Some painters transform the sun into a yellow spot;
others transform a yellow spot into the sun.
Pablo Picasso
Image of the Day
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| Via John Stossel |
Market Authority has a relevant editorial about the ECB cutting rates to near-zero. I don't agree with all the editorial, particularly this quote:
So when the US was shedding 600k jobs/ month at the end of 2008, the Fed quickly dropped rates to 0% in a bid to stem the job losses. Whether or not monetary policy has been effective in reducing unemployment is anyone’s guess. However, it’s worth noting that Unemployment in the US is much lower than throughout the Eurozone…Let me "help" the editors with "anyone's guess"--we have had 5 years of aggressive Fed action on interest rates and asset purchases, unprecedented over the history of the Fed and the slowest jobs recovery of any recession since FDR. Furthermore, Europe has more burdensome labor regulations.
The bugaboo of the ECB was acting to prevent a deflationary spiral. Now the Austrian School of Economics has much to say of this. Consider this observation from Hollenbeck:
It is true that the Great Depression and deflation went hand in hand in some countries; but, we must be careful to distinguish between association and causation, and to correctly assess the direction of causation. A recent study by Atkeson and Kehoe spanning a period of 180 years for 17 countres found no relationship between deflation and depressions. The study actually found a greater number of episodes of depression with inflation than with deflation. Over this period, 65 out of 73 deflation episodes had no depression, and 21 out of 29 depressions had no deflation.Just a few of many other readings on this topic: Murphy explains how inflation can be subtle in discussing the origins of the Great Depression here; in fact, the Roaring 20's was actually deflationary (and would have been more so without Fed increases to the money supply). Hülsmann adds:
Both the U.S. and Germany enjoyed very solid growth rates at the end of the 19th century, when the price level fell in both countries during more than two decades. In that period, money wage rates remained by and large stable, but incomes effectively increased in real terms because the same amount of money could buy ever more consumers’ goods. So beneficial was this deflationary period for the broad masses that it came to the first great crisis of socialist theory, which had predicted the exact opposite outcome of unbridled capitalism.Finally, Blumen discusses the spiral from several, thoroughgoing aspects. For example, companies operate on margins, not price-levels; a business could still maintain margins with lower costs of production, e.g., under a slack economy, cheaper materials and labor.
Senate Passes LGBT Anti-Discrimination Bill: Thumbs DOWN!
This is one one of those cases where all fair-minded people can agree, correct? No. This is which entrenches government ever further into business affairs--and is basically pushing-on-a-string legislation, which probably benefits most the parasitic lawyer class. Do we need yet another notch on the increasingly crowded list of "more equal" special interest groups? The last thing employers need is an overly sensitive LBGT threatening or filing a lawsuit.
Don't get me wrong; as an employer, I would not care if the best candidate for a position was a green Martian with a strange attraction to cats. It's not personal, it's business. (I have personal religious/moral objections to LGBT lifestyles, but I don't think the State should regulate lifestyles.) I have no idea how LGBT issues enter the workplace (except maybe in the porn industry).
In life, not everything is fair. People may date others for superficial reasons like looks, the boss's son may succeed him, not necessarily on grounds of merit. There are a potentially infinite number of mistaken decisions where one's biases come into play, whether open or hidden. I don't know why an LGBT would want to work for a business where he or she does not feel accepted or appreciated.
Facebook Corner
(LFC). So I was arguing against some liberals on another page and they said that income inequality was the same thing as poverty. Could somebody bring me to light against why this statement sounds and feels so very wrong?
In a capitalistic system, economic success is the result of efficiently and effectively providing goods and services consumers want or need; it's not a zero-sum game (the poor are also consumers). Poverty as a condition can reflect one's own industriousness, not acquiring value-added knowledge and skills, etc. The one thing that is certain: redistribution schemes exacerbate poverty: equal shares of an ever smaller pie is morally hazardous: why should I work for those whom benefit without effort? For a better, more comprehensive discussion of these issues, see Mises and Hazlitt, among others.
(Learn Liberty). Would you feel better about paying taxes if you could choose which government programs your money went to?
No. All this would do is vest you in a dubious, ineffective government program; in a free market, we might see more efficient, effective charities. Would I feel better if someone stole from me and gave some of my property to a needy family? No. It is my property; if I wish to support charitable causes, it's my decision. I will say short of privatization, I would rather see user fees used vs. general expenditures, but if a program is self-sustaining, why not divest it and have it compete?
(LFC). How do you respond when people claim that the poor working conditions, low wages, and child labor in the industrial revolution were a product of deregulation? Is this a valid argument against pure Capitalism?
This is a very confused problem statement. Are you saying that that the government preceding, say, the Gilded Age, was highly regulated and deregulation led to these alleged abuses? The fact of the matter is that we had rapid economic growth and strong immigration during this period; improvements in the standards of living had more to with economic growth, improved productivity--not with counterproductive "progressive" busybodies trying to intervene in the economy. If someone wants to contract at a "low" wage, it's surely better than no wage. Why should we discriminate against children willing and able to work? The real story here is the self-interested unionist whom benefits from less competition for his services....
(LFC) How do AnCaps propose dealing with crime? Assume that a murder occurs and the perpetrator subscribes to a different justice system in a different geographical area than the victim. Wouldn't his justice system have a vested interest in NOT turning him over? I Googled this before I asked, btw. I couldn't find what seemed to me to be a satisfying answer.
I am not an AnCap (although I think even minimal government needs to be downsized and reformed), but I would point out that (1) law and order is not "free" and (2) we might benefit from competition, say, for detective and other services. I could easily see using pro bono work to market one's services. In the prospective problem statement, let me point out that the other region has the same problem if a lawbreaker there left. We would probably see some reciprocity agreements, just like we have between states today, with a baseline bill of rights.
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| Via LFC |
LFC published a quote from Mises, pointing out that government blames capitalism for its own failures. I'm responding to a couple of critical progressive trolls in a thread.
Capitalism is based on voluntary exchanges. Anyone who thinks that the American economy is, or has been in the recent past, a free market is in a state of denial. The economy is choked by a $1.8T regulatory drag, and the government is another $3.8T drag on the economy. All these moronic progressive trolls believe the conspiracy theories and propaganda spoon fed to them and are unable to think for themselves.
LFC references a trade pact rant by a left-wing columnist.
Wow, this guy Monbiot is a leftist piece of work. This is just an anti-corporate rant. These "democratic" laws are basically unprovoked acts of aggression against producers; governments often enact thinly-veiled protectionist measures under a misleading spin. Regardless of your feelings about corporations, we need to support any constructive steps towards liberalizing trade, improving consumer choices.
Political Cartoon
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| Courtesy of Gary McCoy and Townhall |
Bbmak, "The Ghost of You and Me"
