The productivity theory of capital dominates the popular view and public discussions. It presumes that capital generates the yield like a tree begets its fruits. In this view, more savings imply more investment, and more investment generates a higher capital stock, which in turn raises future yields. The belief is widespread that monetary assets grow and render automatically the returns. Yet already at the end of the 19 th century the Austrian economist von Eugen von Böhm-Bawerk exploded the productivity theory of capital.

The profound question which transcends all this day-to-day market drama over the holidays is the nature of the economic slowdown now occurring globally. This slowdown can be seen both inside and outside the US. In reviewing the laboratory of history — especially those experiments featuring severe asset inflation, unaccompanied by high official estimates of consumer price inflation — three possible “echoes” deserve attention in coming weeks and months. (History echoes rather than repeats!)

Jeff Deist recently published an editorial in the Washington Times challenging various proposals—popular among DC think tanks—to create monetary policy “rules” or targets based on statistical data related to inflation or GDP. 

Some highlights:

Thomas Sowell used to ask his students to imagine a government bureaucracy that had two functions. One function was to provide medicine to sick children, and the other function was to construct statues of Benedict Arnold. He would then ask his students that if the bureaucracy suffered budget cuts, which function would the bureau stop funding?

When crafting Obamacare, the top priority for policy writers was not identifying the best ways for patients to receive the medical care they needed, but instead to identify ways to reduce the costs of care.

President Donald Trump is pushing for a wall to be built built to prevent immigration through the southern border of the United States. It was a signature issue of his successful campaign to become president and has stated that he is willing to shutdown the federal government in order to get what he wants. Indeed, a large majority of Americans are opposed to paying taxes in order to provide welfare and free education for foreigners, but is a wall the right solution?

Life’s but a walking shadow, a poor player who struts and frets his hour upon the stage and then is heard no more.  ~ Macbeth

Our limited time, our brief candle as Shakespeare’s Macbeth had it earlier in the soliloquy quoted from above, may count for very little in the grand scheme of things, but is of the utmost importance to each of us personally. Unlike the other dimensions, height, breadth and depth, the fourth is almost infinite, but individuals enjoy only a small part of it, our three-score years and ten. Time moves on. What really matters is not wasting it.

On December 14, U.S. District Judge Reed O’Connor ruled Obamacare unconstitutional because its individual mandate requiring people to have health insurance “can no longer be sustained as an exercise of Congress’s tax power,” since the tax that enforced it is now gone. Progressive leaning critics quickly called it bad jurisprudence and assured people that Obamacare remained constitutional.

A growing chorus of alarmist voices decries the rising economic inequality in the Western world and especially in the United States.1 Surprisingly enough, the same mainstream analysts complain about the anemic growth of labor productivity without seeing the correct link between the two.