty, he doubled down on power, attempting to annul the relationship between supply and demand and reduce the gregarious, enterprising spirit of man to points on a graph or constants in an equation.

It is certifiably true that Krugman doesn’t “defend” Diocletian’s economic policies; rather, those advocated by him match those tried by Diocletian almost precisely. The Nobel Prize economist calls vociferously for higher taxes, which was a specific policy objective of the Roman emperor. He goads policy makers to create more money and target higher levels of inflation — which Diocletian did, with clearly adverse outcomes. Diocletian’s massive buildup in both state-funded construction projects and a broadened state officialdom correspond neatly with Krugman’s specification of greatly amplified state-employment initiatives.

But the inept tax, inflation, and price-fixing approaches of Roman emperors can, in part, be excused by virtue of their having had little history to consult alongside a limited number of economic theories, all of which were grounded in pantheistic theology.

With 2,000 years of recorded history between the 3rd-century calamities of the Roman Empire and the present day — plus a handful of recent, well-documented economic crackups perusable amid a wide range of discredited economic theories — what excuses can Krugman offer?

Continue reading…

From Mises.org, here.

Mass Masking VERSUS The Precautionary Principle

Twenty Reasons Mandatory Face Masks Are Unsafe, Ineffective, and Immoral

By John C. A. Manley
Global Research

January 26, 2021

Nine Potential and Proven Dangers to Muzzling Yourself

1. Cavities: New York dentists are reporting that half their patients are suffering decaying teeth, receding gum lines and seriously sour breath from wearing masks. “We’re seeing inflammation in people’s gums that have been healthy forever, and cavities in people who have never had them before,” Dr. Rob Ramondi told FOX News.

2. Facial Deformities: Masking children triggers mouth breathing which as been shown to cause “long, narrow faces, narrow mouths, high palatal vaults, dental malocclusion, gummy smiles, and many other unattractive facial features,” according to the Journal of General Dentistry.

3. Acne Vulgaris: Moisture and germs collecting in the mask cause “facial skin lesions, irritant dermatitis… or worsening acne” (according to Public Health Ontario) which stresses the immune system, can lead to permanent scarring and has been linked to depression and suicidal thoughts (according to the Journal of Dermatologic Clinics). Children also develop impetigo, a bacterial infection that produces red sores and can lead to kidney damage (according to the Mayo Clinic).

4. Increased Risk of COVID-19: “Mask use by the general public could be associated with a theoretical elevated risk of COVID-19 through… self-contamination,” states Public Health Ontario in Wearing Masks in Public and COVID-19. “By wearing a mask, the exhaled viruses will not be able to escape and will concentrate in the nasal passages, enter the olfactory nerves and travel into the brain,” theorizes nationally recognized board-certified neurosurgeon, Dr. Russell Blaylock, MD (in an article at The Centre for Research on Globalization).

5. Bacterial Pneumonia: At an Oklahoma Press Conference, Dr. James Meehan, MD testified: “Reports coming from my colleagues all over the world are suggesting that the bacterial pneumonias are on the rise” as a result of moisture collecting in face masks.

6. Immune Suppressing: Masks are often worn by criminals trying to hide their identity while perpetuating an offence (theft, violence, rape, murder, etc.). They produce subconscious anxiety and fear. Fear and anxiety activate the fight-or-flight nervous system which down-regulates the immune system, as shown in a study by the American Psychological Association.

7. Germophobia: Masks create an irrational fear of germs and a false sense of protection from disease, leading to antisocial (or even hostile) behaviour towards those not wearing a mask. (See the paper in the Journal of Obsessive-Compulsive and Related Disorders titled “COVID-19, obsessive-compulsive disorder and invisible life forms that threaten the self”).

Medical Doctor Warns that “Bacterial Pneumonias Are on the Rise” from Mask Wearing

8. Toxic: Many (if not most) masks and face coverings (including cloth) are made with toxic and carcinogenic chemicals including fire retardant, fibreglass, lead, NFE, phthalates, polyfluorinated chemicals and formaldehyde that will outgas and be inhaled by the wearer. (See “5 main hazardous chemicals in clothing from China named” by Fashion United).

9. Psychologically Harmful: “I believe the real threat right now is what we’re doing to sabotage the mental, emotional and physical health of… our children, whose development is dependent on social interactions, physical contact and facial expressions,” writes Dr. Joseph Mercola of Mercola.com. “Between mask wearing and social distancing, I fear the impact on children in particular may be long-term, if not permanent.”

Six Proofs Masks Do Not Reduce Infections

1. Insubstantial: A CDC-funded review on masking in May 2020 came to the conclusion: “Although mechanistic studies support the potential effect of hand hygiene or face masks, evidence from 14 randomized controlled trials of these measures did not support a substantial effect on transmission of laboratory-confirmed influenza… None of the household studies reported a significant reduction in secondary laboratory-confirmed influenza virus infections in the face mask group.” If masks can’t stop the regular flu, how can they stop SAR-CoV-2?

2. Unreasonable: “Evidence that masking as a source [of] control results in any material reduction in transmission was scant, anecdotal, and, in the overall, lacking… [and mandatory masking] is the exact opposite of being reasonable,” ruled a hospital arbitrator in a dispute between The Ontario Nurses’ Association and the Toronto Academic Health Science Network.

3. Ineffective: “Oral masks in healthy individuals are ineffective against the spread of viral infections,” write Belgian medical doctors in an open letter published in The American Institute of Stress, September 24, 2020.

4. Unsanitary: “It has never been shown that wearing surgical face masks decreases postoperative wound infections,” writes Göran Tunevall, M.D. in the World Journal of Surgery. “On the contrary, a 50% decrease [in bacterial infection] has been reported after omitting face masks.”

5. No Protection: “There were 17 eligible studies.… None of the studies established a conclusive relationship between mask ⁄ respirator use and protection against influenza infection,” concludes a research review in the journal Influenza and Other Respiratory Viruses.

6. Unproven: Dutch Minister for Medical Care, Tamara van Ark, asserted that “from a medical perspective there is no proven effectiveness of masks” after a review by the National Institute for Health on July 29, 2020 (according to Reuters).

Five Ways Forced Masking is Immoral

1. Reckless: “By making mask-wearing recommendations and policies for the general public, or by expressly condoning the practice, governments have both ignored the scientific evidence and done the opposite of following the precautionary principle,” writes Denis Rancourt, PhD in his 2020 paper Masks Don’t Work.

2. Manipulative: Dr. Andreas Voss, member of the World Health Organization expert team and head of microbiology at a Dutch hospital in Nijmegen, on July 24, 2020, told I Am Expat that masks were made mandatory “not because of scientific evidence, but because of political pressure and public opinion.”

3. Fear-Mongering: “In fact, there is no study to even suggest that it makes any sense for healthy individuals to wear masks in public,” write Drs. Karina Reiss, Phd and Dr. Sucharit Bakdi, MD in Corona, False Alarm? “One might suspect that the only political reason for enforcing the measure is to foster fear in the population.”

Continue reading…

From LRC, here.

HXC: One Early Intervention For Corona Israeli Government Doctors Are Busy Denying

When Politics Corrupts Science

by Jonathan Rosenblum
Mishpacha Magazine
September 2, 2020

How politics polluted our search for a COVID cure

Lawrence Krauss writes in the Wall Street Journal (“The Ideological Corruption of Science,” July 12) how as a young physics professor at Yale, he and his colleagues in the hard sciences looked with bemusement at the dominant deconstructionism of the comparative literature department, which denied the existence of objective truth itself. That could never happen in the sciences, they assured themselves, except under a totalitarian regime such as Stalin’s.

That idealized view of science as a separate realm devoted to the pursuit of truth and devoid of all political bias, Krauss notes, is no longer sustainable. In June, the American Physical Society, representing 55,000 physicists, declared a one-day “strike for black lives” to eradicate “systemic racism” in science. No evidence was adduced for the latter, other than the underrepresentation of blacks in the sciences.

One of the day’s activities was to organize a protest campaign that resulted in the removal of physicist Stephen Hsu as vice president for research at Michigan State University. His crimes: his own studies in computational genomics to study how human genetics might be related to cognitive ability, and research by MSU psychology professors that did not support the narrative of racial bias in police shootings.

A distinguished Canadian chemist was censured by his university provost for calling for merit-based hiring, and the editors of a journal that accepted an article by him were suspended. Meanwhile, Francis Collins, the director of NIH, declared that he will no longer attend scientific conferences where white males, like him, predominate, regardless of their professional merit.

The pure objectivity of science is further clouded by fact that scientists are also human beings, prey to normal human temptations, such as the billions of dollars at stake in the race to produce medical cures or the quest for academic advancement. In 2005, Stanford professor Dr. John Iaonnidis published a paper titled “Why Most Published Research Findings are False,” analyzing how bias creeps into study designs; it quickly became the most downloaded article in the history of the Public Library of Science. And in 2014, his group argued in the Journal of the American Medical Association that 35 percent of the results of controlled clinical trials could not be replicated upon reanalysis of their raw data.

THE POLITICALLY CHARGED field of climate science has been beset by data manipulation by leading research centers. And now there is evidence that politics has crept into the search for cures to COVID-19, argues Dr. Norman Doidge in a lengthy article in Tablet, “Hydroxychloroquine: A Morality Tale.”

On March 21, President Trump tweeted that a combination of hydroxychloroquine (HCQ) and azithromycin might be a real “game changer” in treating COVID-19. Since that moment, the mainstream media, led by the Washington Post and CNN, has trumpeted every piece of evidence that HCQ is ineffective against COVID-19 and/or potentially dangerous, and downplayed or ignored all evidence to the contrary, in order to establish that Trump is a dangerous idiot. The MSM has, uniquely in the history of pandemics, engaged in what Doidge terms “unwishful thinking” — fervently hoping that a drug with the potential to save tens of thousands of lives, at a low cost, and without dangerous side effects, would turn out to be a bust.

Now, I would not recommend getting one’s medical information from the president’s Twitter feed. And his tweet was, in any event, premature. At most, there was, at the time of his tweet, tantalizing evidence of a “proof of concept.” A study from China published in Nature, a respected science journal, showed that HCQ inhibits COVID-19 in cells in test tubes. As often happens in medicine, the idea of testing HCQ arose when front-line physicians in Wuhan noticed serendipitously that none of those admitted to hospital for COVID-19 were being treated with HCQ for diseases of the connective tissues.

In May, however, Dr. Didier Raoult, the most cited microbiologist in Europe, and a researcher with long experience repurposing existing generic drugs for new diseases, published a study of 1,061 COVID-19 patients given a combination of HCQ and azithromycin, which showed that over 90 percent showed a significant decrease in viral load over the course of treatment. Around that time, a survey of 6,000 front-line physicians in 30 countries showed that a large plurality — 37 percent — chose HCQ, out of 15 possible medicines, as the best response to a diagnosis of COVID-19.

But a non-peer-reviewed Veterans Administration study, a month after President Trump’s tweet, showed a much higher percentage of patients treated with HCQ died than those who were not treated with it. The CNN headline trumpeted: “No Benefits; Higher Death Risks.”

That VA study, however, proved highly flawed. It had ignored a crucial confounding factor: Those patients receiving HCQ in the study were much sicker than those who did not. At that time, HCQ was only approved for use as a desperation measure for seriously ill patients. Dr. Anthony Fauci was still recommending doing nothing for patients quarantined at home.

Yet no proponent of the HCQ-azithromycin combination had ever suggested it is anything more than an early intervention remedy to reduce the viral load and thus the severity of the disease. No one ever proposed it was a wonder drug that could repair failing organ systems at a late stage of the illness.

If the VA study was flawed, sister studies published in Lancet and the New England Journal of Medicine, two of the world’s leading medical journals, and whose lead author was an eminent Harvard professor, constituted, according to Lancet editor Richard Horton, “monumental fraud.” The studies, which purported to be based on data obtained from 96,000 patients on six continents, showed a 30 percent higher mortality rate for patients treated with HCQ and a greater danger of adverse cardiac events. But when 100 scientists around the world wrote to Lancet seeking the underlying data, the studies’ authors immediately withdrew the two articles.

By labeling the articles a “monumental fraud,” Lancet’s editor sought to divert attention from the no less monumental failure of the peer-review process. Anyone with even a rudimentary knowledge of medical record-keeping, argues Doidge, would have been extremely skeptical that there existed comparable data sets from around the world. (Incidentally, the week before publishing the study, Lancet called editorially for Trump’s defeat in November.)

DEEPLY FLAWED, EVEN FRAUDULENT, negative studies of HCQ do not establish either its efficacy or safety. But if I tested positive for COVID-19, I would not hesitate to take the HCQ-azithromycin combination.

HCQ has been in use for 65 years and has been given to at least one billion people to treat malaria and lupus. Physicians know what dosages are safe. Yale Medical School epidemiologist Dr. Harvey Risch terms the risk from proper doses, administered over a ten-day period, negligible — 9/100,000. In addition, it is cheap — sixty cents per tablet — and can be taken at home with water.

No doubt other early intervention drugs will be developed: No single drug is appropriate for every patient, and the possibility of better drugs is always there.

On July 1, the Henry Ford Medical Center in Detroit published in the International Journal of Infectious Diseases a study of patients in which the severity of illness was fully taken into account, which showed that HCQ reduced the mortality hazard (mortality over a fixed period of time) by 66 percent. Another study from Italy at the end of July found the same 66 percent reduced mortality rate.

And yet Margaret Sullivan, the Washington Post’s media critic, opened her July 31 column (nearly a month after the Henry Ford study was published), ridiculing “fringe doctors spouting dangerous falsehoods about HCQ as a COVID-19 wonder cure.” She was engaged in “unwishful thinking” that Donald Trump would prove right about something.

Doidge’s enumeration of the multiple errors of experts and institutions we trusted to help us solve our most pressing scientific and medical problems includes “academics who increasingly see all human activities as ‘political’ power games, and so in good conscience can justify inserting their own politics into academic pursuits and reporting.”

What, for instance, besides “implicit bias,” at a minimum, can explain a presumably intelligent Harvard medical school professor making the following self-contradictory statements in one breath: HCQ is possibly dangerous, and we must save it for patients suffering from lupus or rheumatoid arthritis. Be wary of the experts.

From Jewish Media Resources, here.

‘Vox Populi Vox Dei’ In Judaism

Civil Disobedience in a Torah State

The coronavirus plague has brought the issue of civil disobedience to the forefront in many countries around the world. Authoritarian and even totalitarian governments have faced uprisings from desperate citizens. One cannot help but hope that this will lead to greater freedom and liberty for oppressed people around the world.

More democratic countries have employed draconian measures to limit the spread of the virus, in many respects resembling authoritarian regimes. Leaders have had to straddle the line between public safety, economic collapse, preventing citizens from panicking, and unjustified power grabs. Citizens in these countries have had to straddle the line between social responsibility, financial ruin, obeying authority, and fear of punishment. In these cases there is a great debate over whether harsh measures from governments will ultimately cause more harm than they will prevent.

As always, the Torah provides a model for how we should respond to every situation. Our divine treasure waits quietly to be sought, allowing those who think they can devise a better way to fumble and stumble. Perhaps social fabrics across the world must fray, perhaps Man must experience epic failure before he surrenders and turns to God’s instruction manual.

The Torah provides a unique model for the relationship between citizens and authority figures. Most people – even, sadly, religious Jews – view the Torah’s system of a monarchy and religious tribunals as primitive and unenlightened. Let us take a closer look and then compare with the best of what our modern, enlightened world has to offer.

*

We tend to view monarchs as ruthless dictators commanding unflinching obedience and lopping off heads right and left for their own amusement. This is for good reason; the archetypical monarch throughout history has been such a character, and there is no shortage of world leaders today who follow that tradition sans the crown and title.

Ancient Israel contributed many members to this dubious club, yet the vast majority of “bad” monarchs belonged specifically to societies that rejected the rule of the Torah. This includes the Davidic kings who embraced idol worship, the kings who broke away from the Davidic dynasty, and the kings during the second Bais Hamikdash. All of the non-Davidic kings except for Shaul and Yerovam derived their power strictly from force and rejected the Torah. This is not a coincidence – the two go hand in hand.

The Torah’s description of a king’s powers is unique among all man-made systems. Man-made systems invariably describe a leadership position by outlining the powers of the one who occupies it. The Torah, on the other hand, describes a king specifically by restricting his powers! He must not have too many wives, lest they sway his heart. He must not have too many horses, just enough for the needs of his army. He must not even have too much silver and gold, just enough to cover his expenses and bring appropriate respect to the kingdom. He must carry a Torah with him at all times to remind him that he is merely an ambassador of the King of Kings. He must learn from the Torah all his days so that he will fear God and not exalt himself over his fellow Jews. The Torah utters not a single word about the glory and power a king – only limits him and humbles him.

Indeed, the “good” Davidic kings, beginning with David himself, were extremely humble and responsive to the common people, despite wielding enormous power. We find throughout the books of Navi that they derived their power from the consent of the people, and were ever-mindful of that. The same David who inflicted unparalleled terror on Israel’s enemies responded meekly when Jews rebelled against him. This is the prototypical Jewish king.

Compare and contrast to our modern, “enlightened” leaders, who tend to take a reverse approach.

At the same time the Torah humbles the Jewish king, it commands the people to accept his authority. The king is not a mere figurehead, but a powerful ruler who represents the entire nation, and one who rebels against the king even slightly can be put to death.

Yet just as the king must balance his broad power with humility and prudence, the Torah balances the people’s subservience with the right to disobey a command that violates the Torah. In fact, they are obligated to do so. For example, Avner, the powerful general of Shaul, refused an order to murder the people of Nov. Avner is praised for this and suffered no repercussions for disobeying this order. On the contrary, the Gemara says he was later killed by divine punishment for failing to dissuade Shaul from pursuing David. The message is very clear: obeying a corrupt order from a king is ultimately far more hazardous than disobeying the king.

The Torah strikes the perfect balance for us, and if things are less than perfect, it is only because we have failed to adhere to this balance.

*

We find something similar with rabbinic leadership, which also gets a bad rap by secularists who consider themselves too sophisticated for religion. The Torah grants enormous power to the religious courts as well. Obeying their rulings is one of the 613 commandments. The Jewish courts have the power to levy fines, appropriate property, and even administer corporal punishment beyond the letter of the law if they deem it necessary to repair moral breaches in society.

Yet here too we find that they derive their powers entirely from the people. Judges and officers are appointed by the people, and once again the Torah goes to great lengths to warn judges against any form of corruption or negligence.

The Talmudic sages viewed themselves as divinely mandated to serve the people by virtue of their knowledge, against their personal best interests. Their calling was a wearying burden, and they lived in terror of the repercussions for ruling incorrectly (Sanhedrin 7A and many other places). A judge who ruled incorrectly would in many cases have to make restitution out of his own pocket! Again, compare and contrast to any religious or secular court in the world today.

Rabbi Shimon and Rabbi Yishmael were on their way to be martyred by the Roman government. Rabbi Shimon said to his teacher that he could not fathom the divine cause of his execution. Rabbi Yishmael asked him if he had ever kept litigants waiting momentarily for him to finish his drink, put on his shoes, or wrap himself in his tallis before adjudicating them. Rabbi Shimon was consoled by these words, accepting his death as a heavenly punishment for inconveniencing ordinary people who came before him to be judged! (Mechilta, Mishpatim Chapter 18)

As if that’s not enough, the Jewish courts were literally powerless to impose laws on society without the people’s cooperation. When they passed a gezeira, they would keep the reason behind it a secret for a full year even from their students. Furthermore, the courts were prohibited from passing a law that society could not tolerate. If the public voted with their feet not to accept the law, it was repealed, not forcibly imposed. (See Avoda Zara 29B, 35A, 36A)

We find here a truly divine balance between respect for authority and the power of the people. The court could not pass a single law without the trust of the people. This trust was earned by their track record of faithfully serving the people, to the extent that they would follow a new edict even if it was difficult and the reason for it incomprehensible. If the people accepted the law, nothing less than unswerving obedience was required. On the other hand, if the people felt the law was too constraining, they would simply disregard it, and the power of the courts would automatically be checked.

The rabbis know best, but the people know best, too. They serve each other, and the power flows between them to create a healthy, stable society.

*

Today in many parts of the world there is great tension between the rulers and the common people. Do the leaders have wisdom and integrity? Are they going too far with their authority? Can the people be trusted to behave responsibly? Do they have the right to disobey? Should the orders of governors and judges be obeyed even if they are misguided and immoral, simply to preserve the rule of law? These are questions millions of people are grappling with as their society teeters on the edge of both authoritarianism and anarchy.

The Torah provides a system that is far superior to anything Man has ever created, a perfect distribution of power between political leaders, religious leaders, and regular citizens. One doesn’t have to be religious to appreciate this system.

It’s high time we seriously discussed it.

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Did the Nazis Win the War? – Because Everyone Copies Their Economics…

Hitler’s Economics

By 

October 29, 2018

[Originally published August 02, 2003.]

For today’s generation, Hitler is the most hated man in history, and his regime the archetype of political evil. This view does not extend to his economic policies, however. Far from it. They are embraced by governments all around the world. The Glenview State Bank of Chicago, for example, recently praised Hitler’s economics in its monthly newsletter. In doing so, the bank discovered the hazards of praising Keynesian policies in the wrong context.

The issue of the newsletter (July 2003) is not online, but the content can be discerned via the letter of protest from the Anti-Defamation League. “Regardless of the economic arguments” the letter said, “Hitler’s economic policies cannot be divorced from his great policies of virulent anti-Semitism, racism and genocide.… Analyzing his actions through any other lens severely misses the point.”

The same could be said about all forms of central planning. It is wrong to attempt to examine the economic policies of any leviathan state apart from the political violence that characterizes all central planning, whether in Germany, the Soviet Union, or the United States. The controversy highlights the ways in which the connection between violence and central planning is still not understood, not even by the ADL. The tendency of economists to admire Hitler’s economic program is a case in point.

In the 1930s, Hitler was widely viewed as just another protectionist central planner who recognized the supposed failure of the free market and the need for nationally guided economic development. Proto-Keynesian socialist economist Joan Robinson wrote that “Hitler found a cure against unemployment before Keynes was finished explaining it.”

What were those economic policies? He suspended the gold standard, embarked on huge public-works programs like autobahns, protected industry from foreign competition, expanded credit, instituted jobs programs, bullied the private sector on prices and production decisions, vastly expanded the military, enforced capital controls, instituted family planning, penalized smoking, brought about national healthcare and unemployment insurance, imposed education standards, and eventually ran huge deficits. The Nazi interventionist program was essential to the regime’s rejection of the market economy and its embrace of socialism in one country.

Such programs remain widely praised today, even given their failures. They are features of every “capitalist” democracy. Keynes himself admired the Nazi economic program, writing in the foreword to the German edition to the General Theory: “[T]he theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under the conditions of free competition and a large measure of laissez-faire.”

Keynes’s comment, which may shock many, did not come out of the blue. Hitler’s economists rejected laissez-faire, and admired Keynes, even foreshadowing him in many ways. Similarly, the Keynesians admired Hitler (see George Garvy, “Keynes and the Economic Activists of Pre-Hitler Germany,” The Journal of Political Economy, Volume 83, Issue 2, April 1975, pp. 391–405).

Even as late as 1962, in a report written for President Kennedy, Paul Samuelson had implicit praise for Hitler: “History reminds us that even in the worst days of the great depression there was never a shortage of experts to warn against all curative public actions.… Had this counsel prevailed here, as it did in the pre-Hitler Germany, the existence of our form of government could be at stake. No modern government will make that mistake again.”

On one level, this is not surprising. Hitler instituted a New Deal for Germany, different from FDR and Mussolini only in the details. And it worked only on paper in the sense that the GDP figures from the era reflect a growth path. Unemployment stayed low because Hitler, though he intervened in labor markets, never attempted to boost wages beyond their market level. But underneath it all, grave distortions were taking place, just as they occur in any non-market economy. They may boost GDP in the short run (see how government spending boosted the US Q2 2003 growth rate from 0.7 to 2.4 percent), but they do not work in the long run.

“To write of Hitler without the context of the millions of innocents brutally murdered and the tens of millions who died fighting against him is an insult to all of their memories,” wrote the ADL in protest of the analysis published by the Glenview State Bank. Indeed it is.

But being cavalier about the moral implications of economic policies is the stock-in-trade of the profession. When economists call for boosting “aggregate demand,” they do not spell out what this really means. It means forcibly overriding the voluntary decisions of consumers and savers, violating their property rights and their freedom of association in order to realize the national government’s economic ambitions. Even if such programs worked in some technical economic sense, they should be rejected on grounds that they are incompatible with liberty.

So it is with protectionism. It was the major ambition of Hitler’s economic program to expand the borders of Germany to make autarky viable, which meant building huge protectionist barriers to imports. The goal was to make Germany a self-sufficient producer so that it did not have to risk foreign influence and would not have the fate of its economy bound up with the goings-on in other countries. It was a classic case of economically counterproductive xenophobia.

And yet even in the United States today, protectionist policies are making a tragic comeback. Under the Bush administration alone, a huge range of products from lumber to microchips are being protected from low-priced foreign competition. These policies are being combined with attempts to stimulate supply and demand through large-scale military expenditure, foreign-policy adventurism, welfare, deficits, and the promotion of nationalist fervor. Such policies can create the illusion of growing prosperity, but the reality is that they divert scarce resources away from productive employment.

Perhaps the worst part of these policies is that they are inconceivable without a leviathan state, exactly as Keynes said. A government big enough and powerful enough to manipulate aggregate demand is big and powerful enough to violate people’s civil liberties and attack their rights in every other way. Keynesian (or Hitlerian) policies unleash the sword of the state on the whole population. Central planning, even in its most petty variety, and freedom are incompatible.

Ever since 9/11 and the authoritarian, militarist response, the political left has warned that Bush is the new Hitler, while the right decries this kind of rhetoric as irresponsible hyperbole. The truth is that the left, in making these claims, is more correct than it knows. Hitler, like FDR, left his mark on Germany and the world by smashing the taboos against central planning and making big government a seemingly permanent feature of Western economies.

David Raub, the author of the article for Glenview, was being naïve in thinking he could look at the facts as the mainstream sees them and come up with what he thought would be a conventional answer. The ADL is right in this case: central planning should never be praised. We must always consider its historical context and inevitable political results.

From LRC, here.