You are browsing the archive for 2014 July 10.

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Your Problem With Guns or Gays Is Not Political

July 10, 2014 in Blogs

By Robin Koerner

Last month I did something I’d done only once before: I went to a range and shot some guns. Lots of guns. All shapes, ages and sizes.

This is a very strange thing to do for a guy born British. Guns feature nowhere in British culture.

Accordingly, I was unsurprised by the reaction of my mother when I called home and told her that I’d had a great time learning about firearms and discovering I wasn’t a bad shot, even with a World War II Enfield. “That’s the last thing I’d ever imagine you’d enjoy doing,” she said to me. She wasn’t being judgmental: It was an expression of genuine surprise.

“That’s because you just can’t imagine why nice or normal people would enjoy guns,” I replied. “Because you don’t know any. No Brits know any.”

Mom thoughtfully agreed.

Many decent people who have no interest in guns simply can’t imagine what it must be like to be someone who is passionate about something whose primary purpose is to kill people. Although the gun debate is waged using words, logic and fact (by both sides, to different ends, of course), the arguments constructed using these three tools are not what brings people to their pro- or anti-gun position. Rather, most people are emotionally or intuitively committed to a position first and deploy these tools retroactively in defense of their position. Despite what we like to think, we form most if not all of our political views this way. Studies show, time and time again, that David Hume was right when he claimed:

[A]s reasoning is not the source, whence either disputant derives his tenets; it is in vain to expect that any logic, which speaks not to the affections, will ever engage him to embrace sounder principles.

What most anti-gun people are really feeling (rather than thinking) is that there has to be something strange about you if you like guns. I mean, why would you get turned on by something whose primary purpose is to kill people? If you do, you can’t be like me. You are sufficiently different that I am suspicious of your worldview, or your motives, or both. You are culturally “other.”

Productive engagement, and the pervasive acceptance of individual rights, involves bridging such …read more

Source: ROBIN KOERNER BLOG

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Fiat Money: ‘A Large-Scale Fraud System’

July 10, 2014 in Economics

By Ryan McMaken

Euro_coins_and_banknotes

The Center for Financial Studies in Frankfurt reports on a recent talk given by Thorsten Polleit:  

Thorsten Polleit on the “planned chaos” of money

What are the reasons for economic booms and busts and which reforms are necessary to create an economically viable monetary order? On 2 April, Thorsten Polleit addressed these questions in his lecture “Boom & Bust, or: Planned Chaos” referring to the Austrian school of economics. Polleit is Chief Economist of Degussa Goldhandel, President of the Ludwig von Mises Institut Deutschland and Honorary Professor at the Frankfurt School of Finance & Management.

Polleit identified the state-controlled fiat money system as a main cause of the international financial and economic crisis. This system, he said, is based on the ability of banks to create money literally out of nothing. It is, in principle, a “large-scale fraud system” because today’s money is “intrinsically worthless and not redeemable”. This has damaging consequences for the overall economic development.

Circulation credit reason for economic fluctuations

To prove this fundamental critique, Polleit referred to the theoretical principles of the Austrian School of Economics, in particular to Ludwig von Mises. According to Mises, the circulation credit is the cause of economic fluctuations. Circulation credit means that banks lend money, and thereby expand money supply, without backing them by real savings (or reduction of consumption). This circulation credit is creation of money “ex nihilo”. Booms as well as busts are damaging because they slow down long-term investments with the consequence that resources in fluctuating economies are lacking. According to Mises, the problem is not low consumption but low savings. This means that the countercyclical policy in the manner of Keynes is based on a wrong diagnosis. This policy prevents an early market-driven correction with the result of an even bigger bust.

Fiat money system creates failures

Polleit explained, on the basis of the interest theory of Mises, that the market interest rate in a fiat money system was chronically below the natural interest rate. The consequence of adherence to such a system with its too low interest rates is that economic and political mistakes during the bust phase are not completely corrected – and, thus, new failures will arise. One current example for the failure of the low interest rate policy in the industrial countries is the flow of foreign capital into the emerging markets with all its harming effects. Especially since the US Federal Reserve has announced to reduce …read more

Source: MISES INSTITUTE

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Sen. Rand Paul Appears on CNN's New Day to Discuss the REDEEM Act – July 10, 2014

July 10, 2014 in Politics & Elections

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Source: RAND PAUL

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The True Purpose of “Competition” Policy

July 10, 2014 in Economics

By Peter G. Klein

Ad_apple_1984

“Competition policy” is one of those great Orwellian terms that means the opposite of what it seems to mean. In most countries, antitrust policy is designed not to enhance competition, but to stifle it, by protecting privileged incumbents from upstarts or from their established rivals. A great example of the latter comes from today’s headlines: “Apple Invites FTC To Probe Google.” Having recently settled a case brought by the FTC about in-app purchases on iOS, Apple is now urging the FTC to investigate Google’s policies on in-app purchases on Android. All in the name of “leveling the playing field,” of course. In the tech sector in particular, many of the most important antitrust and regulatory actions against leading firms are initiated by rivals, using whatever means necessary to bash competing firms.

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Source: MISES INSTITUTE

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Ron Paul Was Dead Right about the Export-Import “Bank”

July 10, 2014 in Economics

By Jeff Deist

B737

Just as certain conservatives have attempted to latch on to Ron Paul’s anti-Fed movement (purely for populist political gain), some also recently discovered that the non-bank known as the Export-Import Bank represents (gasp) a form of corporate welfare!

Who knew that Boeing needed a little help from taxpayers like you to sell those beautiful new 737-800s (and they are beautiful) to EgyptAir, for instance? According to the GAO, the Ex-Im Bank finances or guarantees financing for about 25% of Boeing’s sales of wide-body aircraft.

Here’s Dr. Ron Paul arguing against Export-Import Bank reauthorization back in 2002:

In conclusion, Mr. Chairman, Eximbank distorts the market by allowing government bureaucrats to make economic decisions in place of individual consumers. Eximbank also violates basic principles of morality, by forcing working Americans to subsidize the trade of wealthy companies that could easily afford to subsidize their own trade, as well as subsidizing brutal governments like Red China and the Sudan. Eximbank also violates the limitations on congressional power to take the property of individual citizens and use it to benefit powerful special interests. It is for these reasons that I urge my colleagues to reject H.R. 2871, the Export-Import Bank Reauthorization Act.

Read the entire statement (which is excellent) here.

…read more

Source: MISES INSTITUTE

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Why Piketty's Wealth Data Are Worthless

July 10, 2014 in Economics

By Alan Reynolds

Alan Reynolds

No book on economics in recent times has received such a glowing initial reception as Thomas Piketty’s “Capital in the Twenty-First Century.” He remains a hero on the left, but the honeymoon may be drawing to a sour close as evidence mounts that his numbers don’t add up.

Mr. Piketty’s headline claim is that capitalism must result in wealth becoming increasingly concentrated in fewer hands to a “potentially terrifying” degree, on the grounds that the rate of return to capital exceeds the rate of economic growth. Is there any empirical evidence to back up this sweeping assertion? The data in his book—purporting to show a growing inequality of wealth in France, the U.K., Sweden and particularly the United States—have been challenged. And that’s where the story gets interesting.

Mr. Piketty’s premonition of soaring U.S. wealth shares for the top 1% finds no credible support in his book or elsewhere.”

In late May, Financial Times economics editor Chris Giles published anessay that found numerous errors in Mr. Piketty’s data. Mr. Piketty’s online “Response to FT” was mostly about Europe, where the errors Mr. Giles caught seem minor. But what about the U.S.?

Mr. Piketty makes a startling statement: The data in his book should now be disregarded in favor of a March 2014 Power Point presentation, available online, by Mr. Piketty’s protégé, Gabriel Zucman (at the London School of Economics) and his frequent co-author Emmanuel Saez (of the University of California, Berkeley). The Zucman-Saez estimates, Mr. Piketty says, are “much more systematic” and “more reliable” than the estimates in his book and therefore “should be used as reference series for wealth inequality in the United States… (rather than the series reported in my book).”

Zucman-Saez concludes that there was a “large increase in the top 0.1% wealth share” since the 1986 Tax Reform, but “no increase below the top 0.1%.” In other words, all of the increase in the wealth share of the top 1% is attributed to the top one-tenth of 1%—those with estimated wealth above $20 million. This is quite different from the graph in Mr. Piketty’s book, which showed the wealth share of the top 1% (which begins at about $8 million, according to the Federal Reserve’s Survey of Consumer Finances) in the U.S. falling from 31.4% in 1960 to 28.2% in 1970, then rising to about 33% since 1990.

In any event, the Zucman-Saez data …read more

Source: OP-EDS

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Jean-Baptiste Say: An Underrated Revolutionary

July 10, 2014 in Economics

By Ryan McMaken

6802

Mises Daily Thursday by Carmen Dorobăț

Jean-Baptiste Say was no mere French popularizer of the ideas of Adam Smith. As a forerunner of the Austrian School and a father of laissez-faire in France, Say’s insights continue to challenge interventionist economists to this day. Everl Schoorl’s new biography sheds new light on Say’s life and works.

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Source: MISES INSTITUTE