‘Why Ludwig von Mises Wouldn’t Have Feared Islamic State’

Territorial_control_of_the_ISIS.svgJohn Tamny makes some good points at Forbes

In reality, the entity that has left and right up in arms in search of a muscular response was born in a part of the world that is one of the least productive economically, that can’t claim to create even one consumer good (the oil wealth there is largely a creation of western ingenuity) that is desired by global consumers, that can’t claim even one university that would appeal to the best and brightest. Despite this, numerous wise eyes are on ISIS?

Even more puzzling is the reporting about this nascent group. A recent Wall Street Journal front-page headline referenced “The Islamic State’s Economy of Extortion.” The article explained that ISIS is a largely self-financed entity by virtue of it “exacting tribute from a population of at least 8 million,” along with other funds raised through “criminal and terrorist activities.” Ok, so a group that is financed by plunder is a threat to the most powerful, capitalistic nation on earth?

Mises likely would have mocked today’s consensus precisely because the basis of ISIS’s existence is one of theft, coercion, or both. As he similarly wrote in Socialism, “Our whole civilization rests on the fact that men have succeeded in beating off the attack of the re-distributors.” We thrive because we’re largely free, yet a terrorist entity that is financed by thievery supposedly “cannot be contained.” What’s interesting about this is how many on the American right buy into the latter narrative. Though incentives and reduced barriers to economic activity properly animate their policy views as applied to the health of the U.S. economy, apparently redistributionist economics can create vibrancy and effectiveness in the Middle East?

Even more interesting is how allegedly skillful are those inside ISIS. To read the previously referenced Journal article without a skeptical eye is to believe that ISIS is run by a team of McKinsey consultants, as opposed to the radical militants who are actually in charge. As Nour Malis and Maria Ari-Habib wrote, the “radicals from the group administer an orderly extortion system of business and farm tributes, public-transport fees and protection payments from Christians and other religious minorities who choose to live under the militants rather than flee.” Would such a scenario birth resource-abundant growth in the U.S., or any other part of the world? It surely wouldn’t, and economic logic suggests it’s not doing so for ISIS.

Some will say oil revenues can or could fund ISIS, and if that’s true, President Obama’s Treasury should seek a stronger, more stable dollar to push down the price of oil. The stronger dollar that would lightly suffocate Middle Eastern oil producers would at the same time exist as a magnet for global investment in the U.S. What could weaken ISIS funding would cause the U.S. economy to soar. As Mises wrote,

“More highly developed societies attain greater natural wealth than the less highly developed; therefore they have more prospect of preserving their members from misery and poverty. They are also better equipped to defend their members from the enemy.” (emphasis mine)

Taking this further, despite the U.S. still being the world’s most advanced country in a freedom and economic sense, to watch what goes on inside Washington, D.C. is to be horrified by the ineptitude that defines our political class. Lest we forget, Harry Reid leads the Senate, John Boehner leads the House of Representatives, while Nancy Pelosi leads the opposition in the House. In the United States of America.

Since we Americans can claim such “competent,” “enlightened” leaders in our nation’s capital, do readers want to speculate on the quality of leadership inside ISIS? It doesn’t take several Foreign Affairs columnists to deduce that there probably isn’t a collection of Thomas Jeffersons and George Washingtons at the top of an entity that has Washington transfixed. Figure our political class can’t agree on much of anything (this latest alleged terrorist threat once again a rare example of consensus), the fighting is constant, yet somehow we’re supposed to believe that a criminal organization’s activities are defined by competent consensus and quietude at the top such that failure to respond now dooms us to eventual massacre in the cities and states we live in?

Read the full article. 

Does Janay Rice Have a Right to Conceal Public Acts?

800px-Revel_Atlantic_City_from_boardwalk

The Revel Hotel in Atlantic City

I don’t follow the NFL, so I had no idea who Baltimore Ravens ex-player Ray Rice is until stories about him started appearing in my Facebook feed. Given that a lot of people watch ESPN, it’s now well known that Rice apparently (and allegedly) beat his now-wife (Janay Rice) unconscious in a hotel elevator.

This wouldn’t be news at all, of course, if a famous person were not involved, and it would be just another story of domestic abuse.  And obviously, it’s blatantly unlibertarian and un-laissez-faire to beat people unconscious who pose no threat, so there’s no need to weigh in on at that aspect of the case.

What makes this case interesting from a property-rights standpoint, however, is the fact that the media is now being accused of “re-victimizing” Janay Rice, as if the media were in some way obliged to not show information that has been confirmed as true by numerous sources. I must confess I’m a Walter Blockian on this and neither the media, nor anyone else, is violating Janay Rice’s person or property in any way by merely showing true events that happened in a public place.

The only property issue here is the matter of whether or not the person who leaked the recording to the media was authorized to do so. That is, the hotel that made the recording may not have authorized the recording’s release to the public. Or it may be have been leaked by the police officers who had access to the recording. In either case, the relevant property dispute does not involve Janay Rice at all, but those who made and had access to the recording. If any party has a right to claim any control over the use and airing of the video, it is only the Revel Hotel which made the recording and owns the building in which the recording was made.

If Janay Rice, on the other hand, has a problem with the public nature of her beating, there is exactly one person she can blame for that: Ray Rice. The public elevator and hotel in which Rice chose as the venue for his actions is no different from the electronics aisle at Wal-Mart, or the parking lot in front of Ikea. One does not “own” the witnessing of one’s actions that play out in public, and if people witnessed it in person, or later in a recording,or even recorded it themselves, the public nature of the acts remains the same, and voids any expectation of privacy.

Thus, it is simply wrong to claim that the media is “victimizing” anyone at all by simply showing information that would have been plain to see for anyone who could have been standing near the Rices when he struck her. Moreover, Janay Rice has no right to claim ownership over the opinions of other people. That is, she does not own her reputation, which, as Block has noted, consists of thoughts in other people’s heads. Thus, to claim that Janay Rice is a “victim” of the media because the video’s release has affected the thoughts in people’s heads has no basis in reality. The events in this case were already public the second they happened. The fact that the number of people who saw the events has increased is unimportant.

The purpose of the “victim” claim is to assert that she has some right to constrain the actions of the media and others who are doing things she doesn’t like. But of course, she has no such right, and the only person who has victimized her is the person who hit her. Indeed, the claim of media victimization in this case is dangerous because it is founded on the idea that public information should be removed from the public eye if a person involved doesn’t like it. The argument being made is that the video “does not inform, but only shocks.” This is mere bumper-sticker philosophy since obviously the video does inform, although it may also shock. The same is true of a video of US military personnel shooting innocents. It’s both informative and shocking, but of course, the US government and its apologists make the same claim as Janay Rice, saying that video of such misdeeds should be hidden from the public for the sake of the victims, or even for the sake of the perpetrators who “are just following orders.” One might also include in this category efforts by police to ban video recording of things they do in public.

If the media were purposely distorting the facts that would be another matter, but in the Rice case, it’s hard to even make the claim that general politeness dictates that the media not play the video. The media’s use of the video doesn’t even rise to the level of gossip since there’s nothing necessarily mean-spirited in the airing of the video and (in this case) the media is (apparently) not attempting to distort the facts by strategically editing the video or smearing anyone involved.  And if there were distortion of facts, the distortion itself would be the relevant issue, not the reporting of facts. The claim to a right to control a person’s (or in this case, the media’s) prerogative to report or repeat public events after the fact is dangerous indeed, and stands up to no serious consideration of the actual property rights involved.

Misesians on 9/11, Then and Now

wtc

Libertarians were virtually alone in opposing the planned expansions of government power in the wake of 9/11, and then as now, we saw the attacks for what they were: criminal attacks on human persons and property which nonetheless have not been set right or rendered impossible by more than a decade of nearly untrammeled government theft, war, regulation, and spying.

An updated ’9/11 Reader:’

 

A New Austrian Textbook for All Economists

college2Mises Daily Thursday:

Randall Holcombe talks about his new textbook on Austrian economics: “The idea was to write a book for people who already know some economics,” Holcombe says. “But even a student who has only taken an introductory economics course will have enough background to understand what is in the book.”

Government Interest Payments Overwhelming

It’s not just homeowners who have to worry about rising interest rates, the Federal government might soon get a taste of its own medicine.

With the Fed doing all it can to stimulate inflation, increases to interest rates are taking a front seat amongst borrowers’ fears. From the admittedly partisan Republican Senate Committee on the Budget comes this report outlining how federal interest outlays will dovetail with other expenses in the future.

CBO - interest expense

To summarize:

The U.S. gross federal debt currently stands at $17.548 trillion, and net interest payments to our creditors are the fastest-growing item in the budget. In 2014, the Congressional Budget Office projects that the nation will spend $233 billion on interest payments. By the end of the budget window in 2024, however, CBO forecasts that interest payments will nearly quadruple to an astonishing $880 billion. Every dollar spent paying our creditors is a dollar wasted—money for which we get nothing in return. Interest payments threaten to crowd out every other budget item. To put the $880 billion, single-year interest payment in perspective, here is what we currently spend on other budget items:

  • Federal Courts – $7.4 billion

  • Department of Education – $56.7 billion

  • Secret Service – $1.8 billion

  • Food Inspection – $2.3 billion

  • Census Bureau – $1.0 billion

  • Border Patrol – $12.3 billion

  • National Parks – $3.0 billion

  • NASA – $17.6 billion

  • Centers for Disease Control – $7.1 billion

  • Federal Prison System – $6.9 billion

  • Workplace Safety Inspections – $0.9 billion

  • Immigration and Customs Enforcement – $5.6 billion

  • FDA – $2.6 billion

  • Federal Highway Budget – $40.4 billion

  • Coast Guard – $10.0 billion

  • Small Business Loans – $0.9 billion

  • Veterans’ Health Care – $55.3 billion

  • FBI – $8.3 billion

 

Every debt incurred today will be paid off in the future. The graph above may be shocking to some, but it’s only a very small part of the picture. This is just interest on debt, and doesn’t even include the costs of repaying the principal. Of course, the principal never really gets repaid as the government just borrows afresh to paper over its old debts. Interest payments, on the other hand, must be paid lest savers stop lending money to the government.

Nor is this only a concern for the future. Last year the government spent more on interest payments (c. $700 bn.) than it did on Medicare (a little under $600 bn.).

(Cross posted at Mises Canada.)

“We” Are Doing Great Things

220px-We_first_ed_dust_jacketI never went to the moon. I never even wanted to go there. So you can just stop talking about how “we went to the moon” or how “we sent men to the moon.”

If other people want to go to the moon or to send someone else there, I have no objection provided they do not force me to contribute any part of the funds needed to pay for the project.

Remember, however, that no matter how impressive an engineering feat someone’s going to the moon might be, it indicates absolutely nothing about “our” ability to solve pressing economic, social, or political problems. To suppose that it does shows that one has no real understanding of the nature of such problems.

Long-Term Unemployment Benefits Expire; Long-Term Unemployment Falls

250px-Unemployed_men_queued_outside_a_depression_soup_kitchen_opened_in_Chicago_by_Al_Capone,_02-1931_-_NARA_-_541927The unemployment rate has fallen from 6.7% at the end of 2013 to 6.1% in August 2014. That decline is primarily the result of the expiration of long-term unemployment benefits.

Unemployment compensation usually expires at the end of 26 weeks of unemployment, but during the last recession Congress extended that period, and many states paid benefits for well over a year. If we pay people to be unemployed, we should expect more unemployment, and that’s what we got. The long-term unemployment rate skyrocketed during the recession because we paid people to be unemployed longer.

In August 2013, when people were eligible for extended unemployment benefits, people unemployed for 27 weeks or more made up 38% of total unemployment. In August 2014, after extended unemployment benefits had been eliminated, only 31.2% of the unemployed had been unemployed that long.

Looking at this table from the Bureau of Labor Statistics, we see that the number of people unemployed for less than five weeks has actually risen from August 2013 to August 2014, while the number unemployed 27 weeks or more has declined by more than 30%.

The decline in the unemployment rate isn’t due to fewer people who are newly-unemployed, it is due to the shorter duration of unemployment for those who are unemployed. And people have shorter durations of unemployment now because we are no longer paying them to be unemployed for longer periods.

Many government policies have prolonged the recovery from the 2008 recession, and one was the extension of unemployment benefits. In hindsight, it is easy to look at the data and see that once long-term unemployment benefits were eliminated, long-term unemployment fell, and because of the shorter duration of average unemployment, the unemployment rate has fallen.

The Economics of American Pickers

6874Mises Daily Wednesday by Joel Poindexter:

The television show American Pickers shows many economic concepts in action, such as comparative advantage and specialization and trade, and it also illustrates numerous Austrian insights such as subjective value and the role of the entrepreneur.

 

U2 Gives Away New Album, Makes Money by Serving Customers

200px-EdisonPhonographSometimes being an entrepreneur means just seeing the writing on the wall. Amazingly, there are still Intellectual Property dogmatists out there who think it’s fine that the FBI runs around arresting the band’s own fans for making copies of digital files, but U2 has apparently figured out that ship sailed long ago, and is giving away the band’s latest album.   While some artists are trapped in a mid 20th-century time warp – and think that musicians should be able to make money for selling a recording of a song recorded decades before – U2 accepts that in order to make money, they might have to do actual work, such as touring and giving their fans what they want.

Anyone who has followed popular music over time knows that changes in technology (e.g., the 12-inch single) constantly change the nature of the business and the kind of music that gets recorded. The proliferation of infinitely-copyable digital files is no different, and the artists who have figured this out and serve their customers, will make much more money (ceteris paribus)  that those artists who think the fans exist to do what the artist wants. In other words, those entrepreneurs who better serve society will be more handsomely rewarded.  Those who have contempt for their customers will disappear.  This is the basic equation of entrepreneurial activity.

U2′s latest move also adds an additional nail to the coffin of the old system of charts and RIAA certifications such as certified “gold” records. “The charts” have been meaningless for years in the face of new technology, and U2 knows this. Anything that inceases the irrelevance of the RIAA, BFF of SOPA, can’t be bad.

Mark Thornton: ‘Record number of Americans in extreme poverty’ (with video)

Mark Thornton on PressTV:

“The United States has problems with unemployment and has problems with poverty and a record number of people meeting the standard of extreme poverty,” said Mark Thornton, senior fellow with the Ludwig von Mises Institute in Alabama and a research fellow with the Independent Institute in California.

“Extreme poverty in the United States is now over 4 percent, that means they have less than $2 cash per person, per day,” Thornton said in a phone interview on Monday.

“We also have over 20 percent of Americans on food stamps with a record number of households receiving food stamps and other government welfare benefits,” the economist stated. “So the direction of change in the United States has been negative with respect to poverty over the last several years and that doesn’t seem to be turning around anytime soon.”

mark

Lamenting the Decline of Labor Unions?

Not Morgan Reynolds.  The eminent labor economist has  an insightful and unsentimental  review of sociologist Jake Rosenfeld’s lament about diminishing union power in Barron’s. (Scroll down to find article.)

Native Americans Find Way to Make Money, Feds Outlaw It

rsz_1280px-mountain_view_california_these_ranch_houses_are_typical_in_many_rural_sections_where_residents_of____-_nara_-_537834In California during the late nineteenth and early twentieth century, anti-Japanese sentiment ran high, in spite of the fact that they never comprised more than 3 percent of the population. To discourage Japanese immigration to California and to curb the wealth of the immigrants themselves, a large number of major employers agreed among themselves to not hire any Japanese workers. At the same time, politicians at the state legislature passed laws prohibiting Japanese immigrants from working in various occupations. In response, both immigrant and native-born Japanese worked around these laws and employment bans by focusing on industries that were ignored by much of the population due to the hard work required and the slim profit margins involved. Japanese workers and entrepreneurs began to dominate the truck farming and flower and nursery industries.

The Japanese, who developed more efficient ways of farming and getting crops to market soon began to put white farmers out of business.  White Californians responded with alien land laws in 1913 and 1920 which banned the sale of land to foreign-born Japanese and also prohibited leasing land to the same for more than three years. The Japanese merely responded by putting the land deals in the names of their native-born children, and the cycle continued, until Roosevelt solved many of the whites’ problems by simply locking the Japanese in concentration camps.

I was reminded of this episode, and the economic ingenuity of powerless political minorities when I noticed this article in the Wall Street Journal. Some Indian tribes, many of which are geographically isolated from economic and population centers, figured out how to make some money over the internet:

Thus the geography-defying digital revolution has meant a financial revolution for Native Americans: Several tribes have begun to benefit in recent years from e-commerce by owning and operating businesses offering short-term installment loans over the Internet. The Otoe-Missouria in Oklahoma and the Lac Vieux Desert Band of Lake Superior Chippewa in Michigan are two such tribes, out of the more than 560 federally recognized tribes in the U.S.

Like many past efforts to improve their economic situation, tribes have attempted to capitalize on their (theoretical) status as politically sovereign entities to get around federal and local regulations that stifle enterprise among  the general population. Casinos are an example of this, of course, but so are other industries from resource extraction to financial services.

But, as we all know, the United States government respects no “sovereignty” but its own, so the feds have begun to crack down on the latest attempt by tribes to achieve greater financial independence:

Tribal governments in America predate the founding of this country. Accordingly, the Founders viewed tribes as political entities with the inherent sovereignty to make their own laws and to be governed by them, just as states do. The Constitution and centuries of legislative and judicial precedents support this concept. Accordingly, Native American tribes have been able to successfully develop their businesses free from the bureaucracy and red tape that some state governments have created to restrict options for consumers.

Unfortunately, the Justice Department has now begun targeting tribal businesses as part of its Operation Choke Point, a concerted effort to put specific industries that it deems undesirable out of business by forcing banks to cut off their access to the financial system. Businesses offering short-term loans are among those targeted.

Legally, this is all “justified” by Operation Choke Point,  which authorizes Federal control of the financial system in the name of combating crime, terrorism, drug use, or any other “threat” to “national security.”

Harry Browne once noted that the government is good at breaking your legs, handing you crutches and then saying “see, without government, you couldn’t walk.”  This latest case with the tribes shows that if you do manage to heal your legs and walk again, the government will be sure to break your legs all over again.

This latest case with the tribes is different from the efforts against the Japanese, of course, in that the earlier case was based on racial animosity and the politics of envious whites against more successful Japanese. But the two cases are similar in that those on the receiving end of government efforts to impoverish them are often rather inventive in coming up with ways to get around the government’s edicts. Not one to declare defeat however, governments will always be back with new ways to break your legs, whether they’re in the name of protecting us from the Yellow Peril or from terrorists. It’s always just for society’s own good.

 

Final Call for Conference Papers

The 3rd Annual International Conference of Prices & Markets will be held on November 8th, with an opening reception the evening before. Hosted at the University of Toronto, last year´s event drew scholars from the across Canada and the States, as well as several from Europe.

The Conference is designed to combine the opportunities of a professional meeting, with the added attraction of hearing and presenting new and innovative research, engaging in vigorous debate, and interacting with like-minded scholars who share research interests.

The deadline for applications is tomorrow, September 10th. Scholars interested in presenting papers, serving as chairs/discussants, or proposing entire panels should submit proposals by email to David Howden at dhowden@slu.edu. With all submissions, please include the following information for each participant, including non-attending co-authors:

1. Name
2. Affiliation (title and institution)
3. E-mail address
4. Telephone number
5. Title of paper(s)
6. Abstract(s) of no more than 100-200 words

Select papers from the conference will be published as Papers and Proceedings of the conference in the Journal of Prices & Markets, the flagship journal of the Ludwig von Mises Institute of Canada.

I hope to see you there!

Drug Warriors Claim Colorado Going to Pot

6872Mises Daily Tuesday by Mark Thornton:

Drug warriors rely on bad and manipulated data to make the claim that respecting private property rights in Colorado is “terrible public policy.” They fail to make the case, and since they want to tax and imprison people for their pet prohibition project, the burden of proof remains on them.

Ron Paul Draws Big Crowds at Mises Institute Brazil Conference

Dr. Paul was received like a rock star at the 2014 Conferência De Escola Austríaca in Sao Paulo, with more than 400 people attending his keynote speech.  Thanks to Helio Beltrao of Mises Brazil for hosting Ron and putting on a fantastic event.

More photos here, and Ron’s report here. Many more Facebook photos here.

Ron Helio

RP HB

Goldman Sachs on Scottish Independence

A senior economist at Goldman Sachs has weighed in on the upcoming Scottish independence vote, and it’s not pretty:

Goldman warned that public services would have to be cut if Scotland goes it alone, and that the country would face much higher borrowing costs. But the most worrying consequence, the bank predicted, would be that uncertainty over a currency union would cause a run on sterling and a capital flight with echoes of the eurozone crisis. ”The most important specific risk, in our view, is that the uncertainty over whether an independent Scotland would be able to retain sterling as its currency could result in an EMU-style currency crisis occurring within the UK,” wrote Kevin Daly, senior economist at Goldman.

Royal_Standard_of_Scotland,_Holyrood_Palace

Agnosticism is almost certainly warranted with respect to the politics of the referendum itself. The Scots will choose the yoke of London or the yoke of Brussels, the Pound or the Euro. A Scottish currency is neither discussed nor even considered. But it is a distinct pleasure to watch elite interests panic at the thought of losing even some degree of centralized control over a country of only 5.2 million people.

And the endless push for centralization and control extends beyond currency:

“One of the main lessons from the euro area crisis is that a reasonably high degree of fiscal and/or financial integration is necessary, as a means of effective risk sharing, for a monetary union to work,” Mr Daly wrote.

This brings to mind the late Harry Browne’s famous quote: “Government is good at one thing: It knows how to break your legs, hand you a crutch, and say, ‘See, if it weren’t for the government, you wouldn’t be able to walk’”. Browne’s dictum applies perfectly to the Eurozone: first the ECB destroys any vestige of monetary sovereignty via the Euro, and effectively monetizes the sovereign debt crisis. Then it begins, via the loathsome European Parliament, to make demands for integration of fiscal policy as well. After all, once you’ve accepted the Euro it’s awfully hard to argue for the continued ad hoc issuance of sovereign debt without regard to the impact on other Eurozone partners.

One MEP has already warned poor Scotland (lacking its own central bank) that under “EU law” (sic) it must use the Euro if it votes for independence:

Olli Rehn, vice president of the European Parliament and former commissioner for economic and monetary affairs, said in a letter to chief secretary to the Treasury Danny Alexander the use of sterling in Scotland is prohibited unless Westminster grants explicit permission. All three main political parties have already refused to allow Scotland to retain the pound in case of a ‘Yes’ vote, making this option illegal under EU law, which requires a country to have access to an independent central bank to use a currency. Alex Salmond, Scotland’s First Minister, argued this would not stop the country from using the existing currency, but Rehn has moved to prevent that option. He wrote: “As to the question whether ‘sterlingisation’ were compatible with EU membership, the answer is that this would simply not be possible since that would obviously imply a situation where the candidate country concerned would not have a monetary authority of its own and thus no necessary instruments of the EMU”.

There is no happy ending here for the Scots, who regardless of the referendum vote are highly unlikely to become the “Singapore of the North.”

 

 

The War on Cash: Latin American Front

In the latest episode in the global War on Cash, Uruguay will ban all cash transactions for more than US$5,000.  The law is set to take effect May 2015 and also mandates that all taxes, no matter how small the sum owed, must be paid electronically.

HT to Nick G

Ten Reasons to Condemn Inflation

6871Mises Daily Monday, by Andreas Marquart:

Increasing the supply of fiat money, also known as inflation, leads to a myriad of social and economic ills, affecting employment, the family, emotional health, and more.

 

Richmond Fed President Sees Fed as the Problem

250px-Federal_Reserve_Bank,_Richmond,_VirginiaHow large a problem is moral hazard caused by the Fed helping out troubled bank during financial crises? Pretty large, at least according to Jeffrey Lacker, President of the Federal Reserve Bank of Richmond.

One argument for central bank credit market activism rests on the notion that fragility is inherent in modern financial markets… Four decades of precedent [Fed and FDIC rescues of uninsured creditors] surely encouraged the belief that acute financial distress is likely to elicit some sort of rescue. Although this question is not yet settled, my view is that pre-crisis financial vulnerabilities were in large part induced by financial markets’ response to a long record of discretionary Federal Reserve interventions in credit markets.

Lacker heads one of the country’s 12 Federal Reserve districts, and thinks that the Fed is the problem. Unfortunately, he also thinks it is the solution.

One can appreciate how this interventionist tendency rose, though. When one is confronted with an instance of financial distress, an ex-post mindset makes it tempting to leave moral hazard problems for another day, to be dealt with after the crisis through tougher regulatory constraints on risk-taking.

If Lacker sees a “chicken or the egg” problem, he could appeal to the size of the problem. Richmond Fed economists estimated that at least 45% of financial sector liabilities were implicitly guaranteed by the government at the end of 1999. By the end of 2011 that figure rose to 57%. More than half of these guarantees were set by precedent, rather than explicit legislative solutions like deposit insurance.

Moral hazard is a problem, and every time it leads to a new chapter of crisis it gets worse. Ending Fed support for the financial sector today might cause some disruptions today, but at least it avoids a worse fate in the future.

(Cross posted at Mises Canada.)

Böhm-Bawerk: Austrian Economist Who Said “No” to Big Government

6851Mises Daily weekend by Richard Ebeling:

To his last, Eugen von Böhm-Bawerk defended reason and the logic of the market against the emotional appeals and faulty reasoning of those who wished to use power and the government to acquire from others what they could not obtain through free competition.