Economic Recovery Requires Capital Accumulation, Not Government “Stimulus Packages”

An economic system entering into a major recession or depression is in a situation very similar to a sleep-deprived individual. A stimulus further depletes his body’s already diminished energy reserves and takes him down the path of utter exhaustion.The main difference between such economic “stimulants” and pharmaceutical stimulants is that the economic stimulants will not succeed even in temporarily restoring the economic system to anything approaching its normal level of activity.

Stimulus, Savings, and Stocks

As the president signs the trillion-dollar stimulus package into law, financial networks are abuzz with investment pundits speculating on what companies will benefit, and thus what stocks should be purchased. Such analysis makes an error of causality commonly found in equities research. It assumes a direct correlation between business activity and stock prices.

Inauguration Tickets and the Failure of Central Planning

Tickets to Obama’s inauguration were in extremely high demand. Members of Congress were each allotted a couple hundred tickets to distribute freely to their constituents with only one rule: they were to be given out for free. With no pricing mechanism for allocating the tickets, which were going for as high as $40,000 on websites claiming to sell tickets, the government resorted to its favorite form of distribution: the political process.

Bring Back the Bank Run!

Is the banking dilemma eternal? It doesn’t have to be. We could desocialize credit risk and let the bank runs take their toll. Absent federal meddling, the bottom line would be simplicity itself. The proof that banks have created excess credit would be found in the action of markets. It would be a fascinating picture if not a pretty one.

More land seized

Considering all that is going wrong in Zimbabwe, 10 sextillion percent inflation, 90% unemployment, mass starvation, and disease, it is hard to imagine that the new unity government could do anything that would worsen the situation. Unfortunately, they have found a way to make things worse. The BBC reports that in the last 14 days, the new unity government has seized 77 white owned farms.

What’s Wrong with Theft?

As I noted in Copypats, many non-specialists and proponents of IP erroneously believe that copying is an element of patent infringement--they conceive of the typical patent infringer as some bad guy who knocked off, or “stole,” the patentee-inventor’s idea. They are usually unaware that proving copying is neither necessary nor sufficient to prove patent infringement. It’s not necessary because even an independent inventor can be guilty of patent infringement.

What You Must Read About the Great Depression

In the present recession, advocates of government intervention often evoke the specter of the Great Depression. Unless the government intervenes massively, we are told, we risk an economic collapse comparable to that of the 1930s. To see the fallacy of this claim, it is imperative to understand that government intervention both led to the Depression and prevented recovery from it. The following books, I hope, will assist those interested in grasping what happened in this vital historical era.

Letter to the Fed

Continuing in the fight for a 100% reserve banking system (or at least a system closer to that than the one we have), I just sent the following message to the Board of Governors.

Naturally, feel free to copy-paste, or send them your own comments here.

To the Board of Governors:

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