What happened to all of the doom and gloom economic threads?

[4est_4est_Gump]

This curious phenomenon of a vaunting inflation occurring at the same time as a steep recession was simply not supposed to happen in the Keynesian view of the world. Economists had always known that either the economy is in a boom period, in which case prices are rising, or else the economy is in a recession or depression marked by high unemployment, in which case prices are falling. In the boom, the Keynesian government was supposed to "sop up excess purchasing power" by increasing taxes, according to the Keynesian prescription — that is, it was supposed to take spending out of the economy; in the recession, on the other hand, the government was supposed to increase its spending and its deficits, in order to pump spending into the economy. But if the economy should be in an inflation and a recession with heavy unemployment at the same time, what in the world was government supposed to do? How could it step on the economic accelerator and brake at the same time?
Murray N. Rothbard
http://mises.org/daily/5595/The-Many-Collapses-of-Keynesianism

 

[4est_4est_Gump]

The Roberts Ruling on ObamaCare Signals a Turning Point

Have we lost sight of first principles?

Andrew Napolitano | July 12, 2012 | Reason.com

Presently in America, nearly half of all households receive either a salary or substantial benefits from the government. Presently in America, nearly half of all adults pay no federal income taxes. Presently in America, the half that pay no income taxes receive the bulk of their income courtesy of the government, but ultimately from the half that do. This money is extracted involuntarily from the paying half by a permanent bureaucracy that extracts and gives away more each year no matter who is running the government. The recipients of these transfer payments rely upon them for subsistence, so they have a vested financial interest in sending to Washington those who will continue to take your money and give it to them.

It is no wonder that we are now saddled with the micromanagement of health care by the same bureaucratic mindset that mismanages the Post Office and everything else the federal government runs. It should not be surprising to know that presently in America, half of the people actually want the government to take care of their needs. The same was the case under Communist regimes, but here those folks vote.

Hence, we have laws that force us to be charitable to those whom the government designates as worthy of our charity, that limit the amount of salt that restaurants can put into our food, that permit the government to watch us on street corners and subways and in the lobbies of buildings, that let the president fight wars of opportunity, that permit the Federal Reserve to print money with no value and inflate prices and destroy savings, that allow the government to listen to us on our cellphones and use those phones to follow us wherever we go, and, according to CIA Director David Petraeus, that let the government anticipate our movements inside our homes.

And as of the last week in June, the government has a vast new power that was brought to us by the Supreme Court's latest attack on personal freedom. Congress can now lawfully command any behavior of individuals that it pleases—whether or not the subject of the behavior is a power granted to Congress by the Constitution—and it may punish noncompliance with that command, so long as the punishment is called a tax.

Justice Antonin Scalia's whimsical query during the Supreme Court oral argument on the health care law about whether Congress could make him eat broccoli suddenly isn't as funny as it was when he asked it, because the answer is: It can fine him for not eating broccoli, so long as it calls that fine a tax.

Quick: If you call a tail a leg, how many legs does a dog have? Answer: Four, because calling a tail a leg doesn't make a tail a leg.

How did we get here?

We got here because voters and the government we elected, and even the courts the popular branches appointed and confirmed, have lost sight of first principles.

http://reason.com/archives/2012/07/12/the-roberts-ruling-on-obamacare-signals/print

 

[4est_4est_Gump]

Greenspanism-Bernankeism reigns today, and that is the true tragedy of our times. The Fed, the Treasury, the president, the regulators, and the Congress have done everything possible to reflate, stimulate, stabilize, and counter market forces. As expected, they have lost the battle. Unemployment is still outrageously high, and inflation is working its way up yet again. But there is an even more serious problem. In the course of stimulating the economy, the Fed has created incredible amounts of fake money that it has stuffed in the vaults of its best friends in the banking industry. And those phony reserves seem now to be leaking out to cause horrific waves of price inflation.

Llewellyn H. Rockwell Jr.
http://mises.org/daily/5595/The-Many-Collapses-of-Keynesianism

 

[unregistered]

 

[4est_4est_Gump]

How Rail Screws the Poor

The dirty secret of the Los Angeles County Metropolitan Transportation Authority (MTA) is that it provides some of the finest public transit service in the country. With a network stretching over 1,513 square miles, the MTA runs a fleet of 2,723 buses every weekday, operates trains over 87 miles of track, and carries more than 1 million passengers a day.

The authority’s newest service, the long-aborning light-rail Expo Line from downtown L.A. to Culver City, rides like a dream along its eight-mile route. Shortly after the Expo Line opened in late April, my colleague Scott Shackford and I found Expo Line riders unanimously enthusiastic about the train.

Unfortunately, we also found very few riders. Based on our counts and calculations, we estimated total daily ridership could not exceed 13,000 people. A few days after we rode the rails, Los Angeles County Supervisor Zev Yaroslavsky came up with an even smaller figure of 9,000 daily riders.

Here you begin to see how the MTA is simultaneously increasing operating costs, reducing operating revenue, cutting service for working-class and poor customers, and dismantling a functioning mass transit system, all in the service of a fantasy that was pushed on an unwilling L.A. by wealthy liberals.

Since 2009 the MTA has added eight miles of train service, at a capital cost of about $2 billion. These new trains, the Expo Line and an extension of the east-county Gold Line, carry a total of about 39,000 people a day.

In the meantime, the cash-strapped authority radically reduced bus service twice: It cut bus lines by 4 percent in 2010 and 12 percent in 2011. These cuts were made even though buses move more than four times as many Angelenos as trains do. In 2009 MTA buses carried about 1.2 million riders a day. Multiplying that by 16 percent, we can estimate more than 180,000 people had their service canceled while fewer than 40,000 had service introduced.

Not surprisingly, the result is that fewer people are using mass transit overall in Los Angeles than in 2009 (about 5 percent fewer, according to MTA statistics). This is a continuation of a long-term trend. Since the MTA began rail construction in 1985, more than 80 miles of railroads have been built, but mass transit ridership as a percentage of county population is lower than it was in 1985.

http://reason.com/archives/2012/07/11/how-rail-screws-the-poor

 

[4est_4est_Gump]

The tendency towards Utopianism, that preoccupation with jerking failure from the jaws of success.

You can always find a victimized class and call for a wholly secular crusade...

 

[unregistered]

 

[4est_4est_Gump]

We've been crusading for the poor for so long now that we've had to add the middle-class to their ranks and still the call to crusade sounds about the land like the holy call to prayer...

 

[4est_4est_Gump]

[Testimony before the Subcommittee on Domestic Monetary Policy and Technology of the Committee on Financial Services, US House of Representatives "Fractional Reserve Banking and Central Banking as Sources of Economic Instability: The Sound Money Alternative," June 28, 2012]

Fractional-reserve banking has historically been viewed by some economists and most monetary cranks as a panacea for the economy — a source of easy credit and new purchasing power to quicken trade. Better economists, however, recognized fractional-reserve banking with its ability to create credit, Mises's (1971, pp. 268–69) circulation credit or Rothbard's (1994) deposit banking, as a major source of financial and economic instability. The establishment of a central bank was often, when not driven by fiscal priorities of government, an attempt to achieve the first while mitigating or eliminating the second. For the United States, in particular, the effort was perhaps misguided. Per Vera Smith (1990 [1936], p. 166),

A retrospective consideration of the background and circumstances of the foundations of the Federal Reserve System would seem to suggest that many, perhaps most, of the defects of American banking could, in principle, have been more naturally remedied otherwise than by the establishment of a central bank; that it was not the absence of a central bank per se that was at the root of the evil … there remained [even with a central bank] certain fundamental defects which could not be entirely, or in any great measure, overcome by the Federal Reserve System.

Rothbard (2002) covers the history of money and banking in the United States and amply documents periods of instability generated by banking panics associated with fractional-reserve banking sans an explicit central bank. However, compared to this earlier era, fractional-reserve banking supported by "scientific" management of the currency by a central bank has failed to provide the promised stability. Besides the continuing instability, the Fed has guided a significant (massive) decline in the purchasing power of the dollar. The dollar currently has a purchasing power less than 5 percent of a 1913 dollar. Selgin, Lastrapes, and White (2010), "Has the Fed Been a Failure?" summarize:

Drawing on a wide range of recent empirical research, we find the following: (1) The Fed's full history (1914 to present) has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed's establishment. (2) While the Fed's performance has undoubtedly improved since World War II, even its postwar performance has not clearly surpassed that of its undoubtedly flawed predecessor, the National Banking system, before World War I. (3) Some proposed alternative arrangements might plausibly do better than the Fed as presently constituted. We conclude that the need for a systematic exploration of alternatives to the established monetary system is as pressing today as it was a century ago.

During a period known as the Great Moderation, roughly 1983–2000, the US economy experienced a period of apparent relative stability and prosperity. The US economy was then buffeted by two boom-bust cycles tied directly to credit expansion and low interest rates driven by fractional-reserve banking supported by central-bank activity (Garrison 2012 and 2009, Salerno 2012, Ravier and Lewin 2012, and Cochran 2011). The most recent recession and slow recovery rivals or exceeds the instability of 1970s and early 1980s in severity and is arguably the most significant crisis since the 1930s. While much of the discussion following the recent crisis has focused on why the recovery has been so slow, a lesson that should have been learned is that the economic growth driven by money and credit creation is short term only; an artificial boom cannot last. Ultimately credit creation is a major destructive power that misdirects production, falsifies calculation — even in a period of relatively stable prices — and destroys wealth (Salerno 2012, pp. 32–36). An economy with a complex financial system like the present banking system, which in turn depends on a government monopoly of the supply of money, is prone to cycles and crises even with the best of either discretionary or rule-based management. Under our current system of interest-rate targeting, "Policy-induced booms tend to piggyback on whatever economic development is underway" (Garrison 2009). This would be true whether the central bank followed a single (rather than the current dual) mandate, such as a policy goal of price stability or adopted nominal GDP targeting (Garrison 2012, pp. 435–36). Under fractional-reserve banking supported by a central bank the interest rate brake which would normally stop such events before they turn into bubbles or booms is effectively neutered (Hayek, 1941, pp. 406–10). Because of this neutering, booms and busts remain a significant threat in a "learning by doing" policy framework (Garrison 2009).

Without a foundation of sound money, a market-determined money, cycles are inevitable and destructive not only of short-term economic well-being but potentially destructive of long-term freedom and prosperity. It is urgent then that policy makers take seriously Hayek's proposal, developed during the economic crisis of the 1970s, for drastic monetary reform, for a "denationalization of money." This call is echoed by Garrison (2012, p. 436) who argues future prospects for "achieving long run sustainable growth can only rest on the prospects for decentralizing the business of banking."

John P. Cochran
http://mises.org/daily/6100/Fractional-Reserves-and-Economic-Instability

 

[RoryCockGobbler]

The tendency towards Utopianism, that preoccupation with jerking failure from the jaws of success.

Speak English.

 

[unregistered]

 

[4est_4est_Gump]

This horror story by James Pethokoukis ought to scare the living daylights out of you and anyone else who cares about the future of the country soon to be formerly known as the United States of America:

The original purpose of Medicaid was to provide improved healthcare access for poor people, while not turning the safety net into a trap. Under President Obama’s Affordable Care Act, Medicaid will be greatly expanded beyond what Congress originally intended.

In fact, as these charts show, it has already expanded beyond what Congress surely originally envisioned and, in the process, has created a terrible fiscal problem for the United States. (These charts and graphics come from a briefing today here at AEI, conducted by Gary Alexander, secretary of public welfare for Pennsylvania.)

A few scary factoids:

In the 1960s, there were 18 workers per Medicaid recipient. Today that number is 2.5.
The number of Americans on disability has risen 19% faster than jobs created during this recovery.
There are just 1.2 private sector workers per 1 person on welfare or working for government.
There are now just 1.65 employed persons in private sector per 1 person on welfare assistance.

There follows a series of charts that are even more terrifying than the factoids, so please read the whole thing. And then think about this: what happens to a nation when the Party of Take becomes bigger than the Party of Give?

http://pjmedia.com/michaelwalsh/2012/07/12/twilight/?singlepage=true

 

[unregistered]

 

[4est_4est_Gump]

...and Wall Street prostrates itself at the prospect for mana from on high.

And we keep gettin' richer
But we can't get our picture
On the cover of the Rolling Stone...

Or Mother Jones,
Gonna see my picture on the cover.
Gonna buy five copies of that mother!

Isn't what Mises said so very true in Interventionism? The only winners in an inflation are those closest to the source...

 

[RobDownSouth]

The Roberts Ruling on ObamaCare Signals a Turning Point

Have we lost sight of first principles?

Andrew Napolitano | July 12, 2012 | Reason.com


http://reason.com/archives/2012/07/12/the-roberts-ruling-on-obamacare-signals/print

How DARE Chief Justice Roberts put that pesky Constitution above the needs of the regressive wing of the Republican party?

(The "first principles" of the fringe right: Just win. Cheat if you must, but win. .)

 

[unregistered]

 

[4est_4est_Gump]

Futures 80.00

http://cdn.pjmedia.com/eddriscoll/wp-content/blogs.dir/24/files/2012/07/obama_unexpectedly_thumbnail_6-30-11-3.jpg
FINE!

 

[4est_4est_Gump]

Damn straight. Ponte calls them the "inflatocracy."

Nice word but I'll stick with Keynesianology...



... as taught by Krugman and Romer.
__________________
If you ask me, I think what we're experiencing isn't in fact closer to a "growthless" recovery than to a jobless one. Because GDP started to grow more than a year and a half ago, but with the exception of just a couple of quarters, growth has not been noticeably above its trend rate of about 2-1/2 percent a year. I don't rejoice at the news that we added 216,000 jobs in March. About a hundred thousand of that 216,000 is needed every month just to keep up with the growth in the labor force. At this rate of job growth, it would take most of the decade to replace the eight 8-1/2 million jobs that were lost in the recession.
Christina Romer
Chairwoman of Obama's White House Council of Economic Advisors

 

[4est_4est_Gump]

The differences between the Keynesian-based new view and Mises, Machlup, and Selgin are significant and lead to different explanations of macroeconomic instabilities and policy proposals. In the Keynesian form of the new view, banks, including a necessary and benevolent central bank, do not create credit. With a "fetish for liquidity," an economy absent central-bank expansion of credit and lower interest rates will be subject to economic stagnation as the rate of interest exceeds the natural rate and investment falls below the level needed to achieve and sustain full employment. Central banking is a needed extramarket solution to a market malady (Garrison 2001).

In contrast, Mises (1971) developed the argument that fractional-reserve banking creates credit. Created credit is the source of the malinvestment of the boom phase of the cycle. But significant malinvestment in the Misesian cycle depends on central-bank action or government-backed special privileges, either explicit or implied. The central bank either actively provides new base money that banks use to create credit or the central bank passively makes new base money available to provide the needed liquidity (reserves) to an overextended banking system.[12] Without central-bank activity, the credit creation by fractional-reserve banks would be limited in extent. Large misdirection of production caused by credit creation requires either newly created base money or the promise to create new base money in the event of a crisis by a central bank.[13] Central banks provide the source of the newly created credit or remove the market barriers to bank-initiated created credit.[14]

Banking freedom can potentially limit the scope of and quickly correct for or reverse any created credit that originates from fractional-reserve banking. Extensive and harmful credit creation is the result of the activity of central banking. The malady is extramarket. Created credit distorts the structure of production causing the boom-bust cycle and the remedy, really the preventative, is a return to free markets in money creation. The solution: eliminate the central bank and restore a free market in money and banking (Herbener, 2012).[15]

http://mises.org/daily/6100/Fractional-Reserves-and-Economic-Instability

 

[RobDownSouth]

Llewellyn H. Rockwell Jr.
http://mises.org/daily/5595/The-Many-Collapses-of-Keynesianism

Lew Rockwell, Nuttier than a Squirrel Turd

 

[4est_4est_Gump]

Still winning!

http://www.downinthevalley.com/images/product/medium/164228.jpg

Throb thread:
http://forum.literotica.com/showthread.php?t=745068

 

[bra_man69]

How DARE Chief Justice Roberts put that pesky Constitution above the needs of the regressive wing of the Republican party?

(The "first principles" of the fringe right: Just win. Cheat if you must, but win. .)

 

[RobDownSouth]

http://www.downinthevalley.com/images/product/medium/164228.jpg

Throb thread:
http://forum.literotica.com/showthread.php?t=745068

Moar Lew Rockwell goodness! In praise of segregation

Small wonder AJ idolizes teh man!

 

[kbate]

How Rail Screws the Poor


http://how-rail-screws-the-poor

Is this where we should ask the question, "Were you for rail before you were against rail?"

 

[mercury14]

Futures 80.00

http://cdn.pjmedia.com/eddriscoll/wp-content/blogs.dir/24/files/2012/07/obama_unexpectedly_thumbnail_6-30-11-3.jpg
FINE!

Fapping to the Dow being down -78 points? Keep rootin' for the economy to tank! Party over country at all costs!