Global Warming Debate Over: We’re Doomed

Annual_Average_Temperature_MapAccording to Guy McPherson, Professor Emeritus of Natural Resources, Ecology, etc., at the University of Arizona, (presumably man-made) climate change is “irreversible” and, basically, we’re all doomed.

As I’ve noted before, anyone who actually values human liberty and progress should welcome declarations of the “irreversible” nature of global warming. After all, if there’s nothing we can do to stop it, then we can just get on with our lives and leave humanity to dealing with environmental problems as they come, which is what homo sapiens have been doing for millennia.

So, McPherson’s pronouncement that it’s irreversible is a real load off. We can stop having the debate about whether or not to crush human economic progress with global regulatory efforts to massively reduce everyone’s standard of living via carbon emission controls (except for the super-wealthy and politically-well connected, of course).

But not so fast.  McPherson has come up with a novel twist on this one. Even though humanity is totally doomed, that doesn’t mean we can now just drop the issue and get back to increasing our standards of living as fast as possible in our last remaining years. Nope, we apparently have a responsibility to destroy ourselves to that other animals can have the planet instead. The method of suicide? We must “terminate industrial civilization.”

Since McPherson considers himself qualified to speak on these matters, I’m going to assume that he is in fact aware that terminating industrial civilization would result in the near-immediate starvation of a large portion of the human race. This no doubt fits into his plan to destroy humanity for the sake of amoebas and elk, but he then implies that he doesn’t understand what the end of industrial civilization means when he declares that, being doomed, our only choice is is to “enjoy and create moments of joy while we are here.”

So which is it? Should we terminate industrial civilization or “create moments of joy,” because those  two propositions are mutually exclusive for the vast majority of humans.

Perhaps McPherson is one of those people who is under the mistaken impression that prior to industrialization, life on earth was some sort of bucolic joy-filled wonderland. Such risible nostalgia for a past that never existed seems to infect many environmentalists. The reality of the good ol’ days of the pre-industrial world, of course, is one of scratching a subsistence out of the ground from dawn until dusk while hoping one isn’t struck down by some plague.

For most people, joy comes from having some free time in relative comfort, and access to modern medical amenities when one falls ill. Without industrial civilization, there’s no modern medicine, little comfort, and certainly no free time to speak of. Where we’re supposed to attain this “joy” is a mystery in McPherson’s vision.

The End of QE3, Trouble Ahead for the Bulls?

Austrian economist Micheal Pollaro writes that with the end of QE3 coming that stock market bulls need to take a note of caution because the Austrian measure of the money supply is already falling. This is typically a sign of trouble for stock markets.

The Federal Reserve’s latest asset purchase program, QE3, is coming to an end. What was once an $85 billion a month program, one in which at its peak had been goosing the financial markets and economy at an annual rate of $1.0 trillion – and over its 27 month life will have pumped $1.7 trillion of money into the economy – is going to zero. Given the outsized impact QE has had on the growth of U.S. money supply and thus the U.S. economy, we say investors take note, especially those furthest out on the risk curve, because what was once your primary tailwind could soon become your greatest headwind, maybe even a gale force.

Thus, when an economy is subjected to a bout of monetary inflation, investors can enhance their performance by correctly positioning their portfolios on the right side of the boom-bust cycle. Though easier said than done, one should buy claims to the malinvestments of the boom; i.e., when the money supply is surging; then sell those same claims after the growth in the money supply peaks and begins to head down. Importantly, the bigger the bout of monetary inflation, the more important it is to be positioned on the correct side of the boom-bust cycle. The reason is simple – lots of monetary inflation means lots of malinvestments in the economy and financial markets. Indeed, correct positioning is even more important on the downside of the boom-bust cycle. You see, booms tend to develop slowly. Busts, complicated by the distortions created during the boom, more often than not do anything but.

Now you know why we call this current monetary cycle the Bernanke Risk-On Boom – Bust-to-Be! Unlike in past monetary cycles where money was largely injected into the real economy via bank asset purchases and loans, this inflation cycle is all about huge swathes of money being injected directly into the financial markets via Federal Reserve’s QE asset purchase programs. The banking system, at least to this point, has had a minor role.

Unless the Federal Reserve changes its mind, the last installment of QE is ending next month. That means that if the banking system, the other and more traditional source of monetary inflation, does not step up and fill the inflationary void being vacated by the Federal Reserve, the money supply is set to fall, and fall substantially in the coming months.

In other words, bulls take heed – our yellow light could be tuning red.

I Only Read It for the Articles! Rothbard’s Penthouse Interview

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G-Rated (Almost) Edit of October 1976 Cover

In the 1970s, Penthouse magazine had a reputation for featuring the ideas of unorthodox political thinkers and movements. That’s why in October 1976 it interviewed Murray Rothbard to ask about the rapidly-growing philosophy of libertarianism. This interview is now difficult to find, but was recently excavated from the archives at the Mises Institute.

The article begins with an introduction that provides a great snapshot of both Rothbard’s work and personality:

The Murray Rothbard wall poster depicts a graying professor pecking at a typewriter. His words rise magically from the machine and blend into a black flag of anarchy rippling above his head. Beneath the drawing is this caption: “Murray N. Rothbard—the greatest living enemy of the state.” The poster, like almost everything else relating to politics, causes Rothbard to laugh… If someone mentions the name of almost any establishment economist or political figure, Rothbard will respond with a nasal guffaw… Jerry Ford, John Kenneth Galbraith, Alan Greenspan, Ronald Reagan—they all receive the same response: a laugh followed by a theoretical disputation in which Rothbard employs buzz-saw logic to rip into these persons he views as enemies of liberty, prosperity, and the common good.

There are some entertaining stories as well. For instance, the interview points out that Rothbard’s criticism of conventional economics made him an unpopular choice for private consulting, which is often a lucrative line of work for economists. In Rothbard’s case though, “Only one firm—a mushroom factory—has called on him for consulting advice in the past twenty years.”

The bulk of the interview consists of Rothbard offering up his trademark analysis of economics and public policy. He tackles a long list of objections to the free society, explaining how government causes war, depression, poverty, and pollution, and how the market fixes these problems.

One of his best responses, especially relevant today, regards socialized medicine:

Penthouse: What about efforts to socialize medicine in America?

Rothbard: That would be a monstrous development. In countries with socialized medicine, for instance, Britain, the result has been a tremendous decline in the quality of the medical service and a huge burden of taxes on the public and on the economy. The usual advance estimates of how much socialized medicine would cost are always extrapolated from the current number of people going to doctors and other statistics. What most people don’t realize is that if a visit to a doctor were free, then many people would consult a doctor all the time. There would be an enormous increase in demand for medical service, most of it unnecessary, and then the doctor’s time would have to be rationed in some way and the quality of medical care would decrease. That happened in England, with the result that the people who can afford to do so avail themselves of private medical care. They have to do this in order to get decent treatment.

The current government intervention in the medical field in the United States has created most of the problems that now exist. By creating licensing requirements—state regulations restricting the number of doctors and medical schools—the government creates a medical monopoly and increases the cost of medicine. In the last decade or so, the government has created the Medicaid-Medicare program, which has enormously increased the cost of doctors and hospitals by an almost indiscriminate disbursement of money to doctors. At first everybody thought the program would be a big bonanza. “Now we’d be able to get most of our medical bills paid,” they thought. But what actually happened? Medical bills simply increased, and so we’re really no better off than we were before.

In fact, we’re worse off. Any further government intervention would compound the damage. And I advocate the elimination of licensing requirements for doctors and hospitals and the loosening of restrictions on other aspects of medicine. The cost of drugs could be cut by eliminating the requirement for prescriptions, which creates a pharmacy monopoly so that people have to go to licensed pharmacies in order to get their drugs. I don’t think there’s any real need for that.

There are plenty of other gems sure to interest fans of free-market economics. The entire interview will be published in The Rothbard Reader, forthcoming in 2015, edited by Joseph Salerno and myself. The collection will provide an introduction and overview of Rothbard’s thought, and will feature several of his lost and out-of-print writings alongside some better-known works.

The Fed as Stock Market Manipulator

The notion that the Federal Reserve has been acting to manipulate stock markets has been active for decades, but rarely has that notion been openly discussed in the mainstream media. In this article by Howard Gold the Fed is praised for its “market timing” as Fed official quickly responded to recent volatility in the stock market with promises of more quantitative easing if necessary.

Investors got the message. The S&P 500 Index advanced for three straight days and the VIX fell under 20 again.

Bullard was only the latest Fed official whose words or actions “just happened” to boost the stock market when it was down.

“They are definitely in the market-manipulation business, and nothing has changed,” said James Bianco, president of Bianco Research LLC in Chicago and a longtime student, and critic, of the Fed.

Called the “Greenspan/Bernanke put,” the Fed’s willingness to jump in when stocks fall dates back a quarter-century.

“The put option is back. If the market sells off enough, they will give us QE4,” Bianco told me.

Conspiracy theorists have pinned it on a government “Plunge Protection Team” that wants to keep stocks from crashing at all costs.

But conspiracy or no, consider these actions:

Aug. 31, 2012: In his annual speech in Jackson Hole, Wyo., Fed Chairman Ben S. Bernanke all but announced the third round of QE, extraordinary bond buying of $85 billion a month. The S&P 500, which had languished after a nearly 10% decline, rallied from 1,399 points and hasn’t corrected substantially until now.

Sept. 22, 2011: Following a 19.4% stock sell-off amid a debt crisis in Europe and the U.S., the Fed launched Operation Twist, in which it sold short-term and bought long-term securities to push down long rates. After first slipping, the S&P 500 resumed a multiyear take-off that, with a little help from the Fed, ultimately drove it 80% higher.

Obama Appointee Supports Individual Rights

vguptaI’ve been critical of the Obama administration in the past, so it’s nice to find something positive to say. This article says that President Obama’s new acting head of the Justice Department’s Civil Rights Division, Vanita Gupta “supports decriminalizing cocaine, heroin, LSD, methamphetamine, ecstasy and all dangerous drugs, including marijuana.” It’s nice to see that someone in government supports individuals’ rights to make their own choices, rather than having the government tell them how they have to live their lives.

My personal view is that it is a bad idea to take any of these drugs, but just because that’s what I think, or that’s what some politicians think, doesn’t mean it should be illegal for you to do things other people think are bad for you. “Freedom” is meaningless if you only have the freedom to make choices that your government thinks are good choices.

The article says Ms. Gupta has argued that the misnamed war on drugs “is an atrocity and that it must be stopped.” The article goes on to say that she objects to what she perceives as draconian mass incarceration, which has resulted in a bloated prison population, and the war on drugs that she perceives as a failure.

I don’t know anything about Ms. Gupta beyond what is in that article, and the article focuses on her supporting freedom for individuals to make their own choices with regard to drug use, rather than have government dictate those choices for them.

Based on that article, everything I know about her is positive, and I’m happy to see the president appointing people who stand up for individual rights.

The article I linked to came from The Daily Signal, an internet publication of The Heritage Foundation. One would expect the conservative Heritage Foundation to be at odds with the Obama administration on most issues, but I admit that I am disappointed in this case that The Heritage Foundation, which claims on its website to support public policies based on limited government and individual freedom, is taking a stand against individual rights, and in favor of more government oversight and interference in our lives.

People are not free if they are prohibited from making what those in government perceive are bad choices. In this case I am happy to see the Obama administration standing up for individual rights, and disappointed that a prominent conservative organization supports the nanny state.

Would ‘President Rothbard’ Shut Down Flights to West Africa?

1280px-HFX_Airport_4Last week in The American Spectator, Emily Zanotti noted that the Obama administration refuses to intervene and shut down flights between West Africa and the US: “Yesterday, the White House reiterated that a ban on flights originating in outbreak countries is not on the table.” According to Zanotti, the rationale is that any disturbance of air travel would negatively impact West African economies.

Zanotti is skeptical of this rationale, saying:

…from a libertarian perspective: free markets are better able to pull people out of poverty than free money, and where we don’t allow capitalism to flourish we end up subsidizing with foreign aid. But if we were talking about President Murray Rothbard, I might consider that awfully practical and economically-focused excuse a real thing. But since this might officially be the first time the Obama Administration has talked their way out of something using unfettered capitalism as an excuse, I consider it suspect.

The larger political point is fair enough, but really, would Rothbard ever make such a simple-minded argument as Zanotti suggests? I recognize that she’s just using Rothbard here as a stand-in for any hard-core free-market libertarian, but it’s highly unlikely that Rothbard would argue, “gee, let’s just let any diseased person fly into any airport anywhere because it would be good for the global economy.”

Key to understanding Rothbard on matters like this is that he identified himself as a “radical decentralist.” He did not make simplistic arguments like “free markets will solve all our problems” and leave it at that. Nor did he think that — like some sort of Marxist — that only a full-blown version of his vision could better achieve the ends he proposed. On the contrary, Rothbard knew that even a move in the direction of truly free markets, through radical decentralization, was better than the centralized state that dictates to all local governments and private owners everywhere. Centralization cuts off every possible solution except the few accepted by the “experts” of the centralized state, and thus ensures that , if the one “official” plan fails, that there is no plan B, or way to prevent the problem from spreading throughout the one, giant national jurisdiction.

In other words, the current lack of decentralization prevents local governments, airlines, airports, or even individual states from having any control over movements between states or into airports. Such matters are all dictated by a single source: the federal government. Were a decentralized approach allowed, however, individual states, cities, airlines, and airports would be responsible for their own safety precautions. Moreover, those making the decisions, i.e.,  those in charge of safety in Atlanta and the Atlanta airport (as just an example), would also be personally affected were the precautions to fail.

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Swiss Central Bankers Don’t Like Gold

Swiss National Bank governors sound a lot like Fed and ECB central bankers when it comes to the upcoming Swiss referendum on gold. It might deprive them of needed “flexibility.”  And you might be surprised by how much the SNB has increased the country’s money supply since 2008, despite our image of the Swiss franc as a more stable (or less unstable) currency:

The Swiss National Bank (which is run by a bunch of Keynesian dunderheads – not too surprising for a central bank, but somewhat surprising for Switzerland) is trying its best to somehow thwart the upcoming referendum on gold. If the referendum is successful, at least 20% of the SNB’s assets would have to be held in gold – and the gold would have to be kept in Switzerland.

Not surprisingly, the central bankers argue that this would “severely crimp their flexibility”, apparently completely unaware of the irony. Crimping the “flexibility” of central bankers is a good thing after all. They are doing enough damage as it is. We actually are not quite sure what they are complaining about, since they will still be able to create money out of thin air in nigh unlimited quantities.

However, if they once again more than double the money supply as they have done since 2008 – inter alia to buy up foreign exchange in order to manipulate the CHF’s exchange rate – they will be forced to buy gold as well to keep the 20% reserve level intact if the referendum succeeds.

Switzerland money supply

Swiss monetary aggregates. Monetary inflation in Switzerland has gone hog-wild since 2008 (note especially the more than doubling of M1 which is roughly equivalent to TMS-1). And yet, the people responsible for this printathon are worried about “deflation” (seriously). It is of course no wonder that these inflationist bureaucrats hate gold.

Obama Care Update

I have previously reported about a friend of mine and her experience with Obama Care. Earlier this year her catastrophic health insurance was canceled as insufficient under Obama Care regulations. Her monthly premiums would have increased by several hundred percent to get the cheapest available qualifying coverage. Instead she was given a “better” plan that cut her premiums by more than 90% of what she was paying for her catastrophic coverage.

Update: My friend has not been able to use her “better” health insurance coverage over the last 6 months. All the health related providers have turned her insurance down and she has had to pay cash for everything. She inquired about a BCBS plan that she had been previously offered and was told that it had increased by over 100%. She was told that they were no longer able to qualify people by risk factors and that several new coverages were made mandatory under Obama Care. The silver lining for her is that she will probably qualify for a 50% subsidy under Obama Care, leaving tax payers to pick up the other half.

There is more to health care insurance than affordability.

Making Money by Making Money

It was reported today that Federal Reserve Chairwoman Janet Yellen earns over $200,000 as head of the world’s biggest central bank. Amazingly, there are at least 113 employees at the Fed’s Washington DC headquarters that earns more than she does!

MADRID (MarketWatch) — $201,700 a year doesn’t seem like chump change. That’s what the Federal Reserve Chairwoman Janet Yellen earns as head of the world’s biggest central bank.

But at least 113 other staffers at the Fed’s Washington headquarters earning more than she does, according to Reuters, which asked for details of central-bank pay under a Freedom of Information Act request.

Reuters sought information on all salaries on the central bank’s board that are above $130,810, generally the top of the government’s pay scale. The Fed responded with a list of those who make more than $225,000, with some exceptions, Reuters said.

The average of those 113 earners at the Fed is $246,506 per year, not counting bonuses and other benefits. The top earner is the Fed’s inspector general, with an annual salary of $312,000, according to Reuters. Yellen’s salary is set by Congress.

By comparison, the average salary at the Securities and Exchange Commission was $157,946 in 2013, while at the Commodities Futures Trading Commission it was $146,323, Reuters pointed out.

Attaining Economic Freedom w/ Mises Institute Senior Fellow Mark Thornton

In this interview, Mark Thornton covers some basics about the Austrian School and the current economic situation.

Four Reasons the Bernanke-Yellen Asset-Price Inflation May Be Nearing Its End

6923Mises Daily Friday by Joseph Salerno:

Once interest rates begin to rise — and rise they must, whether as a result of Fed policy or not — the end of the asset price inflation will be at hand. The result will be another financial crisis and accompanying recession.

CDC, PHARMA, And Mainstream Media On The Same Team

THREE_BEST_FRIENDSUnfortunately this team seems to be covering up a possible risk to children, especially black children.

For years, some parents of autistic children have claimed a link between their children’s condition and vaccines. One vaccine in particular has been mentioned: the MMR (Mumps, Measles, and Rubella).

The Center for Disease Control of the United States has consistently denied any MMR/autism connection. In congressional testimony and elsewhere, it has cited a 2004 study of its own published in Pediatrics.

Now one of the authors of that study, William W. Thompson, a senior scientist employed by the CDC, has admitted that critical data from the study was suppressed.  Thompson released the following statement through his lawyer: “ I regret that my coauthors and I omitted statistically significant information in our 2004 article published in the journal Pediatrics. The omitted data suggested that African American males who received the MMR vaccine before age 36 months were at increased risk for autism.”

It’s Hard to Believe in Vaccines Contaminated by Crony Capitalism

The larger problem here is that the government either develops a new vaccine itself  and licenses it to a private company or subsidizes the development by a private company. It then receives payments for testing the product as well as possible licensing fees if the product is approved. The same government promotes the vaccine to the states and often ensures that it is mandated  for school children.

This system is obviously fraught with conflicts of interest. The party that develops the vaccine should not do the approving. The approving agency should not receive payments depending on approval. This situation would not be hard to fix if government would embrace a few obvious and much needed reforms.

It would help us get the reforms if the mainstream media would come out of its foxhole and report on the problems. The New York Times, Wall Street Journal, NPR, and other mainstream outlets have refused to touch the CDC researcher’s startling admission. Why? A possible explanation is that the mainstream media today is completely dependent financially on drug company advertising. And it is drug companies that make vaccines.

The Recent Cover Up

So how serious was the cover-up of data relating to black children described by the CDC’s Dr. Thompson? How much increased risk for autism was associated with the vaccine?

One scientist,  Dr. Brian Hooker, sought the complete study data for a decade and finally got it with the help of Congress. He reported that the raw data suggested a 340% increase in autism among African-American males vaccinated at the recommended age. Others have already challenged this number, and it is still unclear exactly what the newly revealed data will show.

“Dr. Thompson told Dr. Hooker over the phone: “It’s the lowest part of my career, that I went along with that paper.” Thompson revealed that he did not know Dr. Hooker was recording the conversation but did not deny making the statement.

We must also keep in mind that the controversy so far is about the age of vaccination. Children vaccinated before 36 months are being compared to children vaccinated a little later. What is really needed is a study of children given the MMR and other vaccines versus children who have not received the shot at all. For whatever reasons, the government has not done this.

The CDC has instead claimed that the case against vaccines in general is closed. Quite apart from Dr. Thompson’s startling new testimony, there have been reasons to doubt this. For example, a review of the literature in Immunotoxicoloy by the respected researcher Helen Ratajczak has raised many questions. Dr. Thompson agrees that there are still questions that need answering.

“I will do everything I can to assist any unbiased and objective scientists inside or outside the CDC to analyze data collected by the CDC or other public organizations for the purpose of understanding whether vaccines are associated with an increased risk of autism. There are still more questions than answers, and I appreciate that so many families are looking for answers from the scientific community.’ “

At least one observer has compared the CDC’s refusal to publish pertinent and potentially alarming data related to the health of black newborns to the Tuskegee Experiment (http://vimeo.com/user5503203/review/103711143/91f7d3d4d8).

In that infamous case, black males were cold-bloodedly denied treatment for syphilis without their knowledge in order to study what would happen to them.

The controversy over the 2004 paper has also given rise to new charges (http://www.naturalblaze.com/2014/09/5-examples-show-why-cdc-is-corrupt-and.html). One of them is that the CDC knows of potential harm to newborns from flu shots administered to pregnant women, but won’t publish the data or review its recommendation of the shot. These allegations are too new to assess and like the MMR controversy should be studied by objective scientists, if they can be found.

Worries about the CDC have also circulated for years about its handling of the HPV vaccine for genital warts. This vaccine, developed by government scientists and licensed to Merck,  is intended to prevent cervical cancer.  The head of the CDC, Julie Gerberding, who gave it to Merck,  is now president of Merck’s vaccine division.

Economic Illiteracy is Alive and Well

seattle_minimum_wageAs an academic and economist, few things are as frustrating and mind-boggling as the fervor with which people embrace and display their economic illiteracy. It appears some, and an increasing number of them, consider it to be a quality or even a moral advantage to remain ignorant of basic economics.

Rather than considering economic knowledge, which has often been known and affirmed for centuries, this knowledge is attacked. While the scientific process should be one of fundamental (that is, not just for show) and constant scrutiny and reassessment of accepted conclusions, scientific discourse is not the primary domain for the critique and outright rejection and dismissal of economics. No, the critique is formulated by those who show no understanding for the discipline, its scientific approach, or its findings.

A recent column by economic illiterates Mike Konczal and Bryce Covert in The Nation illustrates clearly what this critique of economics is about. The column, titled The Score: Does the Minimum Wage Kill Jobs?, poses as an examination of the evidence regarding the effects of minimum wage laws, and is intended to settle the debate once and for all. Konczal and Covert seem completely oblivious to the fact that this “score” has long been settled in economics; raising, introducing, or enforcing a minimum wage above the market wage produces a situation with fewer jobs ceteris paribus.

But note that while this score has been settled in economics, Konczal and Covert have a different audience in mind. They address the reality-immune punditry: “Throw a rock into the punditsphere and you’ll hit someone arguing that minimum-wage increases kill jobs,” they begin the column. We are supposed to accept that this rhetorical politicization (“kill jobs”) of an economic law is ridiculous on its face. And economic illiterates probably willingly do so, especially if they belong to the same party camp as the authors. Most who read their column also likely won’t see the authors’ dishonest representation (frequently used by “both sides” in the punditsphere) of the well-established economic truth that artificially raising costs reduces voluntary supply. (Its truthfulness should be obvious, really.) Read More→

New Leonard Read Sculpture at the Mises Institute

Board member Dr. Don Printz has donated to the Institute a magnificent bronze bust of libertarian pioneer Leonard E. Read (1898-1983), founder of the Foundation for Economic Education and friend of Ludwig von Mises, Henry Hazlitt, Ron Paul, and Lew Rockwell.

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More photos here.

The Connection Between Wealth Disparity and Recessions

Mark Thornton on PressTV:

“In a sense wealth disparities do indicate recessions because they have the same cause as the boom-bust cycle in the economy, that is, when the central bank – the Federal Reserve of the United States – reduces interest rates to very low levels, they cause a boom in the economy which leads to an inevitable bust in the economy,” Thornton, senior fellow at the Ludwig von Mises Institute, told Press TV in a phone interview on Wednesday.

He added, “Low interest rates; easy money, easy credit help people who own capital, so that their wealth increases, but those same real interest rates actually hurt the average worker in the economy and, as a result, the disparities in wealth increase and you get also the  boom-bust cycle.”

Capture

Anarchic Courts and More

Summary by Luis Rivera III:

Here Dr. Walter Block, host Daniel Rothchild and other guests go over a number of topics including:

-Courts in an anarchic society and how applied moral philosophies such as deontology and utilitarianism can help with libertarian hypothetical constructs.

-Punitive settlements which are non-monetary such a installing fear to your perpetrator.

-The differences in battles that legitimate courts would face

-The intrinsic free market hindrances against bandit courts and the intrinsic incentives for legitimate courts.

Youtube link. 

Leland B. Yeager: Master of the Fluttering Veil

One of the more important monetary theorists of the mid to late 1900s, Leland Yeager, Ludwig von Mises Professor of Economics, Emeritus, at Auburn University, recently turned 90. The Mises Institute last week hosted a reception his honor. Multiple tributes to Professor Yeager are available at the free banking blog.  Well worth reading to anyone interested in monetary economics.

Steve Horwitz has referred to Yeager as “one of the most underappreciated economists.” Horwitz summarizes, quite correctly, the importance of Yeager’s contributions thusly, “Everyone who finds Austrian economics valuable and wants to comment on monetary matters should not do so until they have read and digested Yeager’s work.” I would add more broadly, ANYONE, Austrian leaning or not, who wants to comment on monetary matters should not do so until they have read and digested Yeager’s insightful work. The Fluttering Veil is a great collection of Yeager’s major contributions.

For those who might be interested, Credit Creation or Financial Intermediation?: Fractional-Reserve Banking in a Growing Economy, provides a quibble with some aspects of Yeager’s work relative to ABCT.

Leonard Liggio, RIP

liggioRalph Raico writes in Mises Daily:

Leonard Liggio has died, at the age of 81.

He was my friend for close to sixty years, and I came to know him well. Today my mind is filled with thoughts and memories of him.

Leonard was a Catholic, a scholar, and a libertarian.

His Catholic faith was his lodestar. Leonard was a “birthright Catholic,” and from his childhood through to university and graduate work at Georgetown and Fordham and for the rest of his life, Leonard enriched his understanding of his religion and participated in the sacraments of his Church. Ultimately, he was admitted into the Order of the Knights of Malta.

But he was also a Christian in another sense as well. I never witnessed Leonard treat other people with anything but evident respect, and his life was filled with innumerable kindnesses. A small example: once Leonard took me to a meeting of Dorothy Day’sCatholic Worker group. Day was a left-anarchist with confused views on economics, but he favored her for her opposition to war and because each year she and her associate Ammon Hennacy publicly protested on the anniversary of the atomic incineration of the Japanese cities. I saw Leonard privately slip to Day what was at the time a notable contribution. Here also he was following Jesus’s admonition, “When you do some act of charity, do not announce it with a flourish of trumpets, as the hypocrites do in synagogue and in the streets…when you do some act of charity, do not let your left hand know what your right is doing…”

Leonard Liggio was a humble man. He never stood in judgment of the personal foibles and idiosyncrasies of his friends. I suppose he believed that his job was to see to the perfecting of his own soul. Yet he could act forcefully. Once when we traveling in Europe, in Germany as I recall, I was startled to hear Leonard say, “Your hand is in my pocket!” I saw that he had caught a young woman’s forearm in an iron grip. He cast it disdainfully away, and the little thief scampered off.

Leonard was a man of immense learning, the most learned person I knew of his generation. Yet no one ever wore his learning more lightly. He pioneered the study of the highly significant school of French liberals of the early nineteenth century, introducing them to the English-speaking world. He introduced Murray Rothbard and me to historical revisionism, which has become a standard component of libertarian thought today. I know that Murray very much appreciated Leonard’s many suggestions in regard to his multi-volume work, Conceived in Liberty, on libertarian currents in colonial and revolutionary America.

Read the full article.

Trade as Good as Gold—or, How the Hanseatic League Thrived without Debt

Fotothek_df_ps_0005300_Rathäuser_^_Kirchen_^_BasilikenWe’re often told that international trade thrives on debt. In an especially risky line of business, financial intermediation, with its loans and guarantees, is the indispensable infrastructure for the progress of commerce. Perhaps entrepreneurs wouldn’t even consider selling goods to foreigners if it weren’t for banks and credit markets to finance them. Naturally, if and when markets fail in this role, Ex-Im Banks and other government intervention must provide ‘extra liquidity’ for trade.

While this string of non-sequiturs sweeps economists of all stripes, international trade—or better yet, trade in general—is better off not ‘banking on’ such helping hands. Without doubt, loans have their economic role, but retained earnings, equity, or simply cash-hoarding can be just as effective in transferring purchasing power to entrepreneurs. In fact, international trade thrived in times when banking and financial systems were not only in their in their infancy, but also when oceanic trade was dangerous and expensive.  Nonetheless, it began as a self-financed venture, a venture for which merchants themselves set money aside. The Hanseatic League (c. 13th to 17th century)—a commercial association of traders from German towns—is a good example of this type of financial behavior.

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Market Choices in Cannabis, Plus Cooking Classes

As part of a follow-up to my article on cannabis industry and its many related industries, I picked up a copy of Culture magazine, which bills itself as “the #1 cannabis lifestyle magazine” at  a Denver pizza place. I was intrigued by the ads. A lot of them are what you’d expect: hippie or stoner-themed ads for, well, stoners. But many ads were for more sophisticated users such as this one which illustrates how the market, when legal, can provide a wide array of different strengths and features of the cannabis itself.  In the black market, on the other hand, you’re just stuck with whatever your shady and unaccountable illegal dealer happens to have.

meds

And of course, there’s money to be made in related service industries, such as this one which teaches cannabis cuisine:  Read More→