You are browsing the archive for 2014 September 11.

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Mises Alumni News: David Rapp

September 11, 2014 in Economics

By Ryan McMaken

Dr. David Rapp (Mises U, 2013) writes:

I received my Ph.D. from Saarland University in Saarbruecken, Germany in May 2014 (grade: summa cum laude) and right now I am a visiting professor at Grove City College, Grove City, PA at Dr. Herbener’s invitation. I will be staying at Grove City College for the fall semester, conducting research and teaching the course “Investment Theory and Business Valuation.”

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Source: MISES INSTITUTE

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Who Pockets the Gains from a Weak Euro?

September 11, 2014 in Economics

By Carmen Dorobăț

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New EU stimulus measures will begin next month with aggressive purchases of asset-backed securities and covered bonds, and will eventually increase the ECB balance sheet by approximately €1 trillion. Among their touted benefits—higher asset prices, increases in bank lending and employment, rivers of milk and honey—many expect an upswing in exports, as the depreciation of the euro will make them cheaper and more attractive to foreigners. In fact, because Eurozone monetary inflation lagged behind the Japan and the U.S. in recent years, it has—among other things—turned the exchange rate against European exporters. “Perhaps the main immediate benefit of the additional policy action is a weakening of the exchange rate,” claims the chief economist of Markit, Chris Williamson. “The lower exchange rate will undoubtedly provide a boost to exporters’ competitiveness.”

Mises dealt with the alleged stimulating effect of inflation on trade for the first time in 1907 in an essay titled “The Political-Economic Motives of the Austrian Currency Reform”. Mises explained that interest groups in Austria at the end of the 19th century pushed for currency reform so as to favor their commercial ventures. The depreciation of the Austrian florin which followed “functioned like a protective tariff against the import of foreign manufactured goods, and assisted the export of domestic products like an export premium” (Mises 2012 [1907], 13).

European interest groups are nowadays after the same advantages, and luckily for them, the ECB is ready to deliver. After the stimulus was announced, the euro fell below $1.3 for the first time in more than a year. The export premium will originate from the fact that the exchange rate is adjusting faster to the new purchasing power than the structure of domestic prices in the euro bloc. As the latter changes gradually, exporters (albeit not all of them) will be paid higher prices for their products while the prices of factors of production and the goods they buy have not yet risen. The monetary gain they’ll pocket is part and parcel of the redistribution of wealth that accompanies the revolution in prices.

Mises added detail to his analysis in 1912, in The Theory of Money and Credit:

Speculation on the foreign-exchange and security markets anticipates coming variations in the exchange-ratios between the different kinds of money at a time when the variations in the value of money have by no means completed their course through the community, perhaps when they have …read more

Source: MISES INSTITUTE

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Obama's Plan Has Nothing New or Strategic

September 11, 2014 in Economics

By Benjamin H. Friedman

Benjamin H. Friedman

President Barack Obama’s speech last night ended with paeans to the virtues of American global leadership. That sort of talk would be unexceptional but for the fact that it concluded a speech about U.S .efforts to stabilize Iraq, a nation whose current strife owes enough to past U.S. policies to suggest modesty about new ones.

The hubris was not confined to the president’s rhetoric. The policy he outlined puts great faith in the transformative powers of minor exertions of U.S. military power. The nine brutal years U.S. forces spent trying to reorder Iraq’s politics with ground forces, vast infusions of aid and military training apparently taught this administration not to avoid such projects but to try them on the cheap. In the name of counterterrorism, the president now proposes to manage civil wars in Iraq and Syria with bombs, smaller checks and new training for rebels and militias that we pretend are liberal.

Our leaders’ unwillingness to make hard choices and take bigger risks indicates that their rhetoric about the threat outstrips the reality.”

The White House billed the speech as a new strategy to defeat the Islamic State. But what the president outlined is neither new nor truly strategic. Besides the expected expansion of air attacks into Syria, the president announced no new polices. And the plan is likely to fail because it is not strategic: Its means are weakly connected to its stated ends.

The first element of the plan is continued use of U.S. air power to support Iraqi offensives against the Islamic State. While these efforts are likely to contain the Islamic State, defeating it is far more difficult. U.S. training and aid is supposed to remedy the Iraqi military’s disastrous recent performance. But the failure of past efforts to professionalize the Iraqi military should make us skeptical about succeeding at it now. It’s tough to build a competent multi-sect military on top of a corrupt state dominated by one sect. Kurdish Peshmerga forces are more proficient, but they are not likely to advance too far against the Islamic State. Doing so would upset Iraq’s other communities.

The president also plans increased aid for the “moderate” Syrian opposition, the weakest party in Syria’s three-sided civil war. That seems likely to prolong the war, and by tying up Syria’s military, to aid the Islamic State. We cannot sensibly remain a counter-revolutionary power on Iraq’s side …read more

Source: OP-EDS

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

September 11, 2014 in Economics

By Ryan McMaken

Territorial_control_of_the_ISIS.svg

John 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 …read more

Source: MISES INSTITUTE

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Does Janay Rice Have a Right to Conceal Public Acts?

September 11, 2014 in Economics

By Ryan McMaken

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 …read more

Source: MISES INSTITUTE

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Misesians on 9/11, Then and Now

September 11, 2014 in Economics

By Ryan McMaken

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:’

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Source: MISES INSTITUTE

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A New War Can't Fix What Ails Iraq

September 11, 2014 in Economics

By Justin Logan

Justin Logan

The grisly beheadings of our two countrymen, James Foley and Steven Sotloff, got Americans’ blood up, and we want to punish their murderers. This can and should be done without another Iraq War.

It’s grotesque that the foreign policy elite has seized on the outrage at the deaths of Foley and Sotloff to sell the public on another U.S. war whose success turns on remaking the region’s politics.

The administration’s strategy can’t work unless politics in Iraq and Syria change.”

If we should have learned anything from the Iraq War — and the Obama administration’s failed policies in Afghanistan and Libya — it’s that we can’t fix other countries’ political pathologies at an acceptable cost.

And make no mistake: The administration’s strategy can’t work unless politics in Iraq and Syria change.

Progress in Iraq used to hinge on Nouri al-Maliki changing Iraq’s politics. When he failed, we helped get rid of him and bring in Haider al-Abadi. Perhaps al-Abadi will have the extraordinary political skills that his several predecessors since our invasion in 2003 lacked. Perhaps Iraq’s politics are finally turning toward liberalism and unity. Perhaps.

The Syria policy seems equally dim. President Obama says U.S. policy is to destroy ISIS but in doing so we don’t want to help the Assad regime, whose rule in Syria it challenges. So Obama says he’ll do more to help moderate rebels. For their part, the Sotloff family says their son was sold to ISIS by a “moderate” group much like the ones the administration aims to help.

ISIS is a symptom of a number of problems: the regional conflict between the Gulf Arabs and Iran; the civil war in Syria; and Iraqi political disputes set loose by the 2003 regime change.

If a new U.S. war doesn’t cure those diseases, they will remain to cause similar symptoms in the future. As Chas Freeman, the former U.S. ambassador to Saudi Arabia, put it, “The contradictions and incoherence of our strategy really beggar the imagination.”

Our aim in response to the Foley and Sotloff killings should be simple: punishment. Several years on, when we look back on our latest Wilsonian experiment in the Middle East, perhaps even Barack Obama will see its folly.

Justin Logan is director of foreign policy studies at the Cato Institute.

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Source: OP-EDS

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No, We Shouldn’t Have Stayed in Iraq – and "History" is Not on our Side if We Go Back

September 11, 2014 in Economics

By Christopher A. Preble

Christopher A. Preble

Before Americans follow Barack Obama into another war in the Middle East — this time in two countries simultaneously — it would be a good idea to get a handle on the history of the last few U.S. wars there.

This history is, after all, relevant with respect to the current debate over what the United States should do to fight the Islamic State in Iraq and Syria (ISIS).

If one believes, for example, that nation building in Iraq could have worked, or was working in January 2009, when George W. Bush left office, then one can also believe that Barack Obama is the reason why it failed, and that Obama can succeed this time around, so long as he is truly committed to the mission.

We see this notion among some Republicans in Congress who seem to believe that the relevant history of the last Iraq war begins in January 2007, and ends in January 2009.

Before Americans follow Barack Obama into another war in the Middle East, it would be a good idea to get a handle on the history of the last few U.S. wars there.”

“We can argue over whatever about the Iraq war, but most of our guys believe Bush left in 2009 with the U.S. in position to win,” Representative Tom Cole (R- OK) told the New York Times. Barack Obama has been president for nearly six years. “At some point,” Cole continued, “it can’t be Bush and Cheney’s fault.”

According to Washington Post columnist Mark Thiessen, none of it is their fault. George W. Bush set Iraq on the path to peace and reconciliation. He warned that a failure to leave troops in Iraq for an indeterminate period of time would amount to “surrendering the future of Iraq to al-Qaeda.”

It would risk, Bush said, “mass killings on a horrific scale.” And, of course, leaving Iraq would increase “the probability that American troops would have to return at some later date to confront an enemy that is even more dangerous.”

But this particular history is flawed on several counts. First, it ignores the depths of the political dysfunction in Iraq precisely at the time when Bush was boasting of the success of the surge. As Gen. David Petraeus explained during congressional testimony in November 2007, “The fundamental source of the conflict in Iraq is competition among ethnic and sectarian committees for power and …read more

Source: OP-EDS

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Terrifying Senate Democrats Vote to Give Political Speech Less Protection than Pornography

September 11, 2014 in Economics

By Trevor Burrus

Trevor Burrus

This week, the Senate voted on and debated a proposed constitutional amendment that would give Congress and the states nearly unlimited power to regulate election spending. The 79-18 vote was only a cloture vote to advance the resolution to the floor, and the proposed amendment stands almost no chance of passing the high hurdle needed to become part of our Constitution–that is, a two-thirds vote from both houses of Congress and ratification by three-fourths (38) of the state legislatures.

Yet, even despite the resolution’s poor political prospects, there is one word to best describe it: Terrifying. Even though this resolution can be properly classified as a political stunt, and even though some Senators (including some Republicans) only voted for it just to score political points, it is terrifying that this proposed amendment can even score political points.

If passed, the amendment would repeal the most important parts of the First Amendment, those that protect our right to advocate for political change. If passed, the amendment would create a world where pornography, videos depicting small animals being crushed, profanity-laden jackets, and Phelps family funeral protests all receive more protection from government interference than even the smallest amount of political speech.

In the world championed by the terrifying Senate Democrats, individuals will have to seek permission from the government to criticize it.”

By giving Congress and state governments essentially unlimited power to prohibit or regulate anyone who is spending money trying to “influence elections,” the Senate stooped to a level of governmental malfeasance previously reserved for the former Soviet Union, North Korea, Cuba, and Venezuela. In fact, if Venezuelan president Nicolás Maduro passed this same law, Americans would properly see it as a thinly veiled attempt to squelch the political rights of Venezuelans and to entrench himself in power.

In an America, though, where the words “spend money to influence elections” are increasingly spoken in same the ominous tones used to describe the actions of thieves and murderers, those who want to genuinely protect political speech are becoming distressingly rare. Many Democrats have fully jettisoned their historic support for free speech in the name of “equality of voice”–with numerous exceptions to that supposed equality principle, of course, for Oprah, the New York Times, actors, established political parties, and incumbent politicians.

Or perhaps not. Under this amendment, Congress could feasibly ban an hour-long Oprah special that featured current candidates, or even ban an …read more

Source: OP-EDS

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13 Years On, Our Choice Is Between America and Fear

September 11, 2014 in Blogs

By Robin Koerner

Lights at WTC

The politics of our nation since 9/11 have been the politics of fear.

Because of fear that one of us is a terrorist, we’ve allowed our intelligence services to listen into our private conversations; because of fear of terrorists from abroad, we have killed innocent people in foreign nations (supposedly to protect ourselves here); because of fear that our planes will get blown up, we let government agents put their hands on our children’s crotches and look at our naked bodies, and because of fear that the economy will implode, we’ve given trillions of dollars to organizations that have brought us to that point.

None of it feels very brave or free. None of it feels very American.

Nations confident of their strength don’t seek fights. The most powerful nations win without firing a shot. Nations confident of their security and the ability of their agents to maintain it don’t compromise the dignity or legal rights of its citizens. Nations confident that the innovativeness and entrepreneurism of its people can provide prosperity don’t reward bad custodians of financial resources to “save the system.”

America has surely been a great nation. But with true greatness — true power — comes self-confidence. What has happened to the America that the world used to love, even if in some quarters, grudgingly? It was always American self-confidence, justified largely by the examples we set regarding the treatment of our people and, during our grander historical moments, other people, on which our leadership depended. We were respected and powerful to the extent that other nations wanted to be like us — to have our prosperity, our freedom and our openness.

Thirteen years after 9/11, who have we become and who do we appear to be?

Minimizing risk at reasonable cost is the action of a sensible man or nation. Trying to eliminate all risk at any cost — not only financial, but also of principle — is the action of a man or nation that has become obsessive, compulsive, scared, or all three.

A few years ago, a friend of mine returned from a tour in Iraq as a proud American soldier to be required at Seattle airport to remove his shoes and equipment and be screened in the full fashion. The treatment shocked him as it was his first encounter with it and gave the …read more

Source: ROBIN KOERNER BLOG