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Jim Grant on the Gold Price

April 16, 2013 in Economics

By Mark Thornton

Here is a video interview of Jim Grant discussing the steep drop in the gold price. He says it was the result of the “structure” of the market. I interpret “structure” to mean who is invested in gold and how are those investments financed, along with “technical” factors. He compares it to the 1987 stock market crash and the 1994 bond market crash. Both were dramatic, but did not leave a lasting impact on the future course of those markets.

Grant says that gold is an investment in our destiny.

…read more
Source: MISES INSTITUTE

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No Guarantee More Gun Laws Will Prevent Next Newtown Tragedy

April 16, 2013 in Economics

By Gene Healy

Gene Healy

How do you solve a problem like mass shootings? The answer is one that, understandably, few people want to hear: You probably can’t.

That’s the logical, if grim, conclusion to be drawn from a new Congressional Research Service Report on “Public Mass Shootings in the United States.” CRS strives to be studiously neutral, so they’re not going to put it quite like that.

Instead, the report’s authors say things like “the utility of widely employed preventive measures in these areas [law enforcement and public health] to fight public mass shootings is far from clear.”

As the Daily Beast’s Megan McCardle observed in December, “it is beyond horrible to suggest that even a small number of attacks are largely unavoidable. I don’t like saying it. Unfortunately, I think it’s true.” The tragic fact is, there’s not a great deal that public policy can do to avert spree shootings.

Still, it’s worth asking, as CRS does, “what are the parameters of this threat?” The report defines “public mass shootings” as incidents involving four or more deaths and “gunmen who select victims somewhat indiscriminately,” excluding drug trafficking, gang activity and terrorism.

How do you solve a problem like mass shootings? The answer is one that, understandably, few people want to hear: You probably can’t.”

By that measure, there have been 78 such incidents in the U.S. since 1983, claiming a total of 547 lives. Horrifying as that toll is, it represents a substantially lower risk than lightning strikes, which have killed 54 Americans a year on average over the last 30 years.

The fact that spree shootings occur so rarely makes the problem extraordinarily difficult to solve, and the solutions aren’t costless.

CRS notes the Obama administration’s support for using the Community Oriented Policing Services program to put more armed officers in schools. Still, they observe, “schools continue to be among the safest places for children,” and only eight of the 78 mass shootings they’ve identified over the last three decades occurred in primary or secondary schools.

Moreover, “there are those who question the impact of such officers on the learning environment.” Indeed, the New York Times recently reported the main effect of the policy so far has been “a surge in arrests or misdemeanor charges for essentially nonviolent behavior,” feeding the “school-to-prison pipeline.”

CRS isn’t dramatically more optimistic about the likelihood that enhanced mental health services in the schools will avert school shootings. Only four …read more
Source: OP-EDS

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From Stagnation to Prosperity to Stagnation

April 16, 2013 in Economics

By Richard W. Rahn

Richard W. Rahn

The great tragedy of our time is that so few know economic history; thus we have been doomed to repeat the mistakes of a generation ago, and millions suffer.

By the late 1970s, many viewed Britain and the United States as in terminal decline. The United Kingdom had been rotting for decades. The empire had been lost, and Britain began to look more and more like a Third World country as incomes stagnated and inflation soared. Then, along came a remarkable lady, Margaret Thatcher, who said “no” to the status quo and through incredible toughness, ability and just plain smarts turned around Britain.

On this side of the Atlantic, the United States was also in despair. Real incomes had stagnated, inflation seemed to be out of control, and the establishment political class had little idea of what to do. President Carter referred to the country as being in a “malaise.” Out of the American West, a savior, Ronald Reagan, rode into Washington and turned around the nation.

Long before taking office, Thatcher and Reagan studied economics seriously. In fact, Reagan is the only U.S. president to have had a degree in economics. Thatcher was impressed with the writings of F.A. Hayek, arguably the best economist of the 20th century. She spent time absorbing lessons and insights from him, in person, before and after she was elected. Reagan, also a fan of Hayek and of Milton Friedman, had the remarkable ability (because his thought process was so logical and clear) to explain economics so that anyone could understand the basic principles and concepts. Reagan was advised by Friedman, and many of Friedman’s associates and students had important roles in the Reagan administration.

The success of the Reagan-Thatcher era has been quickly erased.”

Reagan and Thatcher understood that high tax rates, excessive government, undisciplined government regulation and inflation were the curses that were killing the economies of the United Kingdom and the United States, and to reverse course would take at least a couple of years and a degree of pain. They knew that their political opponents and many members of the press would portray them as heartless for applying the necessary medicine. Fortunately, both had the fortitude to do what had to be done and it worked, as can be seen in the accompanying chart.

Thatcher, British prime minster from 1979 to 1990, and Reagan, U.S. president from 1981 …read more
Source: OP-EDS