What’s More Important: People or Institutions?

A ludicrous rant in Law and Liberty demonstrates everything wrong with liberals. May 09, 2024 [WEBSITE]( | [UNSUBSCRIBE]( What’s More Important: People or Institutions? SEAN RING Of the people. By the people. For the people. The first job of any government is to protect the people. If a government can’t defend its people, it has no purpose and must be replaced. As a Hoppean Libertarian, I am positioned further right on the political spectrum than most libertarians. This perspective shapes my critique of an article I recently encountered in Law and Liberty. In a piece titled “[Unanchored in El Salvador]( G. Patrick Lynch compares El Salvador’s President, Nayib Bukele, to chemotherapy for El Salvador’s social cancer. It’s little more than a hit piece, attacking both Bukele and his right-wing “fanboys.” Having lived in dangerous environments, I find it hard to take seriously those who critique leaders like Bukele from the safety of their homes. And before Bukele’s presidency, El Salvador was far more dangerous than New York, London, or the Philippines. Before I get into Lynch’s article, let me give you a bit of background. New York, Singapore, and Hong Kong I grew up outside New York City and remember the 70s and 80s. It was a shithole. Not until Rudy Giuliani came in with his “broken windows policy” did The City clean itself up. Cops were all over the place, and crime fell off a cliff. It was the world's greatest big city in the late 1990s. When I moved to Singapore in 2009, I was already aware of the complete lack of crime there. Singapore had, and still has, a reputation for being “sterile,” but that usually comes from Westerners who are used to filthy, crime-ridden cities. The comments were completely different when I spoke to a South African friend who lived in Singapore. “I love it here. I can let my kids stay out until 3 am and sleep soundly.” Hong Kong elicits much the same reaction, except for sterility. Hong Kong is a dirty city, but there are no crimes. Again, children are entirely safe there. What did all these cities have in common? A police force that enforced the law, kept the peace, and tolerated zero indiscretions. They still do this in Singapore and Hong Kong. How’s the Big Apple doing? Or Chicago? Or San Francisco? [Regarding next Monday.]( This is an URGENT Customer Service Announcement that our records show you are not on the alert list for this upcoming Monday. And you know it’s serious when our Customer Service Director takes time off the phone to record [this message on camera.]( Please stop what you’re doing… And watch [this urgent message about h]( to add your email address to Monday’s alert list]( [Click Here To Learn More]( Lynch’s Critique of Bukele Let Lynch himself lay out the case before Bukele: El Salvador has had a very bad case of social cancer for a while now—namely, it has had a chronic violence and crime problem. Long ranked as the most dangerous country in the Western hemisphere, daily life in El Salvador was dominated by crime gangs. Now the reflexive tendency in Latin America, not without reason, is to assume this involves drugs. And without question, El Salvador has narco-trafficking. Okay, it was terrible. Lynch continues: Gangs in El Salvador surprisingly have their roots in the US. Salvadoran immigrants got involved in illegal activities in the US and started to establish criminal enterprises back home. While the US has a fairly robust legal system and law enforcement mechanism, El Salvador and most of Central America do not. Policing is poor, civil society is weak, and rule of law is virtually non-existent. The gangs thrived, like an invasive species. Bukele began his term by trying to disrupt gang finances and policing well-known areas where the gangs extorted money from locals throughout the country. He also rehashed many of the public works proposals he tried as mayor. None of that solved the problem, so Bukele decided to change to a much more radical and aggressive form of medicine. In El Salvador, the police and rule of law didn’t exist. Bukele locked down prisons - a huge source of revenue - for the criminals. So, Bukele tried a few things before his big crackdown. Lynch writes on: Eventually the gangs had an outburst of violence and Bukele seized the opportunity to round up tens of thousands of suspected gang members in a nationwide sweep led by his military and police. He packed these individuals into a newly built prison that was unlike any other in the region. Stacked on top of one another and essentially deprived of most of their civil liberties, the prisoners have been locked away for several years. However the violence and crime rates in the country, unsurprisingly, have cratered. El Salvador is now one of the safest countries in the hemisphere and Bukele is a rock star in his country. Well, what do you expect? An elected official hired to do a job does it. Yes, it makes him a rock star in today's clown world. Joke Biden won’t even close the US border. Here’s where Lynch resorts to name-calling: The great American philosopher Alfred E Neuman was famous for his expression that was summarized by the phrase “What, me worry?” He graced the front page of Mad Magazine posed in various crisis situations. Many Salvadorans, and those of the American right who are currently “fanboys” of Bukele, are undoubtedly thinking the same thing now. Faced with a failed state and social crisis, a heroic political leader seems to have emerged to save his nation despite criticism from international organizations and human rights groups—the very groups that the American right and many Latin Americans ridicule. Bukele seems a perfect solution to a serious challenge facing the region. … It’s easy to see why so many on the right have become enamored with Bukele. They too lack basic respect for rules and institutions. They, like him, are largely unanchored by any coherent set of ideas or philosophy. Raw power and faith in “great individuals” seem to be their only consistent views. The rise of contempt for elites and policy experts after the financial crisis and Covid lockdowns have dovetailed with a fear of immigration, crime, and disorder. Bukele looks like a prototype for them, and they are swooning. The Left cares about intentions. The Right cares about results. It’s not like Bukele rounded up these criminals and summarily executed them. He put them in prison, where they belong. And I take massive issue with Lynch’s accusation that the Right doesn’t care about institutions. We didn’t take the Long March through them. The Left did and destroyed them. If the rule of law were enforced, Bukele wouldn’t have been needed. And when institutions no longer serve the people they were built for, they deserve to be torn down and replaced with something that works. Wrap Up As my good friend and former Mises Institute Jeff Deist posted, “It’s up to the Salvadorans to decide.” Ultimately, that’s true. In the meantime, I’m rooting for Bukele. He cleaned the country up in one fell swoop. He reminds me of a young Lee Kuan Yew, the founder of modern Singapore. Singapore’s success speaks for itself. Hopefully, El Salvador’s success will, too. All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… Druckenmiller Dunks On Bidenomics SEAN RING Famed former hedge fund manager and family office owner Stanley Druckenmiller opened a Manhattan-sized can of Whoop-Ass on the notion of “Bidenomics” yesterday in a wide-ranging CNBC interview. It was good of CNBC, however unintentional, to let Druckenmiller mouth off without cutting him off. But then again, he is one of the world’s wealthiest men. He also doesn’t court attention, which is what I like about him. The Meat and Taters Longtime CNBC co-host Joe Kernan said to Druckenmiller, “Let me ask you how this plays into to -- it's another, I think, issue of being, you know, things are going well, and then we totally overspent fiscally as well in Bidenomics.” That opened the floodgates for Druckenmiller: If I were a professor, I'd give them an F. Basically, they misdiagnosed COVID and thought it was -- we were going into a depression. The Fed did, too. I worried about it, too, in the early days. The Fed eventually pivoted, better late than never. Treasury -- Treasury is still acting like we're in a depression. It's interesting because I've studied the Great Depression and you had a private sector crippled with debt, with basically no new ideas. So, interventionist policies were called for and were effective. The private sector could not be more different today than it was in the Great Depression. Their balance sheets are fine. They're healthy. And have you ever seen more innovative ideas that the private sector could take advantage of? Now, you got Blockchain, you got AI, you've got the whole thing. All the government needed to do was get out of their way and let them innovate. Instead, they've spent and spent and spent, and my new fear now is that spending and the -- and the resulting interest rates on the debt that's been created are going to crowd out some of the innovation that otherwise would have taken place. We've got a 7 percent budget deficit at full employment. It's just unheard of... [Trump supporters on FBI watchlist]( A WARNING to patriots… If you’ve supported President Trump… Purchased hunting ammunition… Or even purchased a Bible… [Could you have been placed on an FBI Watchlist]( [Go here now to learn how to protect your God-given rights]( It’s about to get much worse. I believe the Biden Administration is preparing a mass US citizen surveillance program. [See what you can do HERE](. [Click Here To Learn More]( Before We Begin… I know Druckenmiller is a multibillionaire, but I want to present an alternative to the “effective” policies of the Great Depression. Murray Rothbard has a different view, to say the least. Here’s the opening of Chapter 7 of Rothbard’s masterpiece, America’s Great Depression: If government wishes to alleviate, rather than aggravate, a depression, its only valid course is laissez-faire – to leave the economy alone. Only if there is no interference, direct or threatened, with prices, wage rates, and business liquidation will the necessary adjustment proceed with smooth dispatch. Any propping up of shaky positions postpones liquidation and aggravates unsound conditions. Propping up wage rates creates mass unemployment, and bolstering prices perpetuates and creates unsold surpluses. Moreover, a drastic cut in the government budget – both in taxes and expenditures – will itself speed adjustment by changing social choice toward more saving and investment relative to consumption. For government spending, whatever the label attached to it, is solely consumption; any cut in the budget therefore raises the investment-consumption ratio in the economy and allows more rapid validation of originally wasteful and loss-yielding projects. Hence, the proper injunction to government in a depression is to cut the budget and leave the economy strictly alone. Currently fashionable economic thought considers such a dictum hopelessly outdated; instead, it has more substantial backing now in economic law than it did during the 19th century. Laissez-faire was, roughly, the traditional policy in American depressions before 1929. The laissez-faire precedent was set in America's first great depression, 1819, when the federal government's only act was to ease terms of payment for its own land debtors. President Van Buren also set a staunch laissez-faire course, in the Panic of 1837. Subsequent federal governments followed a similar path, the chief sinners being state governments, which periodically permitted insolvent banks to continue in operation without paying their obligations. In the 1920–1921 depression, government intervened to a greater extent, but wage rates were permitted to fall, and government expenditures and taxes were reduced. And this depression was over in one year – in what Dr. Benjamin M. Anderson has called "our last natural recovery to full employment." Let’s get to the rest of Druckenmiller’s calm, cool, and collected rant. “I’d Give Them an F.” Me, too, Stan. Me, too. The incompetence of Joke Biden’s Treasury is staggering. You’d think that Janet Yellen, a former Fed Chairman, would have a clue. Instead, when interest rates were on the floor, Yellen issued short-term paper. She should’ve locked in those idiotically low rates with long-term bonds and enjoyed Powell’s hiking cycle. Now, she’s stuck trying to finance the enormous deficit at normal rates. Stupid. Why are we running a 7% budget deficit when we’ve got full employment? Goodies for all those registered voters. That’s why. The Private Sector Productivity is improving now, just as when email went mainstream in the 1990s. Automation and AI have made it easier for solopreneurs to run fully-fledged businesses, and blockchain has created an entirely new industry. Not everything is perfect, but it’s for businesses to iterate along the path of success. It’s not for the government to dictate. The Fear of Crowding Out First, let’s define “crowding out.” Crowding out happens when increased government spending or borrowing reduces or "crowds out" private spending and investment. It occurs when expansionary fiscal policies, such as increased government spending (as we have now) or tax cuts, lead to higher interest rates. Those higher interest rates - like we have now - make it more expensive for private businesses and consumers to borrow and invest, reducing their spending. This "crowds out" private investment. Crowding out is more likely to occur when the economy is already at or near full employment - where we are right now - as government spending has limited capacity to increase overall economic activity. It has adverse long-term effects by reducing capital accumulation and economic development. For a practical example, if you can buy a “risk-free” US Treasury bond yielding 8%, you certainly would. Most stock market investors don’t make that in a year, so putting your savings in a UST bond that yields 8% is a no-brainer. Now, you’re not investing in the stock or corporate bond markets. That’s the crowding out Druckenmiller fears. When so many decently yielding government bonds are on offer, liquidity drains from the private sector. Since Yellen and her treasury made such a catastrophic mistake issuing short-term instead of long-term bonds, this is the problem we’ll have going forward. Wrap Up It was a pleasure to see Stan Druckenmiller tell it like it is. There were no histrionics, just facts. We need more powerful men like him to stand up to The Establishment. If they do, we may yet get out of this mess. All the best, Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. 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