If the U.S. were ever so foolishly intent on shrinking inequality, doing so would be easy: abolish usage of cars, planes, computers, smartphones and the internet. Presto, inequality shrunk substantially. And a nation immiserated. Which is the point. Inequality isn’t a pejorative, it’s a sign of individuals having the freedom to do what they […]
Soaring Inequality Is a Sign of Progress, Not Devalued Money Read More »
The economic consensus of the moment is that higher prices are the same as inflation, and the Fed is the only governmental entity situated to bring down higher prices. It’s a dangerous consensus. Prices are how a market economy organizes itself. Forget for now that the Fed is not remotely capable of bending the
If Inflation Is Truly Higher Prices, Then the Fed Cannot Fight It Read More »
“They have treated us very unfairly on trade.” That’s one of President Trump’s most frequent economic themes, and he has a point. So do “they.” To see why, it’s easy to forget that no one buys or sells with money. All trade is products for products, with money serving as the agreement about value
Trade Disputes Are An Unfortunate Effect of Floating Money Read More »
Consider taking an exam without clear guidelines on what will be assessed. Many students have likely experienced this situation at least once, resonating with the frustration of preparing for an evaluation with unknown criteria. Now, imagine this teacher lacked the expertise to even grade such an exam effectively in the first place. This scenario illustrates
Maybe It’s Time We ‘Stress Test’ the Federal Reserve? Read More »
To this day it’s said that mark-to-market (MTM) accounting rules are what caused existential troubles for banks and investment banks back in 2008. It sounds so compelling at first glance, but only until readers stop and imagine what the outlook for financial institutions would have been without MTM. No different. As Blackstone co-founder Stephen
The Fed’s Stress Tests Are a Conceited Look Backwards Read More »
“The traditional argument against a rules-based monetary policy is that it requires Fed officials to specify too many contingencies ahead of time.” Those are the words of economist Jason Furman, chairman of Barack Obama’s Council of Economic Advisers from 2013-17, and Harvard economics professor at present. The bet here is that Furman could be persuaded to
A 2025 Resolution For Fed: Have The Courage To Do Nothing Read More »
“The federal government owns a little more than one-fourth of the total land area of the United States. The time is long overdue to consider whether that is the best economic arrangement.” Those are the words of the great Thomas Sowell. How to argue with Sowell? Think of the freedom and economic progress that
Conservatives Must Cease Calling For Tax-Revenue Increases Read More »
Repeat it over and over again: there’s no interest rate, and there’s no such thing as interest rates. There are individuals, and individuals face a myriad of borrowing costs as numerous as there are people. The Fed can’t nor does it make credit easy or tight simply because an economy is people. And the
The Fed’s Critics vs Fed: Central Planners vs. Central Planners Read More »
Promoting his new book over the summer, economist Ruchir Sharma managed to get one of its main themes splashed all over the media: “When the price of borrowing money is zero, the price of everything else goes bonkers.” Ruchir was talking about the stock market, and promoting the falsehood that when the Fed makes
Intel’s DJIA Exit Mocks Silly Notion Abt. Fed Boosting Stocks Read More »
A famous libertarian economic thinker, and memory says it was the late Walter Williams, was once presented on a talk show with the idea of a higher minimum wage. The suggestion was something like $7.25/hour to $10. In a paraphrase of Williams, he quizzically asked, “Why are you being so stingy? Why not raise
Where’s Walter Williams As Fed ‘Cuts’ Rates 50 Basis Points? Read More »
