We have all heard how deflation is supposed to prevent growth and create a economic depression. Yet for the latest 2 quarters Japan has outperformed the US not to mention the UK and the Euro zone with a growth rate of more than 6% at an annual rate compared to 4% in the US and even lower in Western Europe, according to the latest report. This is “despite” a consumer-price deflation of 1,6% at an annual rate for the last 2 quarters.
There may be all sorts of subtle issues at work here that are impossible to understand at a distance, but this NYT story suggests that the stock market collapse is the reason that Sonia Gandhi has decided not to claim the position of prime minister of India.
The practical offshoot of the Austrian theory of money is that the production of money should best be left to the free market. Government interventionism does not improve monetary exchanges; it merely enriches a select few at the expense of all other money users. And on the aesthetic side, the disaster is of course complete: rather than deal with beautiful silver and gold coins, the citizens are compelled by law to hold unbecoming paper notes.
Has a higher corporate tax rate than the US (40%), according to a survey by KPMG International. Communist China and Vietnam check in at 33% and 28%, respectively. Venezuela, under Castro admirer Hugo Chavez, has a 34% rate. Granted, many factors besides this rate should be considered in evaluating the burden of government in any country, but still....shouldn’t we be able to have lower taxes than communists?
Paul Kasriel: “Government spending is on the rise for as far as the eye can see. The U.S. indebtedness to the rest of the world is high and will be rising as far as the eye can see. U.S. policymakers will attempt to lessen the impact of this indebtedness on the standard of living of Americans by running Fed Governor Bernanke’s greenback printing press overtime. At first, this will induce foreign central banks to speed up their printing presses as no country right now wants a strong currency.
When a person’s “idealism” is contingent on issuing a dictate that people must obey or be killed, and on the assumption that human beings will do what they are told to do so long as the knife is at their throat, and on the further assumption that the people paying with their money and lives will believe every lie you tell, it is time to rethink your ideals. Otherwise they will end in mass suffering and devastation. [Full article]
Perhaps it is James Grant’s own sense of timing, or perhaps the NYT’s editors just know whom to call when stocks are down and inflation is rising, but in any case, it warms every Austrian heart to see the the business cycle theory so nicely applied within the framework of an op-ed. (Grant is interviewed by the Austrian Economics Newsletter here.)
Some days it seems that free-market theory has triumphed in every way but in politics. Other days, like today in the New York Times, it seems like the same old fallacies just keep popping up.
Asset manager and market Guru Michael Belkin had some Austrian thoughts on the business cycle and the Fed, as told to Kate Welling [link]. The interview is about one year old, but his comment below is equally relevant today:
