Archive for the ‘economics’ Category

Here is a great interview of former Political Badger guest David Stockman on CNBC yesterday:

http://video.cnbc.com/gallery/?video=3000404293

Check out the latest podcast from Peter Schiff!

Click here to listen!

Listen to all of Peter Schiff’s podcasts at SchiffRadio.com. Visit Peter’s gold company at SchiffGold.com

By: Steve Patterson

Business is often portrayed as being crude and cruel. According to the popular narrative — the Charles Dickens view of the world — businesses are filled with cold-hearted scrooges who value profits more than people. This is then contrasted with the kindness and altruism of charities, non-profits, and governments, which are all supposedly created to help people. Charity, in particular, is seen as ethically superior to business. After all, what could make a greater impact on the world than giving to the needy?

This view of the world is shortsighted. While it’s true that charity helps people, business makes a far greater contribution to humanity. Virtually all of the increases in society’s standard of living are because of simple commerce, and it’s the poor, in particular, who benefit the most. To understand why, we need to examine the different formulas that charities and businesses operate under.

Charities deal with distributing wealth — coordinating the transfer of some people’s “surplus” to other people’s “shortage.” Businesses, on the other hand, deal with creating wealth by selling goods and services people value. (more…)

Please listen to the latest episode from our friend and guest on Political Badger podcast, Bob Wenzel.  On this episode of the Bob Wenzel Show he talks to Dr. Mark Hendrickson about Thomas Piketty and the problems with his approach to economics. Click here to listen!

By: Mark Thornton

We live in a world of massive monetary inflation and extremely low interest rates. Mortgage rates are near historic lows and yet it seems that people cannot get loans. Home sales are up, but with a near record percentage of sales made with cash, rather than a mortgage. The unemployment rate is nearing “full employment” and yet a record number of people do not have jobs.

We are repeatedly told that the unprecedented monetary stimulus by the Federal Reserve and other central banks is necessary to stimulate the economy, create jobs, and generate economic growth. The truth is that this scheme is designed to stealthily steal from the productive classes in order in enrich the unproductive financial class and the counterproductive political classes. It is a con game.

Financial Repression 

With politicians and central bankers seemingly gone made with their obsession of money printing and ultralow interest rates, it is nice to know that academic economists have a term, i.e. financial repression, for the policies that have created our current economic conditions.

However, it is not a new term. Its use dates back to at least 1973 when two Stanford University economists, Edward Shaw and Ronald McKinnon, used the term in separate publications. The phrase was initially meant to criticize various policies that reduced economic growth in undeveloped countries, rather than as an indictment of the world’s leading modern economies.

Financial repression is a revolving set of policies where the government insidiously takes wealth from the private sector, and more specifically makes it easier for government to finance its debt. In today’s environment this includes: (more…)

By: Mark Thornton

Even as the Saudi Arabian state steps up bombing raids in Yemen and spends billions on new military infrastructure, plans are moving forward for the Kingdom Tower in Jeddah. The new tower is to be a kilometer tall and will contain at least 200 floors. It will include both a luxury hotel, class A office space, residences, and many other luxury features. It represents phase 1 of a multiphase development just north of the city of Jeddah on the Red Sea.

The Kingdom Tower project is organized by the Kingdom Holding Company, the chairman of which is Saudi Arabian Prince Al-Waleed bin Talal. He is nephew of the late King Abdullah and is the wealthiest Arab in the Middle East.

The project has been in the works for several years. Between 2008 and 2013 contracts were negotiated and signed, technologies were selected and developed, and preliminary work was carried out. In early 2013 work was begun on the underground foundation and was completed in early 2014. The above-ground construction commenced in the fall of 2014 and is proceeding apace.   (more…)

Please check out Jeff Deist’s (of the Mises Institute) interview with John O’Donnell of the Online Trading Academy and Power Trading Radio.  John will be a guest on our show soon! 

Click here to listen!

By: Peter Schiff

The sudden fall in the price of oil provides a unique opportunity to examine the widely held belief that deflation is economic poison. As many governments and central banks have vowed to fight deflation at all costs in 2015, the question could hardly be more significant.

While falling prices may strike the layman as cause for celebration, economists believe that it can kick off a nasty, and often inescapable, negative cycle, which many believe leads inevitably to a prolonged recession, or even a depression. However, these same economists acknowledge that falling energy prices may offer a stimulus, equivalent to an enormous “tax cut,” particularly for lower and middle income consumers for whom energy costs represent a major portion of disposable income. They suggest that the money consumers and businesses no longer spend on gasoline and heating oil could be spent on other goods and services thereby creating demand in other areas of the economy. Even Fed Chair Janet Yellen, a staunch advocate of the economic benefits of rising consumer prices, has extolled the benefits of falling oil prices.

After considering these competing tensions, most economists agree that falling energy prices are a net positive for an economy (except for oil exporting countries like Russia and Venezuela). But the fact that there is even a debate is shocking. It should be clear to anyone that consumers individually, and an economy collectively, benefit from lower energy prices. As I mentioned in a column late last month, no one buys energy for energy’s sake. We simply use it to do or get the things that we want. The lower the cost of energy, the cheaper and more abundant the things we want become.

But if we all can agree that lower energy prices offer a benefit, why can’t we make the same conclusion about food prices? Wouldn’t consumers get a huge “tax cut” if their grocery bills fell as dramatically? How about health care? Wouldn’t we all be better off if our hospital and insurance bills fell dramatically from their currently insane levels? Come to think of it, why wouldn’t we be better off if the price of everything fell?  When does too much of a good thing become too much? (more…)

If you haven’t seen this video, please check it out. Peter Schiff (brother of Andrew Schiff who we’ve had on the podcast) correctly called the ’08 financial collapse while all the talking heads laughed in his face. He had specifics. He knew the causes, the effects, and knew exactly how it would unfold. The scary part is he is predicting a much worse crisis ahead and, again, all the blowhards on cnbc, etc. are laughing at him… calling him a kook, etc. Check out his stuff on youtube and you’ll get an idea of what he’s calling for and the typical response he gets.

By: Paul Craig Roberts

Financial Market Manipulation Is The New Trend: Can It Continue?
Financial Imperialists Attack Russia

A dangerous new trend is the successful manipulation of the financial markets by the Federal Reserve, other central banks, private banks, and the US Treasury. The Federal Reserve reduced real interest rates on US government debt obligations first to zero and then pushed real interest rates into negative territory. Today the government charges you for the privilege of purchasing its bonds.

People pay to park their money in Treasury debt obligations, because they do not trust the banks and they know that the government can print the money to pay off the bonds. Today Treasury bond investors pay a fee in order to guarantee that they will receive the nominal face value (minus the fee) of their investment in government debt instruments.

The fee is paid in a premium, which raises the cost of the debt instrument above its face value and is paid again in accepting a negative rate of return, as the interest rate is less than the inflation rate.
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From http://www.davidstockmanscontracorner.com today:

http://davidstockmanscontracorner.com/how-financial-bubbles-fester-and-burst-even-as-the-fed-says-not-to-worry/

We recently had a very interesting conversation with Mark Thornton of the Ludwig von Mises Institute. We discussed some Austrian economics basics and analyzed today’s economy through the lens of an Austrian. We also got a sneak peek into his latest article coming out soon on mises.org.

http://www.mises.org/

http://bastiat.mises.org/

Today we spoke with Dr. Paul Craig Roberts on a number of topics including our troubled economy, how we created the mess in Iraq, and the possibility of nuclear war with Russia.  I hope you enjoy this really interesting conversation.

http://www.amazon.com/How-America-Was-Lost-Warfare/dp/0986036293

Today I was very lucky to have the opportunity to chat with Dr. Walter Block.  What struck me most was the courage and conviction he has to hold, disseminate and defend some very unpopular, un-PC opinions.  It was a very enlightening conversation for me.  I hope you enjoy it as much as I did.

 

http://www.walterblock.com

Recently Robert Wenzel of http://www.economicpolicyjournal.com spoke with Jack to give the listeners the basics of Austrian Economics.

http://www.economicpolicyjournal.com

http://www.amazon.com/The-Fed-Flunks-Federal-Reserve/dp/1312047232

Just Kidding… but this is pretty cool.

With the Fed propping up the the stock market with their cheap money policies, what’s a person to do? Andrew Schiff of Euro Pacific Capital says invest abroad:

http://www.schiffradio.com

http://www.europac.net

http://www.amazon.com/How-Economy-Grows-Why-Crashes/dp/1118770277

He’s a contrarian. He’s a prognosticator. He’s a bear on the US economy. He’s Dr. Doom and he was kind enough to chat with us recently:

Given our tendency towards more government, at least since FDR, is there actually hope for an eventual small government in this country? A recent Reason-Rupe survey suggests there may be! We recently spoke with Reason Foundation director of polling Emily Ekins to discuss the results of this fascinating survey.

http://reason.com/assets/db/2014-millennials-report.pdf

On Independence Day, I had the opportunity to chat with Kmele Foster of Fox Business’ The Independents and Freethink Media. We talked about Kmele’s path to libertarianism and to television. We talked about the founders and whether we’ve retained their principles or abandoned them altogether. At times our “movement” can tend to have a negative outlook on our future. The biggest thing I took away from my chat with Kmele is that there is a lot to be optimistic about… which was definitely refreshing for a change.

Also, here are links to the films Kmele mentions in the interview:

http://www.amazon.com/Honor-Flight-Bert-Brach/dp/B00BU984DK/ref=sr_1_1?s=movies-tv&ie=UTF8&qid=1405045292&sr=1-1&keywords=honor+flight+the+movie

http://www.amazon.com/2081-based-Vonneguts-22Harrison-Bergeron-22/dp/B002Y2BDEE

Dinesh D’Souza is a conservative author and filmaker. He made big waves with his 2012 documentary, 2016: Obama’s America. He is now promoting his new film, America: Imagine the World Without Her. He was kind enough to take a few minutes out of his crazy schedule to talk about the movie and discuss a few issues with us. Enjoy…

Coming up in the next 2 weeks, Political Badger talks with Amity Shlaes, Ed Krayewski, Dinesh D’Souza, Kmele Foster and Marc Faber. Please stay tuned!!!

Many of you have read his pieces on his blog bionic mosquito. You have seen his stuff all over the place: on lew rockwell, economic policy journal, lions of liberty

After hearing some talking head on CNBC refer to Ron Paul as a mosquito, the author thought to himself, “If Ron Paul is a Mosquito, he is a powerful one.” Hence the name. Jonathan Goodwin is bionic mosquito and was kind enough to give us a peek into his not-so-mosquito-sized brain.

Political Badger: What was the impetus for starting your blog?

Bionic Mosquito: I had been thinking about doing something like this for quite some time. I thought it would be a good way for me to improve my thinking on several subjects – economics, libertarianism, politics, and empire (I think history wasn’t originally on my mind); I am not trained in any of these. I felt that the act of writing, and posting it publicly, would force an improvement of discipline in my thought. I also thought that receiving feedback online would be a wonderful, free, learning tool. Finally, I wanted to document my own learning / progression.

But what drove me finally to take the step was a minor technical problem (you asked). For a time I was a regular feed-backer at The Daily Bell. Early on, I was not able to post a comment of more than a few characters (it turned out to be a browser problem on my end). In order to get around this, I would post my longer comments on my blog, and DB graciously copied the comments from my blog to their thread.

Pretty dull, I know.

PB: When did it really take off?

BM: Have you looked at the alexa ratings? “Take off” is not a phrase I would use, but thank you.

I guess bionic mosquito first started gaining some recognition (beyond the comments section of Daily Bell, EPJ, and Mises) when Lew Rockwell ran a post a couple of years ago – something I wrote about Pearl Harbor, based on a book by George Victor, “The Pearl Harbor Myth: Rethinking the Unthinkable”. Since then, Lew has re-posted many of my blog posts, as has Robert Wenzel at EPJ and Marc Clair at Lions of Liberty. A few other sites occasionally pick up a post as well.

(more…)

Investing is like a lot of things we in the libertarian/small government/no government movement observe. If you are a sheep and tend to follow the herd (and not a badger who thinks for himself), you are likely to be at a disadvantage. The crowd is very often dead wrong. Jim Rogers has made a fortune by adhering to this simple philosophy. He is very clear that one shouldn’t go against the crowd simply for the sake of being a contrarian. However, he says and proves that when the whole world thinks one way, the exact opposite may just be the right answer.

If you pay attention to financial media even the slightest bit, you have no doubt heard the talking heads freak out over the prospect of deflation. Bloomberg, CNBC, Fox Business, Wall Street Journal, you name it… they all mindlessly repeat the bloviations of Bernanke, Yellen, Krugman, etc. that what we need is for people to spend (not save), to borrow, and for prices to rise. All of this is wrong.

To give you a real basic econ lesson, this attitude is largely inspired by the economist John Maynard Keynes. Bernanke and company are devout Keynesians. They believe an economy is built on consumption and is stimulated by spending. Paul Krugman is outspoken in his conviction that the US does not carry enough debt. That $18 trillion is not nearly enough. He believes we need to spend much, much more and that increasing the debt does not matter in the least. I sh%t you not. These are the people running our economy. Bernanke, Yellen, Jack Lew, the financial media, republicans and democrats alike all believe we must spend our way out of this funk we’re in. And as Shaq once said, “Don’t fake the funk on a nasty dunk.” That literally means nothing, sorry.

(more…)

Recently, I was lucky enough to interview Dr. Michael C. Munger, professor of Political Science, Economics, and Public Policy at Duke University (he’s no dummy). He is also director of the PPE Program at Duke. He has written over 100 scholarly articles and papers and has authored/co-authored four books. Munger ran for governor of North Carolina in 2008 as a Libertarian candidate.

Munger gives a unique libertarian perspective on economics and policy. His interview reminds us that while there may be different factions within the Libertarian party, at the end of the day we all have similar goals and should welcome and support those who don’t conform to every boilerplate libertartian stance. We don’t all have to subscribe to the Austrian school and we don’t all have to list the abolition of the Fed as #1 on our priority list.

Political Badger: How did you become a libertarian?

Michael Munger: Usual story, for economists. I was a socialist, and started studying economics. When you understand markets, you recognize that the state is not very good at organizing things. And then the Republicans proved that the state is capable of great evil, imposing narrow moral beliefs and violence on people, so the state isn’t very good at running people’s lives, either! In 2003, within a month, GW Bush invaded Iraq and I had dinner with Rick Santorum. So I gave up on both of the state-sponsored parties and became a libertarian. (more…)

Seeing as our government bungles and mismanages nearly everything it gets it’s hands on, I decided to do a series of pieces on their ineptitude. Given the endless fodder available, this promises to be an infinite project. My hope is to show that government does almost nothing well and to illustrate that more government necessarily equals more waste, inefficiency, ineffectiveness, and in this case death. And therefore the less government we have, obviously the less we get of these things. (more…)

Great zerohedge.com article today called The Typical Characteristics of a Stock Market Mania. On Wall Street history repeats itself over and over and over… and no one ever notices a pattern. Read the article and decide whether you think we’re in a boom phase:

The Typical Characteristics of a Stock Market Mania

All headlines from today:

California drove Toyota out of state: Torrance Mayor

Apple borrows, Pfizer goes British—blame the US tax code

US doesn’t have a rational tax policy: Jack Welch

Makes you wonder when Atlas is going to shrug…

In an earlier piece I wrote about the hypocrisy of republicans. Today I want to talk about how horrible democrats are. I try to be an equal opportunity politician hater.

Democrats are evil in so many ways, but the most obvious and egregious is their policy of stealing in order to secure votes. They have somehow been able to convince millions that theft is ok and is in fact noble. They have shown millions more that if they vote democrat they will get the booty looted from the victims. LBJ once said, “I’ll have those n*ggers voting Democratic for the next 200 years.” Nice. A thief and a racist. Good combo!

(more…)

Check out this great little article by Walter Williams on the ridiculousness of Obama’s relentless war against the pay discrepancy between men and women.

Walter Williams

April 15th is tax day, or the deadline for submitting your tax returns to the government. It’s a day we should all stop and give thanks to our omniscient, omnipresent, and opulent oligarchy. On behalf of the 50% of Americans who pay for the other half, I would like to give thanks to you today, my all-powerful government, for taxing my income, my property, my purchases, my gifts, my investments, and my estate that I would like to leave to my children when I die. Truly… Thank you. I mean it.

I realize that merely confiscating a large percentage of my hard earned money is not enough to fund your imperialistic military, your entitlement programs, foreign aid, bank bailouts, and all of your massive departments. I understand that if I watch my spending and save a little and invest for my future you must tax that as well (wait, didn’t you already tax that money once?). I also realize that you must tax the food, gas, and clothing that I must buy with some of my money that you allow me to keep. I understand that this is still not enough revenue for you so I must pay you each year for things I own like my house and my car. And finally, I totally get that whatever you leave me with, at the end of my days, that I want to leave for my kids, you must take your cut of that too. (more…)

We must consider the source when we consider the things we were taught growing up in public (government) schools. In a hypothetical true free society where government did not monopolize the school system, we would be much more likely to learn a fair and accurate presentation of facts. This is true of any subject but is most applicable when we’re talking about history. History is largely in the eye of the beholder. There are facts and dates that cannot be debated. But history is more about the why than the when. This is where the perspective of the presenter comes into play. Take 9/11 for example. Depending on who taught the subject, one may get very different explanations as to the cause. A pro-government leaning teacher may say we were attacked because the terrorists hated our freedom and our wealth. They attacked us out of jealousy basically. Another, more impartial teacher may say we were attacked as retaliation for our incessant meddling in the Middle East. Same event, same dates, same number of dead, but very different explanations of the most important lesson: the cause.

The standard account of the Great Depression we got (and still get) growing up illustrates just one of many inaccurate portrayals of historical events regurgitated in government schools. The popular, public school account goes something like this: the unfettered capitalistic, animalistic excesses of the 1920’s resulted in a horrific crash in 1929 that led to the Great Depression. And the do-nothing Herbert Hoover allowed the Depression to continue and worsen while the masses were starving. Roosevelt, with all of his grand programs, put Americans back to work and eventually pulled us out of the Depression. (more…)

As I’ve written before our economy is based on bubbles. The Fed inflates a bubble, we have a crash, they reinflate and round and round we go. Right now we are seeing the cheap money find its way into stocks. Last time it was housing. Today’s report of an unexpected 0.5% increase in producer prices in March makes one think the freshly printed dollars may be finding their way into the economy at large. The dollar has taken a bit of a beating this week on the FX market. It was down 2.5% against the Yen which is tough to do given Prime Minister Shinzo Abe’s rampant money printing. Who knows if this is the beginning of a trend but, if nothing else, its a harbinger of things to come.

The main way by which the Federal Reserve seeks to “stimulate” the economy is by manipulating interest rates. It does this through its so called open market operations. In other words, it attempts (most often) to force interest rates down by changing the money supply, i.e. printing money. (more…)

Dick Cheney famously said, “Deficits don’t matter.” Well, deficits have run our national debt up to over $17 trillion and counting exploding. Dick Cheney and most politicians are great at spending other people’s money. The more they spend, the more likely they are to get votes, and so the more likely they are to say things like “deficits don’t matter.” We need to remember Dick Cheney, as well as most politicians, are not economists. They are in the business of buying your vote. Deficits do matter. They matter a lot. When they tell you the rules that govern your personal expenditures don’t apply to the government, don’t believe them. No matter what anybody says, irresponsibly spending more than you take in year after year after year with no plans to ever slow down is a recipe for disaster. The federal government is buying votes with your credit card and have no plans on paying down your balance.

If you haven’t seen this video by Tony Robbins on our national debt, brace for a wake-up call. He really puts the severity of our situation in perspective. I was blown away the first time I watched it. And I realize its a bit random to put a Tony Robbins video up on the site, but his self-help dvd’s did change my life. Just kidding… or am I? Believe in yourself, reach for the stars… and enjoy this video on our monstrosity known as our national debt:

Moral Hazard is a very simple concept that has immense and sweeping repercusions. It is at the very root of the decay we see in America today. It causes people, companies, and other entities to behave in a manner they otherwise would not… a manner which is often reckless and destructive. The biggest proliferator of moral hazard in this country is our government along with it’s partner in crime, the federal reserve.

If you don’t know, Moral Hazard is the principle that says if you remove or mitigate the consequences of someone or something’s actions you remove their incentive to guard against risk associated with those actions. In other words, if one is not punished for poor choices, he or she will continue to make those same choices. To boil it down even further: people respond to incentives. Too often our government incentivizes destructive, or at the very least, non productive behavior. (more…)

More genius from David Stockman:

Stockman Article

Monday: As I sit here in my dark hotel room in Manhattan looking out the window at the Empire State Building, I can’t help but marvel at the triumphs of capitalism. New York (despite its massive government at present) stands as our country’s greatest symbol and beacon of capitalism. It shows us what is possible in a free society. It shows us that, despite what the politicians and the commentators tell us, profits are a good thing. They provide the motivation to invent, to create, to achieve. (more…)

Timely Article

Posted: February 27, 2014 in economics
Tags: ,

cnbc article

Unintended consequences. The central planners somehow know what the optimum minimal price of labor should be (even though many have no private sector experience), but shockingly they don’t think of all the unintended consequences.

The Minimum Wage

Posted: February 26, 2014 in economics
Tags: ,

There are so many things we grow up learning in school, from our parents, from our friends that we just assume are true. We don’t even think twice about them. They are as good as gravity. One of the reasons I just can’t read enough or watch enough videos or listen to enough podcasts about this stuff is that my mind is constantly being blown. It’s like learning everything for the first time, or maybe more like unlearning so many things you thought were factual. The first time I heard the minimum wage was not good or necessary, I was a little blown away. “Of course the minimum wage is necessary,” I thought. “Otherwise employers would just pay their employees peanuts.”

I now know this is just a ridiculous notion. It comes down to basic economics: supply and demand. If you increase the cost of something people will buy less of it. Price goes up, demand goes down. This is a law, like gravity. Not debatable. The rules don’t change just because the price we’re talking about is labor. Any study claiming the contrary is nonsense. Any such study is saying gravity does not exist and that the earth is flat. (more…)