Posts Tagged ‘Austrian economics’

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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…)

I recently had the privilege of interviewing Dr. Edward Stringham of Texas Tech University.  We covered a variety of topics including his forthcoming book entitled Private Governance, published by Oxford University Press.  It was a really interesting interview.  I hope you enjoy it:

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 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

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.

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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…)

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…)

What is the free market? By definition it is simply a system of voluntary exchanges, nothing more really. If you have a hat and I have ten dollars and we agree to exchange them, absent coercion we have both obtained something we prefer. I prefer the hat to the ten bucks and you prefer the cash. This simple system of voluntary exchanges has been vilified throughout our country’s history and has been blamed for everything from recessions and depressions to the business cycle, to low wages, to income inequality. We are told it is inherently flawed and predatory and a breeding ground for corruption, greed, fraud, scandal, etc. The pope recently told us the free market is evil basically… awesome! We hear this in the media. It is taught in the schools. The result of this perpetuation of the evil free market has been massive regulation, and controls placed on free exchange in an attempt to fix these perceived flaws. In a democracy, if most people believe the free market is to blame for a weak or volatile economy, they will elect those who will place more controls on the economy. Mysteriously these controls never fix the business cycle so we pass more rules, and round and round we go… at some point to gotta ask, “Is this really a free market?” (more…)