It is hard to believe, but this world has been without Harry Browne for over 8 years now. He passed away on March 1, 2006. While he is no longer physically with us, he did leave quite a legacy with his thoughts and ideas. While most Harry Browne material will be found in written form in books and articles, there are also some great speeches and radio shows that he did.
Harry Browne, while perhaps most famous as the Libertarian Party presidential candidate in 1996 and 2000, was far more than a politician. In fact, I would say that he was the anti-politician. But his talents were not just in politics and libertarianism. He became somewhat known in the early 1970’s for his investment advice. He also wrote How I Found Freedom in an Unfree World, which was more of a self-help book. If you’ve never read it, you may want to see if you can pick up a used copy somewhere.
I find it important to bring up Harry Browne’s name every once in a while. I probably refer to him the most in investing because I am a big advocate of the permanent portfolio as he described in his book Fail-Safe Investing. But while he was influential to me in the investment world, he also had a great impact on shaping me as a libertarian, especially in matters of foreign policy.
It is important for me to let others know about Harry Browne because a lot of new people to the libertarian community are not familiar with him, or at least not much. They may know his name and they may know that he was on the LP ticket, but they haven’t read his material.
The libertarian movement has exploded since 2007 when Ron Paul first ran as a Republican in the presidential primaries. Ron Paul woke up a small (but significant) minority of people that we didn’t really know existed. Or maybe they didn’t exist but only found themselves by listening to Ron Paul. I think the turning point was when Ron Paul was criticized by Rudy Giuliani for his remarks on foreign policy and 9/11 during a debate.
While the Ron Paul followers are a diverse group, it is safe to say that the majority of them are new to the libertarian movement (within the last 7 years) and they are relatively young (under 30). Many of these people are really solid libertarians, probably because they have listened to Ron Paul. But they are reading other works such as Tom Woods, Bob Murphy, Tom DiLorenzo, Lew Rockwell, and Peter Schiff, just to name a few. They may also be reading people who are no longer living, such as Murray Rothbard and Ludwig von Mises.
Unfortunately, I don’t think a great deal of the Ron Paul followers today are reading Harry Browne. That is why I think it is important to mention his name. He influenced quite a few people in his lifetime and I think libertarians today who are unfamiliar with him would benefit greatly in reading some of his work.
Harry Browne had a way of not coming across too radical, while still maintaining a radical position, in a good way. He never offered a government solution to a problem. One of his books is titled Why Government Doesn’t Work.
But Harry Browne also offered a very positive message. I had the pleasure of meeting him in 2004 and he gave a speech on the prospects for liberty in the future. He said that most libertarians didn’t understand that despite everything seemingly working against us, that we had human nature on our side. He said that most people generally want to be free to make their own decisions.
He was very positive and believed that we can change the world. You have to realize that this was before the surge of libertarianism that happened starting in 2007 with Ron Paul’s campaign. If Harry Browne were around today, I think he would be pleasantly surprised at how popular libertarianism has become, but not shocked either.
He always believed in education and that is why he ran for president. He had no illusions of winning and he even said so during his campaigns. He just wanted to teach others on the benefits of liberty.
If you haven’t read anything by Harry Browne, I urge you to do so. Read some of his articles. Even better, get one of his books.
The FOMC released its latest statement on March 19, 2014. The tapering has continued, with another reduction in monthly purchases of $10 billion. Since the end of 2013, the FOMC has announced tapering 3 times in a row, going from asset purchases of $85 billion per month, now down to $55 billion per month.
Surprisingly, this is not what got the most news. The media is instead focusing on the change in the FOMC statement regarding the federal funds rate. Before, the FOMC had guidelines of likely keeping the federal funds rate where it is (targeted between 0% and .25%) as long as unemployment stayed above 6.5% and inflation expectations stayed at or below 2%.
The latest statement removed the 6.5% unemployment guideline. When Janet Yellen was asked about this in her press conference, she indicated (unconvincingly) that the federal funds rate could go up as soon as 6 months after the end of the taper. This sent markets down.
Peter Schiff is speculating that this 6.5% trigger was removed because the Fed is going to find excuses to delay raising rates. Schiff says (correctly) that the unemployment rate has been drifting down in large part because people have stopped looking for jobs.
In this instance, I am taking an opposite view, speculating that the Fed may be concerned that the unemployment rate won’t fall below 6.5% and does not want to be bound by this guideline. The Fed never said that it had to raise rates if unemployment fell below 6.5%, but only that it would not anticipate raising rates as long as it was above this mark.
Either way, I think everyone is focused on the wrong thing. The federal funds rate doesn’t matter right now. The thing that matters is the so-called quantitative easing and the tapering of it.
The Fed has inflated a lot since 2008, but there have also been periods of relative monetary stability. It hasn’t made any difference in the federal funds rate, which is the overnight borrowing rate. This is because the banks have piled up massive excess reserves and have little need for borrowing overnight funds to meet reserve requirements. They are already way in excess of the reserve requirements and they have been since the end of 2008.
What is the Fed going to do to raise the federal funds rate? It can’t control this with monetary policy right now, therefore it doesn’t have that great of an effect on us. It can change the federal funds rate by dramatically increasing reserve requirements. It can also change it by increasing the interest rate it pays for excess reserves, which is the reverse of what most people think. But monetary policy is not going to change the federal funds rate as long as there are massive excess reserves in the banking system.
Let’s not lose focus. The big news is the taper and whether the Yellen Fed will continue with it, even if the economy starts to show more signs of weakness. Yellen is a Keynesian, but she is also a political figure. Will she be able to continue tapering even if the stock market starts falling dramatically? It hasn’t happened yet, but it will be entertaining to watch if and when it does.