Contra-IP

My article “Patent Nonsense,” which makes the libertarian case against “intellectual property,” was published and posted by The American Conservative magazine. Read it here.

We’re the Economy They Want to Manage

In his State of the Union speech President Obama said:

Tonight, I want to . . . lay out a blueprint for an economy that’s built to last. . . .

Considering that an economy (a free one, that is) is just people engaging in exchanges for mutual benefit, it defies blueprinting, which sounds ominously like central planning. The last thing an economy needs is an architect, especially one with the legal power to use aggressive force.

Is It a Tax or Not?

In his State of the Union speech the other night President Obama said:

Right now, our most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let’s agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay.

I’m old enough to remember when politicians denied that the FICA deduction from our paychecks is a tax. “It’s a contribution to your future retirement income and medical care,” they’d say. Today they forthrightly call it a tax.

I’m beginning to suspect that politicians will say whatever they think will get them reelected.

As for the idea that cutting the payroll tax is costless, see my earlier post.

Taxation 101

Is it asking too much for reporters to know the difference between taxes paid and the percentage of income paid in taxes? Despite what the reporters imply, Warren Buffett did not pay less in taxes than his secretary, even if he paid a smaller percentage of his income in taxes.

Do-Nothing Congress?

The 112th Congress is being judged as do-nothing because it passed only 80 bills in 2011, the smallest number since 1947. It shouldn’t be judged by how many bills it passed, but by how many laws it repealed.

Peter Boettke on Austrian Economics

George Mason University Professor and FEE trustee Peter Boettke was interviewed about Austrian economics at The Browser.

Pete is among the most knowledgeable people in the world about this important school of thought and the larger context in which it exists. Highly recommended!

Read it here.

Busts Are Not Punishments for Booms

As a follow-up to today’s TGIF about Matthew Yglesias’s critique of Austrian economics, I note that he claims that for Austrians “the suffering of a bust is a kind of cosmic payback for the boom.” Paul Krugman has similarly charged that Austrians see the bust in moralistic terms, as though it were just punishment for the boom’s bacchanalia.

Yglesias and Krugman are both wrong. Austrian writing about the bust is not intended to be a moralistic lesson about accepting one’s penalty for wrongdoing. That would imply there is a way to avoid the pain of the bust, but that since people committed the sin of living it up during the boom, they do not deserve to avoid the pain.

That, however, is not the Austrian argument, which is an economic, not a moral, argument. In the Austrian view, there is no way to avoid the bust. Artificially low interest rates misshaped the structure of production. The bust occurs when that becomes apparent to everyone and resources have to be adapted (if possible) to real conditions. Perhaps the bust can be postponed with new stimulus (further misshaping the structure of production), but it cannot be prevented.

Taking the pain of the bust sooner rather than later is a strategy for minimizing and getting past the inevitable consequences of the boom. It has nothing to do with accepting one’s just deserts.

Fed Secretly Bails Out Big Banks

From Bloomberg:

Secret Fed Loans Gave Banks $13 Billion

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Read about it here.

What Congress Is Fighting Over

Here’s what the growth in federal spending would look like with and without the ten-year $1.2 trillion “cut” to be trigged by the supercommittee’s failure.

HT: Nick Gillespie

Cato Launches Libertarianism.org

The Cato Institute has unveiled a new website, Libertarianism, which will, in editor Aaron Ross Powell’s words, “facilitate[] deep and fruitful discussion of these ideas [of liberty]. And . . . introduce[] visitors to the value of the presumption of liberty.”

The site will feature classic and new articles and video lectures, never shown before, of such libertarian stalwarts as F. A. Hayek, Murray Rothbard, Milton Friedman, and Joan Kennedy Taylor. Libertarian philosopher and intellectual historian George H. Smith will contribute a weekly essay. His first is titled “Religious Toleration versus Religious Freedom.”

The site also has a blog.

Check it out!