While they may not be able to solve many of the problems they create, the political classes of this country have proven they are still adept at causing crises—and then blaming others for the results. With gasoline prices rising to their highest levels in years, and then falling again after Labor Day, it was inevitable that the politicians would come out of the woodwork and demand yet another costly investigation of the U.S. oil industry.
The Fed’s Job Dilemma (CNN): “The Federal Reserve, which has promised to keep short-term interest rates low for a long time, might even have found incentive in Friday’s dismal jobs report to cut rates again. But would a cut do any good?
Morgan Stanley analyst Joachim Fels has penned an analysis of the bubble and crash cycle that could have been written by an Austrian economist. Fels has a very good idea of the way that injections of inflation by the central banks works its way into asset markets, causing bubbles and economic distortions.
A great verse from the anti-Roosevelt movement of the 1930s (though it seems awfully relevant today):
This Guardian article describes (in glowing terms) Chile’s “socialist internet” and its use in trying to get around the economic calculation problem. Of course, the Guardian doesn’t let on that there is any sort of problem with socialism.
The Guardian has launched a website advocating the abolishment of all agricultural subsidies in Europe and the US. Although replete with historical inaccuracies, (e.g., “Giving subsidies to farmers was a brilliant idea that transformed the food shortages after the second world war into a surplus.”) the newspaper’s sudden discovery of free trade is notable.
It should be no surprise when a government policy generates the opposite results of its stated aims.
Gene Epstein, economics writer of Barron’s (a paid subscription web site), continues his assault on the Fed and explains why it should be abolished. This week he responds to questions that he has received on his previous three articles. Here is a quoted passage from Epstein’s article in which he answer one question:
Parry: Fed still has room to cut (Reuters): “If the economy were to underperform, we have room to cut rates,” Parry told reporters after a speech, though he stressed that he thought this was unlikely.
