Though the effective federal funds rate remains less than 0.1 percent, the reaction of the markets and financial press as the ten-year Treasury yield crossed the 1.5 percent threshold near the start of the month reminds us just how fragile our economy’s underlying monetary framework has become over the past two decades.
What asset price bubbles are is fairly uncontroversial, even if a fast and hard definition is elusive. At their most basic, bubbles are said to exist when a sharp upward departure in the price of an asset, from its historic or otherwise reasonably expected value, occurs over a relatively brief period of time, however defined. These dramatic, often parabolic, rises can be driven by rushes into new sectors, like dotcoms, new tech, or cryptocurrencies—while some economists consider their occurrence completely random.
They can start with as little as a rumor; whether fact or fiction, some new information emerges that spooks depositors or investors, or otherwise convinces them that the institution to which they have entrusted their money isn’t going to be able to cover its debts or obligations. Predictably, those who had deposited or invested their money at the institution in question lose confidence, and this loss of confidence sparks a run on the bank.
The story of European colonization of the Americas is popularly understood as the conquest of American Indians—the end of natives’ control of the land and the beginning of their subjugation. The contingencies of indigenous agency and geopolitics mean that the reality is much messier, as historians have been steadily revealing for decades, but this interpretation still circulates.
One of the worst consequences of converting the federal government to a national security state has been the stultification or warping of the consciences of the American people. With unwavering allegiance to the Pentagon, the Central Intelligence Agency, and the National Security Agency, all too many Americans have sacrificed their sense of right and wrong at the altar of “national security,” the two-word term that has become the most important term in the political lexicon of the American people.
The 1980s were a kind decade for the United States when it came to its ability to project military power.
After completing a controversial withdrawal from Afghanistan in late August, the United States is facing valid questions about the legitimacy of its foreign escapades launched in the last twenty years under the banner of fighting terrorism.
For as long as I can remember, my family and I have greeted men and women in military uniform with a “Thank you for your service.” Like many other average Americans, when we see people in fatigues at a local restaurant we sometimes pick up their tab when we pay our own.
In a thoughtful and thorough article at the Australian publication Quadrant, economist Wolfgang Kasper writes on the Austrian contribution to the role knowledge plays in global economic growth.
Specifically, Kasper provides some helpful observations on the decentralized and specialized nature of knowledge. Unfortunately, though, Kasper veers off course in assigning an excessively exalted role for knowledge in creating economic growth.
There is only one way to describe the fiscal mindset of those in the White House and in Congress who are proposing new federal budgetary expenditure and taxing increases in the trillions of dollars: a fantasy land of financial irrationality.
