There is Nothing Central Planners Cannot Do …

As Robert Murphy pointed out last week, yet another example of 'mission creep' at the Fed has recently surfaced. As readers are probably aware, the Fed is one of the bureaucracies that are constantly rewarded for failure. In fact, it is a general rule of thumb that the greater the failure, the greater the subsequent expansion of power that is granted to the bureaucracy concerned. Examples for this principle of statism abound  – see e.g. the vast expansion of the budget and power of the national security bureaucracy after it failed so abjectly to avert the 9/11 attack.

It is similar with the Fed, the regulatory powers of which have been expanded greatly right after it presided over the biggest financial crash since 1929-1930. However, for some people this doesn't go far enough. The Fed should not only manipulate interest rates and the money supply and act as a kind of fox guarding the financial hen-house. As Bob Murphy relates, it is now argued that the Fed under Ms. Yellen's leadership should add credit dirigisme designed to 'save the planet' to its menu:

 

“I have referred to Ben Bernanke as the “FDR of central banking.” What I mean is that Bernanke not only instituted horrible economic policies, but he used the financial crisis to fundamentally transform the way Americans (and Earthlings more generally) view the role of the Federal Reserve. A recent Huffington Post article on Janet Yellen illustrates my case beautifully. The bio describes the writer, Mike Sandler, as a “climate change professional” (among other things). That should warm us up for his recommendations for incoming Fed chair Janet Yellen:

“On January 6, Janet Yellen will likely be confirmed as the next Chair of the Federal Reserve System. Her to-do list will be full of things like the interest rate, the bank bailouts, the unemployment rate, and in general, running the economy. Climate change would be an unexpected addition to that list, but the Fed Chair is in an important and rarely recognized position to to take action on the climate crisis.”

Sandler lists several ways that Yellen can tackle the “climate crisis,” but I don’t want to overwhelm you. Let’s look at just one of his suggestions:

“She can make a carbon cap a part of the Fed’s operations by tracking and requiring carbon reductions in the footprint of loans originated by Fed member banks. This could take the form of a declining number of annual allowances to banks that provide loans to the energy and oil industry. By connecting economic activity to greenhouse gas emissions, the Federal Reserve could create levers to allow for additional economic growth in low-carbon activities, while reining in high-carbon industries.”

Does everyone see the significance of this statement? Sandler wants the Fed chief to oversee commercial bank loans in order to micromanage specific industries. We have moved well beyond the idea of a Fed that promotes economic growth while trying to minimize the volatility of price inflation. Now we have “climate change professionals” telling the Fed chief to crack down on banks that make loans to industries that the writer thinks are emitting too much carbon dioxide. Finally, just to make sure that we throw out marginal cost/benefit analysis and view the issue in emotional terms, here is how Sandler ends his HuffPo  piece: 

“Janet Yellen will have unique powers over economic policy, and she can use her new powers to save the planet. To do so, she will need to add one more item to her 2014 to-do list.”

 

(emphasis added)

Here is a link to the HuffPo article Bob Murphy refers to. There we learn that Mike Sandler is a 'political economist, climate change expert and sustainability advocate'. The term 'sustainability' has become a catch-all term used by central planners and would-be central planners (i.e., their self-appointed advisors of Sandler's ilk) in their crusade to suppress economic development and economic freedom.

 

The Authoritarian Character of the 'Planet Savers'

One thing Bob Murphy has not particularly stressed in his post on Sandler's piece deserves some further attention. Sandler specifically points to the non-democratic character of the Federal Reserve as putting it into an ideal position to shove his plans down our collective throats with no-one being able to do anything about it. 'Resistance would be futile' in other words. He writes:

 

“In the silos of the Federal Government, domestic efforts to address climate change are typically led by an alphabet soup of environmental agencies including the EPA, DOE, CEQ and others, but not the Federal Reserve (aka "The Fed"). Although President Obama has stated his intention to implement his climate action plan without Congressional approval, there are limits to presidential authority. He cannot institute an economy-wide price on carbon, and he cannot circumvent Congress' power over the budget.

Meanwhile, a major unrecognized power sits in another corner of the policy apparatus. While the Federal Reserve plays an important role in regulating the country's banks, setting the interest rate that banks pay, and determining the level of money supply, it also has the unique ability to reorient the interaction between the economy and environmental degradation by controlling the power and process of money creation.

In our debt-based monetary system, money enters the economy when banks make loans. Those loans must be repaid with interest, leading to an economy-wide growth imperative accompanied by the "side effect" of global warming. A more sustainable approach would be a steady state economy, where people can achieve a comfortable standard of living without jeopardizing the planet's life-support systems.”

 

(emphasis added)

So what Sandler really likes about using the Fed is that it can do an end-run around Congress as its actions are essentially not really subject to democratic control. This authoritarian streak is actually a typical characteristic of many of the so-called 'environmentalists' and 'sustainability advocates'. As we have mentioned previously, we strongly suspect that the environmental movement has become host to many former Marxists who lost their sugar daddy when the Soviet system imploded. Their authoritarian mindset is nicely demonstrated in this advertising campaign filmed by British environmentalist campaigners (the 'No Pressure' movie by “10:10” – we mention this specifically because they were so embarrassed by this revealing movie that they are constantly trying to pull it from youtube, but it keeps reappearing). 

We should also point out that the idea that more and more economic coercion will result in a “steady state economy, where people can achieve a comfortable standard of living without jeopardizing the planet's life-support systems” is  meaningless economically illiterate balderdash. Sandler probably also thinks electricity just mysteriously appears from an outlet in the wall, and it doesn't matter what happens beyond that.  Along similar lines, a few years ago an article at the Guardian asserted that a 'viable  alternative to eco-fascism' would be to simply ban advertising (we will revisit the advertising question in another post). The article is quite interesting because it presents a few of the more prominent outspoken eco-fascists and their ideas/plans. Especially Finnish radical Linkola doesn't hold back with informing us about what it is really all about:

 

“One well-known example of the authoritarian turn in environmentalism is James Lovelock, the first scientist to discover the presence of ozone-depleting chlorofluorocarbons in the atmosphere. Earlier this year he told the Guardian that democracies are incapable of adequately addressing climate change. "I have a feeling," Lovelock said, "that climate change may be an issue as severe as a war. It may be necessary to put democracy on hold for a while." His words may be disturbing, but other ecologists have gone much further.

Take for example Pentti Linkola, a Finnish fisherman and ecological philosopher. Whereas Lovelock puts his faith in advanced technology, Linkola proposes a turn to fascistic primitivism. Their only point of agreement is on the need to suspend democracy. Linkola has built an environmentalist following by calling for an authoritarian, ecological regime that ruthlessly suppresses consumers. Largely unknown outside of Finland until the first English translation of his work was published last year, Linkola represents environmentalism pushed to its totalitarian extreme. "An ecocatastrophe is taking place on earth," he writes concluding several pages later that "discipline, prohibition, enforcement and oppression" are the only solution.

Linkola has a cunning ability to blend reasonable ecological precepts with shocking authoritarian solutions. His bold political programme includes ending the freedom to procreate, abolishing fossil fuels, revoking all international trade agreements, banning air traffic, demolishing the suburbs, and reforesting parking lots. As for those "most responsible for the present economic growth and competition", Linkola explains that they will be sent to the mountains for "re-education" in eco-gulags: "the sole glimmer of hope," he declares, "lies in a centralised government and the tireless control of citizens."

 

(emphasis added)

That's right, according to this luminary of the environmentalist movement, we need “re-education in eco-gulags” for those who serve consumers, and a “centralized government” exercising “tireless control of citizens”. Not only does this reveal a cynical and inhuman authoritarianism and anti-civilization bent, it also shows hopeless naïvete.

Consider the idea that centralized government would be a good steward of the environment. Never has more environmental damage been done than under the rule of centralized governments that had 'total control over their citizens'. After the former Eastern Bloc collapsed and the enormity of the environmental catastrophe that had occurred in these countries came to light, even the staunchest critics of the communist regimes were shocked. East Germany had the dubious honor of being host to the 'most polluted town on earth'. Even decades later, time bombs from the ecological nightmare in the Eastern Bloc continue to go off.

 

Conclusion:

We don't want to give the impression that we think one should not care about the environment. There are certainly places on earth in need of improving their environment – such as for instance China. China suffers from outrageous pollution (especially in the large cities, see this recent report on Beijing), but it is in fact ruled by an authoritarian centralized government. On the other hand, it is a historical fact that all countries that have adopted capitalist modes of production have not only experienced a vast growth in wealth, but following their development phase (which often weighs on the environment, because economic concerns are considered more important) have also seen a notable improvement in their environmental conditions.  In fact, every single indicator of the quality of human life has been improved by capitalism, for all social strata. It does not matter what data one looks at, from life expectancy to literacy to access to amenities, it has all vastly improved for an unprecedented number of people, even though the market economy is severely hampered almost everywhere (see Indur Goklany's book on this topic).

The 'ecological catastrophe' that people like Linkola allege to exist is largely a figment of their imagination and one suspects merely provides the cover under which they act out their authoritarian impulses. The idea to harness the Fed for the purpose of implementing credit dirigisme to control carbon emissions, i.e., to fight the 'climate change' non-threat, similarly displays this authoritarian attitude. 

 


 
 

Emigrate While You Can... Learn More

 
 

 

Dear Readers! We are happy to report that we have reached our turn-of-the-year funding goal and want to extend a special thank you to all of you who have chipped in. We are very grateful for your support! As a general remark, according to usually well informed circles, exercising the donation button in between funding drives is definitely legal and highly appreciated as well.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

8 Responses to “The Fed Will Save the Planet”

  • easypilot:

    In a very old and interesting book is said: “the antiChrist will pacifist, vegetarian and animalist”

  • Crysangle:

    As the FED could only micromanage within the sphere of US facility , and control of carbon emissions would need a global coordination of policy , it must be assumed maybe that the above idea is just a PR attempt to sanction further FED control and leverage of US policy and economy .

    If we return to the idea that there will be a shortage of carbon based energy at some point then it is therefore possible to imagine the FED trying to handle domestic use of energy either pre-emptively or in preparation of a scenario of shortage . If this is the actual plan then it would be a deceit not to acknowledge this concern publicly .

    I consider myself an environmentalist , particularly of the natural environment – others may prefer the social environment and so on . The term ecologist is often misused nowadays , I have always understood ecology to signify the study of the interaction of living beings within their environment . It does not signify taking a stance , it only signifies providing an educative study and providing a hypothetical answer to existing questions of conservation , although man’s place within the larger ecology is often not well defined due to the somewhat personal nature of the opinion needed . In other words I think that eventually we face very simple existential questions on the topic , such as ‘ do you get an acre of land to subsist off or should we legislate it as a natural reserve’ . In one case someone starves and so the answer tends to end up being distorted towards a human bias , at least as long as he remain’s more powerful . That does not necessarily mean that he has managed the situation correctly nor that nature will tolerate his decision.

    Incidentally economy is closely related as a word, at least from what I have read , having its origins in the management of household , a traditional household being land and farm .

    Finally on AGW a couple of recent articles :

    The latest explanations offered on the recent lack of warming

    http://www.nature.com/news/climate-change-the-case-of-the-missing-heat-1.14525

    And a simple picture of the quantity of water and air on the planet . I include this because no-one seems to have offered a clear explanation of how much heat the oceans will absorb . At roughly the same volume as of air and, again roughly , a thousand times the density , if one degree of air temperature rise were absorbed fully by the oceans then the actual rise of temperature of the air would be around 0.001 degrees . That is not to say greater air temperatures than that are not being buffered by the oceans – point is I haven’t seen this quantified in any way, especially the transfer of heat to deeper water .

    http://boingboing.net/2008/03/11/all-the-water-and-ai.html

    • SavvyGuy:

      > Crysangle: At roughly the same volume as of air and, again roughly , a thousand times the density , if one degree of air temperature rise were absorbed fully by the oceans then the actual rise of temperature of the air would be around 0.001 degrees .

      FYI, the capacity of a material to absorb heat is called “specific heat”. A given weight of water has about 4.2 times the capacity to absorb heat as compared to the same weight of air. However, a given volume of water has about 3,215 times the specific heat of the same volume of air.

      • Crysangle:

        Thanks :) . Which in turn means that the water of the world is able to absorb much more heat than I stated (and correct me if I interpreted that wrongly) .

  • No6:

    Another good reason for a well armed populous.

    • jimmyjames:

      Another good reason for a well armed populous.

      *********

      Agree..but.. only if the populace has a clue (informed) about what has happened and what is happening and I think we’re light years away from that reality-
      There is never a true leader when uninformed people are sucked into crowd behaviour- it’s always fluid/no organization.. “let’s burn our own neighbourhood down”.. ie: Rodney King

  • bubbly:

    While people proposing “eco-gulags of hope” may be considered extreme, for now, the idea that AGW “deniers” should be severely punished (including death sentences) is becoming mainstream. Many people are completely brainwashed by these new eco-religions.

  • SavvyGuy:

    The bigger question is…who will save the Fed?

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • French labour union workers and students attend a demonstration against the French labour law proposal in Marseille, France, as part of a nationwide labor reform protests and strikes, March 31, 2016. REUTERS/Jean-Paul Pelissier/File PhotoHow the Welfare State Dies
      Hollande Threatens to Ban Protests Brexit has diverted attention from another little drama playing out in Europe. As of the time of writing, if you Google “Hollande threatens to ban protests” or variations thereof, you will find Russian, South African and even Iranian press reports on the topic. Otherwise, it's basically crickets (sole exception: Politico).  Gee, we wonder why?   They don't like him anymore: 120.000 protesters recently turned Paris into a war zone. All...
  • The-answer-is-yesToward Freedom: Will The UK Write History?
      Mutating Promises We are less than one week away from the EU referendum, the moment when the British people will be called upon to make a historic decision – will they vote to “Brexit” or to “Bremain”? Both camps have been going at each other with fierce campaigns to tilt the vote in their direction, but according to the latest polls, with the “Leave” camp’s latest surge still within the margin of error, the outcome is too close to call.   The battle lines are...
  • water houseA Market Ready to Blow and the Flag of the Conquerors
      Bold Prediction MICHAELS, Maryland – The flag in front of our hotel flies at half-mast. The little town of St. Michaels is a tourist and conference destination on the Chesapeake Bay. It is far from Orlando, and even farther from Daesh (a.k.a. ISIL) and the Mideast.   St. Michaels, Maryland – the town that fooled the British (they say, today). Photo credit: Fletcher6   Out on the river, a sleek sailboat, with lacquered wood trim, glides by, making hardly a...
  • nails-in-a-bed-of-nails-new-yorker-cartoonGoing... Going... Gone! The EU Begins to Splinter
      Dark Social Mood Tsunami Washes Ashore Early this morning one might have been forgiven for thinking that Japan had probably just been hit by another tsunami. The Nikkei was down 1,300 points, the yen briefly soared above par. Gold had intermittently gained 100 smackers – if memory serves, the biggest nominal intra-day gain ever recorded (with the possible exception of one or two days in early 1980). Here is a picture of Haruhiko Kuroda in front of his Bloomberg monitor this...
  • queen_gold-840x501Rule Britannia
      A Glorious Day What a glorious day for Britain and anyone among you who continues to believe in the ideas of liberty, freedom, and sovereign democratic rule. The British people have cast their vote and I have never ever felt so relieved about having been wrong. Against all expectations, the leave camp somehow managed to push the referendum across the center line, with 51.9% of voters counted electing to leave the European Union.   Waving good-bye to...
  • junkThe Problem with Corporate Debt
      Taking Off Like a Rocket There are actually two problems with corporate debt. One is that there is too much of it... the other is that a lot of it appears to be going sour.   Harvey had a good time in recent years...well, not so much between mid 2014 and early 2016, but happy days are here again! Cartoon by Frank Modell   As a brief report at Marketwatch last week (widely ignored as far as we are aware) informs us:   “Businesses racked up debt in the...
  • MACAU, CHINA - JANUARY 28: Buildings of Macau Casino on January 28, 2013, Gambling tourism is Macau's biggest source of revenue, making up about fifty percent of the economy.What Could Possibly Go Wrong?
      A Convocation Of Gamblers The Wall Street Journal and BloombergView have just run articles on the shadow banking system in China.  This has put me in a nostalgic mood. About 35 years ago when I was living in Japan, I made a side trip to Hong Kong.   Asia's Sin City, Macau Photo credit: Nattee Chalermtiragool   I took the hydrofoil to Macau one afternoon and the same service back early the next morning.  On the morning trip, I am sure that I saw many of the...
  • saupload_loves-me-loves-me-notA Darwin Award for Capital Allocation
      Beyond Human Capacity Distilling down and projecting out the economy’s limitless spectrum of interrelationships is near impossible to do with any regular accuracy.  The inputs are too vast.  The relationships are too erratic.   The economy - complex and ever-changing interrelations. Image credit: Andrea Dionne   Quite frankly, keeping tabs on it all is beyond human capacity.  This also goes for the federal government.  Even with all their data gatherers and...
  • rate_hike_cartoon_10.15.2015_largeJanet Yellen’s $200-Trillion Debt Problem
      Blame “Brexit” BALTIMORE – The U.S. stock market broke its losing streak on Thursday [and even more so on Monday, ed.]. After five straight losing sessions, the Dow eked out a 92-point gain. The financial media didn’t know what to say about it. So, we ended up with the typical inanities, myths, and claptrap.   “Investors” are pushing the DJIA back up again..apparently any excuse will do at the moment. The idea may backfire though, as exactly the same thing happened...
  • deflated-souffleThe Fed’s  Doomsday Device
      Bezzle BALTIMORE –  Barron’s, in a lather, says the market is facing the “Two Horsemen of the Apocalypse.” Huh?   Only two? There were four last time!   Supposedly, the so-called Brexit – the vote in Britain this Thursday on whether to leave or remain in the European Union (EU) – and uncertainty over where the Fed will take U.S. interest rates are cutting down stocks faster than a Z-turn mower. But Brexit is a side show. As our contacts in London...
  • Brexit supporterGold and Brexit
      Going Up for the Wrong Reason Gold is soaring. It should—and a lot—but in my view not for the reason it is. Indeed gold is insurance for uncertain times, a time that Brexit seems to represent. But insurance is an administrative cost — one must minimize its use.   August gold contract, daily – gold has been strong of late, but this seems to be driven by “Brexit” fears - click to enlarge.   Moreover, insuring against Brexit might ironically be equivalent...
  • cameron at the EUBrexit Paranoia Creeps Into the Markets
      European Stocks Look Really Bad... Late last week stock markets around the world weakened and it seemed as though recent “Brexit” polls showing that the “leave” campaign has obtained a slight lead provided the trigger. The idea was supported by a notable surge in the British pound's volatility.   Battening down the hatches...   On the other hand, if one looks at European stocks, one could just as well argue that their bearish trend is simply continuing – and...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com