With Greenspan’s widely reported “rate cuts” this fall, most people would probably be surprised to find out that the federal funds rate is not set by Greenspan. It would also probably surprise these same people to learn that only weeks after short-term rates hit rock bottom, longer-term rates rose steadily.
Consumer protection regulation is the consumer’s worst nightmare. In fact, it is not protective at all. It is merely another one of those regulatory rackets that has the appearance of providing necessary security for a collective group in an entirely positive sense while encompassing no negatives. After all, how can anything entitled “protection” have a downside?
As with all economic calamities, pundits will find some way to blame the meltdown and collapse of Argentina on capitalism, deregulation, or the private sector generally. Such nonsense. This crisis is a product of government incompetence, made to order by the IMF, the Argentine political leadership, and the US. As a reminder that the choice of economic policy isn’t politically trivial, the government’s errors ended in hunger, bloodshed, and the resignation (and narrow escape) of the country’s president.
My first “real job,” the summer before my senior year in high school, was selling shoes in a small retail store in my hometown. The job paid only what was then the federal minimum wage, $3.35 an hour, but, then, my labor was probably barely worth that. At least the work was honest and productive.
On May Day 1971, the National Railroad Passenger Corporation, later known as Amtrak, took over a group of overregulated bankrupt private railroads. Officials of Amtrak, which is a blending of the words American and track, announced that the government would make money on these bankrupt railroads. The public sector, they said, was going to do what the private sector couldn’t.
It has been said that the stock market is not an actuarial table. The same can be said of the bond market. Rather than an infallible guide to the future, the bond market embodies the best guesses, hopes, dreams, and fears of many investors. Hence, the bond market can be fallible and, in fact, has been so—in spectacular fashion—in the past.
In February of 1926, the US Senate Committee on Education and Labor and the US House Committee on Education were holding joint hearings investigating the desirability of a then-proposed US Department of Education. Princeton Seminary professor J. Gresham Machen was asked to give his thoughts regarding federal involvement in education. “Uniformity in education under central control, it seems to me, is the worst fate into which any country can fall,” he told the assembled congressmen.
Proponents of socially responsible investing, or SRI, promote it as a way to invest in stocks while having “positive social impact” at the same time. Beneath the surface, everyone knows that what SRI really promotes is old-fashioned socialist ideology employed in the name of investment. The stated objectives of SRI almost always sound like the anti-business slogans of the Green Party: “save the ecology,” “stop sweatshop labor,” “protect human rights.”
