Our current super-long economic cycle is a monetary curse. Under sound money it would not exist, and under the pre-1914 gold standard, it never occurred. The present business cycle expansion in the US — the longest ever — comes in the wake of three recent super-cycle expansions: 1991-2000, 1982-90, and 1961-69. Arguably, the first super-long cycle was in the early years of the Federal Reserve, from 1921-9.
Since I don’t exactly live in the world’s most crime-free neighborhood, I recently had to replace my house’s 30-year old steel doors. They weren’t cheap, but as I spoke with the salesman, he noted I had lucked out because their prices would be going up significantly in the near future due to new steel tariffs.
The company was unsure how just much this would impact sales and staff, but higher prices would naturally have a negative impact on revenue and hiring.
Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez unveiled sweeping new legislation on Thursday that would impose a federal cap of 15% on credit-card interest rates.
The bill would also allow state governments to set interest-rate ceilings even lower than the federal mandate.
Carl Menger, the founder of the Austrian school of economics, expressed a fundamental insight in his essay On The Origins of Money: goods compete on the market to become a monetary medium of exchange. The most saleable goods are the likeliest to become used as a medium of exchange and eventually emerge as the money.
Last week, the the Federal Reserve left unchanged its benchmark federal funds rate, with Fed Chairman Jerome Powell declaring the US economy to be “on a good path.”
In a unanimous vote, the Fed kept the rate in a range of 2.25% to 2.5%.
The latest annual Social Security trustees report recently came out. One of its “lowlights” was the program’s massive unfunded liabilities (currently a $42.1 trillion cumulative shortfall under intermediate population and economic growth assumptions), reiterating what has long been known, though frequently ignored. The program is far from sustainable. Continuing the status quo, is not an option, despite being the default approach every time government decision-makers just kick the can down the road.
Friedrich Hayek’s The Road to Serfdom reached its 75th anniversary this year. This classic, published near the end of the World War II, was incredibly influential. In fact, Milton Friedman wrote that he had made it a practice to ask believers in individualism how they got there in the face of the “collectivist orthodoxy,” and reported that the most frequent answer involved The Road.
UPDATE: As of late Wednesday, the de-criminalization measure managed to close the gap of what had earlier been a 55 to 45 percent loss. It looks like the measure has now narrowly passed, and voters’ laissez-faire attitudes toward mushroom consumption apparently (barely) overcame other concerns. The article has been modified to reflect this outcome.
