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Liberty in Halloween

October 31, 2014 in Blogs

By Political Zach Foster

Halloween is a delightful holiday where the free market takes over.
With minimal government interference, kids and adults across America engage in cultural speech through artistic expression in their costumes.
Private security firms and neighborhood watch groups mobilize for public safety, while parents make arrangements with other parents regarding supervision and safety in numbers. Many parents will carry pepper spray or a gun while they protect their kids from real-world creeps. It’s the one night where the police don’t have the monopoly on public safety and force.
The candy industry booms and people distribute thousands of pieces of candy to kids for what’s basically a front-porch fashion show. This is done without the FDA, Department of Agriculture, and Department of the Interior jumping in and blocking the exchange.
Fans of creepy stories can talk about witches, ghost, and demons–and sell spooky merchandise–without the IRS jumping down their throat for violating tax codes for religious groups.

Many adults are throwing parties where people will drink, laugh, and be merry until the wee hours of the morning. Party-goers meet new people, some people “hook up,” and others party with their old friends.

In essence, the festivities of Halloween Night are the epitome of voluntary exchange and association. Indeed, there is liberty in Halloween.



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Jack-o-Lantern image by Toby Ord, used via CC BY-SA 2.5 license, and obtained from Wikipedia.

…read more

Source: ZACH FOSTER RANTS

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Prepare for the Global Corporate State of Facebook?

October 31, 2014 in Economics

By Ryan McMaken

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In the dystopian movie Rollerball, all the world is ruled by one giant corporate state “controlling access to all transport, luxury, housing, communication, and food on a global basis.”

Thanks to popular media and the errors of neoclassical economics, we are trained to accept this scenario, or one similar to it, often when we are told of the latest move by a mega-corporation to extend its market share.

Two recent articles about Facebook have highlighted the social media platform’s influence in determining what news articles you see and when and how you read them. Many publishers have figured out that Facebook drives a large amount of traffic to their sites, prompting many PR pundits to declare that “the home page is dead.” In a Wired article titled “How Facebook Could End Up Controlling Everything You Watch and Read Online,” Marcus Wohlson explores just that. Wohlson’s article was prompted by David Carr’s Sunday article at The New York Times in which Carr writes: “Given the amount of leverage Facebook has, many publishers are worried that what has been a listening tour could become a telling tour, in which Facebook dictates terms because it drives so much traffic. (Amazon’s dominance in the book business comes to mind.)”

Is Facebook a Proto-Amazon?

Note the reference back to Amazon. Wohlson invokes Amazon too in his own article, and this becomes especially relevant when Wohlson suggests even that Facebook will eventually “cut out the extra click” and become the publisher of content as well as the delivery platform.

The Ghost of Amazon thus looms over the equation, since Facebook is now being framed a proto-amazon which moves from “selling” the content of other publishers and becomes a publisher itself, thus controlling the content. The subtext behind this is an assumption that Amazon is itself an evil monopolist who is destroying the wonderful legacy publishers of old.

Frank Foer at The New Republic has declared that  ”Amazon Must Be Stopped” and Paul Krugman followed up with his own article claiming that Amazon  ”has too much power, and it uses that power in ways that hurt America.” The consensus seems to be that amazon is either a monopolist or at least has unjust monopsony power and must be taken down a notch. Interestingly, however, Matthew Yglesias (of all people) has stepped in to point out what every Austrian already knew: Amazon only has the market power it …read more

Source: MISES INSTITUTE

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Paper, Gold, and the Middle of the Road

October 31, 2014 in Economics

By Carmen Elena Dorobăț

20_francs_belges_1871_avers

Once in a while, the gold standard makes a comeback in the public eye. Most recently it’s happened in connection to Steve Forbes’ book, Switzerland’s referendum, and the approaching mid-term elections in the US. Each time it’s a pleasant surprise, and a definite change of pace from otherwise grim news of war and higher taxes. And yet, the enthusiasm of those who claim the discourse has changed dramatically is unwarranted. Perhaps ‘goldbugs’ are not as mocked today as they were a few years ago, but the limits of the official debate as such have hardly shifted. Surely, we want a stable anchor for monetary policy, but we also want it to be somewhat flexible. We want to constrain the power of the central bank, but not so much that it can’t fight deflation or the balance of payments deficit. We might want the gold, but we definitely want to keep the paper. To paraphrase a Romanian playwright, a contemporary of Mises: let us revise the monetary system, as long as nothing changes. Or let us not revise it, as long as some essential aspects are changed.

There are, I think, two reasons why most debates (with a few welcome exceptions) are framed in this way. First, while the genuine gold standard ended before the First World War, the term itself—much like ‘liberalism’ —remained, only to acquire an unfortunate legacy over the last century. The merits of the pre-1914 system were forgotten once it was likened to the gold-exchange standard and the Bretton Woods monetary scheme. Careful consideration reveals major differences between these systems, but public opinion is not known for thorough research. With the failure of the Bretton Woods system in mind, one assumes, naturally, that the old fashioned version of the gold standard cannot solve modern monetary problems. Then, debates are mostly about how to revamp the currency system into a 21st century, ‘modern’ gold standard.

Second, and perhaps more important, most people tend to assume that on monetary matters, and on matters of great national interest in general, one should hold a ‘balanced’ position. I often heard my students tone down the phrase ‘economic calculation is impossible in socialism’ to ‘calculation is highly unlikely’, because ‘impossible’ sounded too extreme. Students are likewise taught that monetary problems are a delicate matter; and when they become academics or journalists, they shy away from black-and-white statements. It’s …read more

Source: MISES INSTITUTE

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Bank of Japan: Trick or Treat?

October 31, 2014 in Economics

By Mark Thornton

BOJ Chairman Kuroda

The Bank of Japan announced an unexpected major increase in its Quantitative Easing policy increasing its purchases from 50 to 80 trillion Yen sending US stock markets to all time highs and Japanese markets to multi-year highs. Some people made a bundle because of the move, others lost a bundle.

NEW YORK (MarketWatch) — U.S. investors scored a Halloween treat.

An unexpected everything-but-the-kitchen-sink stimulus plan by the Bank of Japan on Friday triggered some sizeable global market moves, across assets from currencies to stocks.

Considering the trillions of yen being bandied about, the market moves aren’t surprising— ¥80 trillion (roughly the equivalent of $714 billion), from 50 trillion. The central bank increased its purchases by ¥30 trillion from the prior pace, and markets went to town. The Nikkei 225 index NIK, +4.83% NIK, +4.83% got the ball rolling by rallying to a seven-year high.

It’s a coordinated global relay race where the central banks are passing the baton,” said Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities.

“The problem with all this global currency devaluation is that nothing is based on fundamentals only intervention. It becomes a dangerous game over time as I believe overall risk assets have the propensity to be mispriced,” said Tom Tucci, head of Treasury trading at CIBC World Markets Corp., in a note.

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Source: MISES INSTITUTE

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Business Week Tries to Resurrect the Corpse of John Maynard Keynes

October 31, 2014 in Economics

By William Anderson

Night_of_the_Living_Dead_affiche

Just when the current “discussion” on economics by public intellectuals like Paul Krugman hits bottom, Business Week decides to dig the hole even deeper by lionizing John Maynard Keynes. Keynes, according to BW, had the theories that can “fix” the currently moribund world economy.

There is a doctor in the house, and his prescriptions are more relevant than ever. True, he’s been dead since 1946. But even in the past tense, the British economist, investor, and civil servant John Maynard Keynes has more to teach us about how to save the global economy than an army of modern Ph.D.s equipped with models of dynamic stochastic general equilibrium. The symptoms of the Great Depression that he correctly diagnosed are back, though fortunately on a smaller scale: chronic unemployment, deflation, currency wars, and beggar-thy-neighbor economic policies.

The secret to understanding the vast wisdom of Keynes, writes Peter Coy, is found here:

An essential and enduring insight of Keynes is that what works for a single family in hard times will not work for the global economy. One family whose breadwinner loses a job can and should cut back on spending to make ends meet. But everyone can’t do it at once when there’s generalized weakness because one person’s spending is another’s income. The more people cut back spending to increase their savings, the more the people they used to pay are forced to cut back their own spending, and so on in a downward spiral known as the Paradox of Thrift. Income shrinks so fast that savings fall instead of rise. The result: mass unemployment. (emphasis mine)

Yes, the economy has fallen on hard times because individual households have saved “too much” money. That the latest downturn occurred when the rate of personal savings in this country was at historical lows apparently was lost on Coy, who is too eager to promote the “your spending is my income and my spending is your income” fallacy that has been pushed very hard in recent months by Paul Krugman.

That so-called respected economists and writers can fall for this fallacy does not speak well of economic discourse these days. First, the whole argument is circular in nature, presenting a picture of an economy in which any cutback in spending by even just one person can morph into horrific consequences. (Think of the Butterfly effect, economically speaking.) This is not a description of an economy at all, but …read more

Source: MISES INSTITUTE

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Patrick Barron: The End of the US Dollar Imperium, Part 2

October 31, 2014 in Economics

By Ryan McMaken

alex

Jeff Deist and Patrick Barron continue their discussion on monetary imperialism. They delve deeper into US dollar supremacy, and how it might end with a whimper instead of a bang; how the Bundesbank is a potential savior for the world monetary order, while the IMF is a paper tiger; how elites will have an increasingly hard time denying gold a role in the global monetary system, and how America’s fiat dollar corrupts cultures as well as economies.

Patrick Barron is a private consultant in the banking industry. He teaches in the Graduate School of Banking at the University of Wisconsin, Madison, and teaches Austrian economics at the University of Iowa, in Iowa City, where he lives with his wife of 40 years.

This interview is also available at Mises.org and Stitcher.

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Source: MISES INSTITUTE

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Spooky Politicians That Go Bump in the Night

October 31, 2014 in Economics

By Christopher A. Preble

Christopher A. Preble

As predictably as falling leaves and longer nights, the end of October brings children disguised as pretend ghosts and goblins, and politicians whipping up fears of supposedly real ones. Democrats air spooky commercials alleging a war on women, on the poor, on teachers, on unions. Republicans speak of Islamic extremists poised to achieve world domination, or of terrorists wielding an Ebola weapon in the United States.

Both sides share the same message: the world is uniquely dangerous, and we’re here to keep you safe.

To think otherwise—that the world is less dangerous—seems foolish. To state it publicly is presumed to be a political liability. After all, the world looks uniquely dangerous—especially if you focus on the dangerous parts. A new Cold War seems in the offing when Russia annexes the Crimea and sends its proxies into eastern Ukraine. President Obama’s offhand remark that the Islamic State in Iraq and Syria (ISIS) was al Qaeda’s JV team has been played back incessantly as ISIS has seized territory in Iraq and Syria. Ebola could be the modern equivalent of the Spanish flu of 1918 that claimed over 50 million lives worldwide. Or, for the U.S. at least, it could be more like the swine flu of 1976, which killed 1 person. More people died from the vaccine to prevent it. We simply don’t know. But there are times, especially in the closing days of an election campaign, when it seems positively absurd to argue that the world is not very dangerous.

The end of October brings children disguised as pretend ghosts and goblins, and politicians whipping up fears of supposedly real ones.”

We can always use a little perspective, however, and campaigns shouldn’t be fact-free zones. Of course there are dangers in the world. There always have been. And there always will be. But one’s chances of dying a violent, premature death are at their lowest point in recorded history. The website HumanProgress.org (full disclosure, a Cato project) documents the many ways in which our lives are improving. And Americans, in particular, enjoy a degree of security and well being that our ancestors would envy and that our contemporaries do envy.

When we think of the litany of threats that Americans worry about, some are rather familiar. We still worry about war with major states, or about being drawn into wars with minor ones. We worry about the proliferation of mass casualty …read more

Source: OP-EDS

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Welcome to the World of Volatility

October 31, 2014 in Economics

By Steve H. Hanke

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Steve H. Hanke

My last column “Regime Uncertainty Weighs on Growth” (October 2014) stressed that market participants do not know what the Big Players (Read: governments and central banks) will do next. This regime uncertainty is creating an economic undertow. No wonder there have been so many recovery false dawns.

In the past month, markets have become very volatile. Equity and oil markets are the most notable. Why? Well, regime uncertainty continues to be ramped up. Indeed, Berlin-bashing by Paris and Rome over fiscal austerity has become the latest political rage. On top of that, weak economic data from the Continent and a spat of surprisingly weak U.S. data moved the world’s stock markets. If that wasn’t enough, there were some so-called mixed economic signals emitted from China. We must not forget the International Monetary Fund’s (IMF) World Economic Outlook report that was unveiled at the World Bank — IMF meetings in Washington, D.C. The report contained a major policy flip-flop, switching mantras from fiscal austerity to fiscal stimulus. The volatility mixer was stirred further when the Saudis clarified that they would not cut back on oil production to prop up crude prices. The Kingdom wants to retain, or increase, its market share. To top it off, Ebola has reared its ugly head. All of this confirms what I call the School Boy’s Theory of History: it’s just one damn thing after another.

Let’s examine some of these factors to see just how they contribute to the world of volatility. The relatively weak U.S. economic data are no surprise. The best proxy for nominal aggregate demand is measured by final sales to domestic purchasers (FSDP). Nominal FSDP has never recovered to its longrun trend of 5% since the crisis of 2009. Indeed, aggregate demand is growing at an anemic year-over-year rate of only 3.9%.

Anyone who is properly informed about the economics of money and banking knows why nominal aggregate demand has not bounced back to a trend rate of growth. The money supply, correctly measured by Prof. William A. Barnett’s Divisia M4, is only growing at a year-over-year rate of 2.0%. Money fuels the economy and without fuel, the economy eventually stalls.

In the U.S., bank regulations since the collapse of Lehman Brothers have been ill-conceived, draconian, and pro-cyclical. In consequence, bank money has shrunk in both relative and absolute terms since 2009 (see the accompanying chart). This has forced the Federal Reserve to …read more

Source: OP-EDS

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The Military Invasion of My High School

October 31, 2014 in Blogs

By Sylvia McGauley, Rethinking Schools

JROTC programs are indoctrinating vulnerable high school students in the science of war — with disastrous effects.


“Will you please write me a letter of recommendation for the Navy, Ms. McGauley? You’re my best class.” Thanh was enrolled in the recently established Junior Reserve Officers’ Training Corps (JROTC) at our high school and he, like many of my students, was enamored with the military’s alluring promises of a magic carpet ride away from poverty and uncertainty.

My heart ripped as I listened to Thanh’s plea. I want to do what is best for my kids. I want to support and honor them in making their own informed decisions. But, given the impact of JROTC at our school, I felt very uneasy about the balance of information students like Thanh were receiving about enlistment in the U.S. military. After much discussion with Thanh, I wrote an honest letter, emphasizing his sensitive poetic nature and his commitment to fairness. The Navy eagerly welcomed him.

The sprawling campus of Reynolds High School (RHS), the second largest high school in Oregon, rests atop a ridge at the entrance to the scenic Columbia River Gorge in tiny Troutdale, 17 miles east of downtown Portland. When I first started teaching here 23 years ago, Reynolds was an almost all white, working-class, conservative, sub-rural community, culturally distinct from its larger urban neighbor. As Portland has become more gentrified, lower rents have attracted numerous low-income families—immigrant, African American, Latina/o, and white. Today, the Reynolds School District is a high-poverty, culturally diverse district with two of the poorest elementary schools in the state—perfect prey for military recruiters who win points for filling the coffers of the poverty draft.

During the Vietnam War era, much was written about JROTC’s role in teaching military training; today JROTC high school (and even middle school) programs incorporate a broader curricular agenda and are expanding rapidly. Yet, within the education community, little has been written about the implications and effects of JROTC in schools.

The potent presence of the military at RHS shines a floodlight on educational inequity. One sees college recruiters walking the …read more

Source: ALTERNET

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Frankenstein (1931): A Libertarian Film Review

October 30, 2014 in Blogs

By Political Zach Foster