Ludwig von Mises
The president and his top advisers have kept an open door for CEOs of Fortune 100 companies, keeping almost 1,000 appointments with them, a Reuters review of White House records shows. Of the hundreds of appointments listed, Obama himself was present at about half. As the corrupting hand of government intervention spreads, so CEOs and the White House have become allies in advocating for immigration reform, the Trans-Pacific Partnership trade deal and reauthorization for the Export-Import Bank. So who really owns The White House?
We are living in a time that can only be considered monetary chaos. The media and the policy pundits may focus on the day-to-day zigs and zags of central bank monetary and interest rate policy, but what really needs to be asked is whether or not we should continue to leave monetary and banking policy in the discretionary hands of central banks and the monetary central planners who manage them.
The lies we tell ourselves are only exceeded by the lies perpetrated by those controlling the levers of our society. The country has been living a Big Lie since the day Nixon closed the gold window in 1971, eliminating any vestiges of constraint upon central bankers and politicians.
A closer look at Star Wars economics highlights that any hope for Galactic harmony does not come from the return of the Jedi, but from embracing capitalism. After all, a true market economy would make the construction of a Death Star nearly impossible in the first place.
Monetary policy 'rules' are no more accurate at determining interest rates than meteorologists are at forecasting the weather. The only difference between the two is that weathermen are precise on occasion, whereas the federal funds rate under the Taylor Rule is, at best, less wrong. Setting the price of money and credit in the name of unleashing the economy’s supposed potential output is the equivalent of enacting price controls on milk to unlock its full buying power. It’s a fallacy that cannot be achieved. The sooner the Fed pawns off its printing press, the sooner its market distortions will be lifted; and the sooner that each individual will be able to make rational decisions that make sense for not only himself or herself, but for the economy at large as well.
Brutal news is pouring in from pretty much everywhere. The world, in short, is rolling over. Debt monetization on the scale so far attempted has failed to stop the implosion of tens of trillions of dollars of bad paper, growth has stalled and geopolitics has begun to turmoil. And none of this is a surprise. It’s just what you get when you put monetary printing presses in the hands of governments and/or big banks.
The cries for going totally crazy are growing louder... the lunatics are running the asylum. One shouldn’t underestimate what they are capable of. The only consolation is that the day will come when the monetary cranks will be discredited again (for the umpteenth time). Thereafter it will presumably take a few decades before these ideas will rear their head again (like an especially sturdy weed, the idea that inflationism can promote prosperity seems nigh ineradicable in the long term – it always rises from the ashes again). The bad news is that many of us will probably still be around when the bill for these idiocies will be presented.
The lasting legacy of the First World War has been the rationales and implementations of paternalist Big Government in the Western world, with its diminished recognition and respect for individual liberty, free association, freedom of competitive trade and exchange, reduced civil liberties and weakened impartial rule of law. From this has followed the regulating and redistributing State, which includes political control and manipulation of the monetary and banking systems to serve those in governmental power and others who feed at the trough of governmental largess. It is a legacy that will likely take another century to completely overcome and reverse, if we are able to devise a strategy for restoring the idea and ideal of a society of liberty.
We will be the first to admit that yield curve inversion is not the only factor causing recessions, but through the credit channel it can be an important contributor. Depending on the importance of the credit channel, the Federal Reserve, by pegging the short term rate at zero, have essentially removed one recessionary market mechanism that used to efficiently clear excesses within the financial system. While stability obsessed Keynesians on a quest to the permanent boom regard this as a positive development, the rest of us obviously understand that false stability breeds instability.
Bernie Sanders’s entry into the presidential race has sparked a nationwide conversation about socialism and its potential to remedy the real and perceived pathologies suffered by Americans. The underlying problem with socialists like Bernie Sanders is that they do not actually believe (or understand) in economics at all. As Ludwig von Mises himself has pointed out, socialism is not an economic theory — it is a theory of redistribution.
It is America the Herd that is keeping America the Civilization from feeling and being prosperous and safe. For too long, we have let our rulers ride us roughshod, using us to trample the economy and global tranquility with its economic and military interventions. Make America good again, and the kinds of greatness actually worth having will naturally follow.
Since the economic downturn of 2008, the critics of capitalism have redoubled their efforts to persuade the American people and many others around the world that the system of individual freedom and free enterprise has failed. These critics have insisted that it is unbridled capitalism, set loose on the world, which is the source of all of our personal and society misfortunes. The political and economic crises through which the world suffers is not the crisis or failure of the free market. No, it is the crisis and failure of the interventionist-welfare state, and its anti-free market capitalist ideology.
There are certain ideas and positions all Americans are supposed to believe in and salute. Near the top of the list is equality, an idea for which we are never given a precise definition, but to which everyone is expected to genuflect. A libertarian is perfectly at peace with the universal phenomenon of human difference. He does not wish it away, he does not shake his fist at it, he does not pretend not to notice it. It affords him another opportunity to marvel at a miracle of the market: its ability to incorporate just about anyone into the division of labor... with a place for everyone in the market economy.
In 1949 Einstein published an essay on economics and education that is brimming with ignorance. According to Einstein, "The economic anarchy of capitalist society [is] the real source of evil." Now yet another popular and renowned physicist, namely Stephen Hawkins, has jumped into the debate, seemingly attacking capitalism. According to the Huffington Post, "Stephen Hawking Says We Should Really Be Scared Of Capitalism, Not Robots." While undoubtedly a genius in his field, this is probably also the field he should stick with. There is no reason to worry while at least vestiges of a free market exist. The only real problem is government intervention in the market process.