Those Garrett Novels

Regular readers know how nuts I am for the novels of Garet Garrett. I can’t even chose among them, they are all so great. To my mind they should be NYT bestsellers. They constitute a major discovery in a hugely important genre: capitalist fiction. I say capitalist but they are not self-consciously so. They are just good stories that put a love of commercial life at the very core of the plot. So they make the reader come to appreciate the great contribution that enterprise makes to civilization.

Tax Rebates: Old Wine in Old Skins

Some 70 percent of economic growth over the past years was a result of consumption. Now that consumption is slowing down -- with lower retail expenditure during the Christmas season and dropping charges to credit cards -- a tax rebate will again fan consumption. It will not do a thing to increase savings, from which future investments can be made, writes Wolfgag Grassl.

A Creditors’ Protection Bill

For the present and the foreseeable future, writes George Reisman, there is probably nothing that will stop the Fed from continuing with its inflation.

Is there anything that can be done to stop the potential destruction of the real value of all dollar-denominated savings and long-term contracts by a flood of inflation? Is there anything that can protect people from a possible tsunami of inflation in the United States?

There is something that could be done. There is a financial life raft, as it were, that could be made available to everyone, that would enable people to salvage at least some significant portion of the real value of their savings and contracts denominated in fixed sums of dollars. It is something much more urgently needed, aimed at a much more realistic danger, and much more feasible than efforts to control global warming, say.

What is it? It is the enactment of a creditors’ protection bill, whose essential provisions would be the insertion into all outstanding contracts of a limited, contingent gold clause, and the removal of all legal obstacles to the inclusion of such clauses in all future contracts.

Credit Crisis: Precursor of Great Inflation

The so-called “credit crisis” is gaining momentum. Investors increasingly question the solidity of the banking system, as evidenced by banks’ tumbling stock prices and rising funding costs. With bank credit supply expected to tighten, the profit outlook for the corporate sector, which has benefited greatly from “easy credit” conditions, deteriorates, pushing firms’ market valuations lower. In fact, peoples’ optimism has given way to fears of job losses and recession on a global scale. The obsession with a policy of lowering the interest rate is rooted in a deep-seated ideological aversion against the interest rate. It is a destructive ideology, in particular if the government is in charge of the money supply. Because then the government central bank will lower the interest rate to whatever is deemed appropriate from the viewpoint of the government, pressure groups, and vested interest.

Wildcat Banking in the Virtual Frontier

The new banking policy in Second Life has strong parallels to the adoption of 19th-century banking regulations in the real world. These regulations were supposed to stop wildcat banking, where ambitious bankers expanded credit through risky loans until defaults led to insolvency and left their depositors empty-handed. Similarly, in Second Life, unregulated banks have offered demand deposits bearing interest rates of 40% or more, at least one of which never actually had any loans underlying its interest-bearing deposits. Cases such as that are almost certainly fraud and should be adjudicated as such, but Linden’s adoption of a draconian ban on all interest-paying banks, which had been preceded by a ban on gambling, has established a clear pattern of economic interventionism. This does not bode well for Second Life users, for as Ludwig Von Mises has taught us, middle-of-the-road policy leads to socialism.

The March

Garet Garrett exarmines the critical question. If we are not marching toward socialism, traditionally and technically understood, what are we marching toward? If you say it is toward socialism you leave out the possibility that it may turn into something else. Much more than that, if you say it is toward socialism you fill the view with smoke and may fail to see clearly what it already has in common with every kind of totalitarian government we know anything about, namely, insatiability. There is no way to sate its appetite for more power.

$30 Billion Taxfunded Innovation Contracts: The “Progressive-Libertarian” Solution

I’ve noted before (2) the disturbing trend of intellectuals–some even libertarian or free marketeers—advocating taxpayer-funded “medical innovation prizes” to supplement or replace the current patent system—e.g., Alex Tabarrok’s support of an $80 billion/year “medical innovation prize fund”, and similar proposals by others, including Joseph Stiglitz and

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