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My letter to the Philadelphia Inquirer re: Wanting to jail the wrong bankers

Monday, June 23rd, 2014 by posted in Banking, Economics.

Dear Sirs: Mr. Joseph N. Distefano’s column “Should some bankers be in jail?” targets the wrong the bankers.  Sure, private sector banks made what ultimately came to be revealed as bad loans, but why would they do this?  There is

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Understanding the Price Level

Sunday, June 22nd, 2014 by posted in Capitalism, Economics.

When I teach Austrian economics, I spend a lot of time explaining the three uses of money–holding, spending, and investing–and how only spending and investing affect the overall price level.  This helps my students understand that the total money supply

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Measuring Unemployment, Take Two

Saturday, June 21st, 2014 by posted in Capitalism, Economics.
unemployment line teaser

I recently looked at whether there is a better way to measure unemployment than the standard measures. In it I made two fundamental criticisms about the common measurements of unemployment. The first had to do with who was counted as

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Krugman: Whether “Potential GDP” Is Way Down or Unchanged, It Proves We Need Stimulus

Saturday, June 21st, 2014 by posted in Economics.
krugman

The time span between utterly contradictory Krugman talking points keeps shrinking. The latest example involves the notion of “potential GDP” and how it relates to the case for government stimulus. In less than a year, Krugman went from arguing that

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End Ottawa´s Equalization Program

Friday, June 20th, 2014 by posted in Capitalism, Economics.

Hot off her Ontario electoral win, Kathleen Wynne is taking aim at Ottawa. The federal government´s equalization program distributes money between the provinces to help those with less fiscal capabilities deliver the same services. In an interview with the CBC,

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My letter to National Review Magazine re: Free trade is NOT a “prisoner dilemma”

Friday, June 20th, 2014 by posted in Capitalism, Economics, Politics.

Dear Sirs: I despair that National Review has run such a piece of economic ignorance as Oren Cass’s “Fight the Dragon”, in which he calls on the US to wage economic war on China.  The basis of his claim that

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Negative Interest Rates– Only The Start?

Friday, June 20th, 2014 by posted in Banking, Capitalism, Economics.
eurobanknote teaser

Reprinted from Circle Bastiat As Ryan McMaken noted on June 5,  the European Central Bank has instituted negative interest rates for member banks. This could soon spread to the US and also to consumer accounts. If so, you would find money

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Public Sector Strikes Need Competition

Friday, June 20th, 2014 by posted in Capitalism, Economics.

It’s not often police officers and firefighters light fires in the streets (in front of City Hall no less). That’s exactly what happened in Montreal recently, as public union members protested the Quebec government’s intent to reform their municipal pension

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Rent Seeking, the Lanham Act, and Pomegranates

Thursday, June 19th, 2014 by posted in Economics, Law.
pomegranate-juice-recipe

The Lanham Act, originally enacted in 1946, is the premier law protecting trademark law in the United States. I have gone on record multiple times opposing the idea of intellectual property, including trademarks, and have no intention of repeating those

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How to follow IMF advice

Thursday, June 19th, 2014 by posted in Capitalism, Economics, Regulation.

From today’s Open Europe news summary: The FT reports that the IMF will today urge the ECB to consider US-style ‘quantitative easing’, including “large scale” purchases of government bonds, to tackle low inflation and boost growth in the eurozone. FT More monetary

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My letter to the Financial Times, London re: Fed oversight will not prevent shadow bank losses

Wednesday, June 18th, 2014 by posted in Banking, Economics, Regulation.

Dear Sirs: In his June 17th essay titled “Make shadow banks safe and private money sound” Mr. Paul McCulley displays a good understanding of the functional mechanics of commercial bank credit creation, shadow bank credit creation, and the powers of

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The Minimum Wage Law and Welfare Payments

Wednesday, June 18th, 2014 by posted in Capitalism, Economics, Regulation.
minwage teaser

Reprinted from LewRockwell.com I think it important to pulverize the case for the minimum wage law. I am guided in this determination by the Jesuit notion of the preferential option for the poor. (Hey I have spent 14 years teaching

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Inequality Did Start Around 1970

Wednesday, June 18th, 2014 by posted in Banking, Economics.

In this post by Bob Murphy, some commenters disagree with the use of the early 1970s as the point when income and wealth inequality started to become a problem. Thomas Piketty has recently gained some fame for pointing this out.

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Meats and Poultry at Record Prices

Tuesday, June 17th, 2014 by posted in Capitalism, Economics.

The Bureau of Labor Statistics’ index of meats, poultry, fish and eggs just hit an all time high. Nor are these higher prices confined to just food items. Consumer prices across the board are registering their sharpest price increases in

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The Fed Won’t Let the Economy Heal

Tuesday, June 17th, 2014 by posted in Banking, Capitalism, Economics.
janetyellen teaser

Reprinted from Mises.org Most commentators are of the view that the massive monetary pumping of the Fed during 2008 prevented a major economic disaster. The yearly rate of growth of the Fed’s balance sheet jumped from 3.9 percent in January

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We Don’t Owe It To Ourselves

Tuesday, June 17th, 2014 by posted in Economics.

Once upon a time it was claimed that the government’s debt didn’t matter because we “owe it to ourselves.” Each government bond is a claim on taxpayers, and if all of the bondholders are taxpayers from the same country the

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War for Prosperity

Monday, June 16th, 2014 by posted in Capitalism, Economics, Foreign Policy.
bombing-of-dresden

Economist Tyler Cowen always has an interesting view on things. He eschews the Austrian, deductive school in favor of a more data-driven approach. But he has sympathies for the heterodox view, and his own politics are described as generally libertarian.

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Wynne Wins on Promises She Cannot Afford

Monday, June 16th, 2014 by posted in Economics.

Following her election win, Kathleen Wynne can finally move forward with her long-promised plans to update and expand Toronto’s transit system. The new premier of Ontario pledged to include $15 bn. of transit infrastructure for the city of Toronto and

2 comments

Shouldn’t EVERY Factor of Production Get Paid Its Marginal Product?

Sunday, June 15th, 2014 by posted in Economics.
Prod vs Compensation

A popular Marxist slogan is that the workers should be paid the “full value of their product.” Ironically, Austrian economists have no problem with the motto, it’s just that Karl Marx and his disciples failed to see that market forces generate

1 comment

Saving Socialists From Themselves

Saturday, June 14th, 2014 by posted in Capitalism, Economics.

French Socialist President Francois Hollande won his election in 2012 on a platform to soak the rich and protect the generous welfare state. Now his Prime Minister Manuel Valls is warning that such policies could cause the French left to

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