Last week Business Insider published an article with the eye-opening title “NYC’s $15 minimum wage hasn’t brought the restaurant apocalypse — it’s helped them thrive.”

There are some signs that the pace of US economic activity is starting to slow down. For instance, the yearly growth rate of industrial production, which closed at 5.4% in September 2018, fell to 1.3% by June this year (see chart).

In addition, the annual growth rate of the consumer price index (CPI) eased from 2.9% in July last year to 1.6% by June this year (see chart).

President Donald Trump wants a lower US dollar. He complains about the over-valuation of the American currency. Yet, is he right to accuse other countries of a “currency manipulation”? Is the position of the US dollar in the international monetary arena not a manipulation in its own right? How much has the United States benefitted from the global role of the dollar, and is this “exorbitant privilege” coming to end? In order to find an answer to these questions, we must take a look at the monetary side of the rise of the American Empire.

A few months ago many of us read about the theory of “the nuclear option,” according to which China could generate a huge debt crisis in the United States and destroy the US economy if it sold its treasury holdings.

As I mentioned at the time, China can become a greater economic leader, but the Chinese yuan cannot be a global reserve currency while maintaining capital controls and exchange rate fixing.

Adam Smith famously begins Wealth of Nations with a discussion on the division of labor. Few things are as impactful as specialization within a market setting á la Say’s Law. However, Smith also claimed that the division of labor is limited by the “extent” of the market. This is often interpreted as population size, which is not quite accurate.

This piece, “Markets Are Eating The World,” is being shared widely. The author, Taylor Pearson, tells a story of the economic history of markets and firms, and what comes next, explained in terms of transaction costs. It’s a fun read, with a seemingly insightful narrative, and makes several good points.

But while the transaction cost explanation is intuitive, it is also mostly wrong. It places the cart in front of the horse.

One of the most fundamental things about economics — which many people who are passionate about politics do not understand — is that the economy is not like a chess board where you can move one piece with deterministic and predictable consequences. On the contrary, an economy is an intricate fabric of interrelated institutions and actors all of whom act relative to one another. Any one move creates a cascade of domino effects. If the price of milk changes dramatically then orange juice sales might be affected — and with them the prices of other fruits as well.

The New Right: A Journey to the Fringe of American Politics
by Michael Malice
All Points Books/St. Martin’s Press 2019
307 pages
This review appears in forthcoming September/October issue of The Austrian

Conservatism, Michael Malice famously remarks, is progressivism driving the speed limit. Malice’s latest book, aptly titled The New Right: A Journey to the Fringe of American Politics, documents a movement of sorts to change this. 

What is the governing dynamic causing both student loans and healthcare burdens to run away from us?