Ron Paul reacts: See the video here

Here’s an article on the topic.

President Obama has recently promoted inequality as a fundamental threat to our way of life, saying, “The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American Dream, our way of life, and what we stand for around the globe.” You can read the rhetoric here. Let’s look at the reality.

I was recommended to watch a 30-minute video by Bridgewater Associates available at EconomicPrinciples.org explaining How the Economic Machine Works. The phrasing “economic machine” should be enough to raise the blood pressure of anyone with the slightest economic literacy. And sure enough, while there are some truths in the video, it is a masterpiece in no-says and well disguised fallacies.

The idea that some goods are “public” has been paraded around for at least 60 years as a justification for state involvement in certain affairs. The idea that some goods are non-excludable (you cannot stop someone from enjoying them), but also non-rivalrous (why would you exclude anyone because one person enjoying the good does not detract from another’s enjoyment) is now the common argument for all sorts of government activities from fireworks to national defense and everything in between.

Mortgage Lending is down more than 50% at the big banks from the 1st to 4th quarter. Higher interest rates on mortgages is leading to less refinances and fewer home purchases. But Market Watch reports that things are not all bad:

Robert Higgs, in spite of his reservations about writing op-eds, has written a great one for the

People often ask today: if the Fed has created so much new money, why hasn’t it produced more inflation?

When the Fed creates masses of new money, it initially flows to Wall Street, which profits from it in a variety of imaginative ways, but from there its path is unpredictable.

The Fed inserted into the TARP bill in 2008 the authority to pay interest on bank reserves. Of course this interest is paid by creating even more new money, but it provides an incentive for banks to leave reserves idle.

In case you missed it, here is Bob Murphy explaining Obamacare on the Tom Woods show.

[From the Summer 2013 issue of The Quarterly Journal of Austrian Economics]

By Nicolay Gertchev

• Thomas C. Taylor, An Introduction to Austrian Economics (Washington, DC: Cato Institute, 1980), pp. 7-51.
• Ludwig von Mises, “Profit Management,” in Mises, Bureaucracy (New Haven: Yale University Press, 1944), chapter 3.
• H.