Listen to our neighbors

Our neighbors from Central and South America have provided us with a warning and a virtuoso economics lesson.

First, we received a warning from Nayib Bukele, President of El Salvador who was reelected to a second term on February 2, 2024:  

Nayib Bukele speech at CPAC 02/23/2024

Full Transcript

Highlights of this speech:

If you want globalism to die here too you must be willing to unapologetically fight against everything and everyone that stands for it, fight for your freedoms, fight for your rights.

The next president of the United States must not only win an election he must have the vision the will and the courage to do whatever it takes and above all he must be able to identify the underlying forces that will conspire against him.  These dark Forces are already taking over your country you may not see it yet but it's already happening.  

We had to remove corrupt judges and corrupt attorneys and prosecutors.  These corrupt judges and prosecutors were setting the gang members free.  It wasn't just the gangs.  The corrupt system worked in tandem with the so-called international community, the NGOs and of course the fake news.  Just like it happens here in the United States.  Unelected bureaucrats are trying to install public policy.

The people of El Salvador have woken up and so can you.  The global elites hate our success, and they fear yours.  The people's free will to choose their leaders is something they despise because they cannot control that.  You have experienced this firsthand here in the United States.  The global Elites control the mainstream media they finance campaigns, District Attorneys to mention a few.  They abuse their powers; they persecute political opponents.

Institutions were created to serve the people and not the other way around.  Somewhere along the way those people forgot their fundamental purpose, which is more important than the institution itself.  When the judicial system was created it was created out of the necessity to bring justice but now it seems that survival and control of the judges of the attorney generals among others are paramount and the need to bring Justice is merely a little more than an afterthought.

So, who's financing the government?  Your government is financed by treasury bonds.  Who buys the treasury bonds?  Mostly the Fed.  How does the FED buy them?  By printing money.  But what backing does the FED have for that money being printed?  The treasury bonds themselves.  So basically, you finance the government by printing money out of thin air.  Someone could ask well so if the government can print limited amounts of money out of thin air why do they collect taxes? I mean in theory it will make sense right if they can print unlimited amounts of money why would they need taxes?  The answer is simple but it's very shocking.  The real problem is that you pay high taxes only to uphold the illusion that you are funding the government which you are not.  It's shocking but it's true.  The government is funded by money printing paper backed with paper a bubble that will inevitably burst.

We didn't tolerate being told what to do in doing so we did the unthinkable against all adversity we transformed our El Salvador from the most dangerous country in the world to the safest in the Western Hemisphere.  We did it by defying the global elites.  We told them no more and that is my message to you.  Put up the fight because in the end it will be worth it.  It has been for us, and you will have your country back.

The next speech is a brilliant economics lesson from Javier Milei the newly elected President of Argentina:

Javier Milei speech at CPAC 02/24/2024

Full Transcript

Highlights of this speech:

Today I will focus on the technical underpinnings of those political views and along those lines I will focus on neoclassical economics and how its view of market failure is conducive to the advance of statism and how this destroys economic growth, putting a break on the improvements in well-being and the fight against poverty.

The thing about the neoclassical model is that when the model doesn't match reality, they get mad at reality calling it a market failure.

The first thing we need is to have a good definition of the market, what the market actually is.  The free market is actually a social cooperation process where you voluntarily exchange property rights.  Actually, since these exchanges are voluntary there can be no market failure because nobody would be self-inflicting harm.  So, if we define the market properly all definitions that are interventionist in nature collapse.  It is also very important to be clear as to what institutions are the foundations of the market.  Two major institutions are private property and markets that are free from State intervention.  If you're going to exchange property rights it means that private property is important and if the exchanges are voluntary there's no room for the intervention, encroachment, and Invasion by the state.  

Actually, when someone engages in an exchange and gives something in exchange for money this creates a historical record or register which is price and that historical record we call price is an information transmission mechanism and also becomes a coordination mechanism as it makes some people be on the supply side and others on the demand side There’s also an adjustment process because demand and supply don't always perfectly match.  When demand goes up prices go up and the other way around so private property and free markets determine the price system, and this is the basis of economic calculation.

This shows why none of the varieties of socialism can work.  In the most extreme cases because there's no private property you can't engage in the exchanges that the market would require.  In the milder varieties that do allow the existence of the private sector what happens is that state intervention creates noise in the price system and the more State the more government there is the more violence there is the more distortion there is and the worse the system functions.

The division of labor combined with the notion of social cooperation ends up being fully destructive as far as socialist ideas are concerned.  I could actually hate him but I need him to buy my product so I must treat him nicely, so as Bastiat used to say when trade goes in soldiers don't and promoting free trade is promoting peace.

This idea of the market as a social cooperation mechanism is a tremendous bomb for socialism because if exchanges are voluntary, it means that it's win-win for both sides so there's no room for the theory of exploitation or for surplus value or for Marxism and socialism.  

Regulating prices and quantities or amounts destroys property rights.

The other major threat or attack from socialists and statism has to do with efficiency as opposed to distribution and so they say that capitalism is high individualist as opposed to the altruism of socialism, (always with the money of others).  This aberration is pursued in the name of social justice.   Hayek used to talk about weasel words whenever they chose an adjective it was actually the exact opposite.  So social justice is violence and unjust, it's not just or anything of the sort, far from it.  It's an aberration.  It's unjust because it involves unequal treatment before the law.

I come from a country that bought all of those stupid ideas and from being one of the most efficient countries in the world now we rank 140.  Don't surrender your Liberty, fight for your freedom.  If you don't fight for your freedom, they will drag you into misery.

I would also like to leave a message of optimism with you.  Argentina seemed to be a country doomed to be like sheep driven by socialists.  When I started my political career in Congress as a congressman, I said that I wasn't there to herd sheep, but rather to awaken lions.

Five converging issues

Adherents of the political ideology that considers themselves socialists, democratic socialists, woke, progressive, social justice warriors have achieved gains that were unimaginable at the beginning of the 20th century.  The following five issues are converging to fracture the collation that has supported this ideology.

1. Transgender militancy.  Young children diagnosed with "gender dysphoria" are now prescribed hormone blocking therapy or gender reassignment surgery, sometimes over the objections of one or both parents. Men using women's restrooms.  Men competing in women's sports.  Lowell Collegiate, and then there is this: Members bar

2. Support for Hamas.  The largest donors to the left have traditionally been Jewish.  Even though many in the Jewish community do not support Zionism or the current war in Gaza, very few members of that community will provide financial support to organizations openly support Hamas and the destruction of Israel.  DSA, DSA Layoffs, Harvard

3. Immigration.  Immigration has exploded into a fiery debate in the "sanctuary cities".  Black citizens are outraged that new immigrants are receiving tax funded benefits and resources.  Chicago

4. Inflation. Average ticket price paid for Taylor Swift's Eras Tour was $3,801.00.  Average ticket price paid for Super Bowl 58 was $8,600.00.  The assets owned by the Federal Reserve have increased from $475 billion in 2008 to $4.7 trillion today.  The money supply (M2) has increased from $7.5 trillion in 2008 to $20.8 trillion today.  Taylor Swift, Super Bowl 58, Fed Assets, M2, and then there is this: Hyperinflation

5. Lawfare.  The use of the legal system to persecute political opponents is becoming obvious to even the casual observer. A loser state, Focus on Texas & Florida