Posted tagged ‘Central Planning’

Must Reads For The Week 2/3/18

February 4, 2018

Patients Are “Dying In Corridors” Of Britian’s Socialised Health System, by George Pickering, at mises.org. Why do people continue to believe that economic central planning doesn’t produce the results the planners planned? The only way to “fix” a health care system is to turn over the decision-making to the individuals involved in the economic exchange (the consumer and the producer). All attempts by central planners to “fix” the problems brought about by the previous “fixes” are treating the symptom, not the problem. Central planning is the disease. Individual decision-making is the cure.

Will Unfinished Train Overpasses Become California’s Stonehenge?, by Victor Davis Hanson, at victorhanson.com. Another example of central planners plans not turning out as planned. In 2008 planners convinced voters that high-speed rail was an affordable way to cure their crowded freeway system. California may not have enough money to finish the project. Even if the project gets finished there will never be enough riders to cover the initial cost of building it, let alone the day-to-day cost of running the railroad.

Six Years After Bankruptcy, Stockton Is Preparing To Start Handing Out Free Money, at zerohedge.com. Another example of central planners arrogance. Excerpt from the article: “The pervasive poverty in his city has led Stockton Mayor Michael Tubbs to announce….the city would soon begin an interesting social experiment. Starting later this year, a random sample of 300,000 Stockton residents will receive $500 every month with no strings attached. This program is set to become the US’s largest experiment with a policy that has become a favorite topic of Mark Zuckerberg and his Silicon Valley peers: Universal Basic Income.” One question: Where is the money coming from? We know Stockton doesn’t produce anything that can be exchanged for enough money to cover the cost of their budget and this social experiment. The money either has to be taxed away from other individuals, or it has to be borrowed (which means it has to be paid back by future tax payers). This is like taking a bucket of water from the deep end of the pool and dumping it into the shallow end, while spilling half the water on the way to the shallow end.

Republicans’ Latest Family Leave Scheme Shows Why We Can’t Be Free, by Robert Tracinski, at thefederalist.com. A majority of Republicans in office aren’t for free markets and smaller government. Family leave is another example of central planning brought to you by the “free market” party. Big government politicians have to be purged from the Republican party through primary election process.

Great Moments In Government Regulation: Meijer Charged By Wisconsin Price Police Of Hurting Consumers By Charging Too Little, by Mark J. Perry, at carpediemblog. Excerpt from the article: “When Meijer opened its first two stores in the Badger State, the greeting Meijer received was far from “Wisconsin nice.” Rivals filed complaints accusing it of pricing 37 items…..below cost…..Wisconsin’s Department of Agriculture, Trade and Consumer Protection sent the superstore a letter explaining the requirements of the state’s Unfair Sales Act.” How can lower prices hurt consumers? The simple fact is lower prices hurt Meijer’s competitors. The quote about “rivals” filing complaints with Wisconson’s Department of Agriculture tells us that consumers are not being thought about. This is an example of government central planners setting price floors. Allow prices to be set by individuals freely exchanging in the market. Central planners can’t possibly know where Meijer’s prices should be set. If Meijer is wrong it will bear the cost of its mistake.

Chart Of The Day (Century?): Price Changes 1997 to 2017, by Mark J. Perry, at carpediemblog.  Intervention by Government central planners increases the prices of goods and services. The freer individuals are to make decisions in a market the lower the prices. Of course we know money printing and artificially low interest rates, courtesy of the Federal Reserve, are the ultimate intervention in the market.

 

EXCERPT FROM THE ARTICLE: ” 1) Blue lines = prices subject to free market forces. Red Lines = prices subject to regulatory capture by government. Food and drink is debatable either way. Conclusion: remind me why socialism is so great again. 2) Almost all of the items above the line are protected industries while those below the line are subject to generally robust competition…3) This is one of the most important charts about the economy this century. 4) Imagine that, prices are cheaper with more competition and less government. 5) What areas are government most intrusive? Education and healthcare or manufacturing? ”

Connecticut’s Towns Are Crying For Help: But Will Hartford Listen? at zerohedge.com. Because central planners have no incentive but to cave to the demands of public sector unions over the years, the government of the State of Connecticut has a serious debt problem. If Connecticut was forced to respond to signals sent by market prices over the years, they wouldn’t be in this mess. These losses wouldn’t have been able to pile up year after year. Market prices send signals to stop unproductive activities. But of course Government can negate market forces for only so long. Paying labor more than it produces is an unproductive activity. Of course Governments think that they can ignore market forces. But ultimately you can’t hide the cost of consuming more than you produce for an extended period of time. Ultimately someone will have to give something up.

Plastic Straws Bill In California Makes Them Illegal Unless Requested, by Josh Hafner, at usatoday.com. This can’t possibly be true can it? Of course we can never underestimate the length which central planners will go to control the decisions of the masses.

Ratings For Grammy Awards Drop 24%, nytimes.com. Politics ruins everything. People want to watch the Grammy awards to be entertained. They don’t want to be preached to by a bunch of people who don’t understand that the very system they denigrate allows them to be as prosperous as they are.

CARTOONS  from theburningplatform.

Political Cartoons by Michael Ramirez

Political Cartoons by Michael Ramirez

Political Cartoons by Steve Breen

Political Cartoons by Lisa Benson

 

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Must Reads For The Week 12/16/17

December 17, 2017

Pentagon To Undergo First Ever Audit After Decades Of Sloppy Accounting And Missing Trillions, at zerohedge.com. Trying to make government agencies more efficient is a fool’s errand. Government agencies have no incentives to be efficient. If you want to cut spending by making bureaucracies more efficient you have put the cart before the horse. The only way to constrain spending is to cut their budget. Cutting their budget by say 25% would reveal what is and is not important to the Pentagon. They will cut spending on what is least important. If you cut their budget another 10%, the next wasteful marginal activities will be revealed. The Pentagon can’t spend what it doesn’t have.

Net Neutrality And The Problem With “Experts“, by Ryan McMaken, at mises.org. The term “Net Neutrality” sounds just as good as “The Affordable Care Act”. No one could be against these policies could they? Progressives are great at making up clever names for their regulations. Unfortunately the results of these regulations are the direct opposite of their names. Net Neutrality is about individuals in government (the deep state) wanting to control the internet. The insiders knew they couldn’t get their regulation passed legislatively, so they used the FCC to implement the policies. If you are for “Net Neutrality” I have one question for you. If the internet, with all its complexity, came to exist today without government regulations, will it continue its growth under government regulations?

Here is a quote from George Gilder: “Socialist and totalitarian Governments are doomed to support the past. Because creativity is unpredictable, it is also uncontrollable. If the politicians want to have central planning and command, they cannot have dynamism and life. A managed economy is almost by definition a barren one.

Harvard Business School Professor: Half Of US Colleges Will Be Bankrupt In 10 to 15 years, by Abigail Hess, at cnbc.com. I have said for years that we can cut the cost of educating high school and college students through online education. This is an example of the creative destruction of the market. Colleges will try to protect their monopoly position by lobbying government to decertify online education and use taxpayer money to prop up their failing business model. Will the market (decisions made by individuals) win, or will individuals in government intervene?

Germany Ends Tesla Model S Subsidies In Massive Blow To Company’s Government Funded Business Plan, at zerohedge.com. Elon Musk is a scam artist. He has become wealthy by convincing individuals in government to give his company tax payer dollars directly and through subsidies for buyers of his product. Under normal market conditions consumers wouldn’t be as ‘charitable’ with their own money. Electric cars may be the cars of the future. That future could come to exist incrementally as the unsubsidized cost of electric cars becomes less than the cost of gas-powered cars. But the cost isn’t the only factor. The electric car must also be a better product according to the desires of consumers. And each consumers desires are subjective, with cost being just one factor.

Ban The Bike! How Cities Made A Huge Mistake In Promoting Cycling, by Lawrence Solomon, at businessfinancialpost.com. Here is another example of government central planning creating economic inefficiency. Using scarce resources for non productive activities is what government does best. Free markets (what results when people are allowed to produce, exchange, consume and save what they want according to they subjectively value) channel scarce resources to their most productive uses. This is why bike advocacy groups spend their time and money lobbying government to get what they want, because markets would constrain their plans.

John Cochrane On Surge Pricing, Economic Freedom And The Sad Paradox Of Free Markets…. by Mark J. Perry, at carpediemblog. Raising the price of tolls during rush hour is a free market solution (trade-off) to traffic congestion during rush hour. Toll road I-66, in the Virginia suburb of D.C., has increased tolls during rush hour to relieve congestion. Of course everyone is complaining. Which means politicians are trying to step in and get these ‘unfair’ prices reduced. People don’t understand how markets work. But they seem to believe that politicians using government power can conger up a solution to an economic ‘problem’. The laws of economics are still in play even though government tries to wish them out of existence. The reality is there is more demand for road space during rush hour than what exist to handle this demand. During normal times of the day there is less demand for this same road space. We could call it an over-supply of road space. One ‘solution’ would be to supply enough road space to handle rush hour demand. But at what cost? The new supply of road space would be a waste of scarce resources at all other times except rush hour. Raising tolls during rush hour is not a solution as much as it is a trade-off. The scarce resource of road space can be rationed through price increases. The increased price of the toll allows individuals to make the trade-off between purchasing higher priced road space now, or lower priced road space at some other time.

Here is an excerpt from the article: “It does not occur to anyone that you’re really not paying tolls to the government. You are paying your fellow drivers to stay home, carpool, come later, so that they will get out of your way and let you sail to work.”

“The reaction to Uber surge pricing is a similar test. Economists love it. You mean rather than sit in the rain and wait, I can pay more, compensate someone else for waiting, encourage a driver to skip dinner, and take me where I want to go, now? I’m in. Or, I can save some money and to later. Everyone else hates it. and gets cities to ban it. And we to back to waiting.”

“The fundamental reason so many markets are not free, and so dysfunctional, is that the voters of our democracy don’t really want freedom. Freedom will come when we want it, when we insist on it, when the average voter sees a free market solution rather than endless controls as the answer to real world problems. The sad paradox of free markets is that free markets don’t need people to understand them to work. But democracy does require voters to understand how things work.

Is The Oil Glut Set To Return? at zerohedge.com. Simple supply and demand. The American fracking industry is what is keeping the price of oil from increasing. OPEC’s attempt to increase oil prices by constricting what they will supply won’t work. As soon as the price increases, because of their production cuts, it becomes profitable for American fracking to increase production. This in turn drives the price back down. The only reason oil is staying around $50 a barrel is because the price rose to an average of $100 a barrel from 2008 to 2014. This price made it profitable to start fracking. During this time period the fracking industry found more cost efficient ways to extract the oil. Today they can pump oil profitably at prices above $40. Free market prices work.

Chicken Wing Spot Prices Collapse 30% As NFL Protests Take Their Toll, at zerohedge.com. Not only are fewer people going to NFL games. Fewer people are going to wing restaurants to watch NFL games. Politicizing the NFL has economic consequences.

Is Free Trade A Problem If Some People Use Their Greater Freedom To Eat More Than Intellectuals Think Wise? by Don Boudreaux, at cafehayek.com. Free trade increases the number of choices for consumers. This is a good thing, unless you are a central planner. Central planners don’t like free trade if the choices people make don’t coincide with what the planners think is wise.

NRA-Republican Backed Bill Makes It Easier For Feds To Disarm Citizens, by Tho Bishop, at mises.org. Excerpt from the article: “While Republicans and supporters of the NRA may not fear the Trump Administration coming after their guns, it is obviously reckless to grant additional power and resources to future administrative states that may be quite hostile to the right to gun ownership. To put it simply, there is never a good reason to give Federal agencies the power the revoke an individual’s ability to lawfully purchase a weapon without due process.”

Can We Be Honest About Women? by D.C. McAllister, at thefederalist.com. With all the allegations of sexual harassment, maybe we need to step back and take a look at the reality of human nature.

CARTOONS, from therightreason.net.

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Must Reads For The Week 3/11/17

March 12, 2017

ECONOMIC STUFF

Donald Trump and Peter Navarro Suffer From ‘Trade Deficit Disorder‘, by Mark J. Perry, at carpediemblog. Here is an excerpt form the article: “In his speech and op-ed, Navarro laid out Team Trump’s trade agenda that involves expanding US exports, reducing imports, and thereby reducing America’s merchandise trade deficit and supposedly therefore increasing our nation’s economic growth. Unfortunately, that’s a pure mercantilist trade agenda, which is an approach to trade that has been discredited now for several hundred years.

How Did Peter Navarro Ever Get A Ph.D In Economics From Harvard? economicpolicyjournal.com. Regular people being ignorant about economics is one thing. But having a Ph.D in economics and being economically ignorant is dangerous.

What Is Laissez-Faire? by Jeffery Tucker, at mises.ca. It simply means ‘Let it be’. A majority of people believe that complex order comes from top down planning by leaders possessing authority. It is inconceivable to them that unplanned order arises when people are allowed to manage their own lives and interact with others. Language is an example of complex spontaneous order. The rules of English were not written by someone and everyone started to follow them. People communicated with people and over time the ‘rules’ were established after discernible patterns (unwritten rules) were recognized. Attempts by Government central planners to control every aspect of society leads to chaos and conflict. Laissez-Faire. Please!

Repeal And Replace Needn’t Be Complicated, by Hunter Lewis, at mises.org. Do you use the term “healthcare system” or “healthcare market” when talking about ‘healthcare’. Most people talk about our “healthcare system”.  This shows we think of healthcare as a centrally planned system. The cost will never go down unless we see healthcare as an economic good rationed by prices in a market. Obamacare was 2500 pages of rules and regulations designed to ‘fix’ what was left of a healthcare market already encumbered by mountains of government regulations. The only ‘fix’ to our current “healthcare system” is to allow it to become a healthcare market. LAISSEZ-FAIRE! Get rid of all government regulations and a complex healthcare order will almost magically form itself. It won’t be a perfect order (nothing man does is perfect). But it will be the best that can possibly exist in a world of scarce resources and subjective value.

High Prices Don’t Cause Economic Bubbles, by Frank Shostak, at mises.org. When central banks increase the money supply (counterfeit money), scarce resources are misallocated to activities that would have never come into existence under normal market conditions. The 08 bubble was caused by the Fed electronically printing counterfeit money. It was not allowed to liquidate. More electronically printed counterfeit money was created to stop the correction. This counterfeit money has and is creating our present financial bubble. Excerpt from the article: “The emergence of a bubble or a monetary balloon need not be always associated with rising prices – for instance, if the rate of growth of goods corresponds to the rate of growth of the money supply then no change in prices will take place……what matters is not whether the emergence of a bubble is associated with price rises but rather with the fact that the emergence of a bubble gives rise to the emergence of non-productive activities that divert real wealth from wealth generators. The expansion of the money supply, or a monetary balloon, in similarity to a counterfeiter, enables the diversion of real wealth from wealth generating activities to non-productive activities.”

The Fed’s Dependence On The Consumer Will Backfire, by C. Jay Engel, at mises.org. Production is the creation of wealth and consumption is the destruction of wealth. Spending is consumption. Consumption is the destruction of what has been produced. Spending doesn’t grow an economy. We can only spend out of our own production. What we produce allows us to spend. Consumption has to lag behind production for an economy to grow. When consumption is increased by debt and money printing, we start a process where consumption is out pacing production. We start to eat our seed corn so to speak. Artificially increasing spending is a quick shot of adrenaline.  But it has no staying power.

 

CARTOONS

Drifting Towards Fascism

September 20, 2016

man drifting in a boat

First let’s define Fascism so we can begin at the same starting point. Fascism is an economic system where the state doesn’t own the means of production, but the state makes the rules that producers and consumers have to follow. There is a bureaucratic layer between businesses and politicians which plans the economy. It is crony capitalism on steroids.

Fascism places politicians and bureaucrats as the ultimate rulers aka decision makers. The individual has no rights or liberty except what the rulers say they have. Order comes from the state, (top down) not from the individual, (spontaneous order).

I saw a great chart (below) showing America’s drift toward Fascism, in an article titled, The Road To Fascism In Just Two Charts, at bawerk.net. I have always thought economic systems fit on a line where at one end no government exists, and at the opposite end there is total government control. Where an economic system is placed on this line depends on how much government intervention exists, or put another way, how little governmental intervention exists.

WHAT IS AN ECONOMY? WHAT IS SOCIAL FREEDOM?

An economy is what results when each individual is free to decide what to produce, consume, exchange and save in a world of scarce resources which have alternative uses. Simply put, you own what you’ve produced or what you’ve received in exchange for your production. It is your property and you have a right to do with it what you wish.

Production is the creation of wealth. Consumption is the destruction of wealth. Exchange is the increase of wealth as both parties place a higher value on what they received than what they’ve given up. Saving is the preference of consumption at some point in the future to consumption in the present. Savings is the basis for capital formation. Capital formation is what increases productivity. Increased productivity is the creation of larger amounts of wealth.

Each individuals decision on what and how much he will produce, consume, exchange and save according to what he  subjectively values in a world of scarcity is the essence of freedom.

In order to have economic freedom you have to have social freedom and in order to have social freedom you have to have economic freedom. In other words, economic freedom and social freedom are different sides of the same coin. Individuals are free to act. Each individual is responsible for the consequences of his actions if they bring harm to others or himself.

I have a quote by F. A. Hayek at the top of my web site. It is my favorite quote because it sums up the choice individuals have faced since the beginning of time:

F. A. HAYEK: “THE COORDINATION OF MENS ACTIVITIES THROUGH CENTRAL PLANNING OR THROUGH VOLUNTARY COOPERATION ARE ROADS GOING IN VERY DIFFERENT DIRECTIONS, THE FIRST TO SERFDOM AND POVERTY THE SECOND TO FREEDOM AND PLENTY.

Let’s take a look at the chart and see what it reveals.

true-political-axis

Zero Government intervention into the economy starts at the bottom left of the chart and moves upward and to the right as Government intervention starts to increase. Zero Social Freedom starts at the top right of the chart and moves downward and to the left as the level of Social Freedom starts to increase.

Communism, socialism, fascism and democratic socialism are on the top right of this chart. They are economic and political systems that strangle individual liberty. Their very nature means intervention into, or control of, what is produced, consumed, exchanged and saved.

Anarcho capitalism, free market capitalism, classical liberalism and our America constitutional founding are on  the lower left of the chart. They are economic and political systems that strangle Government and allow individuals the freedom to produce, consume, exchange, and save as they see fit.

What exists today is the middle ground of crony capitalism, crony socialism and other forms of government interventionism. This is the utopian middle ground that elites think mixes the best parts of both ends of the chart. They know that free market capitalism produces great amounts of wealth as seen by our standard of living. But the elites don’t like the way the wealth is “distributed” and want to use the force of government to make this distribution  “fairer” according to their idea of “fair”.

The elites attempt to redistribute wealth differently than it would exist in the free market, creates incentives that ultimately decreases the wealth that is being produced. It divides us into groups that can be pitted against each other by political opportunists.

These statements by Ludwig von Mises tell us all we need to know about the above chart:

The issue is always the same: the government or the market. There is no third solution.”

The middle-of-the-road policy is not an economic system that can last. It is a method for the realization of socialism by installments.”

Anti capitalistic policies sabotage the operation of the capitalist system of the market economy. The failure of interventionism does not demonstrate the necessity of adopting socialism. It merely exposes the futility of interventionism. All those evils which the self-styled “progressives” interpret as evidence of the failure off capitalism are the outcome of their allegedly beneficial interference with the market.”

CONCLUSION

We are in the chaotic middle. Our choice is to move towards freedom and free markets. It is going to take a lot of time and effort to educate enough people in order to tip the scales toward freedom. Is the cost too high? It’s your decision.

 

Related ArticleCapitalism vs. Crony Capitalism, at austrianaddict.com.

Related ArticleSocialism Sounds Great, at austrianaddict.com.

Related ArticleWhat Creates Wealth? Freedom, at austrtianaddict.com.

Related ArticleWe Can’t Recreate The Garden Of Eden, at austrianaddict.com.

 

Could Brexit Be The Modern Day “Shot Heard Round The World”?

July 1, 2016

 

Ralph Waldo Emerson’s immortalized The Minutemen who made a stand against British Tyranny at Lexington and Concord in his “Concord Hymn”. Here is the first verse:

By the rude bridge that arched the flood,

Their flag to April’s breeze unfurled,

Here once the embattled farmers stood

and fired the shot heard round the world.

Could Brexit be a seminal moment moving forward in the history of liberty? We won’t know until the future unfolds. All we know right now is the UK decided they didn’t want to be ruled by a bunch of unelected bureaucrats who usurped British sovereignty when they went beyond the EU’s original mandate.

The UK was fortunate that they were able to throw off the tyranny of the EU through the political process. They didn’t have to fire a shot. Colonial America had to physically fight to free themselves from British tyranny. The cost of “dissolving the political bands which have connected one with another” is exponentially higher if, in order for you to part ways, you have to fight as opposed to just agreeing to separate. Thank goodness the EU didn’t hadn’t become a military power or maybe this would have turned out differently.

Eight Key Takeaways from Brexit

It’s always beneficial for individuals when layers of bureaucratic regulations can be gotten rid of. This allows decisions to be made at the level closest to the individual, which means they have a better chance of working and a better chance of getting changed when they don’t.

I hope the British realize that just because they got rid of the EU central planners doesn’t mean they got rid of the central planning socialists in their Parliament. If the people want more individual liberty they will have to vote in members of Parliament who will stand for individual freedom and vote out members who have supported government solutions to economic problems. This will be difficult because voting to cut the size and scope of Government means many people will have to vote against their own self-interest. For inspiration, the British people need look no farther than Nigil Farage (click here) and Daniel Hannan (click here). These two men were British representatives in the European Parliament. There support for leaving the EU guaranteed they would lose their job. They voted against their own self-interest which is rare among “public servants”.

If the British Parliament and the Bank of England try to centrally plan the British economy through regulation, taxes and money printing, than all the people have done is exchange one set of central planners, who are far away, for a set of central planners who are local. I hope the people who voted to leave understand that if they don’t remain vigilant, their local central planners will see this as an opportunity to grab more power. All but a few politicians and bureaucrats are sucked into the gravitational black hole of Government power. It is hard to resist. No one with this kind of power should be trusted.

How will this end? No one knows. Let’s hope other countries fire political shots, against central planners, that will be heard round the world.

NIGIL FARAGE RUBS SOME SALT IN BREXIT WOUND

Some good articles about Great Britain leaving the EU.

BROVO BREXIT! by David Stockman, at davidstockmanscontracorner.com. Excerpts from the article:

The central bankers and their compatriots at the EU, IMF, White House/Treasury, OECD, G-7 and the rest of the Bubble Finance apparatus have well and truly over-played their hand. They have created a tissue of financial lies; an affront to the very laws of markets, sound money and capitalist prosperity.”

“…Brexit is a contagious political disease. In response to today’s history-shaking event, determined campaigns for Frexit, Spexit, NExit, Grexit, Italxit, Hingexit and more centrifugal political emissions will next follow.”

“Smaller government – at least in geography – is being given another chance. and that’s a very good thing  because more localized democracy everywhere and always is inimical to the rule of centralized financial elites.

WHAT NOW, BRITAIN?, by Matthew McCaffrey, at mises.org. Excerpt from the article:

Britain’s historic decision to leave the European Union represents a blow to political centralization. However, it’s also a sobering reminder that the work of advancing peace and economic freedom is never done. Britain may be extricating itself from EU political control, but if its goal is genuine progress and prosperity, it will need to do much more than simply sever its ties with Brussels.

“Without winning the battle of ideas, the gains from leaving the EU will amount to very little. In this battle, Brexit is not so much a victory as an opportunity…….Brexit offers a chance to once again spread those long-neglected ideals of peace and free trade from which all human progress derives.

EIGHT KEY TAKEAWAYS FROM BREXIT, by Dan Mitchell, at freedomandprosperity.org. Excerpts from the article;

“What an amazing vote. The people of the United Kingdom defied the supposed experts, rejected a fear-based campaign by advocates of the status quo, and declared their independence from the European Union.” Here are some takeaways, thoughts and interesting developments (click on article).”

Here Is Some Econ. Homework

March 22, 2016

When knowledge is allowed to flow unhampered through the market, mainly through the price system, it works to coordinate all activities as optimally as possible. But when Government interventions don’t allow this knowledge to flow freely, malinvestments and dislocations are the result. The only way to cure these problems is for the interventions to stop. This allows the market to purge itself of these wasteful activities via a recession. Unfortunately no politician, bureaucrat, or Fed policy maker wants to have this correction happen on his watch.

Even tough hampered markets have an appearance of sustainability, they ultimately succumb to economic forces.

Here are two articles that talk about hampered markets. The first article is titled, Mises Was Right: The Hampered Market Is Unsustainable, by Sandy Ikeda, at mises,ca. Here are some excerpts from the article:

“Regulatory Dynamics Are Worse Than Transfer Dynamics. This is all because of the central role that prices play in coordinating market processes. That means that the government’s attempt to execute macroeconomic policy by manipulating the quantity of money and credit is perhaps the worst aspect of regulatory capitalism. Monetary manipulation eventually impacts all market prices directly and severely. Other things equal, it is the most distortionary form of intervention.”

“We can rank the major categories of intervention in order of their distortionary effects and thus in order of their unsustainability: 1) Large-scale monetary manipulation, 2) Large-scale price control, 3) Large-scale income redistribution.”

“So, other things equal, a country that pursues a pure form of welfare state capitalism might last longer than a country that pursues a pure form of regulatory state capitalism……”

“……Every country that has attempted interventionism in the past 100 years or so has experienced repeated economic crises. In Russia, crisis led to the Bolshevik Revolution and later the collapse of the Soviet Union. In Germany, the failure of the Weimar Republic conditioned the rise of National Socialism and then later the “economic miracle” under Ludwig Erhard. And in the United States, regulation and monetary manipulation produced the Great Depression and, decades later, the so-called Great Recession of 2007–09, with the “Reagan Revolution” in between.”

Ludwig Erhard And The German Economic Miracle.

 

Here is the second article titled, We Live In A Time Of Piecemeal-Planning & Incremental Interventionism, by Richard Ebeling, at mises.ca. Here are some excerpts from the article:

“Wherever we turn we are confronted with politicians, political pundits, television talking heads, and editorial page commentators, all of whom offer an array of plans, programs, and projects that will solve the problems of the world – if only government is given the power and authority to remake society in the design proposed.”

“Even many of those who claim to be suspicious of “big government” and the Washington beltway powers-that-be, invariably offer their own versions of plans, programs, and projects they assert are compatible with or complementary to a free society.”

“The differences too often boil down simply to matters of how the proposer wants to use government to remake or modify people and society. The idea that people should or could be left alnoe to design, undertake and manage their own plans and interactions with others is sometimes given lip service, but never entirely advocated or proposed in practice.”

“In this sense, all those participating in contemporary politics are advocates of social engineering, that is, the modifying or remaking of part or all of society according to an imposed plan or set of plans.”

“The idea that such an approach to social matters is inconsistent with both individual liberty and any proper functioning of a free society is beyond the pale of political and policy discourse. We live in a time of piecemeal planning and incremental interventionism.

“Society is a spontaneous order not a planned one.”

“Hayek argued that the true individualism starts from the premise that “society” is not some ethereal entity having an existence of its own, nor the designed creation of one or a handful of minds imposing a “plan” on people that produces the social order.”

“Instead, society is the cumulative and interactive outcome and result of multitudes of individual human beings making their separate individual plans that interact and generate connections and associations with other individual plans to produce the overall social order and its coordinated patterns.

 

If you really want to do some home work, read The Use Of Knowledge In Society, by F. A. Hayek at mises.org.

Related ArticleSpontaneous Order = Free Market Economy, at austrianaddict.com.

Related ArticleCentral Planners Hate Economics, at austrianaddict.com.

Related ArticleCharles Hugh Smith; Why Suppressing Feedback Leads To Financial Crisis, at austrianaddict.com.

Must Reads For The Week 1/23/16

January 23, 2016

ECONOMIC FORCES EVENTUALLY WIN

China Promises To Keep Intervening To “Look After” Stock Market “Investors”, Hurt “Speculators“, at zerohedge.com. So the cure for the Chinese stock market bust is Government intervention? Didn’t Government intervention cause the boom in the first place?  Government planners can’t stop reality. Economic forces are always in the process of correcting Government interventions.

The Rest Belt Goes Red – Glory Days Of China’s Steel Boom Leave Behind Abandoned Mills And Broken Lives, at davidstockmanscontracorner.com. Another example of a Government created bubble ending in a bust. Government centrally planning an economy doesn’t work. Ask the former Soviet Union.

The Three Musketeers Of Global Deflation – China, Russia, and Saudi Arabia, at davidstockmanscontracorner.com. We know about China’s problems, but over 65% of Russia’s and 45% of Saudi Arabia’s GDP comes from oil. Oil below $30 a barrel hurts these two countries. Economic forces can’t be stopped by Government central planners.

The Fragile Forty & How The Word Lost $17 Trillion In 6 Months, at zerohedge.com. Forty global stock indices are in bear markets, as over $17 trillion of equity has evaporated in the last six months. Central banks think the wealth effect created by their money printing will reignite the global economic engine. It hasn’t worked because economic forces eventually prevail.

This Is What The Death Of A Nation Looks Like; Venezuela Prepares for 720% Hyperinflation, at zerohedge.com. Bernie Sanders take note. This is what a socialist utopia looks like. Excerpt from the article: “..in reality the Venezuela economy no longer exists, with all transactions now taking place in grey or black markets, and the government apparatus effectively operating in a vacuum.” Economic forces creating a black markets was inevitable.

Schlumberger Fires 10,000 As It Announces $10 Billion Stock Buy Back, at zerohedge.com. To keep your slumping stock price up, all you have to do is buy back your stock. Simple supply and demand. How do you finance this buyback. Either borrow low interest printed money like many companies have and are doing, or get rid of your biggest expense, your workers. Economic reality forces businesses to make decisions.

A Post Boom World, Auto Prices Will Fall,, by Patrick Barron, at mises.org. Easy credit and sup-prime loans for cars will eventually end in a bust, like the housing bubble. Economic forces of supply and demand will bring the car market back in line.

And You Thought QE Was Over: The Fed Will Monetize Half Of This Years U.S. Treasury Issuance, at zerohedge.com. Over the next four years, the Federal Reserve is going to have to repurchase, with printed money, $1.1 trillion in maturing Government debt that it owns. The Federal Government can only grow to it’s present size if it is financed by it’s central bank, the Federal Reserve.

A RECESSION IS THE CORRECTION

Why We Need A Recession, by Ronald-Peter Stoferle, at mises.org. A recession is nothing more than economic forces correcting the misallocation of resources, labor, land and capital that was brought about by previous central bank money creation and easy credit.

As Ludwig von Mises said: “The return to monetary stability does not generate a crisis. It only brings to light the malinvestments and other mistakes that were made under the hallucination of the illusory prosperity created by the easy money.

And as F. A. Hayek said: “To combat a depression by a forced credit expansion, is akin to the attempt to fight an evil by its own causes; because we suffer from a misdirection of production, we want even more misdirection – an approach that necessarily leads to an even more serious crisis once the credit expansion comes to an end.

GOVERNMENT KNOWS BEST

How Government Poisoned The People Of Flint, by John Counts, at mlive.com. Government doesn’t know what’s best.

Texas Adopts New York Values On Fantasy Football, Tho Bishop, at mises.org. Government wants to protect you from illegal gambling. It’s better for you to buy legal state lottery tickets.