Of course, once it becomes clear that a majority of the states — and specifically those that are the most productive — are seceding, the remaining states of Old America will have to consider their options. Would they want to bail out the corporations, the unionized public-school teachers, municipal workers, and the UAW, and the bankrupt states of California and New Jersey, among others, when the burden falls much more heavily onto them? FULL ARTICLE

What started last year as something of a joke from the “tongue & check” department at Business Week, and a supposedly outlandish column by Michelle Malkin, has now become a reality: the state of Connecticut is seriously considering a rescue package for The Bristol Press. Can the nation’s premier junk-bond newspaper, The New York Times, or The Chicago Tribune–already in bankruptcy court–be far behind? FULL ARTICLE

During the late 19th century and early 20th, a confluence of circumstances transformed the United States into an industrial giant. Among these circumstances were a private-property, profit-oriented economy with a vast, internal free market. Soft coal from West Virginia and iron ore from Minnesota were sent to Pittsburgh to make steel and – with the railroad grid that interconnected the so-called Midwest – automobile assembly plants were opened in Detroit, with suppliers of components dispersed throughout the region.

Just as natural resources were drawn into the region, so too was labor: immigrants from Europe and African-Americans from the South. A new technique of manufacturing enabled these laborers, mostly unskilled or semi-skilled workers, to produce complex products. Joined with others on assembly lines, an individual worker had only to “turn a wrench” to play his or her role in a series of operations that resulted, at the end of the line, in a car or a truck or, for that matter, a refrigerator or a radio.

At the beginning of the transformation of the Midwest into an industrial powerhouse, many of the skilled workers of the day were organized into trade unions, the most prominent of which was the American Federation of Labor. They differentiated themselves from the unskilled and semi-skilled laborers who worked on assembly lines. For these skilled workers, unions represented a level of quality that justified a higher wage. If you hired carpenters, masons, plumbers, electricians, and so forth, through the union, you could be reasonably certain that you would be supplied with well-trained and highly-disciplined workers. For that matter, the skilled workers opposed government-regulation of the labor market, as why would workers need unions if they got the benefits of unions from the government.

All this changed during the Great Depression. The industrial unions, the most prominent of which was the Congress of Industrial Organizations, gained certain monopoly-like advantages through the Wagner Act, and merged with the trade unions to form the AFL-CIO. Wages and benefits for workers in unionized companies rose to an average of something like 20 percent higher than comparable workers in non-unionized companies.

Even with this high cost of labor, the continued abundant supplies of soft coal and iron ore, the amazing productivity of the region, and the destruction of much of the industrial capacity outside the United States during WWII maintained the competitiveness of the region. During the 1950s and ’60s, it seemed that American industrial giants such as U.S. Steel, American Motors and Firestone, couldn’t help but make money. The Harvard University economist John Kenneth Galbraith, in The New Industrial State, said that large corporations controlled the market, instead of being controlled by the market.

Even as The New Industrial State was being published, the first chinks in the armor of this industrial system were being revealed. The American steel industry was losing its international competitiveness, and Japanese and German automobiles were entering the U.S. market. During the 1970′s and ’80s, many industrial plants were closed and some of the largest corporations went bankrupt or were forced into acquisition by other firms. The government made various attempts to help, such as by “rescuing” Chrysler, setting quotas and negotiating voluntary export restraints on automobiles, and periodically jacking up tariffs on steel. But, in the end, the economic forces proved to be relentless; and, the AFL-CIO has turned its attention to organizing government workers.

It is one thing to be concerned about the possible impact of the sum of many tiny human actions on the climate of the planet on which we find ourselves, for this is entirely consistent with choosing life. It is quite another thing to presume that we are doomed unless, whatever we are doing, we stop doing it right now.

As Mises wrote: “Some philosophies … look upon life as an absolute evil full of pain, suffering, and anguish, and apodictically deny that any purposeful human effort can render it tolerable.” FULL ARTICLE

For all the talk by the Federal Reserve about “inflation targeting,” we now see that responding to short-run problems is paramount for the Fed. Holding the line on inflation is something the Fed does when it is convenient. Resorting to inflating the money supply when times are tough is predictable, as is a continuing loss of purchasing power of the US dollar. The only uncertainty is how fast the dollar will lose purchasing power. Will it be at a creeping rate, or at a galloping rate, or at a hyperinflationary rate?

You might think that we learned our lesson about inflation during the 1970s, when we moved first from a creeping to a galloping rate, and then risked a further move to hyperinflation. The double-dip recession we then went through starting in 1979 fell in the second tier of economic downturns (below only the Great Depression). There is currently no indication that a severe downturn is on the horizon. But, if we work hard enough at it, with fiscal and monetary policy pumping up the economy and delaying and exacerbating the inevitable, we can make such a severe recession possible in the future. FULL ARTICLE

On Wednesday, November 14, 2007, federal agents raided the Indianapolis headquarters of a company called NORFED, the National Organization for the Repeal of the Federal Reserve Act and Internal Revenue Code, and seized its holdings of gold, silver, and copper, much of it in the form of coins bearing the likeness of US Congressman Dr. Ron Paul of Texas, a candidate for the Republican nomination for President of the United States.

The search warrant for this raid alleges fraud and money laundering, and a supporting affidavit refers to provisions of the US Code that prohibit the emission of any coins intended to circulate as money, and the emission of anything in the likeness of the currency of the United States.

The details of the case are complicated, but there are two issues that I can address without going into all the claims and counterclaims. How is it that the US government has the power to prohibit people from using alternative forms of money (i.e., the first provision), and how is it that the coins of NORFED resemble those of the United States (the second)? FULL ARTICLE

The Islamic Republic of Iran has just issued a new 50,000 rial banknote. The denomination of the note is much larger than that of the highest banknote previously in circulation — 20,000 rials; which 20,000 rial note was only issued three years ago. In both cases, the notes were issued because rampant inflation was making the currency of the country awkward for use as a medium of exchange. Written on the new Iranian banknote, in Arabic, is a quotation of the prophet Mohammed, that the scientists of Persia would reach to the heavens for knowledge. If the government of Iran were scientific, it would heed the science of economics and desist from inflation before it totally ruins its own country. FULL ARTICLE

Following the Panic of 1819, the state of Kentucky sought to provide relief from the suddenly harsh burden of debt on many of its citizens, by creating the Bank of the Commonwealth, a new kind of bank, one completely owned by the state government and not at all bothered by specie, and by suspending foreclosure for up to two years upon the tender of paper money by debtors. Here I tell the story of inflation, economic collapse, political conflict, concern for the preservation of a republican form of government…and murder. FULL ARTICLE

A member of the US Congress has introduced a bill to eliminate the penny from the coinage. But why do we need a law? Merchants have found a way to deal with the declining value of money with these penny trays at stores. The more fundamental problem is how government control of money and coinage has meant steady declines in its purchasing power. We must deal with this or face a future of “government a dollar, take a dollar” trays at stores. FULL ARTICLE

The attack on Wal-Mart essentially comes down this: opposition to economic progress, defined as greater availability of goods and services people want at ever lower prices that indicate an ever wiser use of resources in the service of society. It is hardly the first time such progress inspired opposition. The history of 19th century economic expansion serves up many examples. FULL ARTICLE