Will France face facts?

Hollande's campaign promises give way to reality

By Tim Bardon

French President Francois Hollande swept into power in May by offering a catnip agenda to France's struggling rank-and-file: Higher taxes on the wealthy and corporations, more government-subsidized jobs, more protection for pensions and entitlements and more protectionism would lead France back to prosperity.

So far, so bad.

Hollande's approval ratings have fallen fast — from 54 percent in August to 43 percent today. France's economy is getting more stagnant. Unemployment is at 10.3 percent and rising.

Talk about a short honeymoon.

Hollande is begging France for patience. "I ask to be judged on results, and that is something that requires time," he said.

But his nation is under increasing pressure to come to grips with economic reality.

The Siren Song of "Beautiful Deleveraging"

"Beautiful deleveraging" is the policy goal, but what we might get is "ugly inflation"

By CHARLES HUGH SMITH

In a world of rising sovereign debts and an overleveraged, over-indebted private sector, history suggests there are only three possible ways out: gradual deleveraging, defaulting on the debt, or printing enough money to inflate away the debt.

Ray Dalio recently described the characteristics of a “beautiful deleveraging” in which equal doses of austerity, write-downs, and inflation gradually lighten the load of impaired debt.  This might be called the Goldilocks Deleveraging, as the key feature of this “beautiful” solution is that each component is “not too hot, not too cold” – inflation is modest, write-downs of bad debt are gradual, and austerity is not too severe.  Given enough time, the leverage and debt are worked off without requiring any structural change to the Status Quo.

Understandably, the Status Quo has embraced this solution for the appealing reason it doesn’t change the power structure at all.  Everyone currently in charge remains in charge, and everyone who owns outsized wealth continues owning outsized wealth. Rather than falling onto the politically powerful “too big to fail” banking sector, the pain of deleveraging is spread over the entire economy.  There is no such thing as painless deleveraging, so the “solution” is to distribute the pain over hundreds of millions of people. That’s what makes it “beautiful” to the Status Quo: It doesn’t cost them either their power or their wealth.

The Status Quo in Japan has pursued this strategy for 20 years, and the Status Quo in Europe and the U.S. have pursued it for the past four years, ever since the global financial system imploded in 2008.

Spain may have a chance

Spain’s New Budget Focus on Spending Cuts

by PaterTenebrarum
For once, at least something positive has emerged from a new 'austerity' budget in the euro area. As Reuters reports, Spain's government has focused on cutting expenditure rather than raising taxes this time.

This is exactly how it should be done – it must be acknowledged that the economic pie isn't as big as it was once thought to be, due to the massive capital malinvestments of the boom. The attempt to leave the size of the government untouched while shrinking everything else and wringing more tax revenue from the contracting private economy is condemned to failure from the outset. The government's size must shrink in proportion, in fact the opportunity should be taken to shrink its size considerably further than that.

The method so far preferred by many euro area governments in their attempts to achieve the budget milestones of the 'fiscal pact' was to raise as many taxes as possible. We have discussed this in the past when criticizing Italy's Mario Monti and France's Francois Hollande with their focus on tax hikes, while they concurrently eschew or postpone genuine economic reform.

Who Killed the Liberal Arts?

And why we should care

by Joseph Epstein

When asked what he thought about the cultural wars, Irving Kristol is said to have replied, “They’re over,” adding, “We lost.” If Kristol was correct, one of the decisive battles in that war may have been over the liberal arts in education, which we also lost.

In a loose definition, the “liberal arts” denote college study anchored in preponderantly Western literature, philosophy, and history, with science, mathematics, and foreign languages playing a substantial, though less central, role; in more recent times, the social science subjects—psychology, sociology, political science—have also sometimes been included. The liberal arts have always been distinguished from more specialized, usually vocational training. For the ancient Greeks, the liberal arts were the subjects thought necessary for a free man to study. If he is to remain free, in this view, he must acquire knowledge of the best thought of the past, which will cultivate in him the intellectual depth and critical spirit required to live in an informed and reasonable way in the present.

For many years, the liberal arts were my second religion. I worshiped their content, I believed in their significance, I fought for them against the philistines of our age as Samson fought against the Philistines of his—though in my case, I kept my hair and brought down no pillars. As currently practiced, however, it is becoming more and more difficult to defend the liberal arts. Their content has been drastically changed, their significance is in doubt, and defending them in the condition in which they linger on scarcely seems worth the struggle.

The loss of prestige of the liberal arts is part of the general crisis of higher education in the United States. The crisis begins in economics. Larger numbers of Americans start college, but roughly a third never finish—more women finish, interestingly, than do men. With the economic slump of recent years, benefactions to colleges are down, as are federal and state grants, thus forcing tuition costs up, in public as well as in private institutions. Inflation is greater in the realm of higher education than in any other public sphere. Complaints about the high cost of education at private colleges—fees of $50,000 and $55,000 a year are commonly mentioned—are heard everywhere. A great number of students leave college with enormous student-loan debt, which is higher than either national credit card or automobile credit debt. Because of the expense of traditional liberal arts colleges, greater numbers of the young go to one or another form of commuter college, usually for vocational training.

Rock Fight

Japan could win a war for the Senkaku islands, but it wouldn't be easy

BY JAMES HOLMES

In recent weeks, Japan and China have squared off over who owns a minor group of islands in the East China Sea. The unthinkable -- a perilous maritime war for seemingly trivial stakes -- no longer appears unthinkable. So how do you defend a group of uninhabited rocks and islets like the Senkaku/Diaoyu islands?

Mainly by positioning yourself to win the air and sea battle around the disputed archipelago. The obvious way to ward off attack -- stationing garrisons and artillery on the tiny, resource-poor islands -- should be a secondary measure. And it would likely prove a losing one, absent superiority in nearby seas and skies. Forces left ashore without external support would find themselves stranded and outgunned, not to mention hungry and thirsty.

To be sure, heavily armed ground detachments can convert islands with rugged terrain into virtual "porcupines," prickly to the touch. For instance, Japan Ground Self-Defense Force (GSDF) troops equipped with truck-launched anti-ship cruise missiles could give any naval assault force fits. They could dig in, hardening their positions against air and missile bombardment. Despite their small numbers, GSDF defenders would be exceedingly tough to dislodge.

America’s Last Crusade

Headed for bankruptcy, Americans have no taste for adventure

by Patrick J. Buchanan

For Americans of the Greatest Generation that fought World War II and of the Silent Generation that came of age in the 1950s, the great moral and ideological cause was the Cold War.

It gave purpose and clarity to our politics and foreign policy, and our lives.

From the fall of Berlin in 1945 to the fall of the Berlin Wall in 1989, that Cold War was waged by two generations, and with its end Americans faced a fundamental question:

If the historic struggle between communism and freedom is over, if the Soviet Empire and Soviet Union no longer exist, if the Russians wish to befriend us and the Maoists have taken the capitalist road, what is our new mission in the world? What do we do now?

The debate was suspended when Saddam Hussein invaded Kuwait. George H.W. Bush assembled a mighty coalition and won a war that required but 100 hours of ground combat.

We had found our mission.

“And—while this may border on a hate crime—some countries are unfit for democracy.”

The United States was the last superpower and a triumphant Bush declared that we would build the “New World Order.”

Neoconservatives rhapsodized over America’s “unipolar moment” and coming “global hegemony.”

But Americans were unpersuaded and uninspired. They rejected the victor of Desert Storm—for Bill Clinton. By Y2K, the Republican Party was backing another Bush who was promising a “more humble” America.

Something Is Wrong

Don't look now, but Islam is becoming the MSM's official religion of America

By BEN STEIN

Now, it's not just that no one bats an eye at the amazing truth that the United States is beaming TV ads all over Pakistan apologizing for a derogatory Internet trailer for a nonexistent movie demeaning the being that Muslims call "The Prophet Mohammed." No one in the MSM even slightly hints that doing the kowtow in the same country that sheltered Osama bin Laden to a group that reveled in, delighted in the terrorism against American civilians and still provides the framework for the terrorist Haqqani network, might be humiliating and an insult to the memory of the great Americans who were murdered just last week in Libya.

No, we just take it in stride that our President and our Secretary of State will apologize to the people who hate us and want us dead. That's not what I am referring to.

I am referring to something worse: Have you noticed that in the past few years, and especially in the past few weeks since the murder of the Ambassador and his guards and colleague in Benghazi (a city that Erwin Rommel loved and whose inhabitants he praised), whenever the New York Times refers to Mohammed, they always call him, without quotation marks, The Prophet Mohammed, as if everyone with any sense understands that OF COURSE Mohammed is The One True Prophet and that it's just understood that Mohammed is The Prophet.

I see this in other news outlets and on TV, too. Sober-looking newsmen and newswomen mention Mohammed as The Prophet Mohammed. No ifs, ands or buts. I hear it on the BBC World Service, too.

Now, if Muslims want to believe that Mohammed is The Prophet, God bless them. Fine and dandy. If anyone wants to believe that, good luck to him or her. But why does our mainstream media here in the USA, an overwhelmingly Christian country, refer to Islam's prophet as "The Prophet"?

Why Do Languages Die?

The state is the only entity capable of forcibly altering the process of language socialization

by Danny Hieber

The history of the world's languages is largely a story of loss and decline. At around 8000 BC, linguists estimate that upwards of 20,000 languages may have been in existence.[1] Today the number stands at 6,909 and is declining rapidly.[2] By 2100, it is quite realistic to expect that half of these languages will be gone, their last speakers dead, their words perhaps recorded in a dusty archive somewhere, but more likely undocumented entirely.[3]

What causes this? How does one become the last speaker of a language, as Boa Sr was before her death in 2010? How do languages come to be spoken only by elders and not children? There are a number of bad answers to these questions. One is globalization, a nebulous term used disparagingly to refer to either global economic specialization and the division of labor, or the adoption of similar cultural practices across the globe.

The Queen's Decaying Throne

Spend more, achieve less

By Theodore Dalrymple

It is possible, on the Welsh borders where I spent the Queen's jubilee, to believe that something of the old England remains.

Only the advantages, not the depredations, of the 20th century are evident there: the food, for example, that would have been unutterably vile at the beginning of the reign has improved out of all recognition.

There are practically no modern buildings for miles around, constructed by those staggeringly brutal and incompetent British architects of the second half of the 20th century who have left little else in the country untouched, and touched nothing that they did not ruin.

In the 60 years of the Queen's reign they have sown nothing but ugliness through the land; and only in this benighted reign would it have occurred to anyone to demolish 18th-century Bath, as it occurred to the city's council, to replace it with Novosibirsk-on-Avon.

Fortunately, the council was stopped by public protest after "only" 4000 18th-century buildings had been pulled down.

The physical ugliness perpetrated almost everywhere has been fully matched by an ugliness of soul and society that is so obvious to visitors to our shores.

The Pauperization Of Japan

The icing on the Japanese cake

By Wolf Richter  

"Pauperization,” the word, became infamous when three executives of huge consumer products companies voiced it as the new challenge in Europe. To market their products successfully, they changed their commercial strategies and applied what worked in poor countries [The “Pauperization of Europe"]. In Japan, a similar process has hounded the economy, but for much longer. And nothing shows this better than the plight of the ubiquitous but hapless “salaryman.”

He is a cultural phenomenon. He enters the formidable corporate hierarchy upon graduation and struggles within it till retirement. Most of the time, the career trajectory flattens sooner or later. Often enough the aging salaryman is shuffled aside to a “window job” where he might not even have the tools to work, such as a phone.

His life is defined by commutes in packed trains and long hours at work. After work, at restaurants and bars, the informal part of work begins with clients or coworkers to hash out inter-office issues, price differences, design problems, or product failures under the influence of alcohol—the official excuse to be direct in a culture that prizes vagueness.

The end of translation

There is a hidden flaw in the story of the tower of Babel

By Thorsten Pattberg 

Few people realize that, quite frankly, the Bible discourages people from studying foreign languages. The story of the tower of Babel informs us that there is one humanity (God's one), only that "our languages are confused". From a European historical perspective, that has always meant that, say, any German philosopher could know exactly what the Chinese people were thinking, only that he couldn't understand them. So instead of learning the foreign language, he demanded a translation. 

Coincidentally, or maybe not quite so, History with a capital 'H' followed the Bible. At the time of the Holy Roman Empire of the German nation, when German scholars still spoke Latin, the German logician Christian Wolff got his hands on a Latin translation of the Confucian Classics. His reaction, I think, is as funny as it is disturbing: He reads Kongzi in Latin and says something like "Great, that looks very familiar, I have the feeling that I totally understand this Confucius!". 

Wolff was so overjoyous with his new mental powers, that he went on to lecture about the Chinese as if he was the king of China. It's brilliant; if it wasn't so comical. Among his unforgettable findings were "The Motives of the Chinese", or "The Final Purpose of the Chinese", and so on. 

Pity the thief

Agile and Lost

By Antony Daniels

The arrest of a couple in Melton Mowbray for shooting at four burglars, wounding two of them slightly, drew the following comment from Pam Posnett, councillor for Melton North:   

I feel sorry for the residents who were put in this position, I also have sympathy for the people who broke in, in so far as how the situation was handled…  

Was Pam Posnett thinking of her electoral chances when she said this, calculating that there were at least as many criminals in Melton North as ordinary householders, and that therefore it was advisable for her not to come too firmly down on the side of householders against burglars? 

Even more alarming, however, was the manner in which she expressed herself. It was thoroughly representative of the moral and intellectual degeneration of public life in this country. At the same time, of course, I have personal sympathy for Pam Posnett: it must be terribly boring to have to live with thoughts such as hers.

Greek Bad Loans Climb To Record 25% Of Total

In the New Normal Insolvent world everybody can pick his own poison

It appears that in the past few weeks, the number 25% is strange attractor of bad luck for Greece. First, a month ago we learned that Greek unemployment has for the first time ever reached 25%. Now we get to see the income statement and balance sheet manifestation of a society in socioeconomic collapse - Kathimerini reports that Greek bad loans, or those which haven't seen a payment made in over 3 months, have hit a record €57 billion, or 25% of all bank debt. 

"With one in every four loans not being repaid for more than three months, the bank system is feeling the pressure, leading to additional capital requirements that are expected to aggravate the state debt further." That was Kathimerini's spin. 

The reality is that just like in Spain, where between bad loans and deposit outflows, the country has become a protectorate of the ECB, which is now fully in control of its banking system, so too in Greece Mario Draghi's tentacles are now in every bank office. Should Greece repeat the festivities of this summer and threaten to pull out of the Eurozone, the ECB will merely in turn threaten to push the red button and cut off all cash to terminally insolvent Greek banks, which of course would also mean a total halt of all deposit outflow activity. So instead what will happen is the ongoing rise in unemployment, and the increase in bad loans as percent of total, until one day the economy, even with all the money in the world pumped into it from Frankfurt, will no longer move. That day is getting very close.

From Kathimerini:

The greatest part of the bad loans derives from business activity, accounting for some 33 billion euros of loans that are not being repaid. Bad mortgage loans come close behind, as they are approaching a record 20 percent of all housing loans, amounting to 15 billion euros. Consumer loans and credit card bills that are not being repaid add up to 30 percent.

Another worrying factor is that nonperforming housing and consumer loans have reached this level despite the fact that banks have proceeded to favorable arrangements for some 665,000 loans totaling 20 billion euros.

Palestinians ditched; Egypt next?

The catastrophic decline of a nation of 80 million people is something the world has not seen in some time

By Spengler

"No one cares about the Palestinians," I wrote in this space two years ago [1], and since then the world has stopped funding them. As a result, the Palestine Authority is collapsing, comments Khalid Elgindy, a former PA adviser, on the website of the Council on Foreign Relations, about "the wave of Palestinian protests that swept through the Israeli-occupied West Bank this month [and] ... virtually paralyzed life in Palestinian cities, with scenes reminiscent of the first intifada".

The PA can't pay salaries because international donors, including the Gulf States, haven't sent promised aid:

A rapid infusion of cash from the international community and Israel may buy the PA some time, but it cannot kick the can down the road forever - especially if a recently released World Bank report is right that a more severe fiscal crisis will take root if donor countries fail to act swiftly.

Even if the PA manages to hobble along for a few more months or years, a weak and divided Palestinian leadership with questionable domestic legitimacy will be in no position to negotiate a comprehensive agreement with Israel or make that agreement stick. This week's mass arrests of Hamas activists, carried out in the wake of the protests, speaks to the PA leadership's deep sense of insecurity. [2]

Free Banking vs Banking Panics

“Panics” are not an inherent aspect of free banking

by CARL SVANBERG 

In the 19th century America experienced one banking “panic” after another: 1819, 1837, 1857, 1873 and 1893. These recurring “panics” allegedly proved what happens in a completely unregulated banking system, a banking system free from the enlightened supervision of the government. To bring order and stability, the government had to step in and regulate the banks. With time, it would also have to establish a government run central bank, the Federal Reserve, as the “lender of last resort”. You have probably heard some version of this story before. This is, after all, the “conventional wisdom”. It is also complete fiction.

It’s true that America suffered from “panics” in the 19th century. But why? Because various government regulations made it difficult for bankers to act as rational businessmen. For one thing, interstate branch banking was illegal. This made banks dependent on the local business, making it virtually impossible to diversify risks. As a consequence banks became under-diversified and undercapitalized. Banks were, furthermore, forced to back up their money stock with state bonds. And since states had a tendency to go bankrupt, there was a justified fear that these bonds would eventually lose their value. When the bonds were losing their value banks quickly became insolvent and they had to declare bankruptcy. The “panics” were, in other words, caused by regulations. Indeed, it’s been estimated that 80% of the bank failures were caused by such destabilizing regulations. (Fribanksskolan, Per Hortlund, p. 50; pp. 134-136.)

He who lives by prediction is destined to die by prediction

The Hermeneutical Invasion

by Murray N. Rothbard

Introduction

In recent years, economists have invaded other intellectual disciplines and, in the dubious name of "science," have employed staggeringly oversimplified assumptions in order to make sweeping and provocative conclusions about fields they know very little about. This is a modern form of "economic imperialism" in the realm of the intellect. Almost always, the bias of this economic imperialism has been quantitative and implicitly Benthamite, in which poetry and pushpin are reduced to a single level, and which amply justifies the gibe of Oscar Wilde about cynics, that they (economists) know the price of everything and the value of nothing. The results of this economic imperialism have been particularly ludicrous in the fields of sex, the family, and education.

So why then does the present author, not a Benthamite, now have the temerity to tackle a field as arcane, abstruse, metaphysical, and seemingly unrelated to economics as hermeneutics? Here my plea is the always legitimate one of self-defense. Discipline after discipline, from literature to political theory to philosophy to history, have been invaded by an arrogant band of hermeneuticians, and now even economics is under assault. Hence, this article is in the nature of a counterattack.

"I Want a Cost-Free Life!"

The state’s purpose involves forcibly taking property from owners and giving it to others

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

                                     ~ Murray Rothbard

by Butler Shaffer

While driving on the freeway the other day, I saw a sign on another car urging me to "demand free energy." Why the driver failed to include "free food," "free gasoline," "free designer clothes," "free cars," "free sex," "free luxury home," or any other whim was not made clear. This man’s message expressed the whine heard from men and women whose parents never helped them to learn that the causal regularities of nature cannot be suspended for their momentary convenience; that the costs of the benefits we desire must be incurred by someone. Such infantile thinking underlies all political programs – the costs of which are forcibly imposed upon others. The self-serving demands for these programs are usually disguised more subtly as "general welfare," "social responsibility," the "public interest," or other seemingly selfless ends. On occasion – as was the case with this driver – the purposes are more patently expressed, albeit without the foot-stomping tantrums attending such displays in adolescent years. When I see or hear such demands, I am reminded of the childhood lyrics "I want what I want when I want it!"

South Africa: still an apartheid state

Black working class has begun to make its presence felt in the new South Africa

The roots of the Marikana massacre lie in the ANC’s deep antipathy to those it relied upon to rise to power: the black working classes.

by Charles Longford 

Since the massacre of 34 striking miners in the Marikana region of South Africa last month, there has been a lot of hand wringing about the underlying causes of the outrage. Many have located the massacre in the African National Congress’s (ANC’s) failure to deal with the enduring legacy of Apartheid, but in truth the roots of the tragedy lie elsewhere – in the reality of South African capitalism, and in the politics of the ANC and its alliance with the South African Communist Party (SACP).

In trying to understand how something like the Marikana massacre could happen, it is important to grasp that the leaders of the ANC have always had a contradictory attitude towards their mass base, the black working class. That the ANC’s leadership is now acting with hatred and violence towards the very constituency that it allegedly represents (and upon whose sacrifice it rode to power), has surprised many commentators. But in reality, Marikana has merely brought to the fore the class interests and tensions at the heart of post-Apartheid South Africa and its ANC-led governing alliance.

The roots of the Marikana massacre can be traced back to the formation of the alliance between the ANC and the SACP in the early 1950s. Following the Apartheid regime’s brutal crushing of the ANC-led defiance campaign in the 1950s, the black masses had always been the key to the ebb and flow of the liberation struggle. But the tragedy of South Africa is that they were never able to develop an independent perspective. Instead, they became the adjunct of political interests that were largely hostile to the real interests of the black working class.

The Global Demise of Pension Plans

Don't count on getting a pension when you reach retirement age

By Raul Ilargi Meijer

We have been saying for a long time that anyone in the western world who's 10-15 years away from collecting their first pension payments, shouldn't expect to get much, if anything, when the time comes. This is because, obviously, the economy has deteriorated as much as it has. It's also because, in essence, pensions plans are the ultimate Ponzi schemes.

What doesn't help are the central bank and government policies that are in fashion today that are based on pushing interest rates about as low as they can get.

The reactions to all this are interesting in their range of variation. Last week I picked up an article (more on that later) that made me refer back to a series of bookmarks I had made over the past month or so. Here are a few quotes that, when put together, paint the picture pretty accurately; you add up the details and numbers and you get an idea of what's going on. Not necessarily for the faint of heart. First, Michael Aneiro for Barron's:

Top Pension Fund Sends a Warning

The California Public Employees' Retirement System, the nation's biggest public pension fund at $233 billion, reported a mere 1% return on its investments in its fiscal year ended June 30. Earlier this year, in an attempted acknowledgment of today's realities, Calpers had lowered its discount rate–an actuarial figure determining the amount that must be invested now to meet future payout needs—for the first time in a decade, to 7.5% from 7.75%. That represents combined assumptions of a 2.75% rate of inflation and a 4.75% rate of return.

Needless to say, a 1% annual return didn't come close to hitting any of those figures and doesn't engender confidence in the assumptions of institutional or individual investors alike. Calpers was quick to note that its 20-year investment return is still 7.7% and that the past year was challenging for everyone. But Calpers is a bellwether, and other systems are expected to report similarly disappointing returns, necessitating higher annual contributions in the years ahead to meet funding needs.

The best president of the future

Que sera sera

One occasionally wishes the great visionary would take his eye off the far distant horizon to focus on the humdrum present where the rest of us have the misfortune to live.

By MARK STEYN 

One of the reasons why Barack Obama is regarded as the greatest orator of our age is that he's always banging on about some other age yet to come – e.g., the Future! A future of whose contours he is remarkably certain and boundlessly confident: The future will belong to nations that invest in education because the children are our future, but the future will not belong to nations that do not invest in green energy projects because solar-powered prompters are our future, and, most of all, the future will belong to people who look back at the Obama era and marvel that there was a courageous far-sighted man willing to take on the tough task of slowing the rise of the oceans because the future will belong to people on viable land masses. This futuristic shtick is a cheap'n'cheesy rhetorical device (I speak as the author of a book called "After America," whose title is less futuristic than you might think) but it seems to play well with the impressionable Obammysoxers of the press corps.

The Financial Crisis Of 2015

A Non-Fictional Fiction

By Oliver Wyman,

John Banks was woken by his phone at 3am on Sunday 26th April 2015. John worked for Garland Brothers, a formerly British bank that had relocated its headquarters to Singapore in late 2011 as a result of what Garland’s CEO had described as “irreconcilable differences” between the bank and the UK regulators. The last three years had been the most exciting of John’s life. Having led the bank’s aggressive expansion into emerging markets wholesale activities, he had recently been promoted to its executive committee.

John picked up the phone. It was the bank’s legal counsel, Peter Thompson, calling. He had dramatic news. Garland Brothers, one of the world’s oldest banks, would tomorrow declare bankruptcy. As he lay there in his spacious air-conditioned bedroom, unable to return to sleep, John tried to reconstruct the events of the last four years.

Planting the seeds of failure

At the beginning of 2011, the global economy was showing signs of finding a "new normal". With the exception of a few smaller troubled economies, the world had returned to positive growth, and Western stock markets had returned to their levels prior to the Lehman crisis. Banks had started lending to each other again, becoming gradually less reliant on central bank funding. Insurers had rebuilt their capital positions back to pre-crisis levels. Ireland had joined Greece in the list of peripheral Euro countries requiring a bailout, but there was a general sense that the broader contagion problems had been contained.

English for All, Freedom for None

That Which Is Not Seen

by Danny Hieber

"English should be the official language of this country" has become something of a mantra for the Republican Party, uttered to raucous cheers in nearly every Republican debate or speech. Moreover, today several organizations exist to lobby for English as the official language, including U.S. English, ProEnglish, and English First. Though the aims of these organizations and politicians vary, they all agree on one central objective: to make English the official language of the United States.

Advocates of official English, however, have given insufficient thought to what they mean by the terms they use, the unseen effects such policies entail, and whether the means they choose are in fact fit to attain the ends aimed at. No good praxeological analysis can do without addressing all three of these concerns, each best summarized by some of the great thinkers in liberal philosophy and economics: It was Voltaire who said "If you wish to converse with me, define your terms"; and it was Claude Frédéric Bastiat who first articulated the core principle of economic analysis in his famous essay "That Which Is Seen, and That Which Is Not Seen," later summarized by Henry Hazlitt in his book Economics in One Lesson:

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.[1]

Finally, it was Ludwig von Mises who established the most important aspect of any praxeological analysis in his magnum opus, Human Action:

In this sense we speak of the subjectivism of the general science of human action. It takes the ultimate ends chosen by acting man as data, it is entirely neutral with regard to them, and it refrains from passing any value judgments. The only standard which it applies is whether or not the means chosen are fit for the attainment of the ends aimed at.[2]

It is important to recall these insights when treating social issues like language, because so much of the previous commentary on official English strays far from any sort of objectivity. Because language is so intimately tied up into our identities and how we perceive ourselves, even Austro-libertarians can forget Mises's methodological individualism when language is involved. So in the spirit of these great thinkers, let's take a praxeological look at what "English as the official language" really means.