You are browsing the archive for 2014 November 03.

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The Pot Vote?

November 3, 2014 in Economics

By Mark Thornton

This has been a great election season. I don’t watch much local TV so I have not been inundated with the attack ads. Very few yard signs. Very little political discussion within my group of friends and colleagues. Additional good news is that the American people hate the Congress, support for the President is tanking so bad that he is not on the real campaign trail, and there is a general disgust for the special interest groups and their attack ads. The only thing I am really interested is the votes to legalize marijuana. Several states and local jurisdictions have marijuana and medical marijuana ballot measures up for a vote.

The ballot measure in Washington DC is looking good, but limited polling makes it too hard to call in Alaska, Oregon and Florida. Prop 47 in California which makes possession a misdemeanor is passing. My sense is that the anti-legalization side is spending more money and is using misleading advertisements and has dampened support for legalization. In Florida you need 60% of the vote for it to pass so it is in trouble of not passing.

…read more

Source: MISES INSTITUTE

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Could Ikea-Style 'Flatpack Clothes' Be the Next Fashion Trend?

November 3, 2014 in Blogs

By Nathalie Olah, The Guardian

A businessman believes you can assemble your own clothes from scratch. But do you really want to make your own T-shirt and pants?


The Malm – Ikea’s minimalist, three-drawer chest – is a staple of the student and twenty-something interior design aesthetic. Walls might be decorated with posters of the Cocteau Twins, Gucci Mane or Ellie Goulding, but the Malm is always there, reminding us that behind our affectations lies a universal need for practical, low-cost furniture.

Fashion works in much the same way. There’s a pair of 1980s denier black opaque tights from M&S underpinning most autumn/winter looks. But according to the predictions of one expert, Fortune 500 businessman Stefan Engeseth, high-street fashion trends as a whole could be going the way of Ikea. According to Engeseth, the future of fashion could be flatpack.

Let’s take a moment to think about what this means: clothes coming in separate parts to be easily assembled at home and adjusted for the purposes of different wearers. Waistbands on trousers you can adjust if you’re in between sizes. DIY sleeve lengths. Adjustable collars. Pick-your-own buttons. Or simply hundreds of T-shirts in the colour you want.

He also explains how building your own clothes from scratch is not just a practical move – it has an emotional effect on the wearer … customers can personalise and “hack the designs” as he explains in a press release. Imagine the sense of pride you’d get from designing and making your own clothes.

At this stage it’s worth mentioning this is at the moment totally hypothetical. A representative from the company also assures me it has no immediate plans to launch a fashion line. But, as extreme as it sounds, surely it’s no more far-fetched than believing 3D printing to be the saviour of fashion, which many experts think it might be.

Is it a realistic move? I think there are two schools of thought. The first one places craftsmanship at its core. Of course independent retailers selling bespoke pieces made by local designers using ethically sourced materials is a preferable alternative to …read more

Source: ALTERNET

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Gold, Switzerland, and Free-Market Money

November 3, 2014 in Economics

By Ryan McMaken

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Contrary to what is commonly assumed, Austrian economics and Austrians scholars themselves are not necessarily in favor of gold-based monetary systems. The problem with fiat money is not that it isn’t gold, but that it’s fiat money. In general, Austrians favor free-market money, which may or may not mean gold specifically.

On a practical level, however, free-market money is often synonymous with gold because gold often functions very well as money. Theoretically,  commodity money could take the form of many things, so long as they could function as money.  (Friday’s Mises Daily article noted that Germany in the 1920s tied its currency to rye bread at one point.)

The upcoming referendum on the Swiss Central Bank’s gold holdings (on November 30) has been lauded by Ron Paul, for example, because, as Paul notes “People are starting to talk about gold more and they should… [The referendum] is one more step in the direction of proving that paper money, fiat money, money created by politician out of thin air to subsidize big government and monetize debt is going to end.”

On a practical level, tying the Swiss currency to gold makes sense since tying the money to a commodity limits the discretion of the central bank in inflating the money supply. The vehement objections by the Swiss government and the central banks also illustrate just how inconvenient commodity money is for governments.

Could the Swiss currency be tied to some other commodity? Certainly. But what makes the referendum important from an economics and public policy perspective is the fact that it will essentially be a referendum on the public’s faith in fiat money.  The November 30 referendum may indeed fail. A great many people, including Swiss people, are frightened that even a small commodity-money-based limit on central banks might lead to an end of the gravy train. The Swiss central bank and its friends in Bern are happy to play up these fears.

…read more

Source: MISES INSTITUTE

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Economists and Entrepreneurs

November 3, 2014 in Economics

By Peter G. Klein

For once I agree with Paul Krugman, who writes: “success in business does not seem to convey any special insight into economic policy.” Unfortunately, everything in his latest column except that single sentence is completely wrong. What Krugman means is that Ben Bernanke, Janet Yellen, Mervyn King, Mario Draghi, and the other academic Keynesians were right about quantitative easing, bailouts, subsidies, etc. as they bravely “navigated their way through a once-in-three-generations economic crisis” (which, of course, their policies did nothing to create). In doing so, they had to overcome resistance from various unnamed businesspeople who thought that a massive stimulus, bank and industry bailouts, and general suppression of market mechanisms might not be the best idea ever.  The Keynesian professors, Krugman reports, “had the courage to defy all those tycoons demanding that they stop printing money.” Well, that all worked out just great, didn’t it?

Well, even a stopped clock is right twice a day. And Krugman is right that success in entrepreneurship does not make one a good economist (see, for exhibits, George Soros, Warren Buffett, Boone Pickens, and too many others to count). More important, skilled economists may be exceptionally poor entrepreneurs. Krugman attributes the differences between economic thinking and entrepreneurial thinking to the sophomoric Keynesian idea of the “fallacy of composition” — e.g., an entrepreneur thinks he should cut his expenditures in response to falling demand for his product, but if all entrepreneurs do this, then total spending will fall, the economy will go into recession, and the entrepreneur’s profits will fall, etc. The Keynesian economist knows that, contra Adam Smith, what is folly in the conduct of a single household is just right for the economy as a whole.

The truth is quite different — economic analysis and entrepreneurial action are fundamentally different activities, requiring different skills. Economic analysis involves abstract, deductive reasoning, the ability to trace out long-run consequences, a view on the whole as well as the parts. Entrepreneurship, as Mises consistently emphasized, is about anticipating future market conditions, something that no economic model can do.

In fact both the economists and the businessmen are fully aware of the uncertainty of the future. The businessmen realize that the economists do not dispense any reliable information about things to come and that all that they provide is interpretation of statistical data referring to the past. For the capitalists and entrepreneurs the economists’ opinions about the future count …read more

Source: MISES INSTITUTE

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The World Bank’s 'Doing Business' Should Pick a Methodology and Stick with It

November 3, 2014 in Economics

By Dalibor Rohac

Dalibor Rohac

In some media outlets, the publication of the 2015 Doing Business report by the World Bank gave birth to exuberant headlines. Russia Today, for example, reported jubilantly: “Russia jumps record 30 places in Doing Business ranking”. The sentiment was echoed by the Wall Street Journal’s Emerging Europe blog, which reported that the report “showed Russia moved up 30 places to 62nd compared with its 92nd position last year and number 111 two years ago.”

Has Russia’s business environment taken a radical turn for the better over the past year? Probably not. The truth is that constant revisions to the Doing Business report risk making it useless.

What has changed is the report’s methodology. The most important change is to the way its overall ranking is arrived at. In the past, a simple average was taken of each country’s percentile ranks in different areas such as paying taxes, getting credit, registering property and so on. Instead, this year’s edition uses an average ‘distance to the frontier’ calculated by comparing the performance of a country in a given area with the best performance recorded by any country in that area.

Other changes involve the introduction of new measures of regulatory quality. One example is the extent to which insolvency legislation reflects the World Bank’s Principles for Effective Insolvency and Creditor/Debtor Regimes and the UN’s Legislative Guide on Insolvency Law. This shift in methodology is not uncontroversial, as the report partly acknowledges.

First, the qualitative measures will reward economies that “follow some good practices even if they may face challenges in implementing those laws” (p. 27 of the report). Second, this change may be seen as caving in to pressures to punish economies with light-touch regulatory frameworks: “In general, economies with less regulation or none at all will have a lower score on the new indicators” (also p. 27). And third, the new indicators — referencing the frequently changing views of ‘best practice’ in regulatory practice — represent a departure from what has traditionally been the main virtue of the Doing Business report: its reliance on simple, objective, clearly defined attributes of legal rules and their enforcement.

Last year, the World Bank conducted a high-level review of its report led by Trevor Manuel, a former South African finance minister. The review gave rise to rumours that <a target=_blank href="http://www.latimes.com/business/la-fi-mo-world-bank-doing-business-rankings-20130624-story.html" …read more

Source: OP-EDS

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Shocking New Study Reveals that Everything You Thought You Knew About Milk Is Wrong

November 3, 2014 in Blogs

By Cliff Weathers, AlterNet

Got milk? Maybe better not.


Recently published research suggests that milk may actually make bones brittle and might lead to earlier mortality.

The study, published in the The BMJ (formerly the British Medical Journal) indicates that high amounts of milk consumption is associated with increased possibility of bone fractures and may be a factor in premature death. The study, conducted by researchers from Sweden's Uppsala Univesity, indicates that milk may increase inflammation and oxidative stress in the body. However, the same study found that milk products, such as cheese and yogurt, which are fermented, did not seem to carry the same risks.

The research team, led by Professor Karl Michaelsson, provided questionnaires to more than 100,000 individuals, some 61,000 women and 45,000 men, and asked them about their daily consumption of 96 particular foods, including dairy products such as milk, yogurt and cheeses. Between 11 and 21 years later, the researchers followed up with the subjects. They found that high consumption of milk was associated with higher mortality rates overall and higher risk of bone fractures in women.

“Our results may question the validity of recommendations to consume high amounts of milk to prevent fragility fractures,” said the researchers.

However, the authors stress that the study is merely theoretical and correlation does not indicated causality. They said their conclusions should “be interpreted cautiously given the observational design of our study.”

The authors even considered the possibility that their findings might be the result of reverse causation, meaning that people who are already susceptible to porous bones, or osteoporosis, may consume more milk to ingest calcium as form of self treatment. But the authors don't believe it's likely as higher consumption of cheese and yogurt, fermented milk products, was actually linked to reduced bone fractures. They also said that people in the study who consumed more milk and did not have bone fractures still had a higher mortality.

However, the researchers say that it draws into question the high amounts of lactose and galactose sugars found in milk, and whether they can be behind inflammation and oxidative stresses in bones, …read more

Source: ALTERNET

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Book Review: Money: The Unauthorized Biography

November 3, 2014 in Economics

By George Selgin

George Selgin

Money: The Unauthorized Biography
By Felix Martin
Knopf, $18.92, 336 pages

The aftermath of the worst financial crisis since the Great Depression is an apt occasion for taking a fresh look at money, that most basic of all financial instruments, atop which all the rest teeter.

As his subtitle suggests, Felix Martin has attempted a warts-and-all unmasking, to which he brings formidable credentials—a doctorate in economics from Oxford, two stints at the World Bank, and his current position as macro-economist for the London-based investment manager, Thames River Capital. The author is further aided by his felicitous prose and eye for money’s naughtier antics.

He’s not short of tales to tell: about money’s little prank of masquerading as stone wheels in the western Pacific, its domestication by Greek kings, its kidnapping by crafty private bankers, and finally, its post-2001 binge. But in his eagerness to reveal truths to which others have been blind, Martin ends up exposing not so much money’s mysteries as his own incomprehension of its real nature. According to a reviewer in the Guardian, this book will leave readers both “surprisingly entertained” and “better informed.” Entertained but misinformed is more like it.

The author first leads readers astray by assuming that money has always consisted of an elaborate system of IOUs rather than of physical stuff. But while simple societies may have tracked and settled debts in many different ways, among non-intimates, monetary IOUs have themselves always been promises to pay some particular stuff, whether tobacco, sea shells, metal discs, or engraved paper.

The distinction between monetary promises and the stuff promised is, admittedly, often unclear, as it was when Britain’s pound sterling ceased to refer to any actual coin, and when modern central banks turned their paper promises to pay gold into what one former New York Fed vice president dubbed “IOU nothings.”

But the fact that a Federal Reserve note is no longer a promise to pay anything else doesn’t make the note an “arbitrary increment on an abstract value scale.” Sometimes a note is just a note, and high-toned talk about universally applicable value confuses the real nature of exchange of goods for money. When a luncheonette sells me a ham on rye for $4.99, that doesn’t mean the sandwich has a value of $4.99, universally or otherwise. It just means that to the luncheonette the sandwich is worth less than $4.99, and to me, more.

The author’s knowledge …read more

Source: OP-EDS

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Is Amy Poehler Right that 'Bitchiness' Is the Secret to Success?

November 3, 2014 in Blogs

By Jessica Valenti, The Guardian

Of course, bitchiness just means not being a doormat.


In Amy Poehler’s new book, Yes, Please, she gives it to us straight: “I am not as nice as you think I am.” She’s not lying.

In her memoir released last week, the Parks and Recreation actor recounts chasing down a bullyish man on an airplane to scream: “Fuck you and your fucking opinions, you piece of shit!” She doesn’t mince words on her sex tips for men: “If you don’t eat pussy, keep walking.” And Poehler doesn’t hide her disdain for strangers who drop scripts in her lap, expecting success the easy way: “I am not impressed when you assure me the story has ‘lots of twists and turns’. I doubt it does and how dare you.”

I’m not a fan of the various iterations of “bitch” – Basic Bitch, Boss Bitch, Betches– that popular culture has adopted lately. But Amy Poehler’s “bitchiness” is the kind to which we can all aspire.

Instead of telling us that her success is thanks to good luck and other people’s good will, Poehler makes clear in the book that her path to fame was paved with hard work and a refusal to take any shit. It’s an all-too-obvious but still much-needed call to women who’ve been told for far too long – at the office, at school, all over the internet – to be too nice if we want to get ahead (or just get along).

I’m sick of powerful women who rely on self-deprecation and likeability to make people feel comfortable with their success. Modesty and niceness are overrated – and I don’t believe for a second that they are the traits of wildly successful women. Tell us how you really got there. I know it wasn’t just “taking a seat at the table” or because you stopped saying sorry.

Poehler’s brand of not-nice has been the <a target=_blank href="http://feeds.feedblitz.com/~/t/0/0/alternet/~www.newrepublic.com/article/118735/problem-esquires-praise-42-year-old-women-amy-poehler" name="in body link" id="in …read more

Source: ALTERNET

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Just Say "No": Time to End the War on Drugs in Afghanistan

November 3, 2014 in Economics

By Ted Galen Carpenter, Christopher A. Preble

Ted Galen Carpenter and Christopher A. Preble

A new report by the Special Inspector General for Afghanistan Reconstruction (SIGAR) confirms that the war on drugs in that country has been a failure, although few within the Obama administration are willing to admit it publicly. After more than a decade of reconstruction, and over $7 billion spent on counternarcotic operations, opium poppy cultivation reached an all-time high in 2013, surpassing its previous peak in 2007.

And, with the United States slated to reduce its presence in Afghanistan, the problem is likely to get worse. Special Inspector General John F. Sopko, in a cover letter to the report, predicts that, given the “deteriorating security in many parts of rural Afghanistan and low levels of eradication of poppy fields, further increases in cultivation are likely in 2014.”

The situation in Afghanistan should come as a surprise to no one. For more than a decade, Afghanistan has been the leading supplier of opium (the raw ingredient for heroin), displacing Myanmar (Burma) and other once-dominant source countries.

As the 2014 World Drug Report from the United Nations Office on Drugs and Crime indicates, global consumer demand for heroin (and other illegal drugs) remains robust. With regard to heroin, modest declines in Western Europe have been largely offset by increased use throughout much of Eastern Europe and South Asia. The problem of “injectable drugs,” (primarily heroin), the report emphasizes, is “particularly stark in Eastern and Southeastern Europe.”

The failure of the drug war in Afghanistan is merely the latest iteration of the frustrating results so common in other regions where Washington has led campaigns to drastically curtail trafficking.”

Afghanistan is ideally positioned to fulfill that demand, both because of its relative proximity to the main consumer markets compared to other source countries, and because the volatile internal security environment allows drug trafficking to flourish. But it would be a mistake to assume that the drug trade is exclusively the province of the Taliban and its allies. As noted in a September 2009 Cato Institute White Paper, there were strong indications that supporters of the government in Kabul under then president Hamid Karzai were deeply involved in the drug trade. Afghans witnessed the proliferation of new mansions in the capital and other major cities, which they dubbed “poppy palaces.” That situation has not changed for the better in recent years.

Given the tens of billions of dollars …read more

Source: OP-EDS

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Moral Hazard and Socialism in Collective Security Agreements

November 3, 2014 in Economics

By Ryan McMaken

6949

Mises Daily Monday by Patrick Barron:

Collective security agreements allow many countries’s politicians to shift the cost of national defense to taxpayers outside their own countries. Moral hazard, belligerence, and over-reliance on military solutions often ensue.

…read more

Source: MISES INSTITUTE