The Ludwig von Mises Institute

On Monday, the Australian Broadcasting Corporation interviewed Hans Hermann-Hoppe, whom they introduce as “the world’s leading living libertarian philosopher.”  Listen here!

Zero Hedge reports,

Yesterday the Japanese Finance Ministry made a whopper of an announcement: in the year ending March 2013, total Japanese debt will surpass one quadrillion yen, or ¥1,086,000,000,000,000. This is roughly in line with the Zero Hedge expectations that by this March total Japanese debt would surpass one quadrillion yen.

It’s hard to imagine…16 digits…and then it’s on to quintillion?

So prepare to add quadrillion to the vernacular. At this exponential rate of increase quintillion will appear some time in 2015 and so on. Yet the scariest conclusion is that as Bloomberg economist Joseph Brusuelas points out, America is not only next, it already is Japan.

How can this not end badly?

Toward the end of his State of the Union speech, President Obama said “I believe what Republican Abraham Lincoln believed: That government should do for people only what they cannot do better by themselves, and no more.” Apparently, he didn’t note the immense irony of those words on the lips of one of American history’s most aggressive expanders of the scope and reach of the federal government, or the cognitive dissonance between that claim and the preceding substantial laundry list of things he wanted to do for (and to) Americans.

But the huge gap between the Presidents limited government words and his expansive government actions shows how limited is the power of such words to constrain centralized power and control. Ritual obeisance to the rhetoric can simply be combined with inconsistent behavior, and his inflation of government even further past any defensible claim of advancing the general welfare is defined out of existence.

Fortunately, this issue has already been considered. In his 1969 Let Freedom Reign, Leonard Read wrote about a loophole in the limited government formulation that now allows President Obama to eviscerate any such limitation. His depressingly current chapter on “Governmental Discipline” merits careful consideration.

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I am a believer in the power of liberty — voluntary relationships — to bring out the best in individuals and, therefore, society. But that well-founded belief makes it painful to see markets (willing exchange) blamed for virtually everything someone can think to object to, in favor of coercion of some by others via government, inspired by some utopian vision that cannot actually be achieved by that coercion.

The question then becomes why unattainable utopian visions seem to be so much more attractive and inspirational to so many people than liberty, which can achieve the best society actually attainable, and how the spell that leads to ever-increasing statism can be broken.

Leonard Read, one of America’s most prolific defenders of liberty in the 20th century, considered that question. And in his 1969 Let Freedom Reign, he offered a useful two-part answer in his chapters, “Free Market Disciplines” and “The Bloom Pre-Exists in the Seed.”

In “Free Market Disciplines”, Read showed that liberty’s failure to gain more adherents than utopian statism can be, in part, traced to the fact that it is the ends envisioned, rather than the means involved, that often motivate people. And since unlike utopian visions, freedom, including free markets — an “amoral servant” — cannot be proven to have no objectionable results to anyone, liberty can be saddled with an inspirational deficit. However, attributing disliked results to markets misplaces the blame. Therefore, restricting voluntary arrangements (beyond preventing the use of force and fraud on others) cannot solve the real problem, yet it hobbles the market’s ability to coordinate people’s cooperative and productive plans, causing harm in the misguided attempt to accomplish good:

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The housing bubble was a global rather than US event. The bubble outlasted the US experience in several other countries such as Australia and Canada which are experiencing some weakness. However, the one I’ve worried about is in China. Keep your eye on this one.

China’s housing market is set for a hard landing

FORTUNE — The Chinese government’s announcement last week that growth for 2011 slowed only slightly to a still impressive 9.2% was greeted enthusiastically by the world’s stock markets. Investors also remain buoyant on China’s future. They appear to be buying the official line that the gigantic property price bubble is gradually and smoothly deflating, posing little risk to an engine that’s so crucial to the future of global trade.

But the math tells a different story. The housing frenzy has driven prices so high, so fast, that a crash on the scale of the real estate collapse in Japan in the 1990s is a virtual certainty. And China’s already exaggerated official growth rate could take a pounding, all the way to the zone of the unthinkable, into the low single-digits.

An applicant’s résumé used to be everything. Type “resume writing” into the search line at Amazon and 4,468 results appear. Book after book containing hundreds of pages each, instructing the reader as to how he or she should put their best foot forward in a page or two.

Now it turns out some firms don’t even want to look at your resume. Instead of requesting résumés, Union Square Ventures asked applicants to send links representing their “Web presence,” such as a Twitter account or Tumblr blog, instead. Applicants interested in the investment analyst job should also send the company short videos demonstrating their interest in the job, reports the Wall Street Journal’s Rachel Emma Silverman.

A résumé doesn’t provide much depth about a candidate, says Christina Cacioppo, an associate at Union Square Ventures who blogs about the hiring process on the company’s website and was herself hired after she compiled a profile comprising her personal blog, Twitter feed, LinkedIn profile, and links to social-media sites Delicious and Dopplr, which showed places where she had traveled.

Ms. Cacioppo says, “We are most interested in what people are like, what they are like to work with, how they think.”

StickerGiant.com founder John Fischer uses online surveys to screen applicants because résumés can’t determine whether an applicant will be a good social fit.

Companies are being inundated with résumés and many run them through applicant tracking systems that weed out unqualified applicants without the use of human time and judgment. The WSJ’s Lauren Weber explains,

today’s tracking systems are programmed to scan for keywords, former employers, years of experience and schools attended to identify candidates of likely interest. Then, they rank the applicants. Those with low scores generally don’t make it to the next round.

Picking employees that will fit in with a company is critical as government mandates and employment laws have made firing someone expensive and difficult. Also, it’s not cheap to hire people. Weber writes,

the costs of hiring a new employee, which now averages $3,479, according to human-resources consulting firm Bersin & Associates. Big companies, many of which cut their human-resources staffs during the recession, now spend about 7% of their external recruitment budgets on applicant-tracking systems, the firm says.

Even at small companies only 19% of hiring managers review all the resumes and 47% say they review but a few.

Of course one key piece of information included on a résumé is college degree. As firms use technology to screen applicants and select employees, how long will it be before having a degree doesn’t really matter?

The Mises Blog long ago spoke of the film Margin Call and it has just been rewarded by the Academy of Motion Picture Arts and Sciences with a nomination for the Best Original Screenplay.

Here is an interview with J.C. Chandor.

Jeffrey Tucker said of the film that it was “the best finance/Wall Street movie I’ve ever seen. The impression it leaves is extremely powerful. There are no splashy scenes, no trumped up relationship dramas, no shocking bits of surprise, violence, etc. Instead, we get the straight dope with a very deliberate pacing of time that is stable and yet the drama remains incredibly intense.”

The new film Margin Call is a tale of a Lehman-like collapse and a Goldman Sachs-like crony return that is the first to even try to explain the Austrian Business Cycle Theory in a major studio film even though they do miss the cause of these fluctuations that is the Federal Reserve, central banks, and the the fiat currencies that cause these bubbles, panics, booms, manias, and busts.

The head of the investment bank during the height of the financial crisis tries to justify his existence and his actions mixing a little Austrian Business Cycle Theory as well as Helmet Schoeck’s theory of envy and social behavior as well as an equilibrium hypothesis:

‎”So you think we might have put a few people out of business today. That its all for naught. You’ve been doing that everyday for almost forty years Sam. And if this is all for naught then so is everything out there. Its just money; its made up. Pieces of paper with pictures on it so we don’t have to kill each other just to get something to eat. It’s not wrong. And it’s certainly no different today than its ever been. 1637, 1797, 1819, 37, 57, 84, 1901, 07, 29, 1937, 1974, 1987 – Jesus, didn’t that [$#@&] me up good – 92, 97, 2000 and whatever we want to call this. It’s all just the same thing over and over; we can’t help ourselves. And you and I can’t control it, or stop it, or even slow it. Or even ever-so-slightly alter it. We just react. And we make a lot money if we get it right. And we get left by the side of the side of the road if we get it wrong. And there have always been and there always will be the same percentage of winners and losers. Happy foxes and sad sacks. Fat cats and starving dogs in this world. Yeah, there may be more of us today than there’s ever been. But the percentages-they stay exactly the same.”

Despite his moralizing he is on to something. Identifying the problem is the start to the solution.

The film was written by the son of a Merrill executive and stars Kevin Spacey, Jeremy Irons, Stanley Tucci, and Demi Moore.

The Las Vegas Sun wonders, “Your next landlord in Las Vegas could be a hedge fund.” Hedge funds have been contacting real estate brokers in Sin City to discuss buying up single-family residential properties to use as rental properties. The idea is that hedge funds can buy relatively new homogenous tract houses for $100,000 a piece, spruce ‘em up for $10,000 to $25,000, rent them out for $1,200 a month, and bang out an 8% to 12% return. Sounds easy. After all, forget the “ownership society” we now have a “rentership society” says Oliver Change at Morgan Stanley. J. Patrick Coolican writes,

between 2005 and 2011, the number of families in Florida, Arizona and Nevada renting a single-family home has increased 67 percent, according to Dennis McGill of the firm Zelman & Associates. Meanwhile, the homeownership rate here continues to plummet toward 50 percent.

In the best of times collecting rent is a little more labor intensive than clipping bond coupons or collecting stock dividends. With the official rate of unemployment in Las Vegas being 12.7%, collecting rent will require a “personal touch.”

Despite the housing market being in a funk since 2007, it’s possible the hedge funds are still a little early. Hubble Smith reported for the Las Vegas Review Journal from last weeks Crystal Ball seminar that SalesTraq’s Larry Murphy told those attended that he thought home prices would decrease another 10% in 2012. Two-thirds of the homes in LV are underwater and it’s Murphy’s view,

“Pretty certainly, I can tell you we’re going to have another 100,000 foreclosures (over the next five years) because about one-fourth of our housing stock is still in default.”

“It’s just another distressed asset,” says Robert Lang, director of Brookings Mountain West and a real estate expert tells the Sun. Housing in Vegas is distressed for sure. But is that housing market undervalued?