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My letter to the NY Times re: The Fallacy of Planning–set Detroit free

Wednesday, February 19th, 2014 by posted in Capitalism, Civil Liberties, Economics, Politics, Regulation.

Re: A Picture of Detroit in Ruin Dear Sirs: Detroit does not need another worthless plan in order to deal with its problems.  To what end will a “blight plan” be put?  This is the question that should have been asked

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China’s Dollar Trap

Wednesday, February 19th, 2014 by posted in Capitalism, Economics, Foreign Policy, Politics.

Re: China Digs Itself Deeper into Dollar Trap This short Bloomberg article is written from a Chinese point of view; i.e., that China finds itself in a trap having sold over a trillion dollars in goods in exchange for what

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What Causes Inflation?

Wednesday, February 19th, 2014 by posted in Banking, Economics.
5214825_02-eng

When the Bank of Canada talks about inflation, what they really mean is price inflation. That is, the general rise in prices of goods and services. Indeed, justification for the central bank is in its perceived ability “to contribute to

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The Economic Harm of Prohibition

Wednesday, February 19th, 2014 by posted in Economics, Law, War on Drugs.
weed teaser

According to the United Nations, cannabis, the plant from which marijuana is derived, is the most widely used, produced and trafficked drug. Governments across the globe have invested heavily in fighting drug production and consumption. Notwithstanding, even though the war

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Mises and Schumpeter: Friendly Rivals?

Tuesday, February 18th, 2014 by posted in Economics, History, Philosophy.
pruckel teaser

Reprinted from Mises.org Ludwig von Mises and Joseph Schumpeter are the most famous economists trained by the older Austrian School, although generally Schumpeter has received the lion’s share of attention.[1] This is especially true, for example, in the field of entrepreneurship.

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Bernanke’s QE Programs: Has This EVER Worked in History?

Monday, February 17th, 2014 by posted in Economics.
Fed assets

Now that Ben Bernanke has handed over the keys of the Federal Reserve, there are all sorts of theoretical arguments, pro and con, concerning his bold quantitative easing (QE) programs, in which the Fed massively expanded its balance sheet: Many

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Choice in Currency: A Way to Stop Inflation

Monday, February 17th, 2014 by posted in Banking, Capitalism, Economics.
currency teaser

[Based on an Address entitled 'International Money' delivered to the Geneva Gold and Monetary Conference on 25 September, 1975, at Lausanne, Switzerland. IEA 1976; Mises institute/IEA 2009] Preface The Occasional Papers are intended to make essays or addresses, of outstanding importance, accessible

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My letter to Nat’l Review Magazine re: Mr. Beckworth’s wrong prescription for monetary stability

Sunday, February 16th, 2014 by posted in Capitalism, Economics, Politics.

Re: David Beckworth’s review of Money, Gold, and History by Lewis E. Lehrman   Dear Sirs: Austrian School economists recommend monetary freedom, not any specific state-supported money.  End legal tender laws and the most marketable commodities will be chosen as mediums

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Yet More Clarification on ObamaCare Work Distortions

Sunday, February 16th, 2014 by posted in Economics, Health Care.
Jonathan Gruber

After publishing my recent post discussing how the proponents of the Affordable Care Act (ACA or “ObamaCare”) were making a distinction without a (significant) difference on the terms “substitution effect” versus “income effect,” I saw that Scott Sumner over at

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The real cause of sub prime lending

Saturday, February 15th, 2014 by posted in Banking, Capitalism, Economics.

Re: Wells returns to sub prime lending The author blames the banks, as if for some unknown reason bankers simply choose to expand lending to sub prime borrowers.  But the real source is the Fed’s artificial lowering of the interest

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“Income vs. Substitution Effects” Not the Issue With ObamaCare

Saturday, February 15th, 2014 by posted in Economics, Health Care.
bank-error-in-your-favor-monopoly

With the Congressional Budget Office’s (CBO’s) recent announcement that the Affordable Care Act (aka “ObamaCare”) will lead to a long-term reduction of employment of (the equivalent of) 2.5 million full-time jobs, the economics pundits are arguing over the significance of

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Anti-Sweatshop Activists and the Crony Capitalists Who Love Them

Friday, February 14th, 2014 by posted in Capitalism, Economics.
sweatshop teaser

Reprinted from PanAm Post There is an old saying that opposites attract. Bruce Yandle refashioned this idea into an economic theory that explains why special interest groups with seemingly antagonistic missions so often find common cause in regulatory crusades. Yandle uses the analogy of

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What’s the Big Deal with High-Frequency Trading?

Thursday, February 13th, 2014 by posted in Banking, Capitalism, Economics.
nyse_ars

One of the fundamental laws of economics is that prices display information. When goods and services are sold, the price reflects the intersection of supply and demand. As Ludwig von Mises showed in his groundbreaking article “Economic Calculation in the

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First step in raiding Europe’s private savings

Thursday, February 13th, 2014 by posted in Capitalism, Civil Liberties, Economics, Law, Politics.

From today’s Open Europe news summary: According to a leaked document, seen by Reuters, the European Commission is probing ways to unlock the investment potential of EU citizens’ savings to boost the economy. The Commission will also ask the European

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Just one example why printing money is irresistible

Thursday, February 13th, 2014 by posted in Capitalism, Economics, Politics.

From today’s Air Force Magazine online: Congress Restores COLA Increases   The Senate voted 95-3 on Wednesday to restore full cost-of-living pension increases for working-age military retirees. The vote comes one day after the House approved the measure with a

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Corporations versus the Market; or, Whip Conflation Now

Thursday, February 13th, 2014 by posted in Banking, Economics.
corporation-reputation-management teaser

Reprinted from Cato Unbound Defenders of the free market are often accused of being apologists for big business and shills for the corporate elite. Is this a fair charge? No and yes. Emphatically no—because corporate power and the free market

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Keynesian Policies: Not Dumb, Just Foolish

Thursday, February 13th, 2014 by posted in Economics.
Matthew-Yglesias

A lot of my Austrian friends refer to Keynesian policies as “idiotic,” “stupid,” etc., but that’s not really accurate. Indeed, the Keynesian policy prescriptions are so counterintuitive–they so defy common sense–that only very intelligent people with plenty of schooling could

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The Limits of Stock Chart Reading

Tuesday, February 11th, 2014 by posted in Economics.
Scary Parallel

Any time people are compelled to decipher the future, strange methods and theories are sure to abound. The stock market has long been a haven of such folly.  Among the diviners in that arena, there are believers in the notion

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Tiff Macklem & Deflation

Tuesday, February 11th, 2014 by posted in Banking, Economics.
macklemcarney

Bank of Canada Deputy Governor John Murray isn’t the only BoC official to jump ship. After former Governor Mark Carney went off to England, it didn’t take long for Senior Deputy Governor Tiff Macklem to announce his resignation as well.

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Bitcoin Bank Run, Take 2

Tuesday, February 11th, 2014 by posted in Banking, Economics, Law, Regulation.

Enough people were upset with my previous post claiming that Mt. Gox is suffering a bitcoin bank run because it is holding only a fractional bitcoin reserve that it caused me to think twice about the claim. I could have

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