How Executive Power Can Dismantle the Deep State
Patrick Newman
Murray N. Rothbard Memorial Lecture
Sponsored by Steve and Cassandra Torello
Rothbard believed in a unified science of liberty that could provide the theoretical edifice of Austrian economics, the empirical illustrations of government failures and how the free market works, and of course, the strategy for actually achieving free market libertarianism in our time.
So in that spirit, I’ve decided to talk about how executive power can dismantle the deep state in line with President Donald Trump’s initiative to eliminate waste, fraud, and abuse from the government.
Why have attempts to reform the government over the past 40 plus years, basically since 1980, failed? They have all relied on achieving reform through Congress, but Congress is too beholden to special interests and constant election pressure.
The Jacksonians, on the other hand, managed to dismantle the deep state of their day, the American System. Murray Rothbard was a big fan of the Jacksonians, and they were really the only successful libertarian mass movement in the United States that actually brought about meaningful policy changes.
How did they do it? The Jacksonian playbook focused on achieving change through the executive. They argued that the president, and governors, should veto crony spending and regulatory bills, issue executive orders to weaken government agencies, and fire entrenched bureaucrats.
What are the Jacksonian lessons for today? Some things that the Trump administration has done are in the spirit of Jackson. For example, Trump has issued an executive order creating the Department of Government Efficiency, a watchdog organization to put the spotlight on the wasteful largesse Congress has authorized. He has also issued executive orders requiring independent agencies to submit new regulations to the president and has empowered cabinet officials to downsize the workforces of their respective departments.
I’m firmly convinced that the Jacksonian playbook, whether or not it succeeds in the current administration, must be used at some point if we are to “achieve liberty in our time.” I can’t guarantee that this playbook will be used by an executive, and while I would love to see it work in the Trump administration, I obviously can’t guarantee that.
But what I can guarantee is that if during our lifetime, over the next several decades, there is actually going to be meaningful reform of the federal government, it’s most likely going to occur through vetoes, executive orders, and rotation in office, short of something like secession or state nullification in a substantive way. Some reformer’s going to be elected president, and they’re more or less going to try to change the government through the
Jacksonian playbook, which has been the only successful way of actually getting a decrease in government size.
Keynes: IS-LM, Socialism, and Modern Macroeconomics
Edward W. Fuller
Henry Hazlitt Memorial Lecture
Sponsored by Shone Sadler
The question is, Do we still live in the age of Keynes? Some economists will argue, No, we no longer live in the age of Keynes. They’ll say that we lived in the age of Keynes between, let’s say, the Second World War and the 1970s, but then in the 1970s, there was a revolution in macroeconomics. Again we entered a new era. Unfortunately, I hate to inform you, we still live in the age of Keynes.
This became painfully obvious during the financial crisis of 2008. Now, here’s the sad part. When policymakers look back at the crisis, they think the Keynesian IS-LM worked well. I think we all know here in this room that the business cycle is caused by fractional reserve banking. We still have a fractional reserve banking system. And so, there will be another crisis.
When there is another crisis, they are going to use IS-LM again. Because during the last crisis, they believed the model worked well. The result of the crisis was to boost policymakers’ faith in IS-LM back to the highs of the 1960s. So, it’s not good news.
The IS-LM model is the trained intuition of economists. Keynes invented IS-LM and he invented IS-LM to justify socialism.
What this means, and I don’t think it’s going to be a surprise to anyone in this room, is that socialism is the trained intuition of economists. I don’t think that is going to surprise a lot of us, but it might surprise some of our colleagues.
The ultimate downfall of IS-LM is inevitable. It is not good science. What I would argue is that it is not science at all. It is not a scientific theory. It is a political theory. And I think Ludwig von Mises would tell you that the truth will win out. Our colleagues will one day figure out that this is not good science.
The other thing I would like to say is that it’s not enough to just annihilate Keynes. We need an alternative. And I take great comfort in the fact that we have the alternative. We have the alternative to Keynes, and of course, it’s the immortal economic system of Ludwig von Mises.
Considerations and Reflections of a Veteran Reactionary Libertarian
Hans-Hermann Hoppe
Ludwig von Mises Memorial Lecture
Sponsored by Yousif Almoayyed
I want to discuss my views contrasting monarchical wars and democratic wars. This will be put into a paper for the Revisionist History of War conference to be held at the Institute in May.
Monarchical wars are wars that are mostly conducted because of territorial disputes arising out of inheritance disputes. They were easily begun, and they were easily concluded because monarchs conducted their wars with their own resources. They rarely could use the draft, for instance, and they had to end the wars usually rather quickly because they ran out of money because, at that time, money was still real money.
Democratic wars, on the other hand, are wars that have some sort of ideological component. The entire people is involved in the war, and you must give them reasons why they must fight the war. One side is bad. The other side is good. And you cannot simply end them by occupying certain territories because the bad guys have to be punished by the good guys.
My main concern will be to show the difference between monarchical peace and democratic peace. I’m not so much interested in who is guilty and why the war started exactly, but in contrasting monarchical peacemaking with democratic peaces.
To give you some examples, take the Napoleonic Wars that ended in 1815. The war was a democratic war as far as France and Napoleon were concerned. It was an ideological war. They wanted to liberate Europe and were conducting the war with these slogans, Liberty, Fraternity, and so forth.
Now, this war was lost ultimately to the opposing monarchs from Prussia, Austria, Russia, and England. The peace was the last monarchical peace. The war ended in such a way that Napoleon was sent into exile. France was restored to the borders that existed before the French Revolution of 1789. Some reparations had to be paid by France to the winning monarchical coalition, but that was basically it. And the peace lasted for almost 100 years. That was a peace conducted by gentlemen.
Monarchical wars were by and large reasonable, nonvindictive wars. Democratic wars, on the other hand, always end with revenge having to be taken. They result in vindictive peaces.
One example, for instance, was the War of Southern Secession. It ended with the North defeating the seceding South, but it did not end with Grant and Lee agreeing at Appomattox to lay down the weapons and leave it at that. There was a revenge taken. The South was destroyed for more than a decade. Some sort of mob rule was installed in the South, and until this day the South is considered to be a region of somewhat lowlife people that have to apologize until the end of the time for having had the audacity to secede from the Union.
From COVID Lockdowns to Exchange Rates, Capital Theory, and Monetary Policy
Steve H. Hanke
Friedrich A. Hayek Memorial Lecture
Sponsored by Jerry Dowell
When covid hit in February of 2020, billionaires’ share of wealth as a share of GDP was 14.1%. What is it today? It’s 21.1%.
The Fed goosed the money supply and of course, we know the transmission mechanism: change the money supply, asset prices change. Then with a further lag, real economic activity changes, and then with a further lag, inflation changes.
And sure enough, they goosed the money supply, the money supply went up, and actually peaked at an all-time record high of 18.1% per year in May of 2021. Since the Fed was formed, that’s the highest rate of growth in the money supply that’s ever occurred.
You know what happened to the stock market. It boomed. Real estate went up, land prices went up, any asset went up. Well, who owns the assets? Rich people do. It’s the biggest move we’ve had in income distribution post–World War II in the United States. Now the lefties are all worried about income distribution. Well, who distorted it more than anyone? The Fed.
They don’t even look at the money supply. All the models they have are post-Keynesian models that don’t even include an aggregate for money. That’s why they never could forecast inflation.
Remember it was a temporary thing? Remember the supply chains and . . . Oh, there was the oil price, and then there was this. Money? Never. Chairman Powell explicitly said in testimony over and over again, “We don’t think at the Fed [that] there’s any reliable relationship between changes in the money supply and changes in economic activity.”
Can you imagine? The guy is still the chairman. The greatest con artist in history.
