You are browsing the archive for 2013 September 06.

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Excerpt from Spitznagel’s Dao of Capital

September 6, 2013 in Economics

By Peter G. Klein

Institutional Investor is running an excerpt from Mark Spitznagel’s excellent book The Dao of Capital: Austrian Investing in a Distorted World (Wiley, 2013). Ron Paul wrote the foreword, and I provided this dust-jacked blurb:

Mark Spitznagel has done a remarkable job summarizing, synthesizing, and extending the great Austrian tradition, and weaving it into a wonderful set of practical lessons. What’s more, he is a great writer and storyteller in the tradition of Bastiat, Hazlitt, and Rothbard, bringing subtle and sometimes complex ideas to life with memorable examples and sparkling prose. Highly recommended!

…read more

Source: MISES INSTITUTE

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Investment, Employment,and the Sluggish Economy

September 6, 2013 in Economics

By John P. Cochran

While Robert Higgs no longer edits The Independent Review, he continues his unique commentary in the “Etceteras.” The newest issue is no exception and his “The Sluggish Recovery of Real Net Domestic Private Business Investment”  should not be missed by anyone wishing to make senses of the Bush-Obama-Fed Great Stagnation (nor should last month’s “Real Gross Domestic Private Product, 2000–2012 be missed).

The abstract:

Five years after its bust and partial recovery, real net private business investment in 2012 remained 41 percent below its previous peak. This weakness plays a central role in the slow recovery in output and even slower recovery in employment.

The conclusion (footnote omitted):

The current situation is not simply an artifact of wounded banks’ reluctance to make new loans; many businesses are in a position to invest in long-term projects by using low-cost internal financing, but they are not doing so. Something else must be invoked to account for the bloodlessness of investors and entrepreneurs during recent years. I have repeatedly suggested that regime uncertainty deserves serious consideration in our attempts to understand the economy’s present sluggishness. Nothing in the foregoing survey of real net private domestic business investment leads me to abandon this view of the matter at this time.

Higgs adds in a footnote:

Much recent commentary and evidence on regime uncertainty, posted by me and others, appears at The Beacon, the Independent Institute’s group blog; available at

http://blog.independent.org/?s=%22regime+uncertainty%22&submit=go.

Higgs reminds us the difficulty selecting data to help us make sense of economic fluctuations. He argues:

Making sense of economic fluctuations is a daunting task. The economy comprises a gigantic set of interrelated assets, inputs, processes, transactions, and outputs, and its dimensions can be and have been measured in countless ways. If we are to speak sensibly about the economy as a whole—recognizing that almost anything we say about the whole may not apply to various subsets of it—we must carefully choose the variables that hold the most promise for helping us to understand its broad movements.

Those who have carefully studied capital structure (See Skousen’s Structure of Production or Peter Lewin’s excellent Capital in Disequilibrium)   arguments know that the Keynesian compatible national income and products are very inadequate as the data tends to greatly understate the amount of current resource use that is actually future oriented – geared to future not current consumption. Mark Skousen provides some suggestive analysis with his discussion of Gross …read more

Source: MISES INSTITUTE

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Washington Times Op-Ed: How do you ask a man to be the first man to die for a mistake?

September 6, 2013 in Politics & Elections

In 1971, Navy Lt. John F. Kerry asked the Senate Foreign Relations Committee, ‘How do you ask a man to be the last man to die for a mistake?’
How do you ask a man to be the first man to die for a mistake?

This week, Secretary of State John F. Kerry came before the Senate Foreign Relations Committee to make his case for war with Syria – a war that a majority of Americans don’t want, the administration still can’t clearly justify and for which Mr. Kerry himself made a very poor case.

A war that Mr. Kerry even refuses to call a war – at least not in the ‘classic sense,’ he assures us.

The American people certainly see this as a potential new war, and the country is war-weary. After well over a decade in Iraq and Afghanistan, they are not eager to commit to another questionable intervention. Americans also know that whatever assurances this administration pretends it can give – that there will not be boots on the ground, that this will not be a protracted engagement – are all negotiable once the war actually begins.
The Washington Examiner’s Tim Carney writes: ‘Some members of Congress say they’ll support a limited strike on Syria. But this is a fantasy. It relies on limiting two things that naturally defy limit: war and presidential power.’

Mr. Carney continues: ‘War cannot be tamed. War might turn out according to plan (for everyone who didn’t get killed or maimed), but that’s largely a matter of chance. Men cannot control war – not even with the greatest military ever; not even with chants of ‘Yes, we can’; not even with a Nobel Peace Prize.’

To the extent that Mr. Kerry made a case at all – along with the chairman of the Joint Chiefs of Staff, Gen. Martin Dempsey, and Secretary of Defense Chuck Hagel – the secretary was not very convincing. Even as the committee predictably approved authorization of the use of military force, the administration still failed to demonstrate any clear national security connection the United States has in Syria. The supposed justification for intervention to stop the use of chemical weapons still does not tell us how military action would actually deter their use. We’re still not absolutely sure about the origins of their use.

What we can be fairly sure of is that we will be helping rebel groups in Syria who are affiliated …read more

Source: RAND PAUL

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Mises Daily: ‘Big Business, War, and Rothbard’s Class Analysis’

September 6, 2013 in Economics

By Mises Updates

halli

Justin Raimondo, writing about Rothbard’s book on big business, wall street and war, notes:

One of Rothbard’s many great contributions to the cause of liberty was to restore the original theory, which pitted the people against the State. In the Rothbardian theory of class struggle, the government, including its clients and enforcers, exploits and enslaves the productive classes through taxation, regulation, and perpetual war. Government is an incubus, a parasite, incapable of producing anything in its own right, and instead feeds off the vital energies and productive ability of the producers.

This is the first step of a fully-developed libertarian class analysis. Unfortunately, this is where the thought processes of all too many alleged libertarians come to a grinding halt. It is enough, for them, to know the State is the Enemy, as if it were an irreducible primary.

As William Pitt put it in 1770, “There is something behind the throne greater than the king himself.”

…read more

Source: MISES INSTITUTE

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Marijuana, Sex and Amsterdam

September 6, 2013 in Economics

By Jeffrey A. Miron

Jeffrey A. Miron

For the past twenty years, I have researched the economics of drug legalization versus drug prohibition. Based on this work and much other evidence, I have come to regard legalization as a policy no-brainer. Virtually all the effects would be positive, with minimal risks of significant negatives.

An important piece of that research has been examination of drug policy in the Netherlands, where marijuana is virtually, although not quite technically, legal. Until recently, however, I had never visited that country.

That changed last month when my wife, college-age offspring, and I spent a week in Amsterdam. The trip was not an excuse to smoke marijuana in the city’s famous coffee shops; despite my pro-legalization position, I do not consume illegal drugs (dry martinis are another story).

Prohibition, not drug use, is the main reason for the association between violence and drugs, prostitution, gambling, or any banned good.”

Instead, we chose Amsterdam because it is an interesting city we hadn’t visited (and because we had frequent flier miles for non-stop flights). We visited the standard tourist destinations such as the Van Gogh Museum and the Anne Frank House, enjoyed rijsttafel (Dutch-Indonesian smorgasbord) and Dutch beer, and avoided being run over (just barely) by the 600,000 bicycles in Amsterdam.

I also visited the famed Red-Light District, which hosts numerous marijuana-selling coffee shops and legal prostitution (with my wife by side; draw your own conclusions). Legalization advocates point to Amsterdam as evidence that legalization works, at least for marijuana. Legalization critics, such as former White House Drug Czar Gil Kerlikowske, believe instead that Dutch policy is flawed, generating crime and nuisance effects. Only first-hand observation could give me a clear view of which description is more accurate.

Beauty is often in the eye of the beholder, so die-hard prohibitionists might be unconvinced by my observations until they visit Amsterdam for themselves.

To my eye, however, the Red Light District could not have felt safer or more normal. Yes, marijuana was widely available. And yes, sexual services of all manner were openly for sale.

But nothing about the District felt unsafe, or suggested elevated crime or violence; I have felt less safe in many American and European cities. The area is full of young people, including many tourists, having fun or in search of it. Some were undoubtedly under the influence of marijuana or alcohol, or taking other risks. None of this “risk-taking,” …read more

Source: OP-EDS

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New From Mises Academy: History of Anarchist Thought

September 6, 2013 in Economics

By Mises Updates

proudhon-255x300

This course will cover the political philosophies of six great anarchist thinkers: Boetie, Molinari, Spooner, Proudhon, Tucker, and Rothbard.

Join David Gordon for a six-week course with online lectures with Dr. Gordon Tuesdays at 5:30 pm Eastern Time.

Lectures will be recorded and archived for later viewing for enrolled students.

All readings will be free and online. A fully hyper-linked syllabus with readings for each weekly topic will be available for all students.

Register now.

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Source: MISES INSTITUTE