Reflections on Last Friday’s Jobs Report: The News Still is Bad

Reflections on Last Friday’s Jobs Report: The News Still is Bad

Stocks reacted positively to the jobs report released Friday morning before selling off sharply that afternoon on geopolitical fears. The report, which showed non-farm payrolls increased by 315,000 for the month of August, was largely in line with the expectations of market watchers, with major surveys held in the run-up to the release of the report yielding predictions of roughly 300,000.

Of itself, the rally was somewhat unexpected since the report seemed to back the hawkish stance reiterated by Federal Reserve Chair Jerome Powell at Jackson Hole last week. At the meeting he restated the Fed’s commitment to further tightening. The implied probability of Fed futures data has shifted accordingly, with oddsmakers having raised the possibility of a further .75 point hike to 75 percent.

With various indicators suggesting inflation might be peaking or slowing, many over the summer had come to hope such data would convince the Fed to signal a readiness to ease up on tightening credit conditions. After all, the economy was slowing. For example, while the figures reported on Friday were in line with estimates, they were still well short of July’s half a million. At the same time, unemployment increased from 3.5 to 3.7 percent. 

And, frankly, there are reasons to look askance at these numbers. For one thing, they are likely to be revised, with like reports over the past two decades seeing an eventual average adjustment of plus or minus 55,000. If the report was “just right,” not too hot to stoke inflation, not too cold to stall the economy, such a regular adjustment would be problematic. In addition, there are large discrepancies between federally withheld taxes and purported hiring, and between the Labor Department’s household survey and the Census Bureau’s employer survey used in headline unemployment numbers – both of which suggest the labor market is actually much weaker than the headline numbers make out.

For example, the Census Bureau’s unemployment figure does not include those who after becoming unemployed eventually give up looking for work and drop out of the labor market.

As the above figure illustrates, the Great Financial Crisis and pandemic-era have led to serious declines in overall labor force participation rates. Millions of workers never returned following the shuttering of the economy in response to COVID, amplifying what was already predestined to be a period of demographically induced labor market tightness. As the legions of America’s baby boomers retired, economists had predicted much of the current labor market predicament decades ago.

A shortage of workers, continuing supply chain disruptions, and epic monetary mismanagement having coincided, it is little wonder retail sales and housing are slowing; critical commodities, such as copper and oil, are trading down; and consumer confidence is just up from its lowest level in 70 years of measurement.

With signs pointing increasingly negative, talk of a “soft landing” is going the way of “transitory” inflation. Seemingly determined not to back down, to regain price stability, a “growth recession” is now the target. Far from backing off rate-hikes for fear of impending recession, as it did in 1974, Fed officials now openly admit that tightening may continue into 2023, with rates being held at that level for some time after.

With the chances of a decrease in the size of September’s rate hike, from .75 bps to .50 bps, getting smaller, and stocks still expensive by historical standards, as measured by the price to earnings ratio, a sell-off on the jobs report Friday would have seemed more in line with the broader macroeconomic conditions.

But whereas job numbers can be massaged or spun, the response of markets to word that gas supplies to Germany from Russia were going to be suspended for an indefinite period just hours after the G7 announced their price capping strategy, was a reminder that some news is just unambiguously bad.

As the war in Ukraine grinds on and the global economy weakens, we can expect more such news.

A Small Continuing Resolution Victory Could Have Big Consequences

1 hour agoRon Paul

Federal spending is so out of control that it only took three months for the federal debt to increase by one trillion dollars to over 33 trillion dollars. In contrast, it took almost 200 years for the federal debt to reach one trillion dollars. So the federal government racked up more debt in the last three months than it did from the ratification of the US Constitution until Ronald Reagan’s first term! There will be even more shocking increases in the future since, according to some experts, federal debt is increasing by approximately 14 billion dollars a day.

Those tempted to blame the increase on President Biden, the Democratic Congress, or the covid-related spending spree, should consider the debt increased by around a trillion dollars a year in 2017 and 2018 — years when Republicans controlled the White House and both houses of Congress.

One more statistic to keep in mind is that the government’s debt already exceeds America’s gross domestic product. In other words, the US national debt, according to the government’s own figures, is already worth more than the value of everything produced by American businesses.

Americans should keep these facts in mind when the media attacks as “irresponsible” the small group of Republicans who refuse to vote for a continuing resolution or CR, and thus risk a government shutdown, unless the CR is accompanied by spending cuts and reforms that would take federal spending off autopilot.

Unfortunately, the welfare-warfare spending coalition has once again triumphed over the small group of fiscal conservatives, as a continuing resolution that did not even pretend to cut spending passed in Congress over the weekend.

Fiscal conservatives and the growing wing of the GOP opposing foreign intervention did achieve one significant victory: The CR did not contain the Biden administration’s requested additional aid for Ukraine. The successful effort to strip Ukraine funding from the continuing resolution may threaten President Biden’s effort to obtain billions more in funding for Ukraine.

Since the start of the conflict, the US government has wasted more than 100 billion dollars in aid to Ukraine, which is close to Russia’s entire 2023 military budget! Not only does the Ukraine-Russia conflict have no impact on America’s national security, it could also have been avoided had the US not helped orchestrate a 2014 coup in Ukraine. The Ukraine conflict is thus another example of Ludwig von Mises’s observation that the unintended (or intended) consequences of government intervention are used to justify further government action.

Unless the US reverses course and begins to cut spending, the Federal Reserve will be forced to end its limited efforts to fight price inflation. Instead, the Fed will bow to political pressure to keep interest rates low in order to help government manage its ever-increasing debt. This will lead to both a rejection of the dollar’s world reserve currency status and a major economic crisis.

The best place to cut spending is the so-called “defense” budget that makes Americans less free and less safe. Hopefully the successful effort to strip Ukraine funding from the CR is the first of many victories by the antiwar fiscal conservatives over the military-industrial complex and its politicians, lobbyists, and propagandists.

Originally published by the Ron Paul Institute. 

Should We Allow U.S. Land To Be Sold to the Chinese?

1 hour agoWalter Block

Admittedly, this idea sounds bad. Both “sell out” and “selling out” have a bad odor to them. Rather, we should “stand firm!” And there is nothing like perking up that patriotic spirit that compares to bashing supposed foreign enemies. However, there are deep and dire problems with this attempt at demagoguery.

First of all, there is simply no mention in the U.S. Constitution, let alone prohibition of, selling land to foreigners. We have been doing so since practically the beginning of our country. A relatively recent high-profile case in point is the sale of Rockefeller Center in New York City to Japanese interests. This land parcel contains 19 buildings ranging from three stories to sky scrapers, and comprises 22 acres dab smack in the middle of Manhattan. A 51% share was purchased for $846 million in 1989 by the Mitsubishi Corporation. As it happens, this sale did not go all that well for the buyers; they sold out in 1995 for a loss (but that is entirely beside the point). If the U.S. Constitution prohibited sales of this sort, this one never would have occurred.

Second, according to one opponent of such sales, a Republican candidate for Governor of Washington state:

“The practice of selling American land to anyone other than American citizens is heinous and unconstitutional. American soil belongs to American citizens. End of discussion.”

Did you notice anything missing from this harangue, apart from a failure to mention which part of the U.S. Constitution is of relevance? In most sales, nay, all sales without exception, there is a buyer and seller. So far, so good. There are these two countries. But there is also a price! What is the price the Chinese are willing to pay for our precious farm land? Typically, fertile agricultural acreage sells for about $3,800 per acre in the United States. Well, suppose the people of the Middle Kingdom offered double that amount, or $7,600 per acre. Then, the likelihood of Americans going without “access to reliable and sufficient quantities of affordable, nutritious food” would be decreased, not increased, by all such sales. American farmers could then purchase twice as much arable land in nearby Canada or Mexico; they would be enriched, and we would have more food rather than less.

Here is a multiple-choice question for those of you who have not yet had Economics 101: are the Chinese likely to offer less than $3,800, that exact amount, or more than that figure, for their average purchase? Go to the head of the class if you selected that latter option. For an explanation: with these new offers for our terrain, the demand curve for it will shift to the right and prices will tend to be higher, not the same or lower. Maybe not double, as in this example, but higher!

Should we sell the entire country to the Chinese? It all depends upon what they offer for it! If it is the sun, the moon, and the stars, then yes. If it is eternal life, plus the entire remainder of the planet, including China itself, then, again, yes, of course. Without knowing what the precise financial and otherwise offer is, it ill behooves anyone to reject any deal!

Third, according to that old folk wisdom, if goods don’t cross borders, armies will. Farm land is not usually thought of as a tradeable good, but it is. The United States is now confronting China in a myriad of ways. Both are nuclear armed. Do we want to exacerbate tensions between these two military giants, or dial them down a notch? There can be only one sensible answer to that question. A nuclear conflagration can ruin your entire day!

What about the lack of reciprocity? Posit that China refuses to allow Americans to purchase land in their country. Should we follow that pattern and ban the sale of our real estate to them? This might be psychologically sound but makes no economic sense. Bob and Allen have a good commercial exchange in product X. Each benefit from it. But Allen refuses to engage in a similar manner regarding product Y. Would Bob benefit from cutting off trade with Allen in X? Of course not. We are positing that both benefit from buying and selling X. If Bob does so, he is cutting off his nose to spite his face, as that old adage states. Ditto for U.S. and China relations.

Let me try again. Two men are sitting in a wooden rowboat. The first one shoots a hole in the hull. Water starts seeping in. Should the second one shoot yet another hole in the boat to get even with his fellow passenger? Not if he has even a modicum of rationality. Yes, China should allow Americans to purchase land there too. And, perhaps, they will one day do so if the advice by candidates like the one above is soundly and widely condemned.

Remember, we invaded their country in the past (and not only tried, but succeeded in shoving addictive drugs down their throats). They never returned the “favor.” They have more of a right to be suspicious of us than we of them.

For the record, I acknowledge that the U.S. government should not be selling land to anyone else. They never homesteaded any of it. They are not the proper owners of any of it. We are here discussing, only, private land sales, as in the case of Rockefeller Center.

Originally published by The Libertarian Institute.

Recessions Are Like Sleep: Seemingly Wasteful, But Necessary

10/02/2023Garrett M. Gess

So-called market manipulation by private firms is illegal under the Securities Exchange Act of 1934, but for the government, it is completely legal. In fact, the Federal Reserve does it every couple of weeks by adjusting the money supply.

Recessions always reflect previous economic errors, but they do serve a vital purpose. In a “perfect world” everyone would be able to live like kings, where their paychecks increase, while the cost of goods and services does not. But that type of “fantasy world” economy is not feasible. The government claims to create such an economy, but their attempts merely mask the problem and create the sleeping giant of inflation.

The economy repairs and reinvents itself during recessions. It shakes out bad companies and bad debts, and the worst of which must be weeded out. The U.S. shelled out $10 trillion in combined fiscal and monetary stimulus in two years after COVID. That did not stop the 2022 stock market decline. Massive government spending without being followed by market growth is a recipe for eventual disaster.

The best companies should be so strong that they can withstand recessions, while the weak companies will falter. That is not how the country works. For example, in 2006, Morgan Stanley, among the major conglomerates in American finance, made around $30 billion in revenue, but somehow, they needed the government to bail them out during the Great Recession, among other financial institutions. Of course, small businesses that spent below their means during the late-2000s got nothing from the government. The bailout system rewards overly risky and unwise decisions. Recessions that will not be followed by government overreach will cause businesses to make financially wise decisions. Sure, the Wall Street banks can make excess amounts of money as the free market allows them to, and because of smart leadership, but it should not be because of a government “insurance” system.

Harry Dent, a financial expert and Harvard MBA graduate said:

If you think recessions are bad, you don't know [jack] about anything. You don't understand the most fundamental thing about the economy. It's like saying we should never go to sleep because we could work those extra eight hours. That shows you don't understand the human body.

If the human body skips a night of sleep, it will be very unproductive the next day, making the eight hours it forgoes through sleep well worth the productivity of the next day. The American economy has gone 15 years without “sleep,” and eventually the collapse will come.

The problem with market bubbles is letting them rise to extremes. Once they get to those extremes, they must find fair value eventually, and there is never a soft landing. Housing prices have increased rapidly since the wear off COVID-19, and the best thing to happen in the housing industry would be for prices to fall back to fair value. Housing should go up because of the cost of building a house, and the demand for the land, not because of speculation.

It is fair to say that the Fed had overstimulated, and because of which, they were forced to tighten because inflation punched them in the face. If Harry Dent is right, the upcoming recession will be like a ticking time-bomb. No one knows when it will happen, but just that the result will be very, very, destructive. This economic contraction will come back to haunt the companies who made malinvestments during the 2021-22 spending spree.

General Milley and the Compartmentalized Military Mind

In a farewell talk, Gen. Mark Milley, the chairman of the Joint Chiefs of Staff, emphasized one of the shibboleths of the U.S. military. “We take an oath to the Constitution,” he stated.

The Sixth Amendment to the Constitution reads in part as follows: “In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed.”

Two important principles in that statement are: a speedy trial and trial by jury. Those two principles are part of the Constitution that Milley says that he and the military establishment are dedicated to supporting and defending.

Let’s now turn our attention to the military’s torture and prison camp at Guantanamo Bay, Cuba, which serves as an alternative means of prosecuting people who are accused of terrorism. The military has kept some people incarcerated in Cuba on terrorism charges for 20 years or so without according them a trial.

No matter what definition is placed on the term “speedy,” there is no possibility that anyone would construe “speedy” to encompass a trial conducted after 20 years of a person’s arrest. 

Moreover, even if the military ever does come around and permit a trial, it will be by military tribunal, not trial by jury. The difference between a military tribunal and a jury of regular Americans is the difference between day and night. A military tribunal would be a kangaroo proceeding, one in which the members of the tribunal would render whatever verdict their superior officers mandate, which, of course, would be a verdict of guilty. A jury of regular Americans, on the other hand, would base their verdict on competent evidence introduced at trial, which could conceivably mean a verdict of not guilty.

So, here we have two instances of where the military is knowingly, intentionally, and deliberately violating the Constitution — the right to a speedy trial and the right of trial by jury. How can that be reconciled with Milley’s statement declaring that he and the military establishment support and defend the Constitution?

One possibility, of course, is that Milley is simply lying. With this possibility, he would be hoping that no one would notice the lie, especially given that the fact that it has long been ingrained in people’s minds that the military really does support and defend the Constitution.

But let’s give Milley the benefit of the doubt. Let’s assume that he really does honestly believe what he says about supporting and defending the Constitution.

How then do we reconcile his statement with the flagrant violations of the speedy trial and trial by jury provisions of the Sixth Amendment?

It’s possible that Milley has been trained to have a compartmentalized mind. One compartment enables him to believe that he a supporter and defender of the Constitution. The other compartment enables him to violate the Constitution by denying people their rights to a speedy trial and trial by jury. These two mental compartments are totally sealed off from each other, so that Milley is able to support and defend the Constitution and to violate the Constitution at the same time. 

It doesn’t really make any difference though whether Milley is deliberately lying or is operating with a compartmentalized mind when he avows his support for the Constitution and, at the same time, supports grave violations of the Constitution. Regardless of Milley’s state of mind, as we have seen with Guantanamo the national-security establishment is, in reality, not a supporter and defender of the Constitution but rather a destroyer of the Constitution. 

Originally published at Future of Freedom Foundation

Artificial Intelligence & the Federal Reserve

09/29/2023Robert Aro

In a recent speech in Toronto titled: Generative AI, Productivity, the Labor Market, and Choice Behavior, Federal Reserve Governor Lisa D. Cook discussed the rise of Artificial Intelligence (A.I.) and how it may impact the future. In her own words:

Some of the uses of generative AI may be unsettling. For example, concerns about the ability of generative AI to impersonate individuals to harm their reputation or violate their privacy exist and are growing. 

It’s true, the use of deepfakes can be used to discredit those in power. Privacy is a concern as well; but we can’t blame A.I. for nefarious activities or privacy breaches just yet.

The notion of “discriminative AI” may also be something of concern for regulators, as explained:

… AI models sometimes harbor, if not amplify, the biases found in their training data, leading to malign effects on decisions about mortgage approvals, insurance rates, medical diagnoses, and even pretrial detention.

Luckily it’s not all gloomy.

Some potential for efficiency improvements in the scientific process when it comes to literature review and writing is obvious. Yet AI can go much deeper, discovering patterns in data and in previous research to generate hypotheses for testing…

In the not-too-distant future, it would be nice if A.I. could analyze texts of Keynes against Ludwig von Mises and compare the use of logical inconsistencies, subterfuge, and nonsensical words or phrases.

Should A.I. ever become capable of making logical and unbiased choices, it would be interesting to see which school of thought it would lean towards. Would it prefer the popular dogmatic teachings guiding the world today or the axiomatic method of the Austrians?

She also asked, “Will AI itself improve steadily over time?” then followed it with uncertainty:

… AI goes back at least to the 1950s … Whether that explosive progress can be sustained is an open question.

Barring worldwide catastrophe, it’s difficult to imagine a future where technology simply stops progressing. World history comprises relentless technological innovations which can be suppressed from time to time; but in the long run (it seems) humanity is unable, or unwilling, to stop innovating.

The impact of Artificial Intelligence is far reaching.

… 80 percent of the U.S. workforce will see at least some of their tasks transformed by generative AI.

Given the high uncertainty and number of people who will be impacted, we should expect policymakers to intervene.

The benefit of AI to society as a whole will depend on the adaptability of workers' skills, how well they are retrained or redeployed, and how policymakers choose to support the groups that are hardest hit by these changes.

Her statements are subtle, yet devastating. On the cusp of major paradigm shifts in society, there are policymakers who advocate for some people at the expense of others.

We mustn’t be surprised if the government uses Artificial Intelligence against its own people, first in secret, then in the open.

Ending with some assurance about the future:

AI makes predictions, but AI does not make choices. Ultimately, human beings are still in control.

There’s much to consider, and much to be seen. It’s unlikely Artificial Intelligence can be stopped at this point; but it is likely the government will look to intervene wherever possible. And while it’s true that human beings are still in control, we should ask ourselves “How long will this control last?”

Image source:
Pixabay

Biggest Debate Joke: Ukraine Aid is a "Loan" That Will Be Paid Back

09/28/2023Tho Bishop

Last night's Republican debate was a farce from beginning to end.

The first laugh line of the evening was Fox Business personality Stuart Varney having a difficult time getting through the name of his co-host Ilia Calderón.

The debate's conclusion ended in a similarly awkward moment for the moderators, with candidates rebelling against an attempt to turn the debate into a political game of Survivor. 

In between,  the politicians on stage attempted to deliver carefully planned one-liners designed to demonstrate more personality than what comes naturally to them. In particular, while there is plenty to laugh at Mike Pence about, his attempted joke was not one of them.

The most comedic line of the night belonged to South Carolina Senator Tim Scott. Scott, whose ten-year career in the Senate has left him with no argument for his candidacy beyond latent Republican desires for diversity on the ticket, dutifully stood up to defend the increasingly unpopular bipartisan financial aid lawmakers have provided Ukraine. In response to Florida Governor Ron DeSantis stating that he would reject further US financial support for the Ukrainian effort, Scott contended that 90% of the assistance is a loan that will be paid off.

It is difficult to know whether or not Senator Scott actually believes this; most of what is said on a political debate stage should not be taken at face value.  Even if we put aside the question of his 90% figure, which is significantly inflated from the percentage of financial aid that is currently considered a loan, a sincere belief that Ukraine will be expected to actually pay back war-time loans shows a disconnect with the way the modern American empire operates.

It is worth noting that there was a time when the United States government took repayment of political loans seriously. As a 1993 report by the Congressional Research Service noted:

Historically, the U.S. Government has rarely forgiven debts owed to it by foreign governments and individuals. It has been willing to adjust the repayment schedule, when the borrowers found they were unable to meet the original repayment terms for U.S. loans. Generally, however, the rescheduling process has been effected on a businesslike basis. Any foreign assistance effect of U.S. loans was provided up front, through the activity financed by the loan and any concessions or discounts in the payment terms. The debt collection procedure was not treated as an additional avenue for providing aid

Interestingly, a footnote in the first sentence did recognize that $2 billion of the $3 billion of Marshall Plan loans made to West Germany was forgiven in 1953, while most other European nations received direct grants rather than loans from the program and therefore didn't have to worry about repayment.

As the report goes on to document, any pre-existing federal commitment to debt repayment began to quickly erode during the George H.W. Bush Administration.

The movement towards debt forgiveness began with an initiative by Congress in 1989, augmented by subsequent legislation in 1991, authorizing the Administration to forgive foreign aid debts owed by countries in Africa and other very poor countries. As a result, the Administration wrote off $2.7 billion in low-income country debt. In 1990, President Bush proposed, in the Enterprise for the Americas Initiative, that debt be written off for Latin America in order to encourage democratization and economic policy reform. Following the adoption of legislation in 1990 and 1992, $605 million in foreign aid debt was forgiven through this program. President Bush also recommended in 1990 that debt owed by Egypt should be forgiven in order to assist and demonstrate U.S. support for that country. Congress concurred and added a similar debt write-off for Poland. As a result of legislation approved in 1990, $8.3 billion owed by these countries (most of it market-rate debt) was forgiven in fiscal year 1991. 

This trend has continued since. President Bill Clinton worked with the IMF and the World Bank for major debt forgiveness for "heavily indebted poor countries." President George W. Bush added on to this legacy with the Multilateral Debt Relief Initiative. Further international debt relief was one campaign promise that Barack Obama fulfilled, even after Republicans took back the House after the 2010 midterms. These programs continue today, such as in 2021 when U.S. taxpayers generously financed $120 million in debt relief grants to the Sudan.

Additionally, any pretension that the United States expects repayment from Ukraine and Europe for loans offered during the Russian conflict flies in the face of how NATO currently operates. On the one hand, some political leaders have suggested a future where Ukraine may be admitted as a member of either NATO or the European Union. While, again, it is reasonable to be skeptical of the credibility of these proclamations, particularly given the history of the West cynically entertaining NATO expansion as a bargaining chip in geopolitical relations with Russia prior to the invasion, the financial standards these international bodies have for admission would be severely undermined by the expectation of Ukrainian debt forgiveness after the war. 

Prior to Russia's invasion, Ukraine's economy would have been an extreme outlier relative to other E.U. nations. As Ryan McMaken notes, E.U. admission of Ukraine would create new economic hardships for a political union that has already been tested in recent years by financial crisis. Does Senator Scott honestly expect the U.S. government to add to these pressures with the expectation of debt forgiveness?

If the answer is yes, that would arguably be more disqualifying than telling a knowing lie.

Image source:
Flickr | Creator: North Charleston

The Abortion Battle We Don’t Need

09/26/2023Ron Paul

Former President Donald Trump infuriated many anti-abortion voters last week when he refused to commit to national abortion restrictions and seemed to blame them for Republican losses in the 2022 mid-term elections. Trump even criticized the six-week abortion ban signed by Florida Governor (and fellow Republican candidate) Ron DeSantis. So, not only is Trump balking at national restrictions but he is criticizing a state restriction. What are pro-life voters to do?

Politically, Trump may feel he does not need the pro-life vote as much as he did in his previous presidential runs. After all, he is so far ahead in all primary polls that absent an extremely unusual event he is all but the presumptive Republican nominee. He hasn’t even felt compelled to participate in any of the primary debates, skipping the first one to sit for a hugely popular interview with Tucker Carlson.

Trump has attempted to placate pro-life voters by repeating that he is the most pro-life president in American history and by touting that the Supreme Court overturned Roe V. Wade on his watch and with his nominees. He is positioning himself as a moderator and dealmaker, promising to finally make peace on the abortion issue after 52 years of political warfare.

It is understandable that Trump may feel he has more wiggle room on the abortion issue this time. Pro-life voters are likely sufficiently angered by the rapid advance of Cultural Marxism and social chaos of the past three years under Biden that they are ready to jump at even the possibility of a return to more socially conservative values to the White House. If pro-life voters just stay home on election day, they may end up with something far worse than a generally friendly occupant in the White House.

But it doesn’t need to be this way. I strongly believe that the more difficult the issue is, the more local should be its solution. That is the real success of the Dobbs decision, because abortion should have never been a federal issue in the first place. Overturning Roe v Wade returned us to where we belonged, with state and local laws governing all issues not Constitutionally reserved for the Federal Government.

Bigger problems are best decided closest to home. Look for example at what happened when parents started going to school board meetings and demanding accountability on everything from Covid restrictions to transgenders in school bathrooms. Parents were extremely effective because they only had to travel to the local school board meeting to demand – and get - results. Does anyone think they would have been able to get the same results at the Department of Education in Washington DC?

Similarly, immigration is much better handled by those closer to the action. Ideally it would be a property rights issue, but at the least states like Texas should be taking an active role in preventing a foreign invasion into its borders rather than waiting for Washington to make a move.

The pro-life voters and a seemingly more moderate Trump are making a mistake drawing federal battle lines on the issue. The doors are wide open for state and local activism on the abortion issue. All in all, it is a win rather than a loss for power to be devolved from Washington to your local capital or city hall.

Libertarian Autobiographies: Moving Toward Freedom in Today's World

Libertarian Autobiographies, edited by Jo Ann Cavallo and Walter Block, delves into the trials, tribulations, intellectual formation, and accomplishments of 80 libertarians from around the world—in their own words! The following is an amended excerpt from the introduction written by the co-editors:

It is our fervent belief that libertarianism is the last best hope for humankind with regard to economics, liberty, justice, prosperity, peace, and thus even survival (pardon us for hyper-ventilating, but we maintain this is indeed the case). This belief of ours is predicated upon the crucial importance of the non-aggression principle (NAP): proper law should allow all people to engage in whichever acts they prefer, with the one exception being any behavior that violates this precept or any threat thereof. Thus, murder, rape, theft, kidnapping, fraud, and similar evil actions should be prohibited, and virtually everything else should be legally permitted.

But why assemble a collection of autobiographies penned by libertarians? Why not, instead, offer a collection of scholarly articles demonstrating the benefits of liberty? Many of the contributors to this volume have published just that sort of work on numerous occasions. Why not do so one more time? Although people may gain an understanding of this philosophy via rational argument, it cannot be denied that autobiographies, too, are important for the promotion of liberty. The personal touch may reach some people not approachable via any other means. Additionally, we all want to know the libertarian stories of people such as those who appear on these pages. Indeed, we find that libertarians have the most interesting stories to share because they often embrace this philosophy as the result of intense encounters with foundational texts or life-changing experiences.

One of the big “problems” we have with some of the best-known libertarians throughout history—such as John Locke, Lord Acton, Ludwig von Mises, Isabel Paterson, Henry Hazlitt, Friedrich Hayek, and Murray Rothbard—is that they never wrote an autobiography. Of course, if they had, alternative costs being what they are, they would likely not have been able to write other precious publications of theirs. But what about libertarians alive today? Would they be willing to share their stories? We already have the example of two volumes of libertarian autobiographies: Why Liberty: Personal Journeys Toward Peace & Freedom (Cobden Press), with 54 autobiographies edited by Marc Guttman, and I Chose Liberty: Autobiographies of Contemporary Libertarians (Mises Institute), with 82 autobiographies edited by one of the co-editors of this present volume, Walter Block (available as a free pdf at https://mises.org/library/i-chose-liberty-autobiographies-contemporary-libertarians). Both volumes were published over a decade ago, however, in 2010. We wanted to learn more about the lives of contemporary libertarians not covered in these two volumes and of others who have emerged since the time of these publications.

We therefore reached out to a number of influential scholars, activists, professors, journalists, and cultural icons who have worked toward a freer society across the globe, inviting them to write a brief autobiography for this collection. We asked them to articulate, for example, what their lives and thoughts were before they embraced libertarianism; which people, texts, or events most influenced their intellectual formation; what experiences, challenges, tribulations, and achievements they have had as participants or leaders in this movement; and how this philosophy has affected their personal or professional lives.

A volume of autobiographies on the part of libertarians immediately raises the question of precisely what constitutes this political economic philosophy. In our “big-tent” view, it comprises several strands. They all have something in common, such as an appreciation for individual liberty, private property rights, the rule of law, and free enterprise, but there are also discernible differences. That is why if you get ten libertarians in a room and ask them a question, you’ll likely get eleven (or more!) different responses. In this volume, we invited libertarians across the political-philosophical spectrum, including (1) anarcho-capitalism; (2) minimal government libertarianism, or minarchism; (3) constitutionalism; (4) classical liberalism; (5) thick libertarianism. The contributors to this volume range over the five main viewpoints mentioned above, and also fill in the gaps between them. Their essays express different perspectives on many issues even while articulating the same core principles. In fact, it is our desire that their very differences of opinion on some matters will invite readers to think for themselves. What we have sought to present is a sampling of the myriad individual journeys toward libertarianism, however defined.

Although the majority of contributors to the volume live in the United States, we are grateful to the libertarians from around the world who accepted our invitation to share their stories. This volume thus includes voices from Argentina, Austria, Brazil, Bulgaria, Canada, Chile, China, Colombia, Czech Republic, England, Germany, Guatemala, India, Ireland, Israel, Italy, Jamaica, Japan, Kenya, Korea, Nigeria, Peru, Poland, Romania, Russia, Scotland, South Africa, Spain, Sweden, and Ukraine. 

It is the hope and expectation of the editors that by bringing together a range of contemporary voices from outside the dominant left–right paradigm, this volume will contribute to the viewpoint diversity that is crucially needed in today’s public discourse. Moreover, these personal and intellectual journeys not only offer compelling insights into their individual authors and the state of the world in our lifetime, but may also serve as an inspiration for the next generation who will feel called upon to make our society a freer one.

N.B. The publisher’s link to the book is: https://link.springer.com/book/10.1007/978-3-031-29608-6. Both the hardcover and the ebook are available for purchase internationally. Get 20% off the printed book or eBook by entering the following coupon code at checkout on link.springer.com: H5DoMQW47RT2HD (valid until Oct 13, 2023). In addition, the MyCopy version (printed ebook) is available at a low cost ($39.99 in the US) to individuals who belong to a university subscribed to SpringerLink. If your university subscribes to SpringerLink, you can also read the book online for free. (If you’re not on a university-sponsored device, a VPN, or the school’s WiFi, you might have to access the book through your university’s library page.)

DC Seeks to Destroy Those Who Say the Obvious: America’s Fiscal Crisis is Here

09/25/2023Tho Bishop

America’s debt clock has ticked past $33 trillion, reaching a billion dollars of spending every hour. Meanwhile, the monetary policy conditions that have emboldened Washington’s spending spree are over. Current estimates predict a $2 trillion deficit for 2023, while the Federal Reserve’s rising interest rates are quickly forcing payments on that debt to become the highest budget item for the federal government.

America’s fiscal crisis is here.

Unsurprisingly few in Congress, of course, have an interest in recognizing the monster they have created. 

Right now, the crisis in Washington is not the economic reality federal spending has created, but the small handful of legislators trying to disrupt the process that has created these conditions. To read Beltway-based publications, the real threat is a government shutdown, eroding support for yet another round of Ukrainian funding, and “far right” legislators seeking to return to a normal appropriations process.

The face of the opposition is Florida Congressman Matt Gaetz, who has made himself one of the most hated men in Washington as a result of his unrelenting criticism of Republican leadership, his entrenched opposition to budget-by-continuing resolution that has become the norm, and his made-for-clip sharing charisma that allows him to effectively communicate the corruption, hypocrisy, and relative dysfunction of the current political elite.

Gaetz, who helped spearhead the historic coronation of Speaker of the House Kevin McCarthy, has managed to build up enough of a coalition of his colleagues to stymie recent attempts to kick the can down the road. His stated goal is to force McCarthy to honor the promises made to the GOP caucus earlier this year, to force the House to vote on twelve single-issue spending bills as required by the Budget Control Act of 1974 rather than the bundled-together appropriation bills that have become the DC norm since the 1990s.

The reality is that any return to legislative normality is a threat to modern Washington. Most of Congress has no interest in vetting appropriations bills, as illustrated by the backlash Rep. Thomas Massie faced by standing in the way of allowing a voice vote to authorize $2 trillion covid-related spending bills. The role of a modern member of Congress is to fundraise and beat the market on stock trades, allowing the professional political class embedded in government bureaucracies to do the real governing.

In an all-too-perfect illustration of this dynamic, last Friday the Republican Appropriations Chair Kay Granger left a Congressional meeting dedicated to the upcoming spending battles early to attend a fundraiser with lobbyists for her political committee. 

While the Gaetz-led coalition’s battle for restoring normality to the appropriations process is commendable, it is noteworthy that it is ultimately insufficient to tackle the basic math problems DC faces. Even the highest ambitions from fiscal hawks have been to cap discretionary spending roughly a third of federal spending to 2022 levels, baking in the massive spendingl increases seen during the Trump presidency.  Untouched are the much larger drivers of fiscal destruction, military spending, entitlements, and the aforementioned financing of the debt. Even the uni party’s dogmatic dedication to the Zelenskyy regime has made the relatively low-hanging fruit, ending future aid to Ukraine that has seen its public support collapse in recent months, a seemingly impossible political sell on Capitol Hill. 

In modern Washington, any responsible voices on fiscal issues will necessarily be presented as reckless extremism. The sacred cows of the Beltway must be slaughtered. National default on debt obligations, including entitlement promises, will be required. Those brave enough to state the obvious will be ruthlessly attacked by the political class and the obedient press, just as Ron Paul was during his Congressional career.

America’s fiscal crisis has required decades of work by both political parties to create. The underlying incentives of America’s political process reward economic myths over recognizing this reality. Younger generations will continue to be made poorer thanks to the policies authorized by the older legislative body in US history. Standing up for a basic return to procedural normality is the easiest challenge facing Congress. Anyone unwilling to take that stand will only continue to fuel a Washington that is preying upon the future of its citizens.

As Ludwig von Mises understood, the destruction of a nation can only be stopped with a change in an underlying shift in the ideology leading to its destruction. This is why the Mises Institute is dedicated to telling these unpopular truths. If you support this mission, please consider making a $5 donation this week during our fall campaign.

The Responsibility of Price Stability

09/24/2023Robert Aro

After not raising rates to fight inflation last week, Federal Reserve Chair Jerome Powell delivered his usual speech and Q & A. He opened with three very peculiar sentences regarding price stability, leading to a few unsettling conclusions.

He starts with:

Price stability is the responsibility of the Federal Reserve.

This statement raises concerns. First, it fails to define what price stability means. Even if Congress had assigned this responsibility to the Fed, it’s not something many would agree with if given the chance. While the approach to achieving this desired state of price stability appears quite absurd, for argument’s sake, let’s consider this statement true.

In Powell’s following sentence he inadvertently shares the dire consequences of giving this responsibility to a central bank, as explained:

Without price stability, the economy does not work for anyone.

This is a rather bold, yet hollow statement. He essentially suggests the economy cannot function without the Fed's intervention.

Examining the history of America reveals that central banking hasn't always been a requirement for prosperity and development. Looking at present-day and historical hyperinflations, it becomes evident central banking is largely culpable in a nation's currency collapse. From what we’ve seen of the Fed, there’s little reason to believe this current iteration of America's central bank is somehow different.

The Austrians have argued for over a century that a currency monopoly or central authority controlling a nation's currency is unnecessary, much like we don't need a czar to regulate the production of shoes, cars, or gold.

To state that the Fed makes the economy work for everyone is simply untrue. It’s clear how bankers who receive bailouts and capitalize off borrowing millions and low interest rates are better off; but the average person on main street who ultimately pays for this market distortion can hardly say the Fed’s policies work in their favor.

The third sentence follows a similar vein as the previous:

In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all.

This claims that a strong labor market is due to the Fed’s management of price stability. He’s taking credit for something that cannot be verified. It would be useful if, during the Q&A session, a reporter inquired as to how the Fed ascertains what a "strong" labor market is and how market intervention contributes to a stronger labor force. However, questions like this are seldom asked.

Returning to one crucial point: although Powell does not address what he means by price stability, the St. Louis Fed has an article elaborating on it…

Price stability means that inflation remains low and stable over the longer run. When inflation is low and stable, people can hold money without having to worry that high inflation will erode its purchasing power.

In addition to not utilizing the historical definition of inflation, the notion that a gradual reduction in purchasing power could ever be beneficial to society is something everyone should recognize as false.

It's also worth noting Powell’s same three sentences have been used nearly verbatim in speeches in February of this year, as well as August and November of last year. If one were the wagering type, it would be reasonable to bet these three sentences have been reiterated more than four times during Powell's tenure.