How Mises Rebuilt Economics
How Mises Rebuilt Economics
Keynes vs. Say Mises Daily: by Henry Hazlitt
[Failure of the New Economics (1959)]
Keynes's "greatest achievement,"
according to his admirers, was his famous "refutation" of Say's law of
markets. All that it is necessary to say about this "refutation" has
already been said by Benjamin M. Anderson, Jr.,[1] and Ludwig von Mises.[2]
Keynes himself takes the matter so cavalierly that all he requires to
"refute" Say's Law to his own satisfaction is less than four pages.
Yet some of his admirers regard this as alone securing his title to fame:
The "Mystery" of the Endowment Effect Mises Daily: by Per Bylund
Government Spending Jobs Myth by Richard W. Rahn
Do increases in government spending increase or
decrease the number of jobs? Conventional wisdom is they will increase
jobs, and a few left-wing economists, such as Paul Krugman of the New York Times,
frequently are trotted out by reckless politicians and some in the news
media to argue that we need more government spending in order to create
jobs. If this were true, we should be able to see it in the historical
evidence, so let’s look at the numbers.
King Newt Takes on the Judges by Roger Pilon
In 1608, King James I announced to the judges of
England that because they were merely his delegates, he was entitled to
decide cases himself. They responded that no king since the Norman
conquest had assumed that power. Lord Coke, chief judge of the Court of
Common Pleas, added that "his Majesty was not learned in the laws of his
realm, ... which require long study and experience, before a man can
attain to the cognizance of them."
The Federal Reserve's Covert Bailout of Europe by Gerald P. O'Driscoll Jr.
America's central bank, the Federal Reserve, is engaged
in a bailout of European banks. Surprisingly, its operation is largely
unnoticed here.
The Fed is using what is termed a "temporary U.S. dollar liquidity
swap arrangement" with the European Central Bank (ECB). There are
similar arrangements with the central banks of Canada, England,
Switzerland and Japan. Simply put, the Fed trades or "swaps" dollars for
euros. The Fed is compensated by payment of an interest rate (currently
50 basis points, or one-half of 1%) above the overnight index swap
rate. The ECB, which guarantees to return the dollars at an exchange
rate fixed at the time the original swap is made, then lends the dollars
to European banks of its choosing.The Fed's Mission Impossible by John H. Cochrane
The Federal Reserve last week announced its new
"Enhanced Prudential Standards and Early Remediation Requirements" for
big banks, as required by the Dodd-Frank law. You have to pity the poor
Fed because it faces an impossible task.
The Fed's proposal opens with an eloquent ode to the evils of
too-big-to-fail and moral hazard. And then it spends 168 pages
describing exactly how it's going to stop any large financial
institution from ever failing again.Pin the Bogeyman On the Tea Party
By Bill Frezza
Have
you watched with amusement as various political commentators have tried
to demonize the amorphous Tea Party movement by outing
behind-the-scenes bogeymen allegedly pulling the strings of this latter
day Great Awakening?
Sarah Palin. Glenn Beck. Dick Armey. Newt Gingrich. Grover Norquist. Jack Abramoff. Lyndon LaRouche. The John Birch Society. The list goes on.
None of it is sticking.
Sarah Palin. Glenn Beck. Dick Armey. Newt Gingrich. Grover Norquist. Jack Abramoff. Lyndon LaRouche. The John Birch Society. The list goes on.
None of it is sticking.
Obama Pursues Rich and Poor, Not Working Class
By Michael Barone
Has
Barack Obama's Democratic Party given up on winning the votes of the
white working class? Thomas Edsall, the longtime Washington Post
reporter now with The Huffington Post, thinks so.
Surveying the plans of Democratic strategists, Edsall wrote in The New York Times on Nov. 28 that "all pretense of trying to win a majority of the white working class has been effectively jettisoned."
Surveying the plans of Democratic strategists, Edsall wrote in The New York Times on Nov. 28 that "all pretense of trying to win a majority of the white working class has been effectively jettisoned."
The Wrong Kind of Minority
By Mona Charen
The Washington Post proclaimed in a recent headline another historic "first" for the United States
-- the first female usher-in-chief at the White House. Stop the
presses! The accompanying story reveals that the nominee hails from
Jamaica, so it's probably a two-fer. Oh, boy.
The Post and other liberal organs are obsessed with firsts. The first female letter carrier to handle the Capitol Hill route will get a mention in the press. The first African-American anything is guaranteed at least a nod. You don't even have to be first to get "first" treatment. The last two Supreme Court nominees have been women, joining a court that had already seated two women (one retired). Nevertheless, the femininity of the candidates was cheerily chatted up. When Barack Obama became the first black nominee of a major party and then the elected president, dignified notice of an historical milestone would have been appropriate. But you know what happened -- the media went on an inebriated, extravagant first binge.
The Post and other liberal organs are obsessed with firsts. The first female letter carrier to handle the Capitol Hill route will get a mention in the press. The first African-American anything is guaranteed at least a nod. You don't even have to be first to get "first" treatment. The last two Supreme Court nominees have been women, joining a court that had already seated two women (one retired). Nevertheless, the femininity of the candidates was cheerily chatted up. When Barack Obama became the first black nominee of a major party and then the elected president, dignified notice of an historical milestone would have been appropriate. But you know what happened -- the media went on an inebriated, extravagant first binge.
The Stupidity of "Buy American"
The Stupidity of "Buy American"
By John StosselOne sign of economic ignorance is the faith that "Buy American" is the path to prosperity. My former employer, ABC News, did a week's worth of stories claiming that "buying American" would put Americans back to work.
I'm glad I don't work there anymore.
Job Creators Fighting Back. By John Stossel
Some politicians claim that politicians create jobs.
Senate Majority Leader Harry Reid says, "My job is to create jobs."
What hubris! Government has no money of its own. All it does is take
from some people and give to others. That may create some jobs, but only
by leaving less money in the private sector for job creation.
Actually, it's worse than that. Since government commandeers scarce resources by force and doesn't have to peddle its so-called services on the market to consenting buyers, there's no feedback mechanism to indicate if those services are worth more to people than what they were forced to go without.
The only people who create real, sustainable jobs are in private businesses -- if they're unsubsidized.
Some CEOs are upset that people don't appreciate what they do. So they formed a group called the Job Creators Alliance.
Brad Anderson, former CEO of Best Buy, joined because he wants to counter the image of businesspeople as evil. When he was young, Anderson himself thought they were evil. But then he "stumbled into a business career" by going to work in a stereo store.
"I watched what happens in building a business. (My store,) The Sound of Music, which became Best Buy, was 11 years (old) before I made a dollar of profit."
In 36 years, he turned that store into a $50 billion company.
Tom Stemberg, founder of Staples, got involved with the Job Creators Alliance because he's annoyed that the government makes a tough job much tougher.
He complains that government mostly creates jobs -- that kill jobs.
"They're creating $300 million worth of jobs in the new consumer financial protection bureau," Stemberg said, "which I don't think is going to do much for productivity in America. We're creating all kinds of jobs trying to live up to Dodd-Frank ... and those jobs don't create much productivity.
Senate Majority Leader Harry Reid says, "My job is to create jobs."
Actually, it's worse than that. Since government commandeers scarce resources by force and doesn't have to peddle its so-called services on the market to consenting buyers, there's no feedback mechanism to indicate if those services are worth more to people than what they were forced to go without.
The only people who create real, sustainable jobs are in private businesses -- if they're unsubsidized.
Some CEOs are upset that people don't appreciate what they do. So they formed a group called the Job Creators Alliance.
Brad Anderson, former CEO of Best Buy, joined because he wants to counter the image of businesspeople as evil. When he was young, Anderson himself thought they were evil. But then he "stumbled into a business career" by going to work in a stereo store.
"I watched what happens in building a business. (My store,) The Sound of Music, which became Best Buy, was 11 years (old) before I made a dollar of profit."
In 36 years, he turned that store into a $50 billion company.
Tom Stemberg, founder of Staples, got involved with the Job Creators Alliance because he's annoyed that the government makes a tough job much tougher.
He complains that government mostly creates jobs -- that kill jobs.
"They're creating $300 million worth of jobs in the new consumer financial protection bureau," Stemberg said, "which I don't think is going to do much for productivity in America. We're creating all kinds of jobs trying to live up to Dodd-Frank ... and those jobs don't create much productivity.
A Libertarian Year Ahead?
By John Stossel
As
2011 draws to a close, I wonder: Is freedom winning? Did America become
freer this year? Less free? How about the rest of the world?
I'm a pessimist. I fear Thomas Jefferson was right when he said, "The natural progress of things is for liberty to yield and government to gain ground." That's what's happened. Bush and Obama doubled spending and increased regulation. Government's intrusiveness is always more, never less. The state grows, and freedom declines.
I'm a pessimist. I fear Thomas Jefferson was right when he said, "The natural progress of things is for liberty to yield and government to gain ground." That's what's happened. Bush and Obama doubled spending and increased regulation. Government's intrusiveness is always more, never less. The state grows, and freedom declines.
Newt's Economic Stand Voters seem to like his pro-growth message but still have doubts about the messenger. By KIMBERLEY A. STRASSEL
Dubuque, Iowa
It is nearly caucus time, and Newt Gingrich has found his closing argument. The question is whether it comes soon enough to save his campaign.
Mr. Gingrich rolled into this state on Tuesday with a new focus on pro-growth economic policies and a new determination to sharply contrast his proposals with those of his main rival for the nomination, Mitt Romney. On his first stop here on his final Iowa bus tour, Mr. Gingrich went straight to the mat. Voters face a choice, between "a supply-sider in the [Jack] Kemp-Reagan tradition," and "the philosophy of a moderate Massachusetts governor" who "said he did not want to go back to the Reagan-Bush years."
This pro-growth mantra isn't just strategy, it's necessity. The Gingrich surge has been checked by a barrage of negative campaign ads from his rivals, reminding voters of the former speaker's ties to Freddie Mac, his checkered Washington tenure, his marital baggage. Lacking the money or organization to respond, the campaign has drifted down in the polls, raising the distinct possibility that Mr. Gingrich could end up in a lackluster fourth place.
It is nearly caucus time, and Newt Gingrich has found his closing argument. The question is whether it comes soon enough to save his campaign.
Mr. Gingrich rolled into this state on Tuesday with a new focus on pro-growth economic policies and a new determination to sharply contrast his proposals with those of his main rival for the nomination, Mitt Romney. On his first stop here on his final Iowa bus tour, Mr. Gingrich went straight to the mat. Voters face a choice, between "a supply-sider in the [Jack] Kemp-Reagan tradition," and "the philosophy of a moderate Massachusetts governor" who "said he did not want to go back to the Reagan-Bush years."
This pro-growth mantra isn't just strategy, it's necessity. The Gingrich surge has been checked by a barrage of negative campaign ads from his rivals, reminding voters of the former speaker's ties to Freddie Mac, his checkered Washington tenure, his marital baggage. Lacking the money or organization to respond, the campaign has drifted down in the polls, raising the distinct possibility that Mr. Gingrich could end up in a lackluster fourth place.
Gingrich Is Making Romney Better
So the first third of the Republican presidential race is ending. The
first third is the introduction: "This is who I am, this is what I want
to do, this is why you want to choose me."
The campaign is announced, organized, and goes forward in key early states.
The second phase is the long slog through the primary states to the convention next August in Tampa, Fla. The third and final is the election proper, in the autumn of 2012.
The campaign is announced, organized, and goes forward in key early states.
The second phase is the long slog through the primary states to the convention next August in Tampa, Fla. The third and final is the election proper, in the autumn of 2012.
***
The first phase was clouded by an overlay of frustration and dissatisfaction: The best weren't in the game. Mitch Daniels, Paul Ryan, John Thune, Haley Barbour, none of them reporting for duty. But in the past few weeks another mood has begun to dig in: You fight with the army you have. You pick from the possible candidates. You make a choice and back him hard.Mexico’s Strengths Still Peak Through Gloom: Enrique Krauze
The news from Mexico, in recent
years, has most often been bad. For a while, it was largely
reports of corruption, electoral fraud and economic crisis.
These days, it’s all about crime and insecurity.
The country hasn’t been given sufficient credit for the good news it has generated since the 2000 elections broke the 71-year hegemony of a single party: the Institutional Revolutionary Party, better known as the PRI. Neither the international press nor we Mexicans have fully acknowledged what has been achieved or maintained. Still, Mexico’s dark image is valid, up to a point, but it’s only a fragment of the truth.
The country hasn’t been given sufficient credit for the good news it has generated since the 2000 elections broke the 71-year hegemony of a single party: the Institutional Revolutionary Party, better known as the PRI. Neither the international press nor we Mexicans have fully acknowledged what has been achieved or maintained. Still, Mexico’s dark image is valid, up to a point, but it’s only a fragment of the truth.
Victims’ Tears for Dictators Honor Their Shared Past: Junheng Li
Illustration by Jesse Lefkowitz
By
Junheng Li
I was born in China in 1976, just a
few months before the death of Mao Zedong. So when I saw footage
of thousands of North Koreans in tears after the death of Kim Jong Il, their leader, two thoughts hit me hard. One: They must
be brainwashed. And two: Were we Chinese that brainwashed under
Mao?
Curious, I called my mother in Shanghai. Both of my parents were survivors of Mao’s brutal Cultural Revolution. Like countless others, they were taken out of urban schools and sent to rural areas to be “re-educated,” weaned off bourgeois culture. And they were the lucky ones -- they survived a campaign that killed millions.
Curious, I called my mother in Shanghai. Both of my parents were survivors of Mao’s brutal Cultural Revolution. Like countless others, they were taken out of urban schools and sent to rural areas to be “re-educated,” weaned off bourgeois culture. And they were the lucky ones -- they survived a campaign that killed millions.
Spain to Cut Spending, Boost Taxes Q By Angeline Benoit
Spanish Prime Minister Mariano Rajoy
announced 14.9 billion euros ($19.3 billion) of deficit cuts,
with the government’s finances in worse shape than expected and
the budget shortfall exceeding European Union forecasts.
The deficit this year will reach 8 percent of gross domestic product, requiring tax increases of 6 billion euros and spending reductions of 8.9 billion euros, spokeswoman Soraya Saenz de Santamaria said at a press conference in Madrid. Spain will finish the year with a budget gap twice that forecast for Italy and more than four times Germany’s shortfall.
The deficit this year will reach 8 percent of gross domestic product, requiring tax increases of 6 billion euros and spending reductions of 8.9 billion euros, spokeswoman Soraya Saenz de Santamaria said at a press conference in Madrid. Spain will finish the year with a budget gap twice that forecast for Italy and more than four times Germany’s shortfall.
Growth in U.S. May Accelerate Even as Europe Shrinks Q By Bob Willis and Timothy R. Homan
Rising confidence, fewer firings and
gains in holiday sales show the U.S. economy is picking up,
defying a slowdown in Europe and much of the rest of the world.
The divergence will become even starker in 2012 as the world’s largest economy accelerates, the 17-member euro area sinks into a recession and growth in emerging markets cools, according to economists like Maury Harris of UBS Securities LLC and Barclays Capital Inc.’s Dean Maki.
The divergence will become even starker in 2012 as the world’s largest economy accelerates, the 17-member euro area sinks into a recession and growth in emerging markets cools, according to economists like Maury Harris of UBS Securities LLC and Barclays Capital Inc.’s Dean Maki.
Why Unemployment Is Worse Than You Think
The widely quoted unemployment rate misses an important factor: demographics.
The large demographic shift that has taken place over the last few decades—driven by the maturing of the baby boom generation—now places considerable downward pressure on the unemployment rate, which makes the current malaise look a bit better than it really is.
Why the Left Is Losing the Argument over the Financial Crisis
Fair-minded people are persuaded by facts, not invective.
It’s worth reading for what it says about the Left’s current situation. According to Nocera, we “almost single-handedly” have created a “myth that Fannie Mae and Freddie Mac caused the financial crisis.” Those who have fallen for this myth, according to Nocera, include congressional Republicans and the Wall Street Journal’s editorial page.
Headed for the Rocks in European Waters
A united Europe is impossible given cultural and economic mismatches.
Having had time to digest the latest round of euro rescue efforts, markets do not seem to be terribly optimistic. The euro is down, equities markets remain unsettled, and, after a brief reprieve, sovereign bond yields in troubled nations are elevated.
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