Current Events

What’s Up with Inflation?

Warren Gibson Current Events, Economics, History, Liberty

Inflation as measured by the Consumer Price Index (CPI) has been almost nonexistent for several years, though it started creeping higher in the first half of 2011. Yet many prices have been rising at double-digit percentage rates. Are official figures trustworthy? And what of expectations? There is a great deal of buzz right now about inflation but also talk of renewed stagnation with the Fed’s QE2 program having ended in June. Could renewed stagnation trigger enough deflation to counter inflation? Or might we get the worst of both worlds—stagflation—as in the 1970s?

We can’t get anywhere with these questions until we agree on the meaning of inflation. At one time the word referred to an increase in the money supply. Over time it came to mean a general increase in prices, an unfortunate turn of events not just because we lost the nice metaphor of an inflating balloon, but also because the shift in meaning tended to obscure the relationship between the two phenomena. Some free-market authors hold out for the old definition, but I suggest this is wasted effort. In my classes I use the phrases “price inflation” and “money inflation” to keep the distinction alive without getting too sidetracked by semantics.

In 1970 Milton Friedman said, “[Price] inflation is always and everywhere a monetary phenomenon.” This is not entirely true but understandable because he was writing at a time when the causal relationship had nearly been forgotten. We can have price inflation without money inflation when there is a supply shock. An overthrow of the Saudi government, for example, might well disrupt the flow of oil from that country. A surging oil price, because it is so important to our economy, would likely pull up the price level with it. In this situation the monetary authorities can help things by doing exactly nothing—letting higher energy prices do the work of encouraging marginal users to cut back. Supply shocks, as such one-time events are called, do not of themselves generate sustained price increases and are therefore not classified as inflation by some economists. Continue reading →

National-Socialist Management Practices; No Obama Derangement Syndrome

Jacques Delacroix Current Events, Law, Liberty, Politics , , , ,

[Editor’s note: this essay first appeared on Dr. Delacroix’s blog, Facts Matter, on July 18 2009]

Quick update on health care on 7/20/09:

I have said before on this blog that there is something wrong with the way we deliver health care in America. It costs us twice more per capita than it costs Europeans and we die younger. That is true in spite of the fact that liberals lie a lot on the subject of health, especially, regarding the number of “uninsured.” The Republican Party missed that boat entirely and we are paying the price for it now.

The President’s insistence that bills must be passed before the August recess has only one explanation: He wants to avoid debate like the plague. Think it through. If our health care system is as bad as he says, it has been so for a long time and we can probably stand it for an additional three months, or six months , or a year. Decisiveness is not everything. (See below.)

After all, the President wants to dispose for the long run of 1/6th of our economy. Given the considerable slowdown in economic growth his other policies guarantee, given the aging of the population, it will soon be 1/5, or 20 % of the economy. There is nothing else like it. For comparison, national defense never took more than 5% since the Korean War.

Aside from anything I may believe about the influence of government on  effectiveness in health delivery, I am interested in the political consequences of the President’s plans, of all his plans. With health, he will make sure the government controls the economy to an unprecedented level. He is turning the US into a corporatist state. That’s another word for “fascist,” without the violent overtones. Continue reading →

(The Myth of) Gun Control as a Panacea

Amar Ali Current Events, Liberty

Just because this is my first post on this consortium, don’t feel shy to comment or rip in!

In light of the horrific tragedy in Connecticut, liberals (not to be confused with leftists[i] ) have decided to take this opportunity to push a political agenda. Inevitably, this leads to dubious arguments rushed to by emotionally moved people trying to justify drastic and sometimes extreme policy positions.

What better time and opportunity to deconstruct this myth and inject a broader perspective?

The most common and tired false rationalization is that guns kills, therefore, gun control, or banning guns would lead to less deaths. Coincidentally, on the same day as the Sandy Hook tragedy, 22 children in China were attacked by a man wielding a knife[ii]. Does this mean we must ban knives or have “Knife Control”? Most would respond no. In fact, it has been shown that more people have been killed with Hammers and Clubs[iii].

Of course the common retort is that guns are different, that they can be controlled and would lead to a decrease in crime. Problem with that theory is that criminals rarely follow the law. Does a person willing to commit an illegal homicide care whether their gun is legal? And in reality, it shows as crime has increased after bans in UK[iv], [v]  and Chicago[vi],[vii] and the after strict bans. Reports show that homicides in Chicago outpace that of Afghanistan[viii] and it is the only major US city to see increases in homicides.[ix]

Here gun opponents will eagerly jump up to point to Europe to demonstrate cases of “successful” gun control. Unfortunately Continue reading →

Abortion, the Conception of Life, and Liberty

Brandon Christensen Current Events, Law, Liberty , , ,

Ridicule is the only weapon which can be used against unintelligible propositions. Ideas must be distinct before reason can act upon them; and no man ever had a distinct idea of the trinity. It is the mere Abracadabra of the mountebanks calling themselves the priests of Jesus. – Thomas Jefferson, 1816

My blog post on freedom and feminism prompted a number of short but informative dialogues in the comments section, and I thought it would be a good idea to draw some of these arguments out a little more and really delve into the implications of what it means to be free.

My original post was meant to serve as a general outline of the major rift within libertarianism (and, by implication, the American Right) today: the cultural one. I think that the rift between libertarians on cultural issues is actually much less serious than the one between libertarians and conservatives, and the comments section highlighted this important disagreement. Instead of a mutual mistrust based upon suspicion of authoritarian tendencies hiding in plain sight, libertarians actively fight conservatives when it comes to the struggle between liberty and power.

Two key arguments will be exploited on this blog for the sake of showing Ron Paul Republicans and other, newer members of the libertarian movement just how nakedly aggressive and barbaric anti-abortion laws really are. Continue reading →

Around the Web

Brandon Christensen Current Events, Links
  1. Gun control: change we don’t believe in
  2. A photo essay of Antarctica. I’m weird (news flash!) and I’ve always had an obsession with Antarctica
  3. On the ethics of voting. Grab a cup of coffee or tea
  4. Canada’s First Nations: Time we stopped meeting like this
  5. What is driving growth in government? This weekend’s must-read

Fresh Blood!

Brandon Christensen Current Events

We’ve got a couple of new changes coming your way: younger bloggers!

Stay tuned, and enjoy the ‘comments’ thread on my recent post in the meantime (don’t forget to have your say as well).

Libertarianism and Feminism

Brandon Christensen Current Events, Liberty , , , ,

I thought I’d throw in my two cents on the recent brouhaha between the two largest camps within the libertarian movement (the “paleos” and the “bleeding hearts”). Really quickly, the differences between the two camps are few and far between on matters of economics, but on matters of culture there is a wide chasm separating the two. The paleos are cultural conservatives and the bleeding hearts are not.

For the record, I consider myself in the “bleeding heart” camp, even though I spent more than enough time in Santa Cruz doing the co-op thing and hanging out out with lazy, dishonest, stinking hippies.

The bleeding heart camp initiated the brouhaha with the following:

This morning Julie Borowski, who makes videos as “Token Libertarian Girl,” shared her answer to the question “Why aren’t there more female libertarians?” […]

Every single one of these things that she criticizes women for doing should be seen not as causes for shame, but as complex choices that smart, thoughtful women can and do make, without destroying their lives in the process.  In addition, Borowski is making arguments that conservatives hurl at women all the time. If we want to pull young women away from liberalism and toward libertarianism, repeating the very same intellectually patronizing conservative arguments that pushed women to liberalism in the first place doesn’t seem to be the way to go.

And a follow-up post had this tidbit to add: Continue reading →

Environmentalism and Property Rights

Brandon Christensen Current Events, History , , , ,

The horrible air in Beijing has been making the news again, and for good reason. Check out these pictures for reasons why. The topic of environmentalism and its compatibility with liberty has been brought up before here at the consortium, but I’d like to briefly use this opportunity to point out something on property rights.

Conservatives and, lamentably, some libertarians often attribute environmental destruction to “the tragedy of the commons,” but this is short-sighted. Anthropologists have long pointed out that land and property held in common is actually governed quite well. Political scientists and economists have recently begun to come around to this point as well, with Elinor Ostrom (a political scientist by training) winning the 2009 Nobel Prize in Economics for her work on how some societies govern the commons.

Common land and its use often requires an informal set of rules for maintaining a harmonious balance between man and land, and is also a characteristic feature of societies that we would variously label, rightly or wrongly, as stateless, pastoral, foraging, tribal, or my personal favorite: undeveloped. In other words, common land is often exploited by poor people who do not have the resources to institute a regime based largely on private property. With this in mind, just think: would you want to be the party that is found guilty for violating an agreed-upon set of rules for a specific area of land? Even if there were no formal state apparatus charged with enforcing a society’s rules? Not only would you have to face justice, but you’d also be held responsible for the possible suffering of many other people depending on the land, which could lead to other forms of punishment besides fines or violence; punishments that could affect the lives of your loved ones and your loved ones’ loved ones. Continue reading →

Don’t Forget

Brandon Christensen Books, Current Events, History

Michael Adamson’s new book, A Better Way to Build…, comes out on the 15th of this month. You can check out more of Dr. Adamson’s (bad ass) work in the ‘recommendations‘ section of the blog. He’s got stuff on Native American property rights (or lack thereof), US foreign policy, and the decline of Argentina just hanging out online waiting for curious minds to read and process.

Dr. Adamson is a historian by trade, and we’re lucky to have him on board here at the consortium. Also, check out his demolishing of the rationales used by the Bush administration to go to war in Iraq (the second time around).

Sardines: A Sordid Story

Fred Foldvary Current Events, Law, Politics , , ,

Sardines are delicious and healthy to eat, but much of the consumption of these fish is for feeding to animals, and this is destroying the wildlife of the seas. We are possibly witnessing the fulfilling of the prophetic verse in Revelation 8:9, “one third of the living creatures which were in the sea died” (World English Bible).

Already several fish ecologies, such as the fish by the coast of Namibia, have collapsed. Sardines and anchovies are in some places the main prey of the predators up the food chain, including birds, seals, dolphins, and whales.

Much of the sardine catch is ground up and fed to farmed fish and factory-farmed chickens and pigs. World-wide, 14 million tons of wild fish, such as sardines and anchovies, are fed to mass-produced food animals. About 75 percent of the fishmeal and oil fed to carnivorous farmed fish come from the harvest of small, open-ocean fish such as anchovies, herring, and sardines. When you eat a farmed salmon, you indirectly eat sardines and the other fish feed. Continue reading →

RIP James Buchanan

Brandon Christensen Current Events, Economics

Nobel laureate and classical liberal economist James Buchanan has died at the grand old age of 93. I have been slowly working my way through his book The Calculus of Consent for a while now, and his other works are on my “to do” list once I graduate in June. He was one of the co-founders of public choice theory, a rather common sense approach to economics that has long been derided by authoritarians on the Left.

EconLib has a succinct biography of him here.

This short piece by Buchanan in the Independent Review has influenced my own way of approaching writing and arguing.

I’ll post more thoughts from around the web as they appear throughout the day.

Liberty has lost a true champion today.

Government’s War on Sharing

Fred Foldvary Current Events, Economics

There is a fuzzy border between trading and sharing. Suppose Adam gathers apples and Eve gathers oranges. The each want some of the other, so they can either trade some of the fruits, or they can share them. The result is the same: they each eat some of both.

Sharing implies that one gives the other some of the goods, and the other gives some to you, but reciprocal sharing is about the same as trading, perhaps though with a psychological difference.

Now comes the income tax to turn the beautiful act of sharing into a taxable commercial transaction. To the government, barter is just as much income as selling for cash. If you trade an apple for an orange, it has the same economic effect as selling the apple for cash, and then using the cash to buy the orange from your trading partner. The person trading his apple is subject to the same tax as the one selling for cash.  Continue reading →

Plastic Pollution in the Ocean

Fred Foldvary Current Events , ,

The world’s oceans are being poisoned. Some of the plastic litter is visible, such as in the Great Pacific Garbage Patch. There, plastics and other debris are trapped by the “gyres” or currents of the North Pacific. Some plastics float while others sink.

Even worse are the plastic particles that are not visible. Much of the plastic tossed into the ocean breaks down into molecules, both of the plastic material and also of toxic chemicals. The particles are eaten by fish and other animals. The plastics then enter the food chain for fish, birds, turtles – and human beings. Worse yet, the plastic molecules absorb pollutants, so the food chain gets poisoned. The pollutants become ever more concentrated as they go up the food chain of contaminated animals. Pollution from eating fish becomes a source of diseases such as cancer. Continue reading →

The Sales Tax Petard

Fred Foldvary Current Events, Economics, Liberty

For years, the web-based book seller Amazon.com had not been charging sales tax in states in which it did not have a physical presence such as a store. States do not have legal jurisdiction over enterprises that are not located within their territory, although Amazon and other companies have had relationships with affiliate companies, which makes the concept of a physical presence unclear.

Customers who do not pay a sales tax to the seller are supposed to pay a Ause@ tax that is equivalent to a sales tax, but they rarely do this, due to the absence of enforcement. This proves that most people do not consider a tax on goods to be a moral obligation.

Now the sales-tax-free era is coming to an end. Book store owners had long complained that it was unjust for them to pay sales taxes while web-based sellers were not charging the tax. In California and some other states, the sales tax rate is about ten percent, a substantial difference when the price of a book is high, and the books can be mailed at the low-cost media rate. Continue reading →

GDP: Who Needs It?

Warren Gibson Current Events, Economics, History, Liberty

“For so it is, oh my Lord God, I measure it, but what it is that I measure I do not know.” –St. Augustine

Gross Domestic Product (GDP) gets a lot of attention these days. It’s fair game for bloggers, talking heads, perhaps your local barber.  While most agree that higher GDP is better than lower, there are problems, some better-known than others. Some theorists have considered the concept hopeless, such as Austrian economist Oskar Morgenstern, who called GNP (the predecessor to GDP) “primitive in the extreme and certainly useless.” Lamenting the idea that the whole of a nation’s economic activity could be captured in a single number, he said that “very few men, even few economists, or should I say regretfully, especially economists, have a real appreciation and understanding of the immense complexity of an economic system.”

Let’s get the formal definition out of the way. GDP is the market value of all final goods and services produced in a particular country in a given year. The federal Bureau of Economic Analysis computes this number and releases it quarterly. The level of GDP is used as a basis for evaluating other things, like the national debt, which currently stands at about 85 percent of one year’s GDP in the United States. GDP growth rates are closely followed. These are inflation-adjusted, seasonally adjusted, and annualized, and are of course supposed to tell us how well the economy is doing.

Simon Kuznets gets credit for the first serious attempt to calculate national income figures, publishing his first work on the subject in 1941. Following in his footsteps, calculation of GDP and other “national income accounts” has become a core area of the economics profession. The explosion of economic and financial news has thrust GDP into the limelight in recent years. Continue reading →