Category: Economy

The American Socialist Commonwealth (Part 1 of 2)

In 1920, as socialist parties held power in Germany, Austria, Hungary, and Russia, it appeared that the world following World War I would be a world built by socialist planning. Ludwig von Mises, the Austrian economist, thought that a socialist world simply wouldn’t do, and put pen to paper to explain why. The result was Mises’ first published article, “Economic Calculation in the Socialist Commonwealth.”

Mises’ premise was really quite simple; in a socialist economy, things that are used to produce other things are controlled by the state, which means that investment in production goods no longer involves price comparisons. In a socialist system, the planners decide that more tractors should be built, and order factories to build them.

Socialist administrators can …


Failed Policies of the Last Century

(The following article was written by Peter Vessenes and contributed via Kassandra Kuehl)

On Saturday, September 1st, President Obama accused Mitt Romney of retreating to policies from the “last century” and “sticking it” to the middle class.

Is this really the case?  Whose policies exactly have “stuck it” to the middle class?

Why not go back to the Great Depression as a starting point?  After all, we are in a “Recovery” that looks a lot like that time period.  Which “policies” began there?  Perhaps the largest was Social Security.  After all, Social Security was a Democrat Party program that promised the government would “set aside” retirement, or safety money for people when they reached 65 years of age.   Unfortunately, the average life expectancy at that …


Tax-Exempt Municipal Bonds Must End

In his autobiography, Calvin Coolidge singled out tax-exempt bonds as a travesty; idiotic, improper, probably immoral, and something which needed to be addressed.

Firmly believing that all the income of the nation had to be treated equally (and that public debt was hostile to liberty) Coolidge decried this special treatment, stating point-blank that it provided a way for the wealthy to hide their income from taxation, made it too easy for local governments to amass debt, and benefited local politicians and the buyers of their bonds all at the expense of the taxpayers who had to cover the interest on the debt.

In Coolidge’s day, the courts had ruled that the Federal government didn’t have the power to tax municipal bonds – cities are incorporated …


21st Century Monopoly

As a child, I used to play the board game of Monopoly.  I still vividly remember the excitement of a “Get out of Jail Free” card and the royal blue of Boardwalk and Park Place.  My brothers would be angered when I’d loft off to using the pink pastel colored dollars for other, imaginary scenarios in make-believe businesses. Who knew at a young age, I’d be an energetic entrepreneur, only my lessons of business and true capitalism would come from something other than playing monopoly with my brothers.

By looking at the meaning of Monopoly as an adult, I am only reminded how badly its lessons are in truly preparing us for the real world and as a Free Market.

Playing the Game:

Monopoly was …


Reds Paint The Town Green in Rio

Last month, the United Nations Conference on Sustainable Development was held in Rio de Janeiro, Brazil. The conference organizers themselves have given the conference the nickname of Rio+20.

This is because twenty years ago, in 1992, the United Nations Conference on Environment and Development was held in Rio de Janeiro, a meeting commonly called the Earth Summit. At this original Rio conference, those who assembled decided that the future would be lost without alternative energy, public transportation, and what was called the “systemic scrutiny of production patterns.” Among the documents excreted by the conference was the Rio Declaration on Environment and Development, which is mostly the typical stuffed-shirt garbage one would expect coming from a conference held by the United Nations.

However, within the Declaration …


The Shakedown

I don’t know what else to call it.  Last week’s “settlement” with the five biggest banks in the country, where the Obama Administration squeezed $25 billion to settle “claims” of “inappropriate” lending practices that resulted in 2008’s Financial Crisis, was nothing more than a shakedown.  The settlement suggests that there were no other parties involved in the creation of our most recent recession (assuming we are in economic recovery).  It did not go after the other responsible parties, namely, the people who took out mortgages they couldn’t afford, the people who packaged these loans into securities and sold them for huge fees, the people who bought the securities and ended up holding the bag, and the government that forced the banks to make substandard loans …


Dr. Bernanke’s Fed Funds Patent Tonic with Opium

If you look at the weekly price chart for either gold or silver for the week ending January 27, 2012, you can make out a distinct “J” shape in prices of both metals. Tuesday the prices were suppressed, and then on Wednesday they spiked upward. You can actually pinpoint on the charts the moment the Federal Reserve announced its intent to keep the Federal Funds Rate at nearly zero percent until late 2014.

Low interest rates are supposed to spur economic growth, or at least that is what the textbook for my International Political Economy course said, so what could possibly be wrong with low interest rates?

Of course, low interest rates provide an incentive to borrow money. However, they also form a powerful incentive …


2011 – The Year of Rabid Tribalism

The following comes from the ESPN college football website:

“Florida defensive coordinator Dan Quinn knew the Gators’ locker room wouldn’t be the same as an NFL locker room, because the roster is twice as big — too many people for the same kind of togetherness seen in the NFL. But he wasn’t expecting so much division. ‘The amount of selfishness and separation between different classes was startling. It seemed like we had a fractured bunch at times, for whatever reason,’ said Quinn, who had spent the past 10 years as an assistant coach with four NFL teams. ‘Not a close-knit team.’”

The Florida Gators had another poor season on the college gridiron in 2011. This exceptionally proud football program finished with a six win/six loss …


Connecting the Dots

Yesterday the Labor Department released the employment statistics for October.  I prefer to refer to is as “employment” rather than “unemployment”.  While it may seem to be nothing more than semantics, it is more positive.

The good news is that the economy created jobs–104,000.  The bad news is that the economy needs to create 120,000 new jobs a month to break even.  But there are now 104,000 new taxpayers, and for that fact alone the rest of us are thankful.  Buried in the article in the Wall Street Journal was this sobering statistic:  there are 13.9 million people looking for work.

President Obama had this to say:  “I’m worried about putting people back to work right now, because those folks are hurting and the U.S. …


Student Loans, Debt Crisis and Bondage

In the medieval era there was a rather odd ceremony; when a member of the lower social castes found themselves in dire straights, they turned to the landowning nobility. In exchange for land to work, the noble demanded a portion of the produce, availability for certain laborious tasks, and service in the event of war. The agreement was sealed when the peasant laid his head into the hands of the noble lord.

This ceremony was called a Bondage, as it sealed the bond of the peasant to the noble, as his serf (in contrast with an Homage, where one noble became a vassal of another noble). In our advanced and progressive times, we are – of course – much more evolved and civilized. Far from …