The World Bank has warned that central bankers around the world are running out of tools for dealing with the flagging global economy. The Fed, in particular, has almost no room left to cut interest rates. The report then turns to hand-wringing about the great monetary fear of our time: deflation.
How an old-line socialist in London succeeded in using free-enterprise rhetoric to pitch and impose a "congestion charge" that turns out to be a confiscatory tax. The attempt to manage congestion and pollution via central planning is now crushing business in London, writes Toby Baxendale.
In the games planners play, the model builder wins by outsmarting an opponent programmed to react in predictable ways. The conclusion is decided by the assumptions built into the system. If this is true in peace, it is all the more true in war. The game called "war" is no better at preparing central planners for real life than the game called "market."
No one can argue about the current moribund economy, complete with flat or falling stock prices, nonexistent profits, layoffs, airline bankruptcies, and exploding federal and state budget deficits. But few people have accurately pointed out why there is no recovery from the original recession.
The September 11th attacks hit no industry more directly than they did the airline industry. In 2001, this industry lost 8 billion dollars. It lost 9 billion in 2002, two thirds of which supposedly derived from 9-11. The Federal government has delivered 5 billion dollars in cash and 10 billion in loan guarantees to airlines affected by 9-11. This massive infusion of money and credit has yet to satisfy the appetites of airline executives.
When assessing the costs of the war in Iraq, the full costs, including the costs on the home front, must be considered every bit as much as the money costs. Sadly, the most expensive aspects of war, especially in terms of lost liberties and cultural decline, are usually the hardest to measure, and are therefore more easily ignored.
A few years ago, Paul Cwik came across an e-mail that was impossibly dumb. It called for a "Gas-Out." The idea was to boycott gasoline for a few days. This action would drive the price of gas down, and at the same time, it would show "Big Oil" that if they tried to raise prices again, we'd hurt them. The email is circulating again.
Should scholars bother to write for the popular press? Of course. Mises wrote: "Economics must not be relegated to classrooms and statistical offices and must not be left to esoteric circles. It is the philosophy of human life and action and concerns everybody and everything. It is the pith of civilization and of man's human existence."
Like previous administrations in modern America, the Bush Administration has openly declared itself an enemy of the rule of law. If well-heeled corporations are unable to defend themselves from what essentially are illegal prosecutions, what chances will avail to the rest of us?
Our age is dominated by the state and its errors. The state has given us recession and war, while liberty has given us prosperity and peace. Which of the two paths prevails in the end depends on the ideas we hold about freedom, capitalism, and ourselves. May we never forget the great truth: tyranny destroys, while liberty is the mother of all that is beautiful and true in our world.
