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Some Recently Translated Mises Daily Articles from South America

September 23, 2014 in Economics

By Ryan McMaken

Our friends at other Mises Institutes around the globe seem to be really churning out the new translations these days. Here are several new ones:

Portuguese:

Cinco lições sobre o referendo escocês” translated from “Five Lessons Learned from the Scottish Referendum” by Ryan McMaken.

A secessão de um país depende do tamanho do seu território?” translated from  ”Is Scotland Big Enough to Go it Alone?” by Peter St. Onge.

O que causou a grande fome da Irlanda?” translated from “What Caused the Irish Potato Famine” by Mark Thornton.

Spanish:

Andy Duncan explica la farsa de la independencia para el UKIP y Escocia” translated from “Andy Duncan Explains The Charade of Independence for UKIP and Scotland

“Cómo las organizaciones sin ánimo de lucro mejoran las libertades y los mercados” translated from “How Non-Profits Enhance Freedom and Markets” by Karen De Coster.

Una visión internacional de la prohibición de las drogas: Una entrevista con Mark Thornton” translated from “An International View of Drug Prohibition: An Interview with Mark Thornton.”

La ética del emprendimiento y el beneficio” translated from “The Ethics of Entrepreneurship and Profit” by Hans-Hermann Hoppe.

La economía de la secesión escocesa” translated from “The Economics of Scottish Secession” by Ryan McMaken.

Las sanciones de EEUU a Rusia pueden hundir el dólar” translated from “US Sanctions on Russia May Sink the Dollar” by Ron Paul.

Los costes del salario mínimo que no se ven” translated from “The Unseen Costs of the Minimum Wage” by Josh Grossman.

¿Es este el momento de los libertarios?” translated from “Is This the Libertarian Moment?“ by Lew Rockwell.

Los guerreros de la droga afirman que Colorado va a la hierba” translated from “Drug Warriors Claim Colorado Going to Pot” by Mark Thornton.

¿Es Escocia lo suficientemente grande como para ir sola?” translated from  ”Is Scotland Big Enough to Go …read more

Source: MISES INSTITUTE

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The First Carl Menger Prize Awarded!

September 23, 2014 in Economics

By Joseph Salerno

The Verein für Socialpolitik is currently the largest association of German-speaking economists in the world.  It was founded in 1873 by economists of the German historical school and was chaired for many years by their leader Gustav Schmoller, who was a bitter opponent of Carl Menger  and the nascent Austrian school.  Well times have certainly changed. At its latest meeting a few weeks ago, the Verein awarded its first Carl-Menger-Prize to Hélène Rey, Professor of Economics in the London Business School.  The newly established Menger Prize is co-sponsored by the German, Austrian, and Swiss central banks and is awarded every two years to an economist no older than 45 “in recognition of excellent research into monetary macroeconomics, monetary policy and foreign exchange policy.”

In one of her more influential papers, Professor  Rey advocates stricter macroprudential regulations, tighter leverage ratios and, in certain cases, capital controls.  She does however, recognize a powerful global financial cycle in capital flows, credit creation, and assets prices, although she seems to connect this with fluctuations in  uncertainty and risk aversion rather than central bank monetary policies. Despite some reservations about her scientific analysis and policy advice,  congratulations are in order to Professor Rey on her award.   Contemporary Austrians also owe a debt of gratitude to the Verein für Socialpolitik for so generously drawing attention to Menger’s legacy by naming a scientific prize in his honor.

…read more

Source: MISES INSTITUTE

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Summer’s Over

September 23, 2014 in Economics

By Ryan McMaken

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Summer’s over at the Mises Institute, but we had lots of great graduate and undergraduate students here this year for Mises University, Rothbard Graduate Seminar, and the Summer Fellows program. It’s not too early to think about which 2015 programs you’ll apply for.

At Mises U 2014. Credit: Matt Battaglioli

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Source: MISES INSTITUTE

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White House: No Estimate on Costs of War on ISIS

September 23, 2014 in Economics

By Ryan McMaken

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Jason Ditz writes at Antiwar.com:

The Obama Administration is seeking to avoid any discussion of the massive costs of the new war on ISIS, with the White House pointedly refusing to provide any estimates on what the war has cost so far, or what it will cost in the future.

An unbudgeted war, the administration has so-far been paying for the airstrikes out of the Overseas Contingency Operations budget. That’s an $85 billion pool to draw from, but could end up being a drop in the bucket.

The United States, deeply in debt and relying on the central bank keep the fiat money flowing, will go even more deeply into debt to fight an open-ended war with no end in sight. The latest campaign, begun with no consultation of Congress, no law passed, no declaration of war, and no debate, will be waged at the discretion of one man, and of course, at the discretion of the military contractors and other crony firms who will make billions off the the extension of this war that’s been raging for 13 years at the cost of trillions. Meanwhile the taxpayers and holders of US dollars will continue to pay the price in exchange for nothing more than assurances from the regime that the world is being made “safe.”

It’s a fiat war paid for by fiat money. This time around, it will surely be an even more glorious and economical victory than the ones achieved in Iraq and Afghanistan since 2001.

…read more

Source: MISES INSTITUTE

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Time Preference and Long-Term US Interest Rates

September 23, 2014 in Economics

By Ryan McMaken

Time for action. Stopwatch on white background. Isolated 3D imag

Mises Daily Tuesday by Frank Shostak:

Long-term interest rates are going down, but many Fed observers, relying on expectations theory, wrongly think they should be going up. If we understand Mises and time preference, however, we can see the true trend much more clearly.

…read more

Source: MISES INSTITUTE

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UN Climate Summit: The Dirty Little Secret about Global Warming Obama Doesn't Want You to Know

September 23, 2014 in Economics

By Paul C. "Chip" Knappenberger

Paul C. “Chip” Knappenberger

President Obama will speak Tuesday, as world leaders assemble at the United Nations in New York for “Climate Summit 2014,” “to galvanize and catalyze climate action.” Environmentalists have taken note, organizing “the largest climate march in history,” to pressure governments to regulate “a world safe from the ravages of climate change.”

The message is clear: Pernicious global warming is upon us, and the government must act.

Bolstering this barrage of alarmism is last week’s finding from the federal government’s National Oceanographic and Atmospheric Administration (NOAA) that the global average surface temperature for August 2014 was the highest ever recorded for the month.

But the anomalous warmth in August still fell short of the all-time record for all months. That record was set nearly 200 months ago in February 1998. And that’s the real news. In this era of human-caused global warming, what is taking so long to set a new global temperature record?

Global warming is not proceeding as planned. The climate appears less sensitive to our emissions of greenhouse gases than expected. The urgency to grant the government the authority to limit energy choice is not justified.

During the 1980s and 1990s, new all-time record-high anomalies were occurring about every 3-4 years. But then, we hit the “hiatus.” The rise in the Earth’s average surface temperature basically stopped, “global warming” morphed into “climate change,” and it has been 16.5 years since the last all-time all-month record monthly temperature anomaly was set.

Just-published research from University of Guelph’s Ross McKitrick pegs the length of the hiatus, or “pause”—the period of no statistically significant rise in the earth’s average temperature—at about 19 years. Looking back even further, the U.N.’s Intergovernmental Panel on Climate Change (IPCC) shows that since the mid-20th century, observed global warming has been less than expected.

In short, all those computerized climate models that predicted large, accelerating, and generally uninterrupted warming were wrong.”

In short, all those computerized climate models that predicted large, accelerating, and generally uninterrupted warming were wrong. And it has the believers in those models scratching their heads.

Global warming is not proceeding as planned. The climate appears less sensitive to our emissions of greenhouse gases than expected. The urgency to grant the government the authority to limit energy choice is not justified.

That’s the real news.

Nevertheless, the scaremongers doggedly claim the world is still on course for a climate catastrophe of our own making. They …read more

Source: OP-EDS

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Don't Constrain Energy Growth

September 23, 2014 in Economics

By Paul C. "Chip" Knappenberger

Paul C. “Chip” Knappenberger

At the U.N. climate summit, President Obama made the case that all nations of the world should follow the U.S. lead and establish concrete and ambitious plans aimed at reducing emissions of greenhouse gases to ensure a more climate-friendly future.

While this sounds like a noble cause, people around the world desperately want and need a lot of other “-friendly” things that aren’t hemmed in by plans like these.

Whatever changes in the climate that are to come, humanity will be better prepared and more resilient if we are healthier, wealthier and wiser.”

In Africa, India and other developing places, 1.2 billion people live without access to electricity, and many more live without an adequate supply. They want a more energy-friendly future with “luxuries” such as light bulbs and clean cooking facilities, not to mention improved sanitation. Energy-starved nations are not well-positioned to take advantage of economic opportunities, better living standards and improved human welfare.

With today’s technologies, greenhouse gas emissions are closely tied to energy production, so the president’s call for lowering emissions is akin to a call for constraining energy expansion in these nations. Such an outcome would have large-scale negative impacts, not only to those directly affected but to the world as a whole.

In the U.S., where our energy wants and needs are fully met, we have the “luxury” to worry about how our energy is generated and the potential environmental consequences. But even here, dealing with climate change consistently ranks low in priority in opinion polls. Topping the list are desires for actions that are job-friendly, economy-friendly and national security-friendly.

The president’s touted “successes” in restricting greenhouse gas emissions have come through Environmental Protection Agency regulations and executive orders, actions that have bypassed our representatives in Congress. This shows he is largely acting on his desires, rather than those of Americans at large.

Overall, the world needs more energy, not less. Whatever changes in the climate that are to come, humanity will be better prepared and more resilient if we are healthier, wealthier and wiser. Restricting our ability to progress in these areas is not a good solution.

Paul C. “Chip” Knappenberger is assistant director of the Center for the Study of Science at the Cato Institute.

…read more

Source: OP-EDS

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The War against ISIS: Moving Beyond Convenient Myths

September 23, 2014 in Economics

By Ted Galen Carpenter

Ted Galen Carpenter

The new US-led war against the Islamic State in Iraq and Syria (ISIS) is packaged as part of the war against barbaric terrorism. British Prime Minister David Cameron epitomized that mindset when he described ISIS fighters as “monsters.” ISIS’s behavior undoubtedly lends credibility to that description. Especially the graphic videos showing the beheadings of two American journalists and a British humanitarian aid worker have understandably led to revulsion throughout the West and galvanized a determination to retaliate. At times, ISIS members behave like typecast villains out of a bad Hollywood movie, validating the narrative of pro-war advocates in the United States and other countries.

But if Washington and its Western allies succumb to the illusion that the group is nothing more than a vicious terrorist organization, they will miss the crucial larger context and get drawn into a complex Middle Eastern power struggle. Such a blunder would likely lead to a frustrating, long-term, and ultimately unwinnable military crusade. Although angry Westerners may be reluctant to concede the point, ISIS is a lot more than just about ISIS.

Even the organization’s spectacular brutality is hardly unique in the region. ISIS is fond of beheading opponents, but a key member of the coalition that Washington is assembling to combat the group has routinely displayed similar barbarity. In 2014 alone, Saudi Arabia has executed 46 people through beheadings — nearly half of them for nonviolent offenses. Likewise, ISIS is not the only faction to slaughter military prisoners. At nearly the same time that videos surfaced of ISIS’s execution of captured Iraqi government troops, Shiite militias fighting alongside Baghdad’s forces committed comparable atrocities against Sunni captives on at least two occasions.

Without understanding that complex context, the United States and the other Western powers are wandering into a geopolitical minefield.”

Indeed, the emergence of ISIS is merely the latest episode in an exceptionally nasty Sunni-Shiite struggle for preeminence throughout the Middle East. That is why treating the group as just a rogue terrorist operation would be a major policy blunder. ISIS arose from two sources, both of which reflect the wider sectarian conflict.

The primary source was the civil war in Syria between largely Sunni insurgents and Bashar al-Assad’s governing coalition of Alawites (a Shiite offshoot), Christians, and other religious minorities who are petrified about possible Sunni domination. Saudi Arabia, Qatar, and Turkey enthusiastically backed the insurgents, while the United States provided …read more

Source: OP-EDS

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Mr. President, CO2 Is Not Pollution, It's the Elixir of Life

September 23, 2014 in Economics

By Craig D. Idso

Craig D. Idso

President Obama will attend a United Nations climate summit in New York this week where he will try to gather support for an international agreement to curb emissions of carbon dioxide (CO2), which he labels as carbon pollution. This could not be further from the truth. Talk with most any biologist or botanist and you will find an opposite perspective, one in which CO2 is the elixir of life.

We all learned in primary school that atmospheric CO2 is the building block of plant life, the primary raw material that they utilize during the process of photosynthesis. As demonstrated in literally thousands of laboratory and field studies, the more of that food there is, the better they grow.

In general, rising atmospheric CO2 endows plants with three major benefits, the most recognized of which is enhanced plant productivity. Typically, a 300 parts per million (ppm) increase in the air’s CO2 content (such an increase over pre-industrial values is expected to occur by the end of this century) will raise the productivity of most herbaceous plants by about one-third and most woody plants by about one-half. This is manifested by more branches, leaves, roots, flowers and fruit.

Contrary to misguided assertions, political correctness, and government edicts, carbon dioxide is not a pollutant.”

A second major benefit is increased water use efficiency. Plants exposed to elevated levels of CO2 need less water to produce the same, or an even greater mass, than they do at lower concentrations. Finally, higher levels of CO2 reduce detrimental growth effects of certain environmental stresses and resource limitations, including high and low air temperature, ozone pollution, low levels of soil fertility, and pest attacks.

These three features of rising atmospheric CO2 greatly benefit the biosphere and show that the world’s vegetation will reap a tremendous advantage in the years and decades to come. And based on a multitude of observations, the future is now! Data unequivocally show that the biosphere is experiencing a great surge in growth, likely due in large measure to the approximate 40 percent increase in atmospheric CO2 that has occurred since the beginning of the Industrial Revolution.

Observations from satellites demonstrate an increase in plant mass of 6–13 percent since the 1980s. Annual carbon uptake by plants has doubled from about 2.4 billion tons in 1960 to 5.0 billion tons in 2010. This planetary greening occurred in spite of the many assaults by both man and nature on planetary vegetation …read more

Source: OP-EDS

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Regime Uncertainty Weighs on Growth

September 23, 2014 in Economics

By Steve H. Hanke

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Steve H. Hanke

Shortly after the current Great Recession started, I wrote a Globe Asia column, “A Great Depression?” (December 2008). In it, I stressed the findings contained in Robert Higgs’ important book Depression, War and Cold War: Studies in Political Economy (Oxford University Press, 2006). Higgs concluded that, because of regime uncertainty, investors were afraid to commit funds to new projects. They simply didn’t know what President Roosevelt and the New Dealers would do next.

I warned, back in December 2008, that regime uncertainty might pose a problem in the current crisis. As I saw it, the political classes were intent on blaming the markets. They certainly were not going to point their accusatory fingers at themselves, and neither were the world’s central bankers.

Well, regime uncertainty still prevails and the U.S. economy, which is now being touted as one of the strongest, isn’t so strong. The accompanying chart of nominal final sales to domestic purchasers (FSDP), which is the best proxy for aggregate demand, shows that FSDP is still rather anemic. Its current year-over year growth rate is only 3.9%, well below the long-run trend of 5%. So, the U.S. remains mired in a growth recession. Thanks to continued regime uncertainty and weak monetary growth — broad money (Divisia M4) is only growing at a 2.5% annual rate — the economy fails to lift off.

To better understand what’s happened since 2008 and where we are going, nothing beats the ability to interpret and understand economic data in terms of patterns, relationships, connections, and structures that are likely to prevail in the future. Accurate topological patterns — in short, good diagrams — hold the keys to developing useful images of the future.

To that end, a series of diagrams that depict the U.S. economy are presented. The diagrams show the relationship between the unemployment rate and the gap between profit and interest.

This important, but neglected, relationship was first analyzed by my former professor, Kenneth Boulding (1910-1993). Here’s how Boulding summarized the economics of the profit-interest gap in his last book, The Structure of the Modern Economy (New York University Press, 1993):

“When hiring somebody an employer sacrifices the interest that could have been made on the money going to wages in the hope of making a profit on the product of the work. The work may consist of alleviating depreciation and decay, such as that carried out by janitors. It may involve …read more

Source: OP-EDS