The plight of the unemployed is why we exist, and to help them, we have to engage them, introduce them to our services and connect them with job opportunities.And Ayn Rand was accused of exaggerating the depravity of her villains.
Tuesday, April 26, 2011
Capes for the Unemployed
Government has all kinds of wonderful ways for fighting unemployment, don't you know? With over one million Floridians currently out of work, Workforce Central Florida has launched a $73,000 tax-funded campaign called "Cape-A-Bility Challenge" that includes spending $14,200 to hand out roughly 6,000 red superhero capes to the unemployed and another $2,300 on foam cutouts of "Dr. Evil Unemployment." Executive Director of Workforce Central Florida, Gary Earl, defended the campaign with these words:
Sunday, April 24, 2011
Hoppe on Central Banking
On Sunday March 27, 2011 The Daily Bell published an exclusive interview with Hans-Hermann Hoppe, professor emeritus of economics at UNLV. During the interview he addressed many topics. Here are some of his comments on central banking:
More paper money cannot make a society richer, of course — it is just more printed paper. Otherwise, why is it that there are still poor countries and poor people around? But more money makes its monopolistic producer (the central bank) and its earliest recipients (the government and big, government-connected banks and their major clients) richer at the expense of making the money's late and latest receivers poorer.
Thanks to the central banks' unlimited money-printing power, governments can run ever-higher budget deficits and pile up ever more debt to finance otherwise impossible wars, hot and cold, abroad and at home, and engage in an endless stream of otherwise unthinkable boondoggles and adventures. Thanks to the central bank, most "monetary experts" and "leading macro-economists" can, by putting them on the payroll, be turned into government propagandists "explaining," like alchemists, how stones (paper) can be turned into bread (wealth).
Wednesday, March 16, 2011
Garet Garrett's Review of Hazlitt's Primer
Garrett's review of Henry Hazlitt's Economics in One Lesson appeared in the October, 1946 issue of American Affairs, My eternal gratitude to Mises Institute for making this and countless other free market publications available for free download.
Garrett's position reminds me of Ayn Rand's comment that people do not accept collectivism because the accept bad economics; they accept bad economics because they accept collectivism.
HERE is Henry Hazlitt exercising his gift for lucidity to produce a book entitled *Economics in One Lesson. If there were such a book this would be it. It deals with those "economic fallacies that are at last so prevalent that they have almost become new orthodoxy,"—to the point that now there is not a major government in the world whose economic policies are not influenced or in fact determined by them. He undertakes to expose them by analysis and reason and to chase them into the ground.
But in the first place, how did they get abroad in this garb of respectability? How is their world-wide vogue to be explained? Mr. Hazlitt's explanation is that people have lost the habit of thinking beyond the present. They have been beguiled by the saying, "In the long run we are all dead." They want everything today; let tomorrow take care of itself. This will hardly answer the question. As one who wrote a book on thinking as a science Mr. Hazlitt would instantly concede that the behavior of the human mind has not changed in 2,000 years, whereas what he is talking about, namely, the rise of economic fallacy to a plane of orthodoxy, displacing axioms that had been unchallenged since Adam Smith, is an event of the last thirty years. Therefore, the probability is that it is a political event, with little or no relation to economic science or to the art of thinking.
For whom is this one lesson intended? If it is intended for those who believe, or who may be persuaded by argument to believe, in free competition as the right regulating principle for a free society, and the only regulating principle that may be trusted to keep it free, then it is wonderfully clear and still as sound as when Harriet Martineau was writing economics for children in Great Britain early in the last century.
But if it is intended for those who believe in another way of organizing society they will say, and say rightly, that there is no such thing as an economic system. There is first a political system and then the economics of it. So you may have a totalitarian system and its economics or a system of free private enterprise and the economics for that, or anything in between. Mr. Hazlitt says, in italics:
Every fallacy that Mr. Hazlitt identifies is a fallacy on his own premise, and his own premise, as he says, is that of the traditional or classical economist, believing wholly in a free political system. If you change the premise, then what was a fallacy from that point of view may become logical from another.
One chapter is on the mirage of inflation. "The ardor for inflation," he says, "never dies. It would almost seem as if no country is capable of profiting from the experience of another and no generation of learning from the sufferings of its forebears." And this he thinks is owing to the fact that people will not consider the secondary consequences; they will look only at the "benefits for a short time to favored groups,"—benefits which are at the expense of others even while they are visible, and at the expense of all when the reckoning comes.
That is all true. But suppose you have those— and we do have them—who regard debasement of the currency as a weapon against the system of free capitalism which they wish to see destroyed. From that point of view is inflation logical or illogical?
In the same way and upon his own premise he comes to the subject of government debt. The fallacy there is the idea that government spending creates wealth. He shows, of course, that what the government spends it must first take, wherefore somebody has less to spend in proportion as the government has more; furthermore, that government debt can represent only postponed taxation because the borrowing must sometime be repaid and it can be repaid only out of revenues from taxation. That too is true. But again it is true only upon the assumption that you have still and will continue to have the kind of government that is appropriate to a free political system, a government of limited powers, one that borrows only in time of great emergency, intending to pay it back in a meticulous mannerand then balance its books again.
But suppose you have those—and we do have them—who regard borrowing, government spending and government debt as instruments of policy, the policy being to redistribute the wealth and income of a nation according to a social plan—the policy of a planned economy in which the government becomes responsible for full employment, full production and the stability of the total enterprise. On that premise a large government debt is an indispensable and powerful implement in the hands of the planners, because it enables them to manipulate the national income by fiscal and monetary measures. And so with wage fixing, price fixing, subsidies, ceilings, floors, and stabilization schemes—all fallacies from the point of view of a free economy but rational enough, almost too rational, if you want a planned economy.
Is the idea of a planned economy itself a fallacy? Will it work? The answer to that question is not what we might wish. The planned economy has a much longer history than the free economy. Is it not now working in a manner to threaten the peace of the world? Is not free capitalism on the defensive against it? But Mr. Hazlitt was not writing a political treatise. What he is saying is this: "If we want to keep our free political system, here are the economic principles to which we must return."
And he makes those principles very clear. G. G.
Garrett's position reminds me of Ayn Rand's comment that people do not accept collectivism because the accept bad economics; they accept bad economics because they accept collectivism.
Economic Fallacy
HERE is Henry Hazlitt exercising his gift for lucidity to produce a book entitled *Economics in One Lesson. If there were such a book this would be it. It deals with those "economic fallacies that are at last so prevalent that they have almost become new orthodoxy,"—to the point that now there is not a major government in the world whose economic policies are not influenced or in fact determined by them. He undertakes to expose them by analysis and reason and to chase them into the ground.
But in the first place, how did they get abroad in this garb of respectability? How is their world-wide vogue to be explained? Mr. Hazlitt's explanation is that people have lost the habit of thinking beyond the present. They have been beguiled by the saying, "In the long run we are all dead." They want everything today; let tomorrow take care of itself. This will hardly answer the question. As one who wrote a book on thinking as a science Mr. Hazlitt would instantly concede that the behavior of the human mind has not changed in 2,000 years, whereas what he is talking about, namely, the rise of economic fallacy to a plane of orthodoxy, displacing axioms that had been unchallenged since Adam Smith, is an event of the last thirty years. Therefore, the probability is that it is a political event, with little or no relation to economic science or to the art of thinking.
For whom is this one lesson intended? If it is intended for those who believe, or who may be persuaded by argument to believe, in free competition as the right regulating principle for a free society, and the only regulating principle that may be trusted to keep it free, then it is wonderfully clear and still as sound as when Harriet Martineau was writing economics for children in Great Britain early in the last century.
But if it is intended for those who believe in another way of organizing society they will say, and say rightly, that there is no such thing as an economic system. There is first a political system and then the economics of it. So you may have a totalitarian system and its economics or a system of free private enterprise and the economics for that, or anything in between. Mr. Hazlitt says, in italics:
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.Very good. But you may define economics also as the study of how people produce, exchange and consume wealth; and when you have so defined it you see at once that when, as in a free political system, people feed and clothe and house themselves, provide their own security, pursue their own profit and absorb their own losses, the economic canons will be very different from those of a totalitarian system in which people are fed and clothed and housed and minded in their work and in their play, by the omnipotent state.
Every fallacy that Mr. Hazlitt identifies is a fallacy on his own premise, and his own premise, as he says, is that of the traditional or classical economist, believing wholly in a free political system. If you change the premise, then what was a fallacy from that point of view may become logical from another.
One chapter is on the mirage of inflation. "The ardor for inflation," he says, "never dies. It would almost seem as if no country is capable of profiting from the experience of another and no generation of learning from the sufferings of its forebears." And this he thinks is owing to the fact that people will not consider the secondary consequences; they will look only at the "benefits for a short time to favored groups,"—benefits which are at the expense of others even while they are visible, and at the expense of all when the reckoning comes.
That is all true. But suppose you have those— and we do have them—who regard debasement of the currency as a weapon against the system of free capitalism which they wish to see destroyed. From that point of view is inflation logical or illogical?
In the same way and upon his own premise he comes to the subject of government debt. The fallacy there is the idea that government spending creates wealth. He shows, of course, that what the government spends it must first take, wherefore somebody has less to spend in proportion as the government has more; furthermore, that government debt can represent only postponed taxation because the borrowing must sometime be repaid and it can be repaid only out of revenues from taxation. That too is true. But again it is true only upon the assumption that you have still and will continue to have the kind of government that is appropriate to a free political system, a government of limited powers, one that borrows only in time of great emergency, intending to pay it back in a meticulous mannerand then balance its books again.
But suppose you have those—and we do have them—who regard borrowing, government spending and government debt as instruments of policy, the policy being to redistribute the wealth and income of a nation according to a social plan—the policy of a planned economy in which the government becomes responsible for full employment, full production and the stability of the total enterprise. On that premise a large government debt is an indispensable and powerful implement in the hands of the planners, because it enables them to manipulate the national income by fiscal and monetary measures. And so with wage fixing, price fixing, subsidies, ceilings, floors, and stabilization schemes—all fallacies from the point of view of a free economy but rational enough, almost too rational, if you want a planned economy.
Is the idea of a planned economy itself a fallacy? Will it work? The answer to that question is not what we might wish. The planned economy has a much longer history than the free economy. Is it not now working in a manner to threaten the peace of the world? Is not free capitalism on the defensive against it? But Mr. Hazlitt was not writing a political treatise. What he is saying is this: "If we want to keep our free political system, here are the economic principles to which we must return."
And he makes those principles very clear. G. G.
Friday, February 11, 2011
DiLorenzo's visit to D.C.
Austrian economist Thomas J. DiLorenzo, who testified before Ron Paul's House Financial Services Committee on February 9, 2011, writes about his experience dealing with the liars, bigots, and murderers on Capitol Hill:
Fed apologists are apparently in a state of panic over the first sighting of two economists – Richard Vedder and myself – appearing before their committee to (horrors!) criticize the Fed. Rather than ask me a single question, Congressman William Lacy Clay decided to lie about my background with a libelous smear.
Monday, January 31, 2011
"When you constantly get bailouts . . ."
. . . you can pretty much do whatever you want, as this xtranormal cartoon suggests.
Tuesday, January 4, 2011
Is the Fed dollar "safe and stable"?
On the website of the Board of Governors of the Federal Reserve System, at the top of the home page, we find the following words:
It's also true that the government has placed mankind's money - gold and silver coins - at a severe disadvantage through its monopoly of minting and with regulations stipulating the coins are legal tender at face value only, not market value. Furthermore, most Americans alive today have never used gold and silver coins in everyday commerce. To them "money" is what the government issues, and the bullion coins minted by the government, though officially monetized, are a fool's token if they are exchanged at face value. Aside from a small minority of gold investors, most Americans have nothing to do with them; they stick with the paper dollar. The government, to sum up, has rigged the system in favor of its remunerative counterfeit currency but so far most people still use it with complete trust.
Is a currency safe and stable if it holds its value over many years? Savers certainly want their dollars to buy as much as they did when they were first hoarded or deposited in a bank. For many, their ideal is to have their savings appreciate merely by not spending it - store it under the bed or in a home safe then forget about it. Putting it in a fractional reserve bank runs risks they don't wish to bear.
The Fed's ideal is a depreciating currency. Its goal is to make the dollar buy less over time. The Fed thus creates premeditated price inflation, or rising prices. It is opposed to the interests of savers. People whose incomes don't keep pace with rising prices are hurt the most. People who are the early recipients of the newly created money have the same advantage any counterfeiter would have.
The St. Louis Fed publishes a month by month history of the CPI from January, 1913 to the present. Using their table of measures, we find that when the Fed opened its doors in October, 1914 the CPI was 10.1. By October, 2010 it stood at 218.711, representing a 2,065% increase in the consumer price level over 96 years. Leaving aside the ongoing CPI controversy, does a two thousand percent increase in prices over a period of a century represent a "safe and stable" currency?
A better way to consider the issue is to take another look at history - in the years before Congress and Woodrow Wilson chained us to the Fed and before Franklin Roosevelt made it a felony to own gold coins. Walker Todd, writing for the American Institute of Economic Research (AIER), states that
Instead of a monetary system, we've been living with a counterfeiting system. When it's done legally, counterfeiting is a bonanza for the ones in charge. As evidence, we see the continuing flood of Wall Street profits and six- and seven-figure bonuses, trillion-dollar bailouts, and a mushrooming federal government in an economy where real private unemployment is around 25 percent.
If we want a safe and stable monetary system we need to eliminate the elements that make our current system grossly unfair and unstable. The Fed must be abolished, and the government must be excluded from monetary matters altogether. We need free market money - probably gold and/or silver - run by free market institutions. Government's one role would be to protect private property and uphold contracts, which would make it difficult, if not impossible, for banks to engage in the fraud of fractional reserve banking. Only then could we look to the future with realistic optimism.
The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system.Flexible? The dollar is a paper fiat currency, backed by nothing. Its flexibility is virtually infinite. Recently, we've seen how flexible the Fed has been with the American dollar, as Senator Bernie Sanders tells us:
We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed.Safe and stable? The Fed doesn't explain what they mean by these terms. Can we say that a currency is safe and stable if people use it in everyday transactions? If so, then there's no question the Federal Reserve Note is at least somewhat safe and stable, because people, in spite of their complaints, have not abandoned it for anything better. True, legal tender laws force Americans to accept the Fed's money regardless of what they might prefer, but history shows that people will abandon the legal tender currency if it becomes too worthless or inconvenient to perform its function as a medium of exchange. Though we're not to that point yet, we've been heading in that direction since the Federal Reserve first rolled up its sleeves.
We also learned that the Fed's multi-trillion bailout was not limited to Wall Street and big banks, but that some of the largest corporations in this country also received a very substantial bailout. Among those are General Electric, McDonald's, Caterpillar, Harley Davidson, Toyota and Verizon.
Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks -- Deutsche Bank and Credit Suisse -- which were the largest beneficiaries of the Fed's purchase of mortgage-backed securities.
Deutsche Bank, a German lender, sold the Fed more than $290 billion worth of mortgage securities. Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds.
It's also true that the government has placed mankind's money - gold and silver coins - at a severe disadvantage through its monopoly of minting and with regulations stipulating the coins are legal tender at face value only, not market value. Furthermore, most Americans alive today have never used gold and silver coins in everyday commerce. To them "money" is what the government issues, and the bullion coins minted by the government, though officially monetized, are a fool's token if they are exchanged at face value. Aside from a small minority of gold investors, most Americans have nothing to do with them; they stick with the paper dollar. The government, to sum up, has rigged the system in favor of its remunerative counterfeit currency but so far most people still use it with complete trust.
Is a currency safe and stable if it holds its value over many years? Savers certainly want their dollars to buy as much as they did when they were first hoarded or deposited in a bank. For many, their ideal is to have their savings appreciate merely by not spending it - store it under the bed or in a home safe then forget about it. Putting it in a fractional reserve bank runs risks they don't wish to bear.
The Fed's ideal is a depreciating currency. Its goal is to make the dollar buy less over time. The Fed thus creates premeditated price inflation, or rising prices. It is opposed to the interests of savers. People whose incomes don't keep pace with rising prices are hurt the most. People who are the early recipients of the newly created money have the same advantage any counterfeiter would have.
The St. Louis Fed publishes a month by month history of the CPI from January, 1913 to the present. Using their table of measures, we find that when the Fed opened its doors in October, 1914 the CPI was 10.1. By October, 2010 it stood at 218.711, representing a 2,065% increase in the consumer price level over 96 years. Leaving aside the ongoing CPI controversy, does a two thousand percent increase in prices over a period of a century represent a "safe and stable" currency?
A better way to consider the issue is to take another look at history - in the years before Congress and Woodrow Wilson chained us to the Fed and before Franklin Roosevelt made it a felony to own gold coins. Walker Todd, writing for the American Institute of Economic Research (AIER), states that
The first chart in every edition of The AIER Chart Book shows the purchasing power of the dollar since 1792, the first date from which relevant statistics can be calculated. Starting at a value of $1 in 1792, through many fluctuations both above and below that value during the 19th and early 20th centuries, a startling conclusion emerges: The price level always had a central tendency of $1 for as long as the United States was on a gold standard (1792-1933, with an 18-year hiatus during and right after the Civil War).According to the Measuring Worth website, $1.00 in 1792 has the same purchase power as $1.04 in 1913, a 4% increase over a span of 121 years. So we have four percent price inflation without the Fed vs. two-thousand percent with the Fed. Which do you consider safer and more stable?
That is, an explicit link to a particular weight of gold per dollar tended to serve as a long-term guarantor of long-term stability of the purchasing power of the dollar.
Instead of a monetary system, we've been living with a counterfeiting system. When it's done legally, counterfeiting is a bonanza for the ones in charge. As evidence, we see the continuing flood of Wall Street profits and six- and seven-figure bonuses, trillion-dollar bailouts, and a mushrooming federal government in an economy where real private unemployment is around 25 percent.
If we want a safe and stable monetary system we need to eliminate the elements that make our current system grossly unfair and unstable. The Fed must be abolished, and the government must be excluded from monetary matters altogether. We need free market money - probably gold and/or silver - run by free market institutions. Government's one role would be to protect private property and uphold contracts, which would make it difficult, if not impossible, for banks to engage in the fraud of fractional reserve banking. Only then could we look to the future with realistic optimism.
Sunday, January 2, 2011
Dave Barry Reflects on 2010
Take a break and laugh with Dave Barry:
Meanwhile, Federal Reserve Chairman Ben Bernanke, speaking from his new office in Toronto, announces a plan to drastically increase the U.S. money supply by "quantitative easing," a controversial process involving what Bernanke describes as "a major job for Kinko's."
Subscribe to:
Posts (Atom)