After reading about this image in Joseph Becker’s article, “Memories of Rothbard at UNLV“, I really wanted to see it. First I looked for it on search engines, but it was nowhere to be found. After that I tried to find a copy of the newspaper that Becker cited in online databases, but all I found was the text of the articles. Frustrated, I checked the LVRJ website, which said to look for copies in the Clark County Library. Their website referred me to another online database that I could not access remotely.
Fortunately, a friend came to the rescue. She volunteered to go to Nevada and manually search through the library’s microfiche archive. She found the original newspaper images and sent them along. Thanks to her, now ancaps everywhere can enjoy this piece of anarcho-capitalist history.
The full text of the related article is below.
Government as Self Therapy
By Vin Suprynowicz
Prof calls Clintonomics `psychotic’
The economic program of the fledgling Clinton administration, predestined by the final consonant of the president’s name to be dubbed “Clintonomics,” is “going to be a cornucopia of evil. It seems totally nuts, totally Looney Toons.”
At the rostrum is Murray N. Rothbard, S.J. Hall distinguished professor of economics at the University of Nevada Las Vegas, vice president for academic affairs of the Ludwig von Mises Institute of Auburn, Ga., and editor of the institute’s “Review of Austrian Economics.”
Look at the screwed-up air drops over Bosnia, Rothbard advises the 85 entrepreneurs, businessmen and lawyers who have journeyed to Las Vegas from as far away as Virginia and Rhode Island. Look at the Clinton “emergency stimulus” spending package, which no one pretends is big enough to stimulate anything but the municipal payrolls
of a few big-city mayors.
“What these people are saying is `It really doesn’t matter if it doesn’t work, we have to do something.’ This is government as self-therapy. These people actually want us to believe that if we say something is so, it’ll make it so.
“Nineteenth century pragmatism brought us the idea `Who cares about principle, whatever works’,” Rothbard says. “Now it doesn’t even have to work as long as we feel good about ourselves. It’s sort of psychotic.”
Murray Rothbard studied with the legendary Austrian economist Ludwig von Mises while acquiring his Ph.D. at Columbia University. It was von Mises who predicted in 1920 _ elaborating the theory in 1922 in his classic work “Socialism” _ that communism would collapse, because its abolition of free markets left government planners without the information they needed to determine the relative value of goods or services, dooming them to make grossly inadequate guesses about what should be produced, and where it should be sent. Von Mises was first ridiculed, and then _ after Franklin Roosevelt embraced John Maynard Keynes’ theories of beneficent government manipulation of the economy _ ignored. The only thing von Mises’ theories have going for them, in fact, is that they turned out to be right.
“The one red thread that runs throughout all this, of course, is `more government power’,” Rothbard tells the appreciative crowd, which is sprinkled with a few UNLV economics students in dinner jackets but for the most part consists of out-of-towners who have paid $125 a head to attend the university’s annual Austrian Economics
Weekend. Clintonomics constitutes “a Great Leap Forward toward socialism,” he says. “And this was obviously planned ahead of time. This is the way our system works now. The Democrats engineer Great Leaps Forward, and the intervening Republican administrations consolidate the gains. Yeltsin calls Clinton a socialist, and who should
Rothbard is the author of 17 books, including “America’s Great Depression” and the four-volume “Conceived in Liberty,” and is currently at work on a forthcoming book on nothing less than “the history of economic thought.” His Saturday evening keynote speech at the Alexis Park Hotel climaxes the March 27 weekend which has seen
presentations by Llewellyn Rockwell on the make-believe environmental crises being hawked by Al Gore and his “watermelons (they’re green on the outside and red on the inside),” Rothbard’s fellow-UNLV professor Hans Hermann Hoppe on “The Origin and Nature of Money,” and rogue Gorbachev economic adviser Yuri Maltsev holding forth on “Bureaucracy: Soviet and American” (hint: They’re hard to tell apart.)
“This form of socialism is not the Bolshevik kind,” Rothbard says, warming up now. “It’s the Menshevik kind, Democratic socialism, also known as welfare state capitalism. You keep a little market: controlled, taxed, and crippled. Some free elections are maintained, so long as you make sure the two parties are pretty much the same. And you don’t send dissenters to the Gulag, you just marginalize them through control of the media.”
Speaking of the media, it seems safe to say Rothbard’s remarks were pithier, more dramatic, and more quotable, on a subject being widely discussed in most of the taverns and workplaces of America that March 27 weekend, than anything heard then or since on the network “week in review” shows. Yet while the national news corps held its breath to see whether Boris Yeltsin would stare down an impeachment threat in the Russian parliament that Saturday, Las Vegas’ local television stations opted to devote their time to a Saturday night two-alarm blaze at the Holiday House Motel.
Not a print reporter, not a television camera, showed up to capture or relay a word about the Austrian Economics Weekend. In a different context earlier in the day, editor and radio commentator Lew Rockwell, the former congressional chief of staff (for Republican-turned Libertarian Ron Paul of Texas) who founded the von Mises Institute in 1982, theorized before a smaller daytime gathering in a second floor meeting room of the UNLV student union that the reason so many Americans buy into the half-truths and outright lies used to justify the Clinton program is “due to the media, which might as well be an arm of the Clinton administration.”
“Take the BTU tax,” Rockwell suggested, “which is 40 percent on nuclear power, 20 percent on oil, 18 percent on coal, and 10 percent on natural gas. This will drive out the nukes. But we’re expected to believe it’s sheer coincidence that Clinton’s energy chief is Matt McClory of ARCO, a big natural gas producer.”
Such things never get pointed out, Rockwell suggests, because the press corps is increasingly manned by co-believers who share with the Clintonistas the notion that more government control is good for us, so there’s no sense stirring up the great unwashed with complex details which will only upset them.
“It’s easier to be a socialist here where you have unlimited supplies of beef and chicken,” explains Russian emigre Yuri Maltsev, smiling broadly, “than in a socialist country where the gap between the promise and the performance is so obvious.”
“There’s a moral and religious quality to the whole environmental movement,” says Lew Rockwell.
“There is no proof that ozone prevents cancer. And seasonal holes in the ozone over the poles appear to be perfectly natural. But chlorofluorocarbons are being outlawed because they `cause’ the ozone holes.
“None of this is based on any reproducible science. It’s all based on econometric computer projections with all kinds of insane assumptions. … Unbelievable propaganda is being handed out as fact. … CFCs are wonderful chemicals. They’re non-poisonous, they’re non-explosive. I hope they don’t really end CFC production, because one
of their major uses is in anaesthesia. The replacement chemical, which is manufactured only by Dupont, has the unfortunate property that it can explode. The new symbol of the environmental movement may well be the exploding refrigerator.”
There’s not much activity in the UNLV student union on an early Saturday afternoon, even in the sunny interludes between scattered rain showers. The cafeteria downstairs is closed and sealed off with sliding metal grilles; UNLV is the kind of campus where a lot of kids go home for the weekend. Rockwell’s voice can be faintly heard next door in an adjoining meeting room, where a group of 30 young female students, mostly blonde and athletic and all casually dressed, listen to an intense and only slightly older woman instruct them on dressing for success and “The Power of Color.”
Clintonomics, Professor Rothbard contends, is “based on hermetically sealing off the economy into two parts. To cure the deficit, you raise energy taxes, and you assume this has no negative impact on anything else.
“Then, on the other hand, they assume that a `short-term stimulus,’ by which they really mean $16 billion worth of pork barrel jobs, will help growth without increasing the deficit!”
Even Clinton’s new idea, “a huge tax increase during a recession,” has been tried once before, Rothbard says.
And what will be the result of Clintonomics? First, Rothbard argues, the Clinton tax hikes will hurt savings and investment.
“The 1980s were not a decade of greed, but they were a decade of bank-credit inflation, mostly into real estate, rather than into the stock market as in the 1920s. Real estate was also kicked in the head by the 1986 tax reform, which was formulated by these Jacobin free market types who wanted to `close every loophole.”‘
When von Mises came to this country in the 1930s, Rothbard recalls, he sat in on some economic discussion groups at Columbia University, “and he kept hearing this word, so he finally asked `What’s a loophole?’ They tried to explain it to him for a while without success, until finally this look of understanding came across his face. `Oh,’ he
said `It means a taxpayer still has some money left we haven’t taxed’.”
The only way to get out of a recession, Rothbard insists, “is to allow the free market to work, not to bail out anyone. Of course, government does just the opposite.”
With an insatiable appetite for meddling and an abiding scorn for industrial “greed,” Labor Secretary Robert Reich wants to raise the minimum wage. “Raising the minimum wage doesn’t create jobs, it just outlaws certain employment,” Rothbard responds. “If it doesn’t unemploy people, why stop at $5 an hour? Why not $100 an hour, and make us all rich?”
To encourage growth, what are necessary are “drastic” cuts in taxes, especially on the wealthy whose surplus earnings are necessary for private investment, and drastic cuts in government spending, Rothbard says. Government “investment” is not the same thing at all, because “government spending is parasitic consumption.
“The Keynesians say not to worry about the deficit, `We only owe it to ourselves.’ But `we’ are the taxpayers, and `ourselves’ are the bondholders. The two groups may overlap, but they are not identical. The deficit is evil because it squeezes out private investment,” Rothbard says.
“But taxes are worse,” Rothbard continues to his dinner audience. “The one thing worse than a deficit is raising taxes to pay it off. No increase in taxes has ever cut the deficit. Tax increases only give Congress more breathing room to spend more dollars.
“An energy tax will not just be passed along to consumers, because we have foreign competition” who won’t bear the same burden as the American suppliers. “It’s a crippler. It forces business to cut costs, to cut jobs, in order to send more money to the useless parasitic public sector.”
Most of the so-called spending cuts in the Clinton budget, meantime, are “phony spending cuts,” Rothbard argues, calling the so-called thinning of the White House staff “a racket”.
“When you peel away all the nonsense, there are hardly any spending cuts at all.”
Why, then, did it take so long for Congress _ for Senate Republicans, at least _ to stand up and say no?
“The opposition evaporated after two or three days, when the polls showed people liked it. He got ’em on `Sacrifice for your children’ and `Don’t worry, the rich will pay even more.’ He sold a phony sacrifice.”
Meddling with the health care system by the Clinton forces will only serve to demonstrate Von Mises’ Law, Rothbard warns: “Government intervention causes problems that require more government intervention.”
“You’ve got to make a distinction between costs and spending. The fact that health care spending is up doesn’t mean each appendectomy costs more. Computer spending is up, too; does that mean we need computer rationing? Cosmetics spending is up; do we need cosmetics rationing?
“They’re going to impose price controls on doctors, on hospitals, and on drugs. But the doctors and the hospitals won’t just sit there, they’ll start gaming the system to find places where they can make money. This will lead to price controls on everything to stop the shift of assets to the unregulated sector.”
Richard Nixon, presumed to be a conservative, demonstrated where that leads in 1973, Rothbard says. “Price controls lead to shortages and black markets. If government pays for health care, we’ll end up banning liquor, and forcing everyone to eat tofu and bean sprouts.”
Wrapping up, over the remains of the stuffed chicken legs and asparagus hollandaise, sheltered in the warm dining room from a cool and rainy Las Vegas evening, Professor Rothbard ends by quoting his friend Lew Rockwell:
“As Lew Rockwell says, we already have a massive workfare program; it’s called the federal government.”
Inside the hall, the 100 enthusiastic supporters of Austrian economics rise for a standing ovation. Outside, there is only the noise of the rain falling on the hotel patios, and into the darkened swimming pool.
Vin Suprynowicz is the assistant editor of the Review-Journal’s editorial page.