An Impassioned Libertarian's Journal

My journey to Libertarianism began in June 2005 when I joined Morningstar’s equity research team, fresh out of business school.  I meet and later became friends with several experienced yet very personable analysts.  Fortunately for me, the person who would most influence me (though I didn’t know it at that time) and later introduce me to Austrian Economics, Matt Nellans, occupied the cubicle right next to me.

Matt’s cubicle, I noticed immediately, was quite different from the rest because of seemingly bizarre items such as the FreeState.org poster, a Ron Paul poster, a Mises Institute coffee mug, etc. Matt also always wore T-shirts purchased from the Mises Institute’s site.

From June 2005 till the end of the year, I was busy initiating coverage on some 25 international banks located in regions ranging from South America to the UK, continental Europe, Korea, Japan and India, at a pace of one bank a week.  I doubt I did very much socializing with my colleagues during that time.  Soon after I published on my coverage list, I felt confident enough to pen a couple of articles for the main website and even visited a few banks in the UK in April, 2006.

It was only in the summer of 2006 that I began to have serious discussions on economic topics with Matt.  It didn’t take me long to realize that while we both claimed to be pro-free enterprise, we had polar opposite views on topics such as the government regulation of banks, the Federal Reserve, etc.  At that time, I felt regulation was good and the Fed was a necessary institution.  Matt felt otherwise and would cut-off any defense I mounted for the government/Fed by saying “Ganesh, you are a socialist!.” (Only later did I learn that Ludwig von Mises would say dismissively of those who disagreed with him that they were a bunch of socialists).  He kept insisting that I read about Austrian Economics and pointed me to www.mises.org and www.lewrockwell.com, two free market websites.  I tried to read an article or two and quickly gave up, concluding that it was well above my pay grade.

Just for the record, we were well aware of a bubble in housing even in 2005 as this article and this article, both written by Craig Woker, my manager and head of the financial services team, clearly state.  In fact, Craig had a running bet with another analyst as to the timing of the housing price implosion.  I recall telling my late friend, Arthur Oduma, who sat behind me and proofread many of my reports, that Alan Greenspan would leave his successor to clean up the mess resulting from his reckless low interest regime. Apparently, Bill Fleckenstein’s writings on MSNBC Money were having an effect on me.

My interactions and debates with Matt increased in frequency since the summer of 2006.  In fall that year, I was made senior analyst and now managed a team of 4 analysts.  Our team covered some 90 stocks and I assumed coverage of the large money center banks from Craig in early 2007, who had moved to the role of chief model developer.  As if on cue, the subprime crisis ensued a couple of months into 2007. The proverbial canary in the coalmine was HSBC’s 2006 year end warning in its US mortgage operations.

Without an understanding of the Austrian Business Cycle Theory, I severely underestimated the repercussions of the popping housing bubble even though I was cognizant of the bubble since 2005. I was optimistic that many of the banks my team covered, while taking a knock for a couple years, would emerge stronger and more profitable.  Much to my chagrin, the banking fundamentals kept deteriorating further and further just when I thought it couldn’t get any worse.  I had a BUY recommendation on several of the banks I covered, most notably (and disastrously) Citigroup.  To say that I got that call horribly wrong is an understatement.

While these events were happening, I had a (minor) setback on the personal front.  I was diagnosed with papillary thyroid cancer.  Fortunately for me, this is one of the least aggressive cancers with a high cure rate.  I underwent surgery in October, 2007 and was back in the office 2 weeks after surgery.  In all, I took just 5 weeks off for my entire treatment.  However, because I had no family in the US, this incident planted in my mind, the thought of returning home to India for good.  When my dad was diagnosed with advanced colon cancer in April 2008, I packed up and moved back to India for good in July.

Needless to say, when I returned to India, I had several urgent issues at hand and the happenings in the financial markets took a backseat.  Though it was certainly the most morbidly exciting time to follow the markets, what with the collapse of one revered firm after another in quick succession, I only paid cursory attention to the events.

On the day I joined my current employer, my dad succumbed to his battle with cancer.  Now needing to move on, I returned to work, determined to solve the old problem of where I went wrong with my call on the banks.  Having taken an extended break from all things financial, I began reading extensively about the markets again. 

Towards the end of my stint at Morningstar, I’d become good friends with Matt Nellans.  I now remembered his exhortation to read Austrian Economics.  So I gave it another go.  This time, amazingly, I was able to comprehend almost everything that I read.  I read voraciously about various topics on sound money, Austrian Capital Theory and the Austrian Business Cycle Theory (ABCT).  I read Ron Paul’s essays and speeches warning about financial doom as far back as 2003.  I’d also stumbled on a few YouTube clips of Peter Schiff’sappearances on CNBC, warning of doom in 2006 even as his fellow guests laughed at him derisively.  Peter Schiff is not a broken clock which is right two times a day. He follows the ABCT and has been consistently preaching that the US will pay for its profilgacy. Watch one of his longer talks here(8-part speech from Nov 2006 where he absolutely nails it). Combined with a theory that was now becoming more coherent by the day, I also had proof of its predictive capabilities, a claim that mainstream economists of the Keynesian and Monetarist Schools could hardly make as they were caught napping when the crisis hit and were completely blindsided by the severity of the crisis. I was sold, I’d completed my transformation into an Austro-Libertarian.

I learned quickly that libertarianism combined free enterprise principles, sound money, property rights and individual liberty.  Indeed, it became clear to me that all those concepts went hand-in-hand and one couldn’t exist without the other.  It also dawned on me that the key issue among the four was sound money.  Without sound money, it is impossible to avoid the dreaded business cycle and the transfer of wealth from producers to the government and other unproductive elements of society.

Having observed the fervor with which I debate my points, my colleagues and friends have asked me to write this blog.  Having swallowed the red pill ala Keanu Reeves in the Matrix, my goal for this blog is to “free” as many souls as possible to the side of free enterprise, sound money and personal liberty by my writing.  The fact that a majority of the people need to become libertarians and vote libertarian policy makers if I ever wish to live in such a society makes this blog that much more imperative.  While I am under no illusions that my efforts will lead to a radical change, let it not be said that I did nothing to stop the evil of collectivism.

I make no pretensions of being a writer.  I believe the contents of my blog are much more important than the writing style, so if you find the writing a bit tedious, please bear with me.  Hopefully as this exercise continues, I’ll get better at writing. I will strive to be as lucid as possible.  Since I’m self taught (I had one course in economics in business school), I will use the examples and illustrations I conjured up myself to make sense of sometimes confusing topics such as real savings, time preference, etc.  I will also try to pen original essays on various topics from time to time.  Essentially, this site will be a repository for my thoughts and ideas.

While the world will be my oyster, I will be blogging mostly about developments in the US and India, the two markets where I have the most familiarity and vested interest.  Still, it doesn’t matter where in the world you are, the principles of liberty and economic freedom remain just as relevant.  My dream would be to spread the libertarian “gospel” to as many people as I possibly can. Hopefully, I’ll be able to convince at least a few readers to switch to the side of liberty. 

Thank you for reading my story.  I sincerely hope that you find my blog useful. Please feel free to provide me feedback on this blog’s content and also let me know if you’d like me to address specific topics.