The Minimum Wage, Discrimination, and Inequality

One of the things that first attracted me to economics is that its logic leads us sometimes to counterintuitive conclusions. A perfect example of this is the regulated workplace. The minimum wage raises incomes for some workers and lowers incomes for others. Workplace safety regulations advantage those who are very risk averse. Laws against “child labor” benefit the relatively well off at the expense of the needy.

Madoff and the Failure of the SEC

Madoff is a perfect case study showing that the SEC is incapable of protecting investors as well as free-market institutions can. The SEC is becoming increasingly irrelevant and people are beginning to take notice. It failed to save investors from the house of cards made up of mortgage-backed securities, credit default swaps, and collateralized debt obligations that resulted from the housing bubble. Now it has failed to protect thousands more individuals and charities from something as simple and old as a Ponzi scheme!

Tulip Fever

[Book Review: Tulip Fever by Deborah Moggach • Random House • 2001 • 288 pages]

 

“The boom produces impoverishment,” wrote Ludwig von Mises in Human Action. “But still more disastrous are its moral ravages. It makes people despondent and dispirited. The more optimistic they were under the illusory prosperity of the boom, the greater is their despair and their feeling of frustration.”

A Puzzling Facet of the Recent Financial Panic

Bob Higgs asks, “Did fearful investors suddenly shift from holding 2-year corporates to holding T-bills, thereby driving down the price of these corporate bonds and, equivalently, driving up their effective yield? Such a move might seem compatible with the onset of regime uncertainty. But the relative steadiness of the yield on longer-term corporates is not consistent with this view. Why would investors fearful of regime change leap out of only the relatively short-term corporates, not the longer-term corporates as well? I am puzzled.”

The Genius of Carabini

Everyone comes to an understanding of liberty through a slightly different route, which is why many primers are necessary. The newest one, I’m convinced, has the potential to become a classic among a certain type of reader, a business owner who seeks to understand his or her place in the world. The book is Inclined to Liberty, and its author is Louis Carabini.

Unions then and now

During the late 19th century and early 20th, a confluence of circumstances transformed the United States into an industrial giant. Among these circumstances were a private-property, profit-oriented economy with a vast, internal free market. Soft coal from West Virginia and iron ore from Minnesota were sent to Pittsburgh to make steel and – with the railroad grid that interconnected the so-called Midwest – automobile assembly plants were opened in Detroit, with suppliers of components dispersed throughout the region.

A Beautiful Mind Indeed

John Nash, who won the 1994 Nobel Prize in economics, praised the gold standard in a recent talk at Fordham. Here’s an excerpt from the news report:

Nash said that various interest groups that subscribe to Keynesian, or short-term, economic theories have sold the public on the notion that inflation is acceptable or that “bad money is better than good money.” Such a notion, he said, led to the dangerous proliferation of bad mortgage loans–loans made on the gamble that house values would continue to rise and eventually turn a profit.

Don’t Cave

If a dystopian nightmare of the totalitarian state finally arrives in the United States, it will be the result of a compromise, and there will be people around until the very end who will insist that we should be grateful because it could be much worse. This kind of strategizing also works as a cover for selling your soul. The temptation to do this is very great indeed.
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