Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Austrian School

Keynesian Economists Finally Catch Up and Agree: China to Have Hard Landing

Paul Krugman, Laureate of the Sveriges Riksban...

Mainstream economist Robert Samuelson admitted last week that the case for the ending of the economic boom in China has some substance. Keynesian economist Paul Krugman also confirmed that China is in trouble and questioned its ability to avoid a hard landing.

Samuelson raised rhetorical questions about China’s economic future, all with the same answer: “Could the world’s economic juggernaut, having grown an average of 10 percent annually for three decades, face a slowdown…or a recession?” Yes, it could. “Does it have a real estate ‘bubble’ about to ‘pop?’ ” Yes, it does. Could that have “global consequences?” Yes, it will.

Noting that Nomura Securities is predicting a one-in-three possibility of a hard landing—defined as a drop in China’s GDP to five percent or less—Samuelson said that such a sharp slowdown “would raise unemployment and social discontent” with consequences similar to the start of the Great Recession between 2007 and 2009 in the United States. Samuelson admitted that the Chinese government has created

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Ethanol Subsidies Disappear, Mandates Remain

English: A combine harvesting corn. Deutsch: J...

The Washington Post’s editorial celebrating the ending of ethanol subsidies iterated the same free-market positions taken by Rep. Ron Paul (R-Texas) and other Austrian school economists about those subsidies. Calling the 45-cent-per-gallon tax credit supporting U.S. corn-based ethanol production and the 54-cent-per-gallon tariff on imported ethanol “two of the most wasteful subsidies ever to clutter the Internal Revenue Code,” the Post estimated that ending those subsidies will save the U.S. taxpayer approximately $6 billion this year.

In a remarkable admission of undeniable truth, the Post added: “Taxpayers will no longer have [to] shell out roughly $6 billion per year for a program that badly distorted the global grain market, artificially raised the cost of agricultural land and did almost nothing to curb greenhouse gas emissions.”

Further, the Post rejoiced over the expiration of another “lesser known but equally dubious energy tax break…the credit that gave electric car owners up to $1,000 to defray the costs of installing a 220-volt charging device in their homes,” and said

As a means of reducing carbon emissions, electric cars and plug-in hybrid electrics are no more cost-effective than ethanol. What’s more, only upper-income consumers can afford to buy an electric vehicle (EV); so the charger subsidy is a giveaway to the well-to-do.

More surprising was the Post’s disappointment that the credit for

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Irony Alert: Keynesian Economists Rip Obama for Failed Keynesian Policies

English: Barack Obama speaking at a rally at t...

The results of a survey by the Associated Press of 36 Keynesian economists—economists who believe that government is the driving force behind a strong economy—are in: President Obama received just “mediocre marks” for his handling of the economy since his inauguration on January 20, 2009. Half of those surveyed rated his performance as “fair” while 13 rated it as “poor.” The remaining five gave the president a rating of “good.” None rated his performance as “excellent.” The survey included explanations for why his performance was so poor even though he has surrounded himself with Keynesians. Some said he didn’t do enough: The stimulus wasn’t big enough. William Cheney, chief economist at John Hancock Financial Services, said Obama’s administration “generally tried to take the right kinds of measures but [has] often failed to lead with enough vigor to overcome political obstacles.” Some said he tried to do too much and got distracted by hammering Congress into voting for his healthcare takeover. Joel Naroff, president of Naroff Economics, said, “Health care wasn’t necessarily the most important thing to be dealing with when you’re in the midst of the worst recession since the Great Depression.” Others said he picked the wrong types of projects to fund, relying too much on public works that took too long to get going. Still others said the President just did the very best he could under the circumstances, noting that the Great Recession was well under way when he took office, and offering the bromide that even if his Keynesian policies didn’t perform as expected, at least he

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Thanksgiving Redux: Of Turkeys and Pencils

Thanksgiving Dinner Turkey Drumstick Leg On Pa...

Jeff Jacoby listed some of the reasons he was thankful on Thanksgiving Day in 2003, including the feast on the table, the company of his family and loved ones, the good fortunes enjoyed during the year, the privilege of being an American. But what about such common things taken for granted, like airline schedules, and movie theaters, and recipes in the paper—and the turkey?

He wrote, “Isn’t there something wondrous—something almost inexplicable—in the way your Thanksgiving weekend is made possible by the skill and labor of vast numbers of total strangers?” The magnificent choreography of the free market, including the poultry farmers, the food distributors, the truckers, the architects who built the hatchery, the technicians who keep it running, the people prepping the turkey—from slaughter to defeathering to inspecting to wrapping to transporting to pricing to displaying—all of this coming together voluntarily by the mystery of the free market. All of this, he said,

had to be precisely timed so that when you showed up to buy a fresh Thanksgiving turkey there would be one—or more likely a few dozen—waiting. The level of coordination that was required to pull it off is mind-boggling.

But what is even more mind-boggling is this: no one coordinated it.

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Harvard Students’ Walkout Demonstrates Economic Ignorance

Harvard

When 70 students attending economics professor Greg Mankiw’s Economics 10 class on November 2nd walked out in protest, they wrote an open letter to him explaining why:

Today, we are walking out of your class…in order to express our discontent with the bias inherent in this introductory economics course…

[The] course…espouses a specific—and limited—view of economics that we believe perpetuates problematic and inefficient systems of economic inequality in our society today…

There is no justification for presenting Adam Smith’s economic theories as more fundamental or basic than, for example, Keynesian theory…

If Harvard fails to equip its students with a broad and critical understanding of economics, their actions are likely to harm the global financial system. The last five years of economic turmoil have been proof enough of this.

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Producers Drive the Economy, Not Consumers

shipping containers at clyde

In Commerce Secretary John Bryson’s announcement that the nation’s Gross Domestic Product (GDP) grew at an annual rate of 2.5% last quarter, he came close to disclosing the real driver of the economy: producers:

In spite of headwinds hitting the U.S. economy, today’s GDP report—the ninth straight positive quarter—reflects strong consumer spending and export growth and continued investment by American businesses (emphasis added).

But then he had to go and spoil it all by touting the Keynesian response to lack of jobs and turning to shill for more government spending:

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Watch. Moneyball. Now.

Drop what you’re doing. I mean it. Stop whatever it is that you’re doing and go online to find out when the next showing of Moneyball is. Take a friend, go alone, doesn’t matter. Moneyball isn’t about baseball. No way. This is about taking a chance,  a risk, and putting it all on the line. This is what it feels like to try to (and succeed in) overthrowing the existing order of things. It’s about finding out not only

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Is Rick Perry Right? Is Social Security a Ponzi Scheme?

Rick Perry shows us around his office. He's Te...

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Presidential candidate Rick Perry opined in the first Republican debate that  Social Security is a “failure” and a “Ponzi scheme,” and then reiterated the charge in the second debate on Monday night. At the first debate, Perry said Social Security is a “Ponzi scheme for these young people. The idea…that the current program is going to be there for them is a lie.” When pressed by the moderator, Perry reiterated, saying Social Security is a “monstrous lie to our kids.”

On Monday night Perry refused to back down: “It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you’re paying into a program that’s going to be there. Anybody that’s for the status quo with Social Security today is involved with a monstrous lie to our kids, and it’s not right.” But in his op-ed piece in USA Today on Sunday, Perry backed off, writing instead that

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Canada’s Remarkable Economic Recovery

Happy Canada Day!

Image by Ian Muttoo via Flickr

In its annual Index of Economic Freedom, the joint effort by the Heritage Foundation and the Wall Street Journal, Canada ranks 6th among the 179 countries of the world, ahead of the United States (9th), the United Kingdom (16th), Japan (20th) and Germany (23rd). Considering ten components of economic freedom (among them: Business Freedom, Fiscal Freedom and Government Spending), the report ranks countries on the degree to which “individuals are free to work, produce, consume and invest in any way they please, with that freedom both protected by the state and unconstrained by the state.”

The latest report from the Canadian Labour Force Survey illustrates the degree to which Canadians have benefited from

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Bernanke’s Invisible QE3 and the Austrian School

Wall Street

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Wall Street professionals’ expectations are modest over Federal Reserve Chairman Ben Bernanke’s highly anticipated remarks at the Jackson Hole symposium this Friday. Unlike last year when the chairman announced the start of his program to purchase government securities in order to keep the economy from slipping into a recession and possibly deflation, known as Quantitative Easing II (QE2), his options now are much more limited. The anticipated bounce in the economy has fizzled, inflation is increasing, the banks are stuffed full of reserves but few are borrowing, and interest rates

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“Extremist” Presidential Candidate Ron Paul

Ron Paul at the 2007 National Right to Life Co...

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Claiming that presidential candidate Ron Paul leads the “economic suicide wing” of the Republican Party, Brent Budowsky, writing for The Hill, says that Paul is the “worst possible role model” for Republicans because he suggested that a default by the government “would be OK.” Budowsky calls Paul a “Banana Republican,” claiming that Paul is taking an extremist position, adding that keeping the debt ceiling in place and putting the government on a diet would “literally crash American and global markets…that would do grave damage to our nation.”

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Financial Crisis Inquiry Commission Report: Classic Misdirection

Money

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After nearly two years of investigation, reviewing millions of documents and conducting hundreds of interviews, the Financial Crisis Inquiry Commission (FCICreleased its report, pinning the blame for the Great Recession largely on Wall Street and alleged deregulation of the financial markets in the 1990s.

The report of the panel of 10 (six Democrats and four Republicans) was delayed by a month as the final report became more of a partisan attack on Wall Street and a push for more regulation of the financial markets. The Republicans ultimately decided not to endorse the report, but instead issued their own report on the cause of the financial crisis.

According to the official report issued today by the FCIC, blame for the financial meltdown beginning in 2007 can be placed on:

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Corporation for Public Broadcasting: Trim, or Uproot?

Doug Lamborn

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When Rep. Doug Lamborn (R-Colo.) introduced a bill in the 111th Congress to defund National Public Radio (NPR), two things were working against him: the overwhelming collectivist mindset of that Congress itself, and the fact that NPR hadn’t yet embarrassed itself sufficiently to build public opinion against the agency. In light of NPR’s series of gaffes since then, as well as the more conservative tone of the new 112th Congress, Lamborn has decided to try again.

He observed:

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American Austerity and the End of “Wars of Choice”

Looking south from Top of the Rock, New York City

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Foreign Affairs, the mouthpiece of the Council on Foreign Relations, is like a 500-pound canary: When it speaks, people listen. Gary North referred to the article in the November-December 2010 issue entitled “American Profligacy and American Power” as “a turning point…the first official announcement…that the Federal deficit is out of control…which threatens the survival of America’s position as the world’s most influential political-military participant.”

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Jobs? What Jobs?

Henry Hazlitt

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When CNBC announced that the number of workers filing new claims for unemployment benefits fell last week while private employers added new jobs in May, this was “further evidence [that] the labor market was improving.” In more muted fashion, the Associated Press called it a “slow-motion recovery,” but a recovery nevertheless.

This was in line with Vice President Joe Biden’s prediction back in April that the economy would be adding between 250,000 and 500,000 jobs “in the next couple of months.” Similar sentiments were echoed by President Obama on Wednesday in a speech at Carnegie Mellon University:

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Free Markets, Deregulation, and Blame

Quarterly Journal of Austrian Economics

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Free markets, in the full sense of the phrase, exist only in the minds and imaginations of free-market economists from the Austrian School, such as Ludwig von Mises and Murray Rothbard.

The classic definition is simply a market without intervention or regulation by government. In truth, commerce in any developed country is always controlled to some extent by government. A free market requires the right to own property, which means that the wages, earnings, profits, and gains obtained by providing products and services to others belongs to the individual generating them. The assumption is that an individual with this kind of freedom would only make an exchange that gained him a benefit.

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Lehman Bros.: Pinprick That Burst the Bubble

Balloon POP !!!

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The culprits blamed for the failure of Lehman Brothers in September of 2008 included the company’s top executives, their accountants, their highly-leveraged loans that had started going bad, their success at hiding those bad loans by cooking the books, and their lenders demanding more and better collateral, according to Anton Valukas in his 2,200 page report released Thursday.

There is certainly plenty of blame to go around, and it looks like there will be criminal charges filed too. The biggest lie, however, wasn’t mentioned: that this implosion of Lehman Brothers caught everyone by surprise.

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The Economy Looks Like “L”

The Letter "L"

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Just when the headline news about the economy was beginning to look good and the talking heads were beginning to sound good, along came a barrage of bad news that was so bad that it couldn’t be covered up. Gallup began with the news that in January nearly 20 percent of the U.S. workforce “lacked adequate employment”, which was worse than the numbers reported by the Labor Department. According to Reuters, these “findings appear to paint a darker employment picture than official U.S. data,” with about 30 million Americans “underemployed.” And Gallup misses the mark by at least 2 percent, according to John Williams of ShadowStats.com.

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Latest on the Economy: Heading Up or Head Fake?

Logo of the United States Bureau of Economic A...

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When the Bureau of Economic Analysis announced that “the output of goods and services…increased at an annual rate of 5.7 percent in the fourth quarter of 2009,” the usual suspects in the kept media could hardly restrain themselves. ABC News’ headline trumpeted, “Economy Grows…Fastest Since 2003” which was “fueled by companies boosting output to keep stockpiles up.”  Their announcement explained that “Growth exceeded expectations mainly because business spending on equipment and software jumped much more than [was] forecast.”

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Bernanke: Lax Oversight Recession’s Cause

FRANKFURT, GERMANY - NOVEMBER 14:  Ben Bernank...

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Regulatory failures and not low interest rates were responsible for the housing bubble, implosion and current recession, Federal Reserve Chairman Ben Bernanke asserted on Sunday.

“Stronger regulation and supervision aimed at problems with underwriting practices and lender’s risk management would have been…more effective [in] constraining the housing bubble [rather] than a general increase in interest rates,” Bernanke told the American Economic Association.  Bernanke, while awaiting Senate confirmation for another term as Fed Chairman, defended recent and continuing charges that the Fed contributed significantly to the current financial crisis by keeping interest rates too low for too long.

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2020 Bob Adelmann