ROLLBACK

REVIEW
There is every reason to be pessimistic about the future of the United States. Another election is looming, offering no possibility of altering any of the poisonous policies of the present. The main candidates differ in style. Time to face the future.

I read lots of books, some better than others, some which I are not worth finishing. Every few years, I read one that is so brilliant it justifies all the dross I’ve plowed through. Rollback is such a book. Before reaching the end, I realised I’d want to read it more than once.

Why? My Web disciples know that my positions can be controversial, not being based upon accepted political reality. Not only does Thomas Woods reach the same conclusions as I do, he develops arguments that demonstrate my brilliance.

Now, I don’t read books to reinforce my beliefs, or I would read far less, but it is comforting to find another person who sees the world as it is, not as some would like it to be.

Rollback begins by asking “Is it already too late?” and ends with some suggested remedies, but the author is not optimistic. For one thing, a consensus supports all the erroneous assumptions driving our current course. These are reinforced by what passes for education, by the media and by most of the establishment who influence thought. Even if someone is persuaded that government is misguided, she resistance is futile.

Most likely, as Woods states, “Americans have given government the benefit of the doubt because they have thoughtlessly accepted a schoolboy narrative of how much worse off we would all be without it.” They believe that even failed policies result from good intentions. As you know, government is the root of all evil.

If government want to help, why do they never recognise that their solutions are making things worse? Why do they never admit they may be wrong, not underfunded?

Take those entitlement programmes. Medicare’s cost projections are based on questionable information. The Medicare trustees “assume” that the historical spending rate of 5% a year will drop to 2% in the next decade. Why? “The only justification they offer is that if Medicare spending did not slow down by then, it would rapidly take over our entire economy.” Really?

The book rips these various payout plans, reminding us what we already know. They are scams.

Woods is tough on Obama, but his is no political tome. He points out that George W Bush was a big government proponent who spent more than any president since LBJ. Economic “stimulus” does not work, nor do bailouts, yet they have been advocated by both parties. He quotes William Graham Sumner, who said in 1896 that “no scheme which has ever been devised… has ever made a collapsed boom rise up again.” Government assumes that there’s always a first time.

The schemes do have an effect, distorting the economy, protracting the pain. Government intervention creates problems, then exacerbates them with further meddling. The auto bailouts were structured unfairly. Woods writes, “For a man who had made such a big deal about his supposed immunity to the demands of special interests, it seemed a bit rich for the president to claim it was in the public interest for him to stiff senior creditors while handing over major portions of the companies to an institution that had spent $5 million to help elect him.”

When President Obama promised he wouldn’t return to the failed theories of the past eight years, without defining what those were, what he meant was that anything he wanted to do was different, even if it was exactly the same. He continues to blame the banks almost exclusively, and George Bush, not the Federal Reserve, Fannie Mae and Freddie Mac, or the bipartisan policies that created the housing bubble that burst the economy. Banks share some of the blame for riding the wave of profit, but they were hardly the only or main reason for the recession.

Woods is riveting when describing the fallacies spread by government schools and by the media. For instance, ersatz deregulation is initiated and, predictably, fails. Then it is offered as proof that deregulation never works. Woods points out that we have done better with little or no regulation because the free market is the best regulator.

Most problems attributed to “deregulation” may be the result of over-regulation, if you can imagine such a thing. One oft-cited example is California’s electric deregulation, which got a bad rap, but which was by no means actual deregulation. Anyone who has lived in California knows there are layers of regulation, which would be difficult to eliminate.

You get to read about OSHA’s costly failure, as well as so-called transportation safety. Seems that “between 1925 and 1960 automobile fatalities decreased by 3.5% per mile driven per year,” when there were almost no safety regulations. Now that the National Highway Traffic Safety Administration is in command, fatalities have decreased 3.5% per year. Pretty good for a government agency. At least deaths didn’t increase, just cost.

Then there is the Federal Reserve. A chapter details how this unaccountable institution encourages deficit spending by printing money, resulting in a devalued the dollar. The only things the Fed doesn’t do is spur full employment, stop recessions or create a stable economy.

Another institution he pillories is the military. Their budget, which cannot be audited, is underestimated by using “Defense” spending because other departments share the cost. Woods shows how the money spent on military research could be more usefully spent, and punches a hole in the argument that such research yields civilian benefits. It is likely that privately-funded research would be better, since it is not politically driven.

Of course, defense has little to do with its government Department. In the 1960s during the “Cold War,” US aircraft and missiles were capable of unleashing the equivalent power of six tons of TNT for every person on the planet. Seymour Melman, who studied the economics of warfare, wondered, “have we become more secure than when we had only 1 ton of TNT per human being on earth?” Six of one, half a dozen of the other.

We may not have been safer, but we were poorer. Now the two major candidates want to boost spending by varying degrees. Cuts are not on the table.

He calls that “a school version of history worthy of Pravda.” The numerous duplicative and failed programmes may not help those who need it, but do help bureaucracies and interest groups. Why fill a real need and have to price your goods or services reasonably, when you can supply a government that can spend as much as it likes? As young persons are learning, borrowing thousands of dollars for “higher education” does not guarantee you a good job, or any job. They learn that lesson for free, after putting themselves in debt for years to come.

The Drug War? Without reopening this argument, suffice it to say that “we” are losing and neither major party will do anything but expand it. As the Voluntary Committee of Lawyers put it in an open letter, “we conclude with alarm that the war on drugs now causes more harm than drug abuse itself.”

Finally, Mr Woods proposes some remedies. They are more severe than, say, voting for one official candidate over another, not surprising from the author of Nullification.

“These ideas are unthinkable, the guardians of approved opinion will say. Not unthinkable, evidently, are

• trusting the same people who caused the problems to solve them,
• doing nothing as the political class intensifies the coming crisis at every turn, and
• ruining the lives of the rising generation.”
  [I believe the last point refers to the mountain of debt burying future generations.]