Payday Lending, RIP
Ohio has effectively shut the door on payday lending. The state legislature -- a bunch of nanny do-gooders -- recognized the seen: the closing of 1,600 payday stores and the loss of some 6,000 jobs. But these same folks missed the unseen: the tens or hundreds of millions of dollars invested in these businesses; with investment losses to be suffered by many, unknown Ohioans.
Of course, these losses are bound to ripple through Ohio's rust belt economy, creating unpredictable effects.
These types of state interventions in the market reduce future investment in capital. An investor has to consider the consumer, the market, and the state. Of those three, the state has become the most volatile, the greatest unkown.
Payday lending is gone in Ohio. Current and future Investors in the state will have to wonder if the whims of the legislature have finally trumped property rights in the Buckeye State, with the state willing and able to alter ownership and control of property with the stroke of a pen.
Is Ohio any different from the troubled countries to our south? I am no longer certain that it isn't.
More on the FairTax
Now online is my article from the May 12 issue of The New American, "Is Making Taxes 'Fair' the Answer?" This comprehensive article on the problems with the FairTax is not based on a Boortz book, although I think I mentioned him once or twice.
Come to Finland, because we need new blood to tax
If this video doesn't motivate you to jump on the next raft to Finland, I don't know what will.
The worst part is not that the narrator admits the country is yet another dying experiment of socialism, but that the director convinced the participants to smile and be happy about "getting by" with the little income they're allowed to take home.
One wonders why there is brain drain from that part of the world and why many immigrants arrive wanting free hand-outs.
See also: Denmark: Potemkin Village
Serving under Mises in WWI
Guido Hulsmann received the following:
I must congratulate you on the fine writings and historical revelations in your book on Mises-Last Knight of Liberalism.
My grandfather had fought under his command in the Austro-Hungarian army in WWI. The losing side has relatively few historical texts written in English. So yours is very eloquent and provides a basis for me to retrace not only the battles but the circumstances under which my grand father fought those battles.
My grand father as was the tradition made trips to Florida during the 50's to reunite with what was left of the regiment. He spoke occasionally of his New York U friend but it did not dawn on me the significance of this association until much later when I studied economics.
I drifted into a pursuit of economics quite innocently and often marveled how a peasant such as my father could have such a grasp of economic issues lacking any formal training. Hence I know much better now and understand the link of economic thought and the deep influence Mises had on the psyche of my family.
It is a fabulous book you have written on the most influential economist in my thoughts and thinking. I thank you for such a fine work and will put alongside my other books written by Mises.
There Is Still No Such Thing As a Fair Tax
Although I believe that taxation is theft, I would gladly support any tax reform plan as long as it substantially lowered tax rates or the total amount of taxes collected. I am not a critic of the FairTax because it doesn't do enough; I am a critic of the FairTax because it cannot be considered an incremental step toward lower tax rates or lower overall taxes. It is not even a step in the right direction. The FairTax is a cure worse than our diseased income tax system. FULL ARTICLE
Louis Michael Spadaro, RIP
Press release here:
Louis Michael Spadaro, Ph.D., the founding dean of the Fordham University Graduate School of Business Administration, died on May 3 at his home in Syracuse, N.Y. He was 94.
Spadaro, a New York City native, joined the Fordham faculty in 1939, and as professor and dean he founded the Graduate School of Business Administration at Lincoln Center.
"Dr. Spadaro pioneered the first years of the Graduate School of Business Administration, and his legacy lives on in the achievements of our students, the success of our faculty and the growth of our programs and global reach," said GBA Dean Howard P. Tuckman, Ph.D.
Spadaro was an alumnus of City College of New York and New York University, where he earned his doctorate in economics and became part of the Austrian School of Economics, a movement that included notable free-market libertarian theorists such as Ludwig von Mises, Friedrich Hayek, Hans Sennholz and Murray Rothbard.
Spadaro edited New Directions in Austrian Economics.
Writing from another planet
Sometimes articles are so exasperating there is no sense in even attempting a response, but usually these don't appear in the Wall Street Journal. Selection from Thomas Frank:
What has overtaken America's working people is not a natural disaster like "globalization," and not even some kind of societal atavism in which countries regress mysteriously to their 19th-century selves. This is a man-made catastrophe, a result that proceeded directly from the deliberate beatdown of organized labor and the wrecking of the liberal state.
It is, in other words, a political disaster, with tax cuts, trade agreements, deregulatory measures, and enforcement decisions all finely crafted to benefit one part of society and leave the rest behind. Few of the voters who gave Ronald Reagan his landslide victories, it is fair to say, intended for this to be the outcome. They wanted their country to stand tall again, certainly; they wanted the scary regulators off their backs, maybe; but I can recall no conservative who trumpeted those long-ago elections - or any of the succeeding contests, for that matter - as a referendum on plutocracy.
So let us have one now. Instead of pleasant talk about "change" and feats of beer drinking at the corner tavern, let us hear our candidates address this greatest issue of them all: What kind of country are we to be? A land of equality? Or a bankers' utopia - where the law of the land has achieved mystical oneness with the higher law of classical economics, and devil take the bottom 80%.
So far as I can tell, the calamity discussed here owes entirely to the one statistic he thinks proves his case: the real hourly wages in the US for most workers has risen only 1% since 1979, where as the richest 20% of the country made more than the rest of the country combined. But perhaps we should consider how much less wages would have risen had the rich not permitted to become so, or maybe this is due not to the merciful loss of union's grip on the economy but rather to such forces as inflation. And as for the supposed dismantling of the interventionist state and the "tax cuts" and de-regulation, well, I guess people are just happy to make up the reality that they want to see.
It's true that the government policy is configured to help the rich and powerful of course but it is hard to see how putting government even more in charge of our economic lives is going to fix that. .
Economic Causes of War
There are no economic causes, said Ludwig von Mises in this 1944 lecture, for armed aggression within a world of free trade and free enterprise. In such a world, no individual citizen can possibly derive any advantage from the conquest of a province or a colony. But in a world of totalitarian states, many citizens may come to believe in an improvement of their material well-being from the annexation of a territory rich in resources. The wars of the 20th century have been, to be sure, economic wars. But they have not been caused by capitalism, as the socialists would have us believe. They are wars caused by governments aiming at complete political and economic omnipotence, and have been supported by the misguided masses of these countries. FULL ARTICLE
PRI Flat Tax Study Released
I realize purists will object to any advocacy of taxation besides absolute zero, but even so I encourage people to read at least the first few chapters of my new study (.pdf) on California tax reform. I know I was surprised at some of the charts, even though I already believed in marginal tax rate reductions for moral reasons.
Is Our Future Really $0?
Chris Anderson, a well-known business guru in the world of online commerce, imagines a world in which all internet services are free. But he has made an error, argues Fernando Herrera-Gonzalez. It is the competition for these resources that seems to explain this trend to "free" services in some Internet business models, and not the existence of marginal costs reducing to zero. The reason why some goods are given away for free in some markets has no relation to any hypothetical notion of "marginal costs tending to zero." In fact, those supposed free goods are "given" to us in exchange for our time and attention. As time is an increasingly scarce resource, its value is steadily rising, in terms of storage, processing, and bandwidth.
With time rightly identified as a scarce resource, economic theory is needed to understand the interchange process. And there is no place for the "freeconomics" of Chris Anderson. FULL ARTICLE
A Mother's Day Gift from the State
Mothers of Ohio, here you go. Ohio Treasurer Richard Cordray is using your tax dollars to provide you with the gift you desired all along. Though, for some reason, you couldn't recognize that desire -- a breakdown of Thymology I suppose.
Regardless, here it is. Enjoy. Cordray knew you would.
Thankfully, my mother lives in Florida and is unaware of Cordray trumping my measly gift. Well, at least I paid for mine.
Hey, wait a minute, I paid for both!
May 8, 2008Gift to Ohio Moms: Tools for Financial Security
Columbus, Ohio
As Ohio families recognize Mother's Day this weekend, Ohio Treasurer Richard Cordray is trying something new to encourage those moms in their quest for financial security.
The Treasurer's office will make available online its newly-revised Women & Money 2008 Workbook, from Saturday, May 10 through Saturday, May 17. The workbook contains information on a wide variety of personal finance topics and is used as part of the office's annual Women & Money free financial workshops held during the summer. The Workbook is usually distributed only at the workshops.
Continue reading (keep in mind that this gift from the state is only available for a short time)
Show Trial Planned for Energy Markets
The US House of Representatives will hold hearings on energy markets trying to determine who is causing oil prices to rise. The anti-market investigation will blame hedge funds and investment banks for manipulating the markets to make oil go to record levels.
Oil is too global a commodity for speculators to determine its price. We know, for instance, that oil prices are high not only in spot markets but in futures markets, not only on the Nymex but in the UK (Brent), Dubai, Malaysia, and numerous smaller, less liquid markets not accessible to speculators. Are we to believe that the conspirators somehow entered all these markets at once?
The argument for speculation also ignores the fact that numerous other commodities are soaring in price, namely gold, silver, platinum, palladium, copper, iron ore, tin, corn, rice, etc, etc. Did the oil conspirators cause all that, too? The commodities that do not trade on futures exchanges (making them less susceptible to speculation) have risen slightly more than exchange traded commodities, indicating that fundamentals are driving prices higher.
The House show trial is surely designed to bamboozle the general public. The one entity that engages in activities directly linked to the scarcity of oil vis a vis dollars, the Federal Reserve, appears to be exempt from government scrutiny.
Anarchy in the Skies
The thought of abolishing all government regulation of the aviation sector and handing this task over to the free market is, to most people, as unthinkable and alien an idea as that of privatizing all police and courts. The general perception is that air travel requires central and international control and regulation by governments in order to prevent total anarchy in the skies (in the derogatory sense). But are governments really needed to accomplish this task, asks Marcus Bergstrom, or can it and should it be handled entirely by the free market? FULL ARTICLE
Mom or government?
It's tornado season here in Ohio.
This afternoon as a few funnel clouds were forming miles from my house, I received a call from my mother living in Florida. Seems she was not about to wait for her son to make his yearly Mother's Day call as she had urgent news. CNN and other news outlets were reporting funnel clouds and tornados in central Ohio, with my county noted as a likely target. This was sometime before 2:00. I turned on the TV and hit the web for detailed updates. Luckily, the storms passed overhead without even a significant touchdown.
With the menace long gone, I received another phone call; an automated call from the county 911 department notifying me of the tornado warning. This was 2:25, with the warning to expire at 2:30. And, more importantly, with the storms no longer in the county or even a threat to adjoining counties.
Then I learned that Franklin County -- just to my south -- also had a delayed tornado warning because "Franklin County EMA deputy director Jim Leonard said the communications room is not manned during weekends and holidays, but there are two people on-call at all times."
Do I complain to management? No way. Those folks are looking for complaints as a means to justify additional funding. Do I keep my mother happy? You bet! Her warning was neither delayed nor costly.
Remember mom, and not just on Mother's Day.
Spotlight on Keynesian Economics
All Keynesians conceive of the State as a great potential reservoir of benefits, ready to be tapped. The prime concern for the Keynesian is to decide on economic policy -- what should be the economic ends of the State and what means should the State adopt to achieve them? The State is, of course, always synonymous with "we": What should "we" do to insure full employment? is a favorite query. (Whether the "we" refers to the "people" or to the Keynesians themselves is never quite made clear.) FULL ARTICLE
Machine to explain the economy (1949)
Thanks to Don Lloyd for this link to an interesting story about a British machine that modeled the workings of the British economy:
A sensation when it was unveiled at the London School of Economics in 1949, the Phillips machine used hydraulics to model the workings of the British economy but now looks, at first glance, like the brainchild of a nutty professor. Where the Bank's team of in-house economists are equipped with state-of- the-art digital computers, the profession's first stab at modelling was very much a do-it-yourself affair with a whiff of the Heath Robinson about it.
The prototype was an odd assortment of tanks, pipes, sluices and valves, with water pumped around the machine by a motor cannibalised from the windscreen wiper of a Lancaster bomber. Bits of filed-down Perspex and fishing line were used to channel the coloured dyes that mimicked the flow of income round the economy into consumer spending, taxes, investment and exports. Phillips and Walter Newlyn, who helped piece the machine together at the end of the 1940s, experimented with treacle and methylated spirits before deciding that coloured water was the best way of displaying the way money circulates around the economy.
But whoops:
By today's standards, the Phillips machine was limited. It made no provision for inflation and, with capital controls in force, had no need to take account of the curse of the modern UK economy - the wild swings in the credit cycle. Professor Brian Henry, a visiting fellow at the National Institute for Economic and Social Research, said: "It was a child of its time. It looked at how the economy could be stabilised when people were worried about the stabilisation of aggregate demand. That is the way things were in the 1950s.
"Things are different now. There is a different financial system and a completely different global economy. But Phillips was a brilliant guy. He came up with interesting ways of providing practical advice on policy."
Even so, Henry says the machine is far more than a museum piece. Today the Bank of England's models are supposed to show how shocks affect the economy and the time it takes for a change in policy to have an effect, precisely the sort of problems that the Phillips machine helped identify. Even with the most up-to-date computers, the Bank is still finding it hard to come up with the right answers.
Indeed, one early demonstration of the machine displayed the difficulties that can arise when monetary and fiscal policy are not synchronised. Phillips asked one of his students to be chancellor of the exchequer and control taxes and spending; the other to be governor of the Bank and control interest rates. Predictably, the policies were uncoordinated and the upshot was that water overflowed on to the floor.
Independent plug in for Community
I'm really taken with this gizmo designed to change the header for Community users.
The Uses of History
Gordon Wood's defense of objective history is salutary, and besides this, as one would expect from a historian of his eminence, he makes many illuminating remarks about concrete issues in American history. Despite its considerable merits, though, his book suffers from a fundamental flaw. He protests against ideologists who impose their own concerns on the past; but Wood himself has definite views about the nature of the past that are as much theoretical impositions as those of the writers he challenges. FULL ARTICLE
Does Money Taint Everything?
Let's pull this sentence out of the civic pieties of our time and see what's wrong with it: "We should all volunteer our time in charitable causes and give back to the community in a labor of love."
We can't argue with the instruction here, or the sentiment behind it. There is nothing wrong with giving and sacrifice. My argument is with the choice of language. It contains a word and three phrases the common usage of which can be highly misleading. FULL ARTICLE
Recent Comments