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Two Decades Since the Fall
Perspective
Two Decades Since
the Fall
On November 9, 1989, the Berlin Wall effectively ceased to exist. Remember the sequence: Communist Hungary started letting people pass into Austria and to freedom. Captives of the Soviet bloc left in droves. East Germans, too—thousands of them. The Hungarian government tried to stanch the flow, but the dam had been breached. [...]
World War II Ended the Great Depression?
In his 2008 book, The Return of Depression Economics and the Crisis of 2008, Paul Krugman writes: “The Great Depression in the United States was brought to an end by a massive deficit-financed public works program, known as World War II.”
He has since repeated this bon mot in a number of columns and television appearances. [...]
Are We Really all Healthcare Collectivists Now?
“We have to do something about health care.”
The scariest word in that sentence is not something. It’s we.
The first-person plural form is not merely a convenience, as in “We’re in for a cold winter.” It indicates that decisions about “the healthcare system” should be made collectively, with one decision binding everyone.
That’s collectivism.
So why is virtually [...]
Free-Marketeers Should Welcome Regulation?
In a Wall Street Journal op-ed, Paul Singer, chairman of the Manhattan Institute, suggests that “there is an urgent need for a new global regulatory initiative” to address the causes of the worldwide financial collapse and that even those who appreciate the qualities of free markets should welcome the new and different regulations he proposes [...]
23Sep2009 | Peter Lewin | 0 comments | ContinuedHuman Action as a Work of Art
What can one say briefly about Human Action? When it was being written and people would ask what it was to be about, the answer given among Mises’s students was: Everything.
Indeed.
From the setting forth of praxeology as the a priori science of human action, to the description of the market’s operation, to the explanation of [...]
Saving Is Killing the Economy?
In the midst of the current recession, many of the oldest fallacies in economics are making a comeback. In a column titled “Why Saving is Killing the Economy,” senior writer Chris Isidore repeats one of the oldest: that the key to economic recovery or growth is consumption and that saving retards that process. Isidore states [...]
19Aug2009 | Steven Horwitz | 4 comments | ContinuedBad Regulation Drives Out Good
In 1969 economist Harold Demsetz identified a flaw in much public policy analysis, the “Nirvana Fallacy”:
“The view that now pervades much public policy economics implicitly presents the relevant choice as between an ideal norm and an existing ‘imperfect’ institutional arrangement. This nirvana approach differs considerably from a comparative institution approach in which the relevant choice is [...]
Government Must Keep Track of Derivatives?
Regardless of what caused the crisis, government efforts to regulate derivatives will only lock in undesirable aspects of the current market and ensure that politically connected players reap artificial gains. It is absurd to ask politicians to promote financial integrity and sound accounting. They are the worst violators of these principles on the planet.
17Jun2009 | Robert P. Murphy | 3 comments | ContinuedOil Prices Are Rigged? It Just Ain’t So!
In reality, all prices are determined by supply and demand, properly defined. Outside investors with lots of money can certainly influence prices, but there are always risks. Funds that had large “long” bets on commodities took a bath as oil fell from its July 2008 high of $145 down to well below $50 a few months later. Futures markets allow producers and consumers to hedge against needless risk by locking in prices, and they allow speculators with superior foresight to improve the allocation of resources over time. Our Time authors think they’ve shown that the oil market is rigged, but it just ain’t so!
21May2009 | Robert P. Murphy | 2 comments | ContinuedWho Watches Our Guardians?
Predictably, the leading inquisitors into the causes of the financial turmoil are themselves among the most culpable: Rep. Barney Frank, Sen. Chris Dodd, and New York Attorney General Andrew Cuomo. AIG got into trouble because it in effect wrote insurance policies (credit default swaps) against the failure of securities based on mortgages, many of which were waiting to blow up when the housing bubble burst. Who created the housing bubble?
21May2009 | Sheldon Richman | 0 comments | Continued“I, Pencil” Revisited
Leonard Read’s classic essay, “I, Pencil,” is justly celebrated as the best short introduction to the division of labor and undesigned order ever written. But it holds another, largely overlooked lesson as well: “I, Pencil” is an excellent primer in the Austrian approach to capital theory.
Read’s pencil describes its family tree, beginning with the cedars [...]
Regulation Will Stop Future Madoffs? It Just Ain’t So!
Bernard Madoff is a boon to financial regulation advocates. A well-known Wall Street figure, he confessed to defrauding his clients of $50 billion, an amazing number. It is now established conventional wisdom, blared across the media, that this and other financial disasters would likely not have happened had there been proper government supervision.
With deregulation fingered [...]
T. Boone Pickens is Right About Oil Imports? It Just Ain’t So!
The $700 billion that Americans spend annually to purchase oil from other countries (according to Pickens) is a price not a transfer. For the $700 billion we send to oil exporters, we get something in return—oil. Our receipt of millions of barrels of oil in exchange for that money is hardly a transfer. We receive a versatile commodity that can be used for everything from making plastics to fueling family vacations. The exporters receive the $700 billion that they can then use to purchase other goods and services.
1Apr2009 | E. Frank Stephenson | 3 comments | ContinuedPaul Krugman Flunks Capital Theory
Nobel laureate and New York Times columnist Paul Krugman is said to have bested commentator George Will over what prolonged the Great Depression during a joint appearance on ABC’s “This Week with George Stephanopoulos” back in November. But all Krugman really did was show that he, as a Keynesian, holds an unrealistic Play-Doh model of [...]
1Apr2009 | Sheldon Richman | 4 comments | ContinuedNews Flash: FDR Didn’t Restore Prosperity!
The New Deal did not end the Great Depression. This statement will come as no shock to Freeman readers, but it will to the many people who have never encountered it before. Now people are encountering it—in newspaper columns and news-talk shows.
Why, after years of being taught that Franklin Roosevelt’s economic intervention saved the country [...]
Greenspan Should Be Shocked by Risky Lending?
Toward the end of his tenure as Fed chairman in early 2006, Alan Greenspan was the object of praise edging at times into adulation. It came from some unlikely sources. Milton Friedman penned an encomium for Greenspan in the pages of the Wall Street Journal titled, “The Greenspan Story: He Has Set a Standard.” After [...]
2Mar2009 | Gerald P. O'Driscoll Jr. | 0 comments | ContinuedIndividualism Clashes with Cooperation? It Just Ain’t So!
Individualists get a bad rap in politics these days. That should come as no surprise; politics these days is dominated by electoral politics, and electoral politics is an essentially anti-individualistic enterprise. With free markets and other forms of voluntary association, people who can’t agree on what’s worthwhile can go their own ways. But the point [...]
20Jan2009 | Charles Johnson | 2 comments | Continued-
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Book Reviews
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Montessori, Dewey and Capitalism: Educational Theory for a Free Market In Education
By Jerry Kirkpatrick
