Macro Confusion: Inflation, Commodities, and the Fed - Kel Kelly - Mises Daily

Macro Confusion: Inflation, Commodities, and the Fed - Kel Kelly - Mises Daily: "For Federal Reserve officials to claim that the large amount of new money they have created in the last few years is not contributing to pushing up the price of commodities markets, and to (implicitly) assume that all of that money has instead flowed everywhere else in the economy except to commodities markets is indefensible."

"While lower interest rates indeed cause businesses to borrow and invest more, what is usually being borrowed, invested, and spent is new money, not previously existing money. Interest rates are lowered by increasing the money supply. It is this new and additional money that causes increased corporate revenues and profits, GDP, and asset prices. It is the new and additional money that is the sole cause of rising prices of any kind, anywhere (given that most other prices are rising simultaneously)."

"The value of the dollar (of each dollar existing) falls because more dollars are created."

"Thus, they are simultaneously saying that their policies are not driving commodities prices higher, but that if they undo their policies, commodities prices will fall. The fact is that it is their money pumping that is driving both GDP growth and commodities prices — but not the real economy."

"Suppose that today it costs a 40-year-old $45,000 a year to live. With inflation of 3 percent per year, it will cost her over $94,000 a year to live when she retires at age 65. Thus, she must save heavily in order to have an amount of savings large enough to live off each year, and still have it grow for future years of retirement (say, into her 90s, given current life expectancies) at a rate faster than she is drawing down on it. A very high growth rate is needed, especially considering that she will be taxed on all her gains.


But consider an alternative scenario in which no money was printed, and that the rate of production increased at 3 percent per year. In this case, upon retirement, the living that used to cost the woman $45,000 would now cost just over $21,000. And by age 95, it would cost less than $8,500 per year — in real terms, and with nothing taxed! In that case, not only would workers not have to race against the inflation clock before and during retirement, but whatever savings they had would buy more each year.

So indeed, in today's world, because of the government's printing of money, even if wages keep up with inflation, people have to save more and consume less than they would otherwise, and once wages aren't earned anymore, most people usually begin falling behind immediately. Clearly, society would be in better shape with greater savings, a stronger economy, and with prices falling in both nominal and real terms on a monthly basis, as would be the case absent money creation and rising prices."

The Road to Taxi Serfdom - Robert P. Murphy - Mises Daily

The Road to Taxi Serfdom - Robert P. Murphy - Mises Daily: "Even though parking is a pain (and expensive), the reason so many people choose to drive their own cars into Manhattan is that it is currently very expensive to take a cab over long stretches. But if it weren't for the artificial government restrictions, the supply of taxi services would be much larger, and cab fares would be a fraction of their current rates."

Debt-Ceiling Myths | Michael D. Tanner | Cato Institute: Commentary

Debt-Ceiling Myths | Michael D. Tanner | Cato Institute: Commentary: "refusing to raise the debt limit does not mean defaulting on our debts. The U.S. Treasury currently takes in more than enough revenue to pay both the interest and the principal on the debts we currently owe."

"It is true that, once we had paid our debt-service bills, there wouldn't be enough money left over to pay for everything else the Obama administration wants to spend money on. The government would have to prioritize its expenditures — sending out checks for the troops' pay and Social Security first. Other spending would have to wait."

Mexican Trucks Spat Costly to Economy | Daniel Griswold | Cato Institute: Commentary

Mexican Trucks Spat Costly to Economy | Daniel Griswold | Cato Institute: Commentary: "the Mexican trucking issue has never been about safety. The proposed pilot program would require Mexican trucks entering the United States to meet all federal regulations on driver qualifications, truck safety, emissions, fuel taxes, immigration and insurance."

"What the Teamsters and their congressional allies really object to is that these trucks will be driven by Mexicans."

Arthurdale as a Board Game for FDR's Players - Joseph Calandro Jr. - Mises Daily

Arthurdale as a Board Game for FDR's Players - Joseph Calandro Jr. - Mises Daily: "with very few exceptions, people always have good intentions. It is results that matter."

"It takes an outsized ego to look upon your fellow citizens and play with them as if they were lab rats. Arthurdale represented a completely new view of the purpose of government in America. No longer would the political elite merely protect the sanctity of liberty by upholding the rule of law; a new purpose had arisen — to improve their fellow citizens."

"in the year 2006, the mayor of the town of Tal Afar, Iraq, chastised the government that invaded his country — the government of FDR's heirs — by stating, 'What you are doing is an experiment, and it isn't right to experiment on people.'"

More Spending, Less Security | Benjamin H. Friedman | Cato Institute: Commentary

More Spending, Less Security | Benjamin H. Friedman | Cato Institute: Commentary: "A more modest defense strategy would increase security and cut debt. If we let rich allies defend themselves and admitted that we lack the ability to fix disorderly states, we could have a smaller, more elite, less strained, and far less expensive military. With fewer missions, we could cut force structure, slash administration and lower operational costs."

"The biggest savings should come from the ground forces. To occupy Iraq and Afghanistan, we added almost 100,000 service-members to the Army and Marine Corps."

"Counterterrorism, as last week's events remind us, does not require occupational warfare. With raids and drones we can deny terrorists safe havens without trying to build states from chaos."

"If we avoid repeating that mistake after the wars end, the ground forces will have far less to do. Their ranks could shrink by at least a third, saving upward of $30 billion annually. By embracing our geopolitical fortune, rather than going out looking for trouble, we can protect ourselves at far lower cost."

National Unity Is Highly Overrated by Ambitious Politicos | Gene Healy | Cato Institute: Commentary

National Unity Is Highly Overrated by Ambitious Politicos | Gene Healy | Cato Institute: Commentary: "Rare indeed is the call for 'national unity' that doesn't reduce to 'Let's all come together — on my terms.'"

"Obama is right that Red Team/Blue Team politicking shouldn't govern our response to our looming fiscal catastrophe. But it's a little rich to hear that from a guy who just got done denouncing House Budget Committee Chairman Paul Ryan's plan to control Medicaid costs as an un-American scheme to put seniors on Alpo rations."

When Capital Is Nowhere in View - Jeffrey A. Tucker - Mises Daily

When Capital Is Nowhere in View - Jeffrey A. Tucker - Mises Daily: "One gets the sense that most [Haitian] people never have any face time with a government official and never deal with paperwork or bureaucracy really. The state strikes only when there is something to loot. And loot it does: predictably and consistently. And that alone is enough to guarantee a permanent state of poverty.

Now, to be sure, there are plenty of Americans who are firmly convinced that we would all be better off if we grew our own food, bought only locally, kept firms small, eschewed modern conveniences like home appliances, went back to using only natural products, expropriated wealthy savers, harassed the capitalistic class until it felt itself unwelcome and vanished. This paradise has a name, and it is Haiti."

Domestic Military Detention Isn't Necessary | David Rittgers | Cato Institute: Commentary

Domestic Military Detention Isn't Necessary | David Rittgers | Cato Institute: Commentary: "Proponents of using military detention for domestic 'combatants' claim that it is weakness to treat terrorists the same as petty thieves and armed robbers.

That's great rhetoric, but the law of war is the law of necessity, meant to be applied when civil authorities are overwhelmed. If the civil rule of law handles terrorist threats adequately, then invoking military jurisdiction is a counterproductive overreaction."

Yes, Cut Medicaid — It Won't Be as Painful as You Think | Michael F. Cannon | Cato Institute: Commentary

Yes, Cut Medicaid — It Won't Be as Painful as You Think | Michael F. Cannon | Cato Institute: Commentary: "In 1996, Congress eliminated Medicaid eligibility for many non-citizen immigrants.Coverage among non-citizen immigrants actually increased — the opposite of what one might expect — because non-citizen immigrants responded to the cuts by obtaining jobs with health benefits.

In 2005, Missouri cut 100,000 people from its Medicaid rolls. The number of adults with health insurance fell, but by a smaller amount than the number cut from the Medicaid rolls, because private insurance filled part of the gap. With children, the news was even better. Missouri cut loose one fifth of all low-income children enrolled in Medicaid, yet the coverage rate among low-income children did not change. Private insurance filled the entire gap."

State or Private-Law Society - Hans-Hermann Hoppe - Mises Daily

State or Private-Law Society - Hans-Hermann Hoppe - Mises Daily: "If an agency is the ultimate judge in every case of conflict, then it is also judge in all conflicts involving itself. Consequently, instead of merely preventing and resolving conflict, a monopolist of ultimate decision making will also cause and provoke conflict in order to settle it to his own advantage. That is, if one can only appeal to the state for justice, justice will be perverted in the favor of the state, constitutions and supreme courts notwithstanding.

These constitutions and courts are state constitutions and courts, and whatever limitations on state action they may set or find are invariably decided by agents of the very same institution under consideration. Predictably, the definition of property and protection will be continually altered and the range of jurisdiction expanded to the state's advantage."

Why the Terrible Destruction of the Civil War? - Jeff Riggenbach - Mises Daily

Why the Terrible Destruction of the Civil War? - Jeff Riggenbach - Mises Daily: "the war's direct costs amounted to $6.7 billion. If upon Lincoln's inauguration, the government had purchased the freedom of four million slaves and granted a forty-acre farm to each slave family, the total cost would have been $3.1 billion, leaving $3.6 billion for reparations to make up for a century of lost wages. And not a single life would have been lost."

GOP Shouldn't Be Afraid to Challenge Reckless Spending | Tad DeHaven | Cato Institute: Commentary

GOP Shouldn't Be Afraid to Challenge Reckless Spending | Tad DeHaven | Cato Institute: Commentary: "Instead of using the growing debt as an excuse, Republicans should package their reforms as worth undertaking even if the government had a surplus. If the GOP fails to articulate a positive message about the benefits of spending cuts and keeps leaning into the Democrats' strong hand, it could find itself on its back staring up at the lights."

Kids Prefer Cheese: Fair Trade Revealed As Feel-Good Hoax

Kids Prefer Cheese: Fair Trade Revealed As Feel-Good Hoax: "The result is that, after a fairly short period, three years at most, the 'fair trade' farmers are getting no more, and maybe less, than everyone else, and no more than they got before the 'fair trade' scam was started. The scam artists, it's true, are skimming the profits"

"the certification process is so corrupt many don't even bother, and just mislabel the coffee as 'fair trade' from the get-go"