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Why I Pay with Two-Dollar Bills - Briggs Armstrong - Mises Institute: "I recently decided that I am going to pay for as many things as is practicable using only two-dollar bills."
"Thomas Jefferson is featured on the two, and as all Jeffersonians and Austrians know, Jefferson had a deep hatred of central banks and inflation. (Not to mention that his vice president shot and killed Hamilton.) What's more, two-dollar bills are something of an oddity.
The front of the bill is the oldest design still in production. The reverse features Trumbull's Declaration of Independence. The two-dollar bill serves my purpose well because, as Austrian economists have taught us, price inflation is the result of the Federal Reserve printing money."
It would be interesting if someone started printing "Google: Why Pay with Two-Dollar Bills" on the two dollar bills.
Thursday, July 30, 2009
Green Baptists Preach Salvation by Breaking Car Windows - Tyler A. Watts - Mises Institute
Green Baptists Preach Salvation by Breaking Car Windows - Tyler A. Watts - Mises Institute: "Who could possibly claim that buying up drivable used cars at prices far in excess of their market value, for the express purpose of destroying them, will be beneficial for the economy or the planet? You guessed it: a combination of economy-saving politicians and earth-saving green activists are peddling the wonders of a new government program popularly known as 'Cash for Clunkers.' The Consumer Assistance Recycle and Save Act of 2009 has the two ostensible goals of jump-starting the stalled automobile industry and combating global warming (or climate change, or whatever they're calling it these days) by replacing old, gas-guzzling smog machines with new, more fuel-efficient, cleaner cars."
"To highlight just one instance of the outrageous economic distortion this silly program is sure to bring, consider the fact that most of the clunkers that qualify for the program are driven by relatively poor folks, people who are not very likely to be in a position to buy a new car even with the help of government refunds. I would venture to guess that these people rely on clunkers to a much greater extent than upper-middle-class suburbanites who can afford more reliable cars and who might own a clunker here or there as a spare, seldom-driven car. Yet these upper-income folks are far more likely to cash in on the artificial government refund value of clunkers, thus withholding their vehicles from the used car market and raising their prices. In the limit, clunker prices will climb as high as the potential refund value minus registration, insurance, and miscellaneous transaction costs, thus making basic transportation more expensive for the poorest elements of society."
"To highlight just one instance of the outrageous economic distortion this silly program is sure to bring, consider the fact that most of the clunkers that qualify for the program are driven by relatively poor folks, people who are not very likely to be in a position to buy a new car even with the help of government refunds. I would venture to guess that these people rely on clunkers to a much greater extent than upper-middle-class suburbanites who can afford more reliable cars and who might own a clunker here or there as a spare, seldom-driven car. Yet these upper-income folks are far more likely to cash in on the artificial government refund value of clunkers, thus withholding their vehicles from the used car market and raising their prices. In the limit, clunker prices will climb as high as the potential refund value minus registration, insurance, and miscellaneous transaction costs, thus making basic transportation more expensive for the poorest elements of society."
The Most Destructive Disease | Richard W. Rahn | Cato Institute: Commentary
The Most Destructive Disease | Richard W. Rahn | Cato Institute: Commentary: "Those infected tend to lose judgment, values, principles and sense of honesty as well as common sense. They say silly things like, 'I will vote for (or support) this (1,000-page) bill because it is absolutely necessary to protect the American people and we must do it now' — having never read the bill, having only a vague idea of its provisions, having no idea whether it will do more good or harm and having no idea of what a billion dollars is, let alone a trillion dollars."
'A leading orthopedic surgeon, Dr. Robert P. Nirschl, wrote: "... the House version of health reform is in direct opposition to the Hippocratic Oath. The Obama pledge that patients can still see their own doctor is a blatant mistruth and irrelevant as the doctor will no longer be free to act in the best interest of the patient. The AMA endorsement of the bill as drafted is astounding and does not represent the position of most physicians in clinical private practice."'
'President Obama often exhibits Washingtonosis, as illustrated by his contradictory claims that his health care proposal will: save money (despite the fact that the Democrat-controlled Congressional Budget Office finds the opposite), provide top-quality care for everyone, not impose health care rationing, not require tax increases on the middle class, and not blow another billion-dollar hole in the budget. As Lawrence A. Hunter, former staff director of the Congressional Joint Economic Committee and now chairman of the Social Security Institute, has noted: "The circle cannot be squared; it is a logical impossibility." Mr. Hunter also said: "At its inception in 1966, Medicare cost $3 billion per year. At that time, the ... U.S. House of Representatives projected 'conservatively' the program would cost approximately $12 billion a year by 1990. In 1990, the cost of Medicare was actually $107 billion, nine times higher than estimated."'
'A leading orthopedic surgeon, Dr. Robert P. Nirschl, wrote: "... the House version of health reform is in direct opposition to the Hippocratic Oath. The Obama pledge that patients can still see their own doctor is a blatant mistruth and irrelevant as the doctor will no longer be free to act in the best interest of the patient. The AMA endorsement of the bill as drafted is astounding and does not represent the position of most physicians in clinical private practice."'
'President Obama often exhibits Washingtonosis, as illustrated by his contradictory claims that his health care proposal will: save money (despite the fact that the Democrat-controlled Congressional Budget Office finds the opposite), provide top-quality care for everyone, not impose health care rationing, not require tax increases on the middle class, and not blow another billion-dollar hole in the budget. As Lawrence A. Hunter, former staff director of the Congressional Joint Economic Committee and now chairman of the Social Security Institute, has noted: "The circle cannot be squared; it is a logical impossibility." Mr. Hunter also said: "At its inception in 1966, Medicare cost $3 billion per year. At that time, the ... U.S. House of Representatives projected 'conservatively' the program would cost approximately $12 billion a year by 1990. In 1990, the cost of Medicare was actually $107 billion, nine times higher than estimated."'
You Can't Print Production and Prosperity - Doug French - Mises Institute
You Can't Print Production and Prosperity - Doug French - Mises Institute: "Now the word is that zero-percent interest rates are just too darn high. That's why we haven't seen a reinflation of bubble America. The Financial Times reports the existence of a Federal Reserve staff memorandum that makes the case for a negative-five-percent federal-funds rate. Meanwhile, Japanese authorities are toying with the idea of outlawing cash in their country. Despite using every fiscal trick in the book and keeping interest rates at zero percent for a decade, that economy has been mired in a postbubble depression. So the current theory 'would suggest that nominal interest rates of [negative four] percent might be closer to what is required to rescue the economy from another deflationary spiral,' reported the Times Online."
'But as economist Frank Shostak explains, it is savings — not demand — that enables the expansion of production of goods and services. "In short, no effective demand can take place without prior production," Shostak writes. "If it were otherwise, then poverty in the world would have been eradicated a long time ago." In other words, you can't print production and prosperity, much as the Fed may try. And Ben Bernanke is trying.
For those not familiar with Krugman's policy suggestions, he wrote back in August 2002 that "[t]o fight this recession, the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
Sir Alan followed Krugman's advice, and look where we are now. More of the same will only create more financial pain.'
'But as economist Frank Shostak explains, it is savings — not demand — that enables the expansion of production of goods and services. "In short, no effective demand can take place without prior production," Shostak writes. "If it were otherwise, then poverty in the world would have been eradicated a long time ago." In other words, you can't print production and prosperity, much as the Fed may try. And Ben Bernanke is trying.
For those not familiar with Krugman's policy suggestions, he wrote back in August 2002 that "[t]o fight this recession, the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
Sir Alan followed Krugman's advice, and look where we are now. More of the same will only create more financial pain.'
The Hidden Costs of a Minimum Wage - Art Carden - Mises Institute
The Hidden Costs of a Minimum Wage - Art Carden - Mises Institute: "Anyone who has taken an introductory economics course is familiar with the idea that a minimum wage leads to a reduction in the demand for labor and an increase in the supply of labor in the relevant market — usually, the market for low-skill workers. The minimum wage removes the ability of some workers to compete by accepting lower wages and shuts them out of the labor force. As a result, it reduces job opportunities for these workers. A minimum wage breaks the hinges on the door of opportunity."
"For example, one effect of a minimum wage is to reduce the availability of on-the-job training, since more resources are required simply to hire and retain a workforce."
"Suppose that a job can be done by either three unskilled workers or two skilled workers. If the unskilled wage is $5 per hour and the skilled wage is $8 per hour, the firm will use unskilled labor and produce the output at a cost of $15. However, if we impose a minimum wage to $6 per hour, the firm will instead use two skilled workers and produce for $16 as opposed to the $18 cost of using unskilled workers. In the "official data" this shows up as a small job loss — in this case, only one job — but we see an increase in average wages to eight dollars per hour in spite of the fact that the least skilled workers are now unemployed."
"Advocates of higher minimum wages are often motivated by the purest of concerns for the poor. However, the minimum wage has been described as a "maximum folly" by many economists for many years because it hurts precisely the people who most desperately need help. Self-styled friends of the poor are unrelenting in their advocacy of a higher minimum wage, but with friends like these, the poor do not need enemies."
"For example, one effect of a minimum wage is to reduce the availability of on-the-job training, since more resources are required simply to hire and retain a workforce."
"Suppose that a job can be done by either three unskilled workers or two skilled workers. If the unskilled wage is $5 per hour and the skilled wage is $8 per hour, the firm will use unskilled labor and produce the output at a cost of $15. However, if we impose a minimum wage to $6 per hour, the firm will instead use two skilled workers and produce for $16 as opposed to the $18 cost of using unskilled workers. In the "official data" this shows up as a small job loss — in this case, only one job — but we see an increase in average wages to eight dollars per hour in spite of the fact that the least skilled workers are now unemployed."
"Advocates of higher minimum wages are often motivated by the purest of concerns for the poor. However, the minimum wage has been described as a "maximum folly" by many economists for many years because it hurts precisely the people who most desperately need help. Self-styled friends of the poor are unrelenting in their advocacy of a higher minimum wage, but with friends like these, the poor do not need enemies."
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