You are browsing the archive for 2014 September 25.

Avatar of admin

by admin

Old Health Insurance Policy Canceled? Your New One May Be Canceled Too.

September 25, 2014 in Economics

By Hunter Lewis

John Goodman, the top health policy analyst, explains why Obamacare policies are also likely to be canceled. Just because they comply with Obamacare this year doesn’t mean that they will comply next year. The way the law is written  guarantees that many policies will not comply for long. In addition,  if your policy keeps changing, and the doctors you are allowed to see are restricted to that policy, you may have to keep getting a new doctor over and over again. That should be popular.

Here is another way in which the drafters of this bill shot themselves in the foot. When Obamacare was being constructed, it was feared that it would outlaw the high deductible policy. That was what the Democrats at first wanted to do. They didn’t want the consumer to have any control over health expenditures, but instead to depend entirely on government policies.  When this goal proved too expensive,  Obamacare ironically outlawed a no deductible policy, as Goodman also explains.

It is easy to deride the authors of this mad bill. But any such legislation was bound to make a mess. Only consumer choice can rationally organize medical services.

http://www.forbes.com/sites/johngoodman/2014/09/23/why-you-are-likely-to-lose-your-health-insurance-no-matter-how-much-you-like-it/

…read more

Source: MISES INSTITUTE

Avatar of admin

by admin

Is a Shift in the Austrian “True Money Supply” Pointing to a Contraction?

September 25, 2014 in Economics

By Ryan McMaken

Slide2-e1411414936442

Michael Pollaro writes at Forbes that “deceleration” in the money supply is increasing the risk of an economic bust. Pollaro, of course is using not the standard Fed-approved measures of the money supply, but the Austrian “True Money Supply” (explained in detail here.)*

Pollaro writes:

The True “Austrian” Money Supply (TMS) as represented by TMS2, our broadest and preferred U.S. money supply aggregate, posted a year-over-year rate of growth of 7.9% in August, the last monthly reporting period, down from an 8.2% rate in July. Although still sitting near the twenty year average of 8%, the U.S. monetary inflation rate is now down 780 basis points (50%) from its most recent August 2011 high and 860 basis points (52%) from its November 2009 cyclical high.

He goes on:

We take the decline in TMS2 very seriously. To Austrian economists, its simple – monetary inflations always end in economic and financial busts. In short, once the economy is subjected to a bout of monetary inflation, whether that be via direct central bank money creation or through money (and credit) creation by the fractional reserve banking system, an unsustainable, artificial economic boom is born, whereby malinvestments are created that sooner or later must be liquidated. And whether that bust takes the form of a hyperinflationary bust or a deflationary, bust we will get. The form the bust takes will depend on the course of the inflation. If the central bank/banking system at large pursues an inflationary course, by throwing continual and importantly ever larger doses of money (and credit) into the economy, the bust will take the form of a hyperinflationary collapse. If instead the central bank voluntarily pulls back (and in increasing fashion) on its monetary largesse and/or free market forces force the central bank/banking system to pull back, the bust will take the form of a deflationary bust. [emphasis mine.

So what is this deceleration in TMS2 telling us? The risks of a deflationary bust are rising.

To lend credence to the theory, let’s have a look at the Austrian boom-bust model in action using our TMS2 metric vs. the forward looking S&P 500, the embodiment of the health of the economy and financial markets…

The data supports what the Austrians teach – monetary inflations create booms which result in deflationary busts once the rate of monetary turns down in a significant and sustained manner. The 1995 to 1999 monetary surge, then subsequent monetary deceleration …read more

Source: MISES INSTITUTE

Avatar of admin

by admin

The Financial Crisis: Why the Conventional Wisdom Has It All Wrong

September 25, 2014 in Economics

Don’t believe for a moment those economic theorists who tell us the reason for our slow growth, economic malaise, and continued high unemployment is due to the uniqueness of a financially led economic recession. In the new issue of Cato Journal, Richard Kovacevich, Chairman Emeritus of Wells Fargo, outlines the political decisions and regulations that have contributed to the crisis and sluggish recovery. Also in this issue, 2012 Friedman Prize winner Mao Yushi looks at the tragic legacy of China’s Great Famine, and 2014 Friedman Prize winner Leszek Balcerowicz discusses the main problems and proposed solutions with respect to the euro.

…read more

Source: CATO HEADLINES

Avatar of admin

by admin

Ron Paul to FSU

September 25, 2014 in Economics

By Ryan McMaken

Lew Rockwell writes:

Ron will be speaking to students, faculty, and members of the public through the prestigeous Golden Tribe Lecture Serues on Thursday, October 2nd, in Tallahassee, Florida. Here’s how to attend An Evening With Ron Paul, for free.

…read more

Source: MISES INSTITUTE

Avatar of admin

by admin

Manufacturing Consent, Then and Now

September 25, 2014 in Economics

By Ryan McMaken

us_propaganda-31

[When it comes to drumming up support for foreign wars in the US, little has fundamentally changed over the past century. Justin Raimondo on "Progressivism and the rise of the welfare-warfare state":]

Ticking at the heart of American society all through the 1920s was the mechanism of false prosperity, which was blowing great quantities of air into a bubble of gigantic proportions. The Federal Reserve system set up before the war made financing the war possible – but at what price? The price was setting up a financial oligarchy with near absolute power over the economy – and also setting up the country for the Great Crash of 1929.

The rise of the totalitarian ideologies as challengers to Western liberalism was made possible, first of all, by the Great War, and by the Crash, which was also caused by the very system that had made the prosecution of the war possible. National Socialism and militant Marxism were “blowback” from World War I just as the jihadists of today are blowback from the cold war era. And these two great enemies of liberty, abhorred by today’s liberals, were at first greeted with something approaching admiration by the progressives of the time. The subsuming of private interests to the collective good under the Italian system drew admiring glances from our liberal professors: Herbert Croly, first editor of The New Republic and champion of Teddy Roosevelt’s “New Nationalism,” touted Italian corporatism as the wave of the future and ended his days as the Duce’s chief apologist outside of Rome. No matter what else they disagreed about, ideologues of both the right and the left agreed on one thing: capitalism was doomed and some form of state-controlled economy was destined to succeed it. The only question was: would it be communism, or fascism?

The same factors that led to our fatal intervention in the first world war were brought to bear in order to have us enter the second. The messianic world-saving doctrines originating in the realm of theology had by this time thoroughly penetrated the secular mainstream and had become the default ideology of the political class and the intellectuals. The Kingdom of God on earth – without God, but with various substitute gods – and every ideological grouplet had their favored gods. The advocates of Technocracy, a group founded naturally enough by an American engineer, wanted to put the technocrats – scientists, and other “experts” – …read more

Source: MISES INSTITUTE

Avatar of admin

by admin

New ‘Mises Daily’ Translations from Europe

September 25, 2014 in Economics

By Ryan McMaken

Some new ones in Polish:

Różnice nie zawsze oznaczają dyskryminację“ translated from “Differences Don’t Necessarily Equal Discrimination” by Andrew Syrios

Opieka społeczna, płace minimalne i bezrobocie” translated from “Welfare, Minimum Wages, and Unemployment” by Greg Morin.

Many more here.

And in German:

“Müssen die Anhänger der freien Marktwirtschaft den Klimawandel leugnen?” translated from ”Must Free-Marketers Reject Global Warming?” by Ryan McMaken

“Teilreserve-Banksystem ist mit einer freien Marktwirtschaft unvereinbar” translated from Confusing Capitalism with Fractional Reserve Banking” by Frank Hollenbeck

…read more

Source: MISES INSTITUTE

Avatar of admin

by admin

Republicans Shouldn't Stoke International Revolution

September 25, 2014 in Economics

By Justin Logan

Justin Logan

Sens. John McCain and Lindsey Graham would like to help National Review readers keep score on who bears what share of responsibility for the rise of the Islamic State. It turns out it’s mostly Barack Obama’s fault.

McCain and Graham lay blame on the lawn of the White House for four reasons: Obama failed to keep tens of thousands of U.S. troops in Iraq indefinitely; he failed to do enough to arm and train “moderate” Syrian rebels against Bashar Assad; he failed to bomb Assad after the now-infamous chemical weapons attack/“red line” walkback; and he didn’t bomb the Islamic State (ISIS) in Iraq in late 2013.

The Batmobile whizzes past self-awareness when the Caped Crusader and Boy Wonder shout that conservatives “who believe that ISIS’s rise is somehow a result of too much action by President Obama and our nation are either misinformed about world events or wedded to naïve ideologies.” It is clear to everyone not in the grips of a different naïve ideology that the chaos and maelstrom of sectarian violence McCain and Graham helped set loose in Iraq contributed to the rise both of a sectarian Shia government and Sunni resistance movements, be they insurgencies or quasi-state groups like ISIS.

In a country situated like the 2014 United States, conservatives should act and think like conservatives, not international revolutionaries.”

Let’s Bomb Everyone All the Time

Their whole argument has an “assume a can opener” quality about it. Neither the American public, nor the Iraqi public, nor the Iraqi government wanted American troops to stay in Iraq. McCain and Graham attribute ousted Iraqi Prime Minister Nouri al-Maliki’s resistance to a fear that the number of troops proposed would not be enough, but this is far from clear. Selling an inflamed Iraqi public on the idea that American troops would be in their country but exempt from their laws was always going to be a tough sell.

Moreover, McCain and Graham attribute a magical power to the presence of U.S. troops: How, exactly, were they to have “played a key role in checking Prime Minister Nouri al-Maliki’s worst sectarian tendencies and in supporting Iraqi security forces”? The same Iraqi security forces that abandoned their weapons and deserted the battlefield while facing ISIS? The same sectarian tendencies that sank Maliki, as well as his predecessor Ibrahim al-Jaafari? It’s almost as if something is causing those sectarian tendencies and <a target=_blank href="http://www.amazon.com/Arabs-War-Military-Effectiveness-1948-1991/dp/0803287836" …read more

Source: OP-EDS