Power & Market
Did Milei Win Argentina's Presidency by Employing Honesty?
In Argentina, Javier Milei recently won the presidential election with 56 percent of the votes, a remarkably wide margin in any country holding reasonably free presidential elections. Milei, an economist, subscribes to the Austrian school of thought. He identifies as a libertarian and even an anarcho-capitalist. In some appearances, he is presenting himself as Captain ANCAP.
Unlike many libertarians seeking political office, Milei has not sanitized his language or tailored his message to sensitive ears. In interviews where journalists are shocked by his labeling of leftists as evil, he doesn't back down or smooth things over; instead, he further clarifies why he believes this description is accurate. In one instance, he demonstrates his intention to shut down unnecessary departments, such as those for transport and education, by ripping them one by one from a chart and shouting ¡AFUERA! (OUT!) each time. He concludes the segment by declaring an end to the era of politician thievery, and with a cheer for “damn liberty”.
Among some libertarians, Milei faces criticism for not being libertarian enough. He waves the Israeli flag, and he seems to believe that neither American nor Ukrainian politicians are culpable for Ukraine being at war. He has even visited the World Economic Forum, a place apparently off-limits for those wishing to spread knowledge of Austrian economics. Other libertarians argue for pragmatism, pointing to the now-open opportunity to disseminate libertarian ideas and economic knowledge.
Regardless of one's stance on this issue, we can acknowledge that the world has never before witnessed a libertarian winning a presidential election or even coming close. It’s also apparent that the path to the presidency for Milei did not involve methods tried by many other liberty advocates.
Broadly speaking, we see mainly two strategies for making society more libertarian:
- Cautiously hint that one or another prohibition might not be appropriate or effective, hoping that this way, an occasional parliamentary vote might swing "our" way. The reason for choosing words carefully is that people may not accept proposals that challenge the status quo too harshly.
- Outright state the fact that the state is evil, that taxation is theft, and that politics is the vilest game ever invented. The proposal is to shut down the state and not replace it with anything. The challenge lies in getting enough people to realize that it's worth a try.
Those of us who have adopted the more radical strategy have so far little to show that we can achieve results. At best, we count among our achievements those in our immediate circle who we believe we have influenced. Most of us understand that as long as people are reasonably well off, a significant portion of them won't spend much time pondering whether the state is morally defensible. A severe crisis, making it difficult for people to put food on the table, might be necessary. Capitalism works against our cause in this regard. At least for now. Politicians work for our cause. With fervor.
On the other hand, the more cautious strategy hasn't shown any real successes either. Politicians are incredibly skilled and effective at creating crises and using them to undermine and curtail our freedoms. We are rapidly heading towards increasingly total tyranny.
But something has just happened in Argentina that suggests a more radical approach might be more reasonable and effective in changing a society in a libertarian direction. Someone who openly and unambiguously explains the evil of the state has stepped up and grabbed the bully pulpit. Unfortunately, it probably required the Argentine society to suffer deep misery for a long time, but the fact remains that it is possible to reach people with a very radical message, without watering it down.
Did he succeed despite insisting on calling a spade a spade? No, his success is thanks to his clarity and forthrightness.
People are not mindless fools. It's likely the purity and unvarnished nature of the message that paves the way for it to reach its intended audience. If Milei had too often backed down and sent increasingly adapted messages, he would have been suspected, and rightly so, of being just another politician with his own interests at heart. (It may still turn out that this is precisely what he is, but so far, that’s an open question.)
Now then. If Milei has proven that the path lies in clarity and that it is reasonable to assume that people are thinking individuals who can understand even radically unfamiliar arguments. What does it mean for us, other than that we should continue on our chosen path, continue to drum out the songs of freedom and economic sense in our most heartfelt verse?
Perhaps it means that we don't need to wait for our society to be completely brought to its knees, making people receptive in that way. We have a golden opportunity to borrow Milei's megaphone, provided we find ways to amplify the signal.
Capitalism: True and False
Hanne Nabintu Herland’s The Billionaire World: How Marxism serves the Elite (2023) is a vital book that will help you understand what is going on in the world today. It will also help you to defend capitalism against objections that are all-too-common today. Herland distinguishes two kinds of capitalism: real and fake. The real kind is a voluntary society, in which people trade goods and services with each other, and everybody benefits. The fake kind is one in which a few greedy billionaires use the state to gain power and privileges for themselves. These billionaires are willing to enslave humanity to gain their nefarious ends.
Here is what Herland says about them:
“In the West, the ultra-rich own almost everything. Private investment corporations such as Blackrock, Vanguard, Capital World, Fidelity Management, Berkshire Hathaway and State Street represent capital owners who own media companies, Big Tech, Big Pharma, the military complex, and the food industry. They also fund politicians and exert strong influence over political decision makers as well as government funds and assets.
These investment companies have become so powerful that they control most of the world’s capital. Whichever industry you take a look at, you easily find many of the top shareholders, decision makers and names among the ten leading institutional investors. Most of the companies that we perceive as competing brands are actually owned by the same company; for example The Coca-Cola Company and PepsiCo.
These mastodonte companies completely dominate our way of life, what we eat, drink, watch on TV, what we wear, and who we vote for. They are the rulers of social media, the mainstream media, Hollywood, and most of the entertainment business.”
This domination leads to a totalitarian control over people:
“To an employee, this economic entanglement has vast implications. In order to keep their job and be able to put food on the table, journalists and editors alike have to exhibit their willingness to agree with the narrative being pushed. If they object to the politically correct groupthink, they’re out. The desired narrative is structured to produce the highest possible capital gain for the news business’ super-rich owners, with the blessing of media leaders, government officials, leading politicians, and the academic elite.”
People usually think of Marxism as the enemy of the super-rich, but in fact the billionaires and the Marxists are allied to overthrow Western civilization:
“This is a point the book ponders over. It would have been close to impossible for the billionaire class to succeed without the weakening of the Western social culture. The reference here is precisely to the remarkable socialist revolt against classical, Western values such as the demand for individual accountability, the right to own the fruit of one’s own labour, the establishment of decentralized government and independent institutions, private property rights, and equality, regardless of race, class, or gender; to precisely the Marxist aim of crushing social stability to impose a centralized government and the atheist world order, destroying the “bourgeois” family structure and the nation-state, and repressing free speech and critical thinking for those who oppose the left-wing narrative. . .Fear was key to create an obedient population under Joseph Stalin and fear is the key word today.”
After reading this, you may wonder, “Who is Hanne Herland? Why should we believe what she says? The distinguished and astute Paul Craig Roberts explains and summarizes her views:
“Hanna Herland is a leading intellect of the Western world. She is a defender of civilization and Christian morality and a stalwart opponent of the Satanic forces that are attacking our civilization. In her new book, The Billionaire World, she explains the variety of assaults on Western civilization that are undermining the belief systems and cohesiveness of Western countries. Among them are the concentration of wealth in a few hands, the weaponization of scholarship by Cultural Marxists, the transformation of education into indoctrination, a declining sense of duty and responsibility on the part of governments, and the erosion of Christian morality.
Wealth concentration brings information control. Herland explains that the voices of people have been silenced by the enormous control exercised by monopolies and interlocking directorships of a handful of immensely rich entities. A few private investment corporations–Black Rock, State Street, and Vanguard–own the stocks and sit on the boards of most of the large corporations. This puts tremendous power and control in a few hands. Even competing companies, such as Coca Cola and Pepsi Cola, are owned by the same parent company.
Six mega-corporations control more than 90% of the US media. The extraordinary control by a handful over Western civilization permits the imposition of self-serving narratives which if challenged results in being fired from livelihood and cancelled. The former feminist icon Naomi Wolf speaks of it happening to her.
We Must Demand Justice for the January 6th Protestors!
New US House Speaker Mike Johnson struck a blow for liberty and justice last week when he finally authorized the release of all the tapes from the January 6, 2021 “insurrection.” We were told by no less than President Biden himself that this was the “worst attack on our democracy since the Civil War.”
The FBI was unleashed by the Biden Administration to hunt down hundreds of participants in this “insurrection” and lock them up in the gulag where they awaited trial in torturous conditions – many in solitary confinement.
A Congressional Committee was set up under then-Speaker Nancy Pelosi to “get to the bottom” of the “Trump-led insurrection.” It did not include a single Representative nominated by the opposition Republican Party, but rather two “Republicans” – Liz Cheney and Adam Kinzinger – who could be relied on by Pelosi and the Democrats to toe the line.
In short, the whole thing was an old-fashioned Soviet show trial, where the evidence was kept secret and the pre-determined verdict – guilty – was to be used to tighten the grip of the ruling regime and intimidate any further dissenters into silence. The message was clear: “speak out against the ‘perfection’ of the 2020 election and you may find yourself in the gulag along with the insurrectionists.”
It was terrifying and profoundly anti-American.
And, as we finally can see for ourselves thanks to Speaker Johnson, it was a huge lie. The new video shows demonstrators shaking hands with police officers once they entered the Capitol Building. They were welcomed into the building by officers who even held the doors for them to enter! They had no way of knowing that they would soon be rounded up and locked away.
Does that mean no crimes were committed on January 6th? Not at all. The tapes already released were carefully chosen to single out examples of violence and other possible criminality. But the full release of the tapes demonstrates beyond a doubt that the endless propaganda that this was a coordinated attempt to overthrow the government was false.
And as for that violence and mayhem on January 6th? How much of it was instigated by undercover FBI agents? New footage clearly shows officers outside the building firing on protestors with no warning. That must be why, in hearing after hearing, Biden Administration officials like Attorney General Merrick Garland have refused to tell Congress the number of federal agents present and their roles in instigating violence.
The release of this evidence should immediately result in the release of all non-violent protestors awaiting trial or serving their sentences. Those in power responsible for promoting this lie should take their places in the jail cells.
This delayed justice will not help protesters like Matthew Perna, however. Though the new video release clearly shows him calmly walking inside the Capitol in the presence of unconcerned police officers, when Merrick Garland’s Department of “Justice” announced they would seek terrorism charges against him, Perna, in despair, decided to hang himself in his garage.
Yes, there was an insurrection of sorts. Those in power hated Donald Trump so much that they were willing to torture and even murder their fellow Americans to keep him from the presidency. Unless these people are brought to justice, we will have no Republic left to defend.
The Economics of Javier Milei
The election of Javier Milei brings the first anarchocapitalist world leader in history. Although prolific in the Spanish-speaking world, English speakers know very little of the Argentine´s views. The fact that he heads the Libertarian Party of Argentina certainly hints at what direction his politics run.
Earlier this year, Philipp Bagus and I edited a two-volume book in honor of Jesús Huerta de Soto. Milei wrote a chapter entitled “Capitalism, Socialism, and the Neoclassical Trap.” To my knowledge, it is Milei´s only writing made directly in English for an English audience.
If anyone doubts Milei´s credentials, the chapter is a scathing critique of neoclassical growth theory. It also offers a full-blown Rothbardian alternative. Mises´s work on interventionism and Hayek´s knowledge problem form the basis of his analysis.
Speaking of neoclassical economic analysis, Milei writes:
Note that whenever situations that do not match the mathematical structure arise, they are considered “market failures”, and that is where the government appears to correct those failures. However, to successfully solve this problem, it is assumed that the government knows the utility function of all individuals (preferences) for the past, the present, the future, the time preference rate and knows the state of the current technology and all future enhancements, along with their respective amortization rates. In short, to solve the problem in question, the government should be able to master a significant amount of information that, by definition, individuals themselves ignore or are not able to handle, which exposes that the idea of the welfare state acting on the market to correct failures is a contradiction.
Furthermore, Milei concludes that:
when it is made clear that the correction of market failures by the government as proposed in the neoclassical paradigm is conceptually invalid, taking into consideration that the only ones who can internalize those effects are individuals, once the artificial separation of decision-making processes is eliminated, there will no longer be any reason for government intervention, which will not only stop the socialist advance but will also allow us to counterattack.
This is not your grandfather´s South American leader who politicizes under the influence of neoclassical "Chicago Boy" economists. Milei is a full-blown libertarian. His Libertarian Party won yesterday´s run-off election by carrying nineteen of twenty-two Argentine states and 56% of the popular vote. A plurality of Argentine voters must also be fed up after decades of socialism.
Have Argentine Voters FINALLY Chosen Liberty? Time Will Tell
A historical event has taken place, not only for the libertarian movement but for the history of the world. The first libertarian president has been elected in none other country than Argentina.
The Argentinian people faced a dichotomy, either continue with the socialist road to serfdom embodied by the ruling Peronist regime or adopt a radical change towards liberty, the leader of said change being Javier Milei, self-proclaimed Rothbardian and anarcho-capitalist. Finally, with more than 55 percent of the votes, Argentinians elected Milei as their new president.
Argentina’s situation is critical and the people know it. 142,7 percent accumulated inflation this year, 40 percent of the population under poverty levels and at least 80 percent of public debt in terms of GDP, just to mention some of the main economic problems. Crime -which is rampant in many parts of the country- is the other main concern of the public that Milei has had to address in his campaign. He has done so mainly through his vice-president Victoria Villarruel, expert on defense and security matters.
Argentinians chose a free market path, a liberty road towards prosperity and justice.
Now, besides the celebration and enthusiasm that such an occasion merits, we -libertarians (especially Argentinian libertarians)- must draw upon the wisdom of the British economist Alfred Marshall who said that one must stay on our toes to keep our heart warm. Milei has introduced many libertarians’ ideas to Argentinian political discourse but not all of them have been received favorably by the general public or the media. Milei has had to engage in retreatism due to backlash regarding some free market-oriented ideas such as a voucher system for education, eliminating gun regulations, 100 percent bank reserves and privatizing both education and the health system.
Milei has offered as much liberty as the Argentinian people are willing to accept. Socialist and collectivist ideals still prevail in major parts of the population, it would be an error to affirm that even half of the electors that choose Milei are full libertarians. Milei’s upcoming administration will be a test, if it succeeds in pushing for a libertarian program, then more people will rally behind the Gadsden flag and Argentina will serve as a beacon of freedom in Latin America.
Even more important is the cultural shift that has taken place due to Milei’s political activism. Books by the Austrian School of Economics and libertarians can be found in any bookstore (before Milei, those works were harder to access, almost clandestine) and liberty friendly universities and programs are now more frequented. Being a classical liberal or a libertarian is no longer a cultural crime in Argentina.
A libertarian hardcore has been formed and continues to grow, they are the vanguard of the movement, convincing lay people to support Milei’s reforms. True enough, many times they may not convince everyone to embrace libertarianism but at least they persuade them not to oppose it. That’s how the libertarian spirit in Argentina can grow.
Milei’s plan is a moderate one if seen through ideal lenses but as I have already pointed out, it is the most libertarian program that could be advanced upon without being ostracized by the public and mainstream media. Compromises were made after the general elections. The Libertarian-Republican alliance was formed to confront the Peronist regime in the ballot boxes, Milei allied himself with his former competitor Patricia Bullrich and former president Mauricio Macri to rally the necessary votes to win in the ballotage against the leftist Peronist candidate Sergio Massa. The alliance succeeded in calling for the votes necessary to win. It was an epic campaign, thousands attended Milei’s rallies crying out “Liberty!” In many parts of the country, shouts of joy and relief were heard when the Peronist candidate recognized his defeat on live TV. I of course joined the people in the cries for victory.
Bearing in mind the compromises made in the alliance to defeat Peronism, the most crucial libertarian proposals such as slashing public spending and taxes, deregulating the economy and labor market, free trade, privatization of public companies (like the oil company “YPF” and the state airline “Aerolineas Argentinas”) and abolition of the central bank are going to be implemented, at least on paper. Milei, although an anarcho-capitalist has had to moderate in order to gain office, once taking the reins of the state we shall see how much of the freedom program he proposes is implemented.
Will it be a revolution of liberty? History will only tell.
A Statement on Javier Milei from Spanish Libertarians
Senior Fellow Jesús Huerta de Soto and Fellow Philipp Bagus write:
In our own name and in the name of the rest of the Spanish libertarians and anarcho-capitalists we want to send Javier Milei our most enthusiastic congratulations. Today is a historic day for liberty only comparable to the fall of the Berlin Wall and communism. For the first time in history an anarcho-capitalist has won the Presidency of a country as important as Argentina. This shows that in the end the ideas of liberty against statism, left or right, end up prevailing. Mises, Hayek, Rothbard and the great thinkers and theoreticians of liberty planted the ideas that Milei have had the enormous merit of making attractive to the broadest layers of the population and, especially, to the most vulnerable who are always the main victims of the manipulations of socialists and interventionists of all stripes. We are now advising him closely especially on the necessity to establish a 100 per cent reserve ratio on his dollarization process to avoid any new "corralitos." Viva la libertad carajo.
YouTube Suspension for Mises Media Channel is a Good Reason to Subscribe to Rumble
Today, the Mises Institute was informed that our Mises Media YouTube channel is suspended for seven days due to two new content strikes, one for an unlisted version of Dr. Naomi Wolf’s Supporters Summit address and the other for a talk by Dr. Peter McCullough, "Modern Medicine's Great Controversy," which had over 100,000 views.
None of this is a surprise. The Mises Institute has long been aware that our content is a threat to many of the narratives that social media companies favor. In the past, we’ve had videos demonetized for criticizing foreign policy. Our first video taken down by YouTube was a 2020 lecture by Tom Woods on the lies used to justify covid tyranny with over 1.5 million views. These recent videos are a reminder that the censorship regime continues regarding the issue of medical freedom.
For those interested in seeing what YouTube is censoring, here is a link to Dr. McCullough's talk. Additionally, "The New Abnormal: The Rise of the Biomedical Security State," is a talk by Dr. Aaron Kheriaty that we proactively kept from our YouTube page for fear of receiving a content strike. Tom Wood's "The Covid Cult" is available at this link.
This is a good time to remind our audience that we mirror our video content on many alternative media sites, including Rumble, Bitchute, and Odysee. Given the SEC’s attack on crypto-based media platforms, including its legal assault on Odysee’s parent company, Lbry, Rumble may be one of the better platforms for supporters to utilize for consuming Mises Media content.
Click here to subscribe to our Rumble channel.
This is also why subscribing to the Mises Institute’s email list is so important. With social media’s ability to throttle content, particularly on Facebook, the ability to directly connect with our supporters is more important now than ever before. As Jonathan Newman recently noted, even Google search has been manipulated to make it harder to reach our content.
The ideas of the Mises Institute are more important now than ever before, precisely for the same reasons that make our content a target for Big Tech. We want to thank our donors who make our operations possible. Click here to become a Mises Institute member.
APEC and the "Transformation" of San Francisco
Anyone who has spent time in San Francisco can attest to the choking rush hour traffic, the ubiquitous presence of homeless people, and hordes of tourists on the Embarcadero. But thanks to the Asia-Pacific Economic Cooperation Conference this week, things have changed a bit.
The APEC gathering has turned much of San Francisco into an armed camp, complete with hordes of cops, everywhere, blocked off roads, temporary fencing and credential checks, and, of course, the presence of The Black SUVs that transport Very Important People. When my son and I picked this day to visit the city, it happened to be when President Joe Biden was in town.
The police presence changed traffic patterns and, more often than not, we crossed the streets facing very little traffic. Likewise, at the usual shopping venues, there were no lines because there were few tourists, something the city’s business owners had feared would happen.
Not that they didn’t try to make the city attractive. We saw a number of workers pressure washing the sidewalks, something I had not seen in my numerous trips to this place. More importantly, authorities have moved the allegedly immovable homeless camps, leading residents to ask why nothing had been done before.
All this is necessary, one supposes, in order to sterilize the city so that all of the police cars and the Black SUVs driven by men dressed like the Blues Brothers and carrying around the Very Important People can move without being forced to see something resembling the real world. Given that America’s Left Coast cities (other than San Diego and Carmel) are pretty much ungovernable and have vast numbers of homeless camps, at least is it somewhat possible to turn San Francisco into a Potemkin Village, unlike L.A., Portland, and Seattle.
Had APEC chosen the latter two cities, the attendees would have been forced to deal with the sheer ferocity of the Antifa protesters, who surely would have managed to disrupt the proceedings and send all of the dignitaries being shuttled about in Black SUVs to run for cover. Furthermore, Biden then might have been compelled to acknowledge that the Antifa folk actually exist.
The larger question to me is why they have these meetings in the first place, given that those present are impediments to trade and economic cooperation. The Asian countries represented didn’t move from poverty to wealth because their political bosses were shuttled around places like San Francisco in Black SUVs. No, their economic lot improved because their countries pivoted from earlier policies of prohibiting importing of capital to encouraging capital development. They liberalized trade, protected private property, and allowed more economic freedom.
While I was (thank goodness) not invited to the conference (thus depriving me of the opportunity to be ferried about in Black SUVs driven by men dressed like the Blues Brothers), nonetheless, had I been there, I doubt I would have heard anyone speak of how best to promote both freedom and wealth creation. Instead, it turns into the usual who-met-with-whom intrigue that promotes the false idea that the world economy is “administered” by Very Important People driven about in Black SUVs and piloted by men dressed like the Blues Brothers.
Of course, what conference would be without the president (Joe Biden this time) meeting with another head of state (Xi of China this time). Too bad Xi didn’t ask Biden why his administration was engaged in such destructive behavior with its massive and unsustainable borrowing and money creation, its protectionism and Biden’s unwavering support of the wealth-destroying Jones Act.
(Given Biden’s very real cognitive issues, one doubts that the two had any kind of meaningful discussion at all, even with the help of interpreters. At least one hopes that Biden didn’t wander off during their staged walk together in a garden outside the city.)
As for my son and me, we went to a very uncrowded Fisherman’s Wharf, ate clam chowder and sourdough bread (as one is supposed to do in that neighborhood), and took a boat to Alcatraz Island, home of what was one of the most notorious prisons in history. Perhaps that ride across the San Francisco Bay to one of the federal government’s former prisons was a fitting analogy, given the way that the plans the ruling elites being driven about in Black SUVs with men dressed like the Blues Brothers behind the wheel have for the rest of us with their Great Reset.
For all the “common man” and “equity” rhetoric that “Lunch Bucket” Joe Biden uses on the stump, the world of Biden and his fellow elites is one in which everything is sterilized. Everyone not in their circle needs to stand behind the barriers, watch the parade of Black SUVs driven by men dressed like the Blues Brothers, and happily accept whatever calamities they impose upon us.
As the CPI Eases, Economists Declare "No Recession" Because This Time Is Different
The federal government’s Bureau of Labor Statistics released new price inflation data on Tuesday, and according to the report, year-over year inflation continued to climb—although at the slowest pace since July of this year. According to the BLS, Consumer Price Index (CPI) inflation rose 3.2 percent year over year during October, before seasonal adjustment. That’s the thirty-second month in a row of price inflation above the Fed’s arbitrary two-percent inflation target. Month-over-month inflation was flat with the CPI rising 0.04 percent (essentially zero percent) from September to October.
The continued growth in the CPI was driven largely by "food away from home" (up year over year by 5.4 percent) and shelter, which was up year over year, by 6.7 percent. Moderation in the rate of increase, on the other hand, relied largely on year-over-year declines in the price indices for gasoline (down 5.3 percent) and used cars and trucks, which were down 7.1 percent.
It will grieve many ordinary people to note, however, that while food prices have somewhat moderated, the other most essential category within the CPI overall index—shelter—remains near a 35-year high when measured year-over-year. The shelter index rose 6.7 percent from October 2022 to October 2023. That is a similar annual increase to what we saw in mid-1977 and mid-1982. Meanwhile, the month-to-month increase from September to October was 0.3 percent. That's for all types of shelter. The situation is more grim when we looks just at renters. The index for "rent of primary residence" has been up for three months in a row and may be reaccelerating toward the 27-year high in monthly rent growth reached in September 2022.
One noticeable oddity in the CPI report was a purported 34-percent drop in the index for health insurance, year-over-year. Those who actually pay premiums will find this rather hard to believe. The CPI report also showed a very suspect two-percent decline in the index for "medical care services," year over year. As explained by Wolf Richter at Wolf Street, the index for medical services has been problematic for some time, understating month to month changes while overstating year-over-year growth. The new method has further created bizarre swings in the index, turning it into, as Richter says "chickenshit."
Any ordinary person knows that medical care services are hardly falling, yet the index for medical care—which is a not-insignificant 6.3 percent of the full index—tells us prices are going down. On Monday, Bloomberg noted how the CPI index has become detached from reality on health services: "The health insurance index ... is currently at its lowest reading in nearly six years. But what Americans actually pay for coverage is a different story." Healthcare prices in the real world are rising rapidly, but you wouldn't know that from reading about the CPI, however.
Moreover, in spite of claims that price inflation is now "falling" or moderating, real average earnings continue to go nowhere. Thanks to a 20-percent increase in the CPI over the past three years, the real average wage has increased a mere 23 cents since the eve of the Covid lockdowns. That, of course, is an average and understates the substantial losses (in real terms) felt by households at the lower end of the income scale—who have not seen as much income growth overall during the past decade.
The news of some moderation in the CPI—which remains nearly 19 percent above the index as measured in January 2020— was interpreted by both Wall Street and much of the financial media as a great victory over price inflation and as evidence of the imagined "soft landing."
The Wall Street Journal, for example, reported on Wednesday:
The U.S. economy is approaching what most economists had thought either unlikely or impossible: inflation returning to its prepandemic norm without a recession or even much economic weakness, a so-called soft landing. ... “What we are expecting now is a soft landing,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics. “We expect the economy to weaken quite a bit but it does look like we’ll avoid an outright contraction” in gross domestic product. ... Six months ago, the consensus among economists surveyed by The Wall Street Journal was that the economy would enter a recession over the next 12 months. In October’s survey, the average forecast of economists was for no recession.
The argument offered by most of these economists, however, amounts to little more than "it's different this time." Even the Journal concedes "If they’re right, it would be highly unusual. In the past 80 years, the Federal Reserve has never managed to bring inflation down substantially without sparking a recession."
By the BLS's own measure, CPI inflation remains well above the Fed's two-percent target even as numerous economic indicators point toward recession. Tax revenue, the yield curve, temp jobs, manufacturing activity, and the leading indicators index all point toward recession.
What really matters in terms of stock prices and Wall Street frenzies, however, is the prospect for a return to easy money. Any decline in CPI inflation is interpreted as a sign that the Federal Reserve will once again turn very dovish and force interest rates lower. With price inflation now moderating, it is assumed cuts to the target policy interest rate will soon be in the cards, and Wall Street is getting excited. Unfortunately, the investment game is no longer about underlying fundamentals, but is about making money off the bubbles created by Fed-induced monetary expansion.
Taxpayers Fume as Politicians Close Streets for Auto Races
Formula 1 week has finally arrived this week in Las Vegas. After months and months of traffic annoyance for workers commuting to their jobs on the Strip and tourists attempting to walk or Uber from one property to another the end is finally in sight.
Once the racing begins, cars will roar down Las Vegas Blvd. (the Strip) weave over to Koval which will provide another long straightaway past the finish/start line then west on Harmon and back to the Strip. The race will go off at 10pm PST to show off the lights of Vegas for TV viewers, or maybe providing a convenient viewing time for European viewers. Three nights of practice, qualifying and the actual race will stymie traffic for the thousands who work at Strip hotels.
The Strip corridor will be shut down from 7pm to 2am during the three days of racing. The Strip is open 24/7 and employees must get to work. Dana Gentry wrote in Nevada Current, “That effort will be complicated by a lack of parking set aside for workers – only about 4,600 spots at the Las Vegas Convention Center on the Thursday, Friday, and Saturday when the event will be ‘hot’ – closed streets, construction unrelated to the race, and a bus transit system that is expected to run on schedule 30% of the time.”
Strip properties are providing incentives for workers to show up during race nights. In one case, a drawing will be held for a new BMW.
The government owns the streets and claims this F1apolluzza will generate $1.3 to $1.6 billion for the local economy. Of course an F1 race is a private venture to be carried out on public streets blocking access to the very taxpayers that pay for these streets. Professor Walter Block, writing about the problem of parades in his book The Privatization of Roads and Highways,
The foregoing was a challenging issue only because there were private people contending for public space. There is no way to solve this under conditions of public ownership, since all private parties have equal standing under any legal system based on the rule of law. The only solution is to reject one of the basic premises—public ownership. Then and only then is there a reasonable resolution of the issue.
“The frustration, inconvenience and blatant disdain for residents living in Las Vegas is evident by the lack of information and coordination with everyone except the promoters of this exhibition,” a resident named Celeste, a Vegas local, told Jalopnik.com.
Tourist David Foxx told Jalopnik, “Everything you read about traffic being a nightmare couldn’t be more true. Numerous lane restrictions on the Strip make it untravelable. The best pedestrian bridge in town is covered. My last night in Vegas, I always take a picture in front of the Bellagio Fountains, but now they are blocked by bleachers for the upcoming race.”
The entire Strip looks to be part of a massive model constructed with an erector set.
According to one Lyft driver, “everyone hates the F1 race. He picked up a woman leaving work at the Sphere last night. She paid two-hours’ wages to get home because the bus would have taken almost five hours with all the rerouting and traffic.”
Gabriel Roth (cited in Block) wrote of applying economic principles to roads and congestion,
“There is nothing new or unusual about these principles, nor are they particularly difficult. What is difficult is to apply them to roads, probably because we have all been brought up to regard roads as community assets freely available to all comers. The difficulty does not lie so much in the technicalities of the matter, but rather in the idea that roads can usefully be regarded as chunks of real estate.
“Someone here is making a lot of money off of this event, and it is not the residents of Clark County,” Celeste told Jalopnik. “We will have our pockets picked, paying taxes for the bill."
Someone who commented to Jalopnik anonymously said, “If the casinos don’t see a massive recurring profit that offsets the pain from construction and teardown, then this race will be dead. No one gives a crap about the sport. No one.”
Local politicians will not want to admit defeat. Let the resorts own the streets and they would decide, rationally.