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By Jeff Deist

By: Jeff Deist

Readers of Ludwig von Mises appreciate not only the depth and breadth of his insights, but also the elegance of his language. Even writing in English, a language he adopted in middle age, Mises conveyed dense conceptual theories and big ideas with a vigorous style not normally associated with economists. Nothing in his writing is dry or technical. This is why, for example, opening Human Action to any random page can yield immediate benefits. To use an analogy from the days when music came on vinyl and compact discs, with songs in a particular order, there are no throwaway songs in Mises’s work.

Mises did not hesitate to borrow heavily from other fields in his writing, including history, sociology, and philosophy (especially epistemology and logic), always in service of presenting economics holistically. His drive to understand the broader implications of human action and reason saved him from the kind of tunnel vision we see in academia today, where “intersectionality”— far from what its trendy name suggests— serves a narrow political purpose rather than the broader cause of advancing knowledge.

In this sense he demonstrated a characteristic humility, contrasted with the hubris displayed by so many brilliant academics: he understood his chosen profession as part of a larger human experience, rather than a self-serving body of knowledge with rigid boundaries to be guarded even as they continually bump up against other disciplines.

One great example of Mises’s wonderful use of language comes at the end of Human Action, in a typically ambitious chapter titled “Economics and the Essential Problems of Human Existence.” Here he uses the wonderful term “élan vital,” originated by the French philosopher Henri Bergson, to describe the innate and noble impulse that drives us to improve our condition. It is this “ineradicable craving” that compels us to seek happiness, minimize discontent, and spend our lives “purposively struggling against the forces adverse to (us).”

As usual, Mises’s syntax and diction hardly bring to mind a boring economics text:

Civilization, it is said, makes people poorer, because it multiplies their wishes and does not soothe, but kindles, desires. All the busy doings and dealings of hard-working men, their hurrying, pushing, and bustling are nonsensical, for they provide neither happiness nor quiet. Peace of mind and serenity cannot be won by action and secular ambition, but only by renunciation and resignation. The only kind of conduct proper to the sage …read more

Source: MISES INSTITUTE

By Ilya Shapiro

Ilya Shapiro

The year just past was a big one for judges. I don’t mean the
decisions they reached or the big cases argued at the Supreme
Court, but how our black-robed arbiters were picked and who they
are. Few would’ve predicted the record number of circuit court
confirmations (12) or total nominees (68), or their quality (a few
overly publicized weak spots notwithstanding). This presidential
administration has surpassed even George W. Bush’s well-oiled
machine for selecting committed and youthful originalists and
textualists, and getting them through the Senate.

A year ago, we were still getting over the surprise that the
next resident of the White House would be Donald J. Trump. It was
just sinking in that one of the new president’s first orders of
business would be to fill the late Justice Antonin Scalia’s seat.
Republican senators’ refusal to take up any nominee until after the
election, of course, preserved the vacancy.

People lost their minds over this maneuver, labeling it a
constitutional crisis, or a dereliction of duty, or the GOP’s
denial of President Obama’s legitimacy. It wasn’t any
of those things, but just good ol’-fashioned hardball
politics. Senate Majority Leader Mitch McConnell took a risky
gamble that paid off, in significant part because voters decided
that Trump’s list of Supreme Court potentials was better than
what they could expect from Hillary Clinton.

We have divergent
interpretive theories that map onto ideologically sorted parties,
so is it any surprise that elections are high-stakes for
judges?

So all the harping about Neil Gorsuch being an
“illegitimate” justice is sour grapes, tied into
general complaints about the election—such as that the
Russians prevented Clinton from campaigning in Wisconsin and wrote
her “basket of deplorables” speech—as much as
anything else. Trump recognized that this was a winning issue and
exploited it.

But What about the Lower Courts?

Lower-court judges, meanwhile, were real wildcards. If a
constitutional lawyer who had been editor-in-chief of the
Harvard Law Review deprioritized judicial
nominations—Obama made relatively few his first term, and
especially his first year—how much would a celebrity
real-estate developer care? Would Trump see these as patronage
posts for his casino lawyers and other JDs he encountered in the
entertainment world? Would he just focus on immigration and trade
and let the judiciary erode away?

As it turns out, the president took door number three: defer
entirely to his counsel, Don McGahn, a libertarian-minded political
lawyer who has been taking advice from the Federalist Society (of
which he and most of his team are members) and other conservative
legal elites.

The result has been the biggest success of Trump’s first
year, and judges of the same kind and caliber as those
conservative-constitutionalist …read more

Source: OP-EDS

By Frank Shostak

By: Frank Shostak

For most economic commentators the underlying driving force of inflation is inflationary expectations1. For instance, if there is a sharp increase in the price of oil, individuals may form higher inflationary expectations that could set in motion spiraling price inflation. Or so it is held.

If expectations could somehow be made less responsive to various price shocks, then over time this would mitigate the effect of a price shock on price inflation, it is argued.

Once we accept that inflation expectations are the driving force of the inflationary process, the next step is to discover a way — using central-bank policies — to make these expectations less sensitive to various price shocks. Once this happens, then expectations have become “anchored,” and various price shocks such as sharp increases in oil or food prices are likely to be of a transitory nature. This means that over time price shocks are unlikely to have much effect on the rate of inflation.

How To “Anchor” Inflation Expectations: Inflation Targeting

To make inflation expectations well-anchored individuals must be clear about the monetary policy of central bank policy makers. If central bankers make it clear they plan to pursue a specific level of price inflation, they believe they can manage present and future expectations for inflation. On the other hand, as long as individuals are unclear about the precise goal policymakers are aiming at with respect to inflation, it will be difficult to bring inflationary expectations to a state of equilibrium.

It's Not Really About Expectations

This is all an interesting theory, but the key factor behind inflation is not expectations — it's growth in the money supply.

After all, without a preceding increase in money supply there cannot be general increase in prices, which is what most mainstream commentators mean when they speak of “inflation.”

A price of a good is the amount of dollars paid per unit of a good. For a given amount of goods, if the stock of money remains unchanged the amount of dollars spent per unit of a good will stay unchanged, all other things being equal.

For example, let us say that because of a sudden sharp increase in the price of oil people have formed higher inflation expectations. If the money stock remains unchanged, then no general increase in prices …read more

Source: MISES INSTITUTE

By Chris Calton

By: Chris Calton

What is now considered the worst Supreme Court ruling of all time, Dred Scott v. Sandford, was a decision that sought to end the controversy over slavery that had raged since the Compromise of 1850. By ruling that Congress had no legal power to prohibit slavery in the territories, Chief Justice Roger B. Taney poured gasoline on the fire that was dividing the nation.

…read more

Source: MISES INSTITUTE

By Daniel Lacalle

By: Daniel Lacalle

The recent elections in the Eurozone have shown that the risks to the European project remain. In Germany, an insufficient victory from Merkel, the collapse of the social democrats and the rise of the alternative right and extreme left have surprised many.

However, it was predictable. The relief rally in the Euro versus its trading currencies and the bullish tone of equity and bond markets after the French elections and the victory of Macron were, in many ways, based on a very optimistic view of strengthening of the current European model. Markets quickly forgot that almost 40% of the voters in France decided to support radical anti-EU parties at both sides of the political spectrum. The German elections showed that this bullish perception was a mirage. In Germany, almost 30% of the vote went to radicals.

The European Union is ignoring this trend and soldiering on with what Brussels calls “more Europe”, which often means more interventionism and central planning. And citizens are not happy with this. Instead of seeing Brexit as a warning sign and an opportunity to improve the European Union strengthening freedom, openness and diversity, the separation of the UK has been taken as an opportunity to advance in an incorrect model that mirrors the French “dirigisme”, a central-planned, heavily intervened model.

The European Commission published in September a surprisingly euphoric docu- ment declaring the end of the crisis thanks to “the decisive action of the European Union”. However, that positive tone contrasts with a growing discontent among European citizens. There is no denying that the European Union is in recovery mode, and that is a positive. Business confidence is rising, and manufacturing indices are in expansion. However, the pace of said expansion has moderated in the past months, and challenges remain. The European economy is not “in shape”, as the European Commission boosts, and this explains a significant part of the rising populist and radical vote.

According to the Bank of International Settlements and Merrill Lynch, Europe has more zombie companies today than before the crisis, i.e. companies that generate operating profits that do not cover their financial costs, despite all-time low-interest rates and an unprecedented monetary stimulus. European banks, at the end of 2016, had more than 1 trillion in non-performing loans, a figure that represents 5.1% of total loans compared to 1.5% in the US or Japan. Europe has gone from financial crisis to …read more

Source: MISES INSTITUTE