You are browsing the archive for 2014 September 14.

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Peter Thiel on Monopoly and Competition

September 14, 2014 in Economics

By Peter G. Klein

Entrepreneur and venture capitalist Peter Thiel has an interesting Wall Street Journal piece on innovation, firm growth, and market structure, misleadingly titled “Competition Is for Losers.” Thiel’s essay is ostensibly about the defense of “monopoly” — the large market shares achieved by successful firms — over “competition,” by which he means perfect competition, the neoclassical economist’s fantasy world in which tiny, identical firms exist in a kind of stasis, not doing anything and not earning any economic profits.

Actually, without meaning to, Thiel gives us a thorough and persuasive critique of mainstream monopoly theory and its bizarre, counterintuitive, and misleading concepts of “monopoly” and “competition.” The business behaviors Thiel praises — innovating, creating economic value, out-competing rivals, and increasing sales and profits — are thoroughly competitive, in the Austrian (and common-sense) notion of of competition. If Thiel had followed the Austrians in defining competition as the absence of legal restraints on entry and exit, he could framed his essay as an explanation of how innovation and entrepreneurship benefit society, rather than making it look like a critique of competition per se. A better title: “Perfect Competition Theory Is for Losers.”

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Source: MISES INSTITUTE

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Lawyer and Two Teachers—All Black—Say Staff at Exclusive NYC Hotel Accused Them of Being Hookers

September 14, 2014 in Blogs

By Terrell Jermaine Starr, AlteNet

Seems like being a professional black women in public equals solicitation

When Kantaki Washington and two of her friends were hanging out at The Standard Hotel in Manhattan's Meat Packing District several weeks ago, neither of them could imagine they'd be accused of soliciting prostitution.

On the morning of Aug. 28, Washington and her friends, Cydney Madlock and J Lyn Thomas say a member of the hotel's security team accused them of being hookers.

The women had just come down from Le Bain, a bar at the top of the hotel, and settled in the lobby when several men approached them and offered to purchase drinks. When they sat down at a restaurant inside of the hotel, an African-American man approached Washington and her friends and introduced himself. Moments later, Washinton says a security guard from the hotel whispered something into the man's ear and ushered him away.

“After the security guard ushers the brotha away, he comes over to me and my friends and says, 'Come on, ladies. You can buy a drink but you can't be soliciting,” Washinton told AlterNet in an interview. “We were like, 'Soliciting?' He said, 'Don't act stupid with me, ladies. You know what you're doing. Stop soliciting in here. We were like, 'Soliciting what?'” 

Shocked, she asked the security guard if he was accusing them of soliciting prostitution. “Don't act stupid with me, you know what you were doing,” Washington recalls the guard saying.

“Dude, I'm a lawyer and these women are educators,” she said in reply. “Why the hell would I be in here soliciting prostitution? Washington said he answered, “I don't know but that's what you're doing.”

She says she and her friends were the only black women in the area and believe they were racially profiled.

Outraged, Washinton demanded that the guard give her his name and the name of his manager. The guard gave her his first name only and directed her a desk inside of the hotel. When she and her friends approached the manager over their claim, Washington says they were met with indifference. She says the manager …read more

Source: ALTERNET

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Sweden Politically Deadlocked

September 14, 2014 in Economics

By Per Bylund

Updated: The poll stations in the Swedish general election closed a mere two three hours ago. With about 60% 90% of voting districts already counted, it looks like the voter turnout has increased – and that voters have caused quite a mess in the parliament. No likely constellation of parties will reach a majority of seats in parliament.

The parliament’s 349 MPs will be distributed proportionally to represent a total of eight parties. The center-right “alliance” four-party government under PM Reinfeldt (marked by * below) has undoubtedly lost the election with a total of 39% to a 44% minority constellation of Three leftist parties. And in the middle is the nationalist/racist party Sweden Democrats as the election’s winner and third largest party in the parliament. The radical feminist party “F!” (Feminist Initiative), it seems, will not make it past the 4% of the popular vote that is necessary to be represented.

To form government requires more pro votes than con votes; most decisions during the four-year period to next election require simple majority.

The results with about 90% counted (with difference to prior election result within parentheses) is as follows:

5.7 % (+0.1) Vänsterpartiet (radical left, formerly the communist party)

31.1 % (+0.4) Social democrats (progressives)

6.8 % (-0.5) Green party (environmentalists)

5.4 % (-1.7) People’s party (social liberal)*

6.2 % (-0.4) Center party (social liberal)*

23.2 % (-6.9) Moderates (conservative party)*

4.6 % (-1.0) Christian democrats*

13.0 % (+7.4) Sweden democrats

3.1 % (+2.7) Feminist initiative

0.8 % Other

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Source: MISES INSTITUTE

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We're Wrecking the Planet for the Next Millennia: Biggest Rally Over Climate Change in Human History Coming Up

September 14, 2014 in Blogs

By Eddie Bautista, La Tonya Crisp-Sauray and Bill McKibben, Tom Dispatch

We march because we know that climate change affects everyone, but its impacts are not equally felt.

To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com  here.

On Sunday, September 21st, a huge crowd will march through the middle of Manhattan.  It will almost certainly be the largest rally about climate change in human history, and one of the largest political protests in many years in New York. More than 1,000 groups are coordinating the march — environmental justice groups, faith groups, labor groups — which means there’s no one policy ask. Instead, it’s designed to serve as a loud and pointed reminder to our leaders, gathering that week at the United Nations to discuss global warming, that the next great movement of the planet’s citizens centers on our survival and their pathetic inaction.

As a few of the march’s organizers, though, we can give some sense of why we, at least, are marching, words we think represent many of those who will gather at Columbus Circle for the walk through midtown Manhattan.

We march because the world has left the Holocene behind: scientists tell us that we’ve already raised the planet’s temperature almost one degree Celsius, and are on track for four or five by century’s end. We march because Hurricane Sandy filled the New York City subway system with salt water, reminding us that even one of the most powerful cities in the world is already vulnerable to slowly rising ocean levels.

We march because we know that climate change affects everyone, but its impacts are not equally felt: those who have contributed the least to causing the crisis are hit hardest, here and around the world. Communities on the frontlines of global warming are already paying a heavy price, in some cases losing the very land on which they live. This isn’t just about polar bears any more.

But since polar bears can’t march, we march for them, too, and for the rest of creation now poised on the verge of what biologists say will …read more

Source: ALTERNET

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Noah Smith: Keynes Misunderstood, Maligned by Austrian Critics

September 14, 2014 in Economics

By Hunter Lewis

In a September 11 Bloomberg article, economist Noah Smith claims that Keynes wasn’t a “ ‘socialist’ “or even a “’progressive’.” He did not favor “a command economy.”

Yes he “ was in favor of some amount of wealth redistribution and government intervention into the economy.” But “Keynesian policies are fundamentally . . . about economic stability, . . . about smoothing out the fluctuations in the economy, reducing risk for everyone concerned.”

“Stabilization theory says that you can smooth out the wrinkles of the business cycle without messing with the deep structure of how the economy works. The expectation is that if the government does just that — just that one small, minor intervention — then recessions won’t be a big problem….” To accomplish this, among other things, the government will raise interest rates when the economy is too hot and lower them when it is too cool.

So who is misrepresenting Keynes? His critics or Smith?  In the first place, Keynes himself did not recommend raising interest rates to cool off an economy. He wrote that “ The remedy for the boom is not a higher rate of interest but a lower rate of interest! For that may enable the boom to last.” [General Theory p. 322]. He even recommended eventually bringing interest rates down to zero and keeping them there [General Theory, pges 220-21 and 336].

Nor are Keynesian attempts to stabilize the economy through interest rates a “small, minor intervention.” They represent a price control of one of the economy’s biggest prices, the cost of credit. Today they are also accompanied by many other managed prices—most notably in world currency markets, but also in large domestic markets such as healthcare.

A market economy depends above all on free prices. All the Keynesian price controls, manipulations, and nudges just lead to boom, bust, and economic destruction, the opposite of stabilization.

Smith states that Friedrich Hayek, Keynes’s most prominent critic in the 1930’s and 1940’s, began the misrepresentation of Keynesianism. But Hayek argued that “ the more we try to secure full security by interfering with the market system, the greater the insecurity becomes,” and Hayek was right. Wilhelm Ropke put it even more succinctly: “ The more stabilization, the less stability.”

Smith also describes Greg Mankiw, a leading contemporary Keynesian and author of one of the most widely used economic textbooks, as one of “the most prominent conservative economists writing in the popular media today.” Well, Mankiw is …read more

Source: MISES INSTITUTE

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Newsflash: Central Banks Elevate Asset Prices

September 14, 2014 in Economics

By Mark Thornton

The Bank of International Settlements has issued a warning that central bank monetary policy has elevated asset prices and reduced market volatility to abnormally low levels.

In its quarterly review, the BIS said financial market volatility spiked higher in August on the back of geopolitical concerns and worries over economic growth, but quickly returned to “exceptional lows” across most asset classes.

“By fostering risk-taking and the search for yield, accommodative monetary policies thus continued to contribute to an environment of elevated asset price valuations and exceptionally subdued volatility,” the BIS said.

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From the BIS website:

The mission of the Bank for International Settlements (BIS) is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.

In broad outline, the BIS pursues its mission by:

* promoting discussion and facilitating collaboration among central banks;
* supporting dialogue with other authorities that are responsible for promoting financial stability;
* conducting research on policy issues confronting central banks and financial supervisory authorities;
* acting as a prime counterparty for central banks in their financial transactions; and
* serving as an agent or trustee in connection with international financial operations.

The head office is in Basel, Switzerland and there are two representative offices: in the Hong Kong Special Administrative Region of the People’s Republic of China and in Mexico City.

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Source: MISES INSTITUTE