Power & Market

Separate Tech and State

11/29/2023Ron Paul

Some libertarians dismiss concerns over social media companies’ suppression of news and opinions that contradict select agendas by pointing out that these platforms are private companies, not part of the government. There are two problems with this argument. First, there is nothing unlibertarian about criticizing private businesses or using peaceful and voluntary means, such as boycotts, to persuade businesses to change their practices.

The second and most significant reason the “they are private companies” argument does not hold water is the tech companies’ censorship has often been done at the “request” of government officials. The extent of government involvement with online censorship was revealed in emails between government and employees of various tech companies. In these emails the government officials addressed employees of these “private companies” as though these employees were the government officials’ subordinates.

Government officials using their authority to silence American citizens is a blatant violation of the First Amendment. Yet some conservative elected officials and writers think the solution to the problem of big tech censorship is giving government more power over technology companies. These pro-regulation conservatives ignore the fact that it would be just as unconstitutional if a conservative administration was telling tech companies who they must allow to access their platforms as it is when progressives order social media companies to deplatform certain individuals. Furthermore, since the average government official’s political views are closer to Alexandria Ocasio-Cortez than to Marjorie Taylor Greene, giving government more power over social media companies is likely to lead to more online censorship of conservatives.

Instead of giving government more power over social media, defenders of free speech should work to separate tech and state. An excellent place to start is pushing for passage of the Free Speech Protection Act. Unlike other legislation, such as the PATRIOT Act and the Affordable Care Act, this bill is accurately named. Introduced by Kentucky Senator Rand Paul and Ohio Representative Jim Jordan, this bill makes it a crime for any federal employee or employee of a federal contractor to use his position to communicate with a social media company to interfere with any American’s exercise of First Amendment protected rights. Violators of this law would face fines of at least 10,000 dollars as well as suspension, demotion, or even termination and a lifetime ban from working with the federal government.

In addition to working to pass the Free Speech Protection Act, those who object to the big technology companies’ “content moderation” policies should abandon big tech for more free speech friendly platforms. Many of the newer social media companies were started to meet the demand for a “content moderation”-free alternative to the dominant companies. Senator Paul himself stopped posting videos on YouTube because of its suppression of free speech. While my Liberty Report still airs on YouTube, its main platform is Rumble. It is wonderful to do a show on any topic I choose without worrying about being canceled.

Big tech censorship is a problem created by big government. The solution lies not with giving government more power but with separating tech and state. Passing the Free Speech Protection Act and making big tech pay a price for cooperating with big government by leaving to use sites like Rumble are two excellent places to start.

Originally published by the Ron Paul Institute. 

Short Memories in Crypto

11/22/2023Doug French

Nowhere are memories shorter than in finance and speculation. Yield farming is back in the crypto market, meaning the “ lending of cryptocurrency which gets you interest and sometimes fees, with the kicker being new cryptocurrency is paid on top of the interest. “The real payoff comes if that coin appreciates rapidly. It’s as if banks were luring new depositors with the gift of a tulip -- during the Dutch tulip craze,” wrote Olga Kharif for Bloomberg back in 2020. 

The Sam Bankman-Fried trial should have jogged everyone’s memory of the crypto crash and the dangers of leverage. Muyao Shen reminds us that just a year and a half ago Terra algorithmic stablecoin triggered an industry-wide meltdown. Upwards of 70% are being offered by “exchanges ranging from GMX to Binance are offering double-digit incentives as a way to jumpstart trading activity after months of stagnation.” 

“It’s always gonna be this” way, said Zaheer Ebtikar, founder of crypto fund Split Capital. “People can’t help it. [Crypto] is literally the most FOMO [fear of missing out] industry ever.” Ever? Ebtikar wasn’t around for tulipmania. Shen writes, 

GMX, a DeFi derivatives exchange that allows users to trade Bitcoin and other cryptocurrencies with up to 50 times in leverage, started an incentives program on Wednesday with Arbitrum DAO. The decentralized autonomous organization is behind Arbitrum, a so-called layer 2 blockchain that seeks to ease congestion on Ethereum network. Through the program, users can earn annual yields of up to 70% for trading, providing liquidity and other activities on a version of GMX. About 12 million, or $12 million of ARB tokens, the governance token of Arbitrum, will be used to pay the extra returns.

Okay. The only thing I know about what is being described in that paragraph is that absolutely, positively nothing can go wrong at 50x leverage. 

“With animal spirits starting to pick back up, projects may feel that now is a good time to spend token emissions to gather some momentum,” Keone Hon co-founder and chief executive officer at Monad Labs told Bloomberg. 

John Law thought the same thing over 300 years ago. 

Sam Bankman-Fried: From Going Infinite to Going Away

11/03/2023Doug French

Sam Bankman-Fried (SBF) took a chance by taking the witness stand. Just like he has continually taken chances his entire life thus far. By all accounts he didn’t come off well as normal people would judge him. He is anything but normal on his best day, under cross examination he didn’t have a chance.

“He came up with a tale that was conveniently put together to exclude himself from the fraud” Assistant US Attorney Nicolas Roos told jurors. “Over three days he took the stand and he lied.”

“It was uncomfortable to watch.”

Early in Michael Lewis’s book Going Infinite: The Rise and Fall of a New Tycoon, the author describes SBF as looking “less like a crypto tycoon than a first grader who needed to pee.” Commitments were made via dial in Sam’s head where he assigned “some non-zero probability to the proposed use of his time.” The generations of these calculations happened “right up until the moment he honored it or didn’t.”

Lewis has been criticized for not being harder on the ex-crypto tycoon in his book. Lewis admits to genuinely liking Bankman-Fried. But, he must know deep down, malintent or not, SBF committed what the courts say is fraud and he told Fareek Zakaria there is foreshadowing throughout the book to that effect. 

If Lewis vents his spleen at anyone it’s John Ray who became CEO of Bankman-Fried’s FTX when Sam docusigned the company into bankruptcy. Ray is famous for recovering money in the Enron case, something Lewis doesn’t mention. Ray came to FTX via law firm Sullivan & Cromwell which would make hundreds of millions on the case.

Ray didn’t know a thing about crypto or Bankman-Fried, but a guy doing his job must make quick judgments while the trail to the assets is still warm. So, people were either good, bad (a crook), or naive. Ray wouldn’t talk to Sam for fear of being misled which made finding the assets that much harder. 

As for Sam’s insiders, Ray described Nishad Singh as naive. “You ask him for a steak and he puts his head up the bull’s ass.” As for Caroline Ellison, sometimes girlfriend to Sam and the head of Alameda Research, “You have had to buy words by the vowel. An obvious complete F**king weirdo.” Sam, in Ray’s view, became a criminal and he didn’t know why. 

Maybe all one needs to know is FTX and related firm Alameda Research, valued at $32 billion, did their financials on QuickBooks. The company had no risk officer, no chief financial officer, or head of human resources. As for a board of directors, “we have something with three people on it,” Bankman-Fried told Lewis. “The main job requirement is they don’t mind DocuSigning at 3 a.m. DocuSigning is the main job.” SBF couldn’t remember who the other two board members were. “We tried having some grown-ups, but they didn’t do anything,” Bankman-Fried told Lewis. “”This was true for everyone over the age of forty-five.” There was a corporate psychiatrist, George Lerner, whose job was to listen to employee’s problems.

Sam had lost his entire management team and half his employees back in 2018 because his staff came to the conclusion he was “dishonest and manipulative.” A corporate coup was attempted but SBF prevailed with one person saying “the only way Sam will learn is if he actually goes bankrupt.” 

Lewis’s most interesting chapter is in the first third of the book, relating Bankman-Fried’s hiring and work at high-frequency trading firm Jane Street Capital. MIT physics majors, if they didn’t go to work for Google, went to work on Wall Street. His interview amounted to mental math questions that became increasingly more difficult. The day was spent solving puzzles and playing games. There were coin-flipping games and poker games, with the rules constantly changing. As the author describes, “games within games, or games about games.” According to Sam, “A median American would take twenty minutes to just figure out what the game was.” And the applicants were constantly on the clock. Sam didn’t feel pressure or emotion. 

Effective altruism (EA) is also a big part of the story. Sam and the inner circle around him believed in making as much money as possible and giving it all away to benefit the largest number of people. Bankman-Fried might be the most well-known utilitarian since John Stuart Mill. The ends justifies the means. 

Sam Bankman-Fried was found guilty on all seven counts in very quick fashion. SBF reportedly stared ahead showing no emotion. Sentencing on March 28th of next year.

Should We Allow U.S. Land To Be Sold to the Chinese?

10/03/2023Walter Block

Admittedly, this idea sounds bad. Both “sell out” and “selling out” have a bad odor to them. Rather, we should “stand firm!” And there is nothing like perking up that patriotic spirit that compares to bashing supposed foreign enemies. However, there are deep and dire problems with this attempt at demagoguery.

First of all, there is simply no mention in the U.S. Constitution, let alone prohibition of, selling land to foreigners. We have been doing so since practically the beginning of our country. A relatively recent high-profile case in point is the sale of Rockefeller Center in New York City to Japanese interests. This land parcel contains 19 buildings ranging from three stories to sky scrapers, and comprises 22 acres dab smack in the middle of Manhattan. A 51% share was purchased for $846 million in 1989 by the Mitsubishi Corporation. As it happens, this sale did not go all that well for the buyers; they sold out in 1995 for a loss (but that is entirely beside the point). If the U.S. Constitution prohibited sales of this sort, this one never would have occurred.

Second, according to one opponent of such sales, a Republican candidate for Governor of Washington state:

“The practice of selling American land to anyone other than American citizens is heinous and unconstitutional. American soil belongs to American citizens. End of discussion.”

Did you notice anything missing from this harangue, apart from a failure to mention which part of the U.S. Constitution is of relevance? In most sales, nay, all sales without exception, there is a buyer and seller. So far, so good. There are these two countries. But there is also a price! What is the price the Chinese are willing to pay for our precious farm land? Typically, fertile agricultural acreage sells for about $3,800 per acre in the United States. Well, suppose the people of the Middle Kingdom offered double that amount, or $7,600 per acre. Then, the likelihood of Americans going without “access to reliable and sufficient quantities of affordable, nutritious food” would be decreased, not increased, by all such sales. American farmers could then purchase twice as much arable land in nearby Canada or Mexico; they would be enriched, and we would have more food rather than less.

Here is a multiple-choice question for those of you who have not yet had Economics 101: are the Chinese likely to offer less than $3,800, that exact amount, or more than that figure, for their average purchase? Go to the head of the class if you selected that latter option. For an explanation: with these new offers for our terrain, the demand curve for it will shift to the right and prices will tend to be higher, not the same or lower. Maybe not double, as in this example, but higher!

Should we sell the entire country to the Chinese? It all depends upon what they offer for it! If it is the sun, the moon, and the stars, then yes. If it is eternal life, plus the entire remainder of the planet, including China itself, then, again, yes, of course. Without knowing what the precise financial and otherwise offer is, it ill behooves anyone to reject any deal!

Third, according to that old folk wisdom, if goods don’t cross borders, armies will. Farm land is not usually thought of as a tradeable good, but it is. The United States is now confronting China in a myriad of ways. Both are nuclear armed. Do we want to exacerbate tensions between these two military giants, or dial them down a notch? There can be only one sensible answer to that question. A nuclear conflagration can ruin your entire day!

What about the lack of reciprocity? Posit that China refuses to allow Americans to purchase land in their country. Should we follow that pattern and ban the sale of our real estate to them? This might be psychologically sound but makes no economic sense. Bob and Allen have a good commercial exchange in product X. Each benefit from it. But Allen refuses to engage in a similar manner regarding product Y. Would Bob benefit from cutting off trade with Allen in X? Of course not. We are positing that both benefit from buying and selling X. If Bob does so, he is cutting off his nose to spite his face, as that old adage states. Ditto for U.S. and China relations.

Let me try again. Two men are sitting in a wooden rowboat. The first one shoots a hole in the hull. Water starts seeping in. Should the second one shoot yet another hole in the boat to get even with his fellow passenger? Not if he has even a modicum of rationality. Yes, China should allow Americans to purchase land there too. And, perhaps, they will one day do so if the advice by candidates like the one above is soundly and widely condemned.

Remember, we invaded their country in the past (and not only tried, but succeeded in shoving addictive drugs down their throats). They never returned the “favor.” They have more of a right to be suspicious of us than we of them.

For the record, I acknowledge that the U.S. government should not be selling land to anyone else. They never homesteaded any of it. They are not the proper owners of any of it. We are here discussing, only, private land sales, as in the case of Rockefeller Center.

Originally published by The Libertarian Institute.

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Specie Money: The Forgotten Currency

With inflation still at high levels, it is becoming overwhelmingly evident to Americans that Federal Reserve notes steadily depreciate in value as a form of currency.

For example, an item that cost a silver dollar in 1913 – the year the Federal Reserve and federal income tax (16th Amendment) began – would cost close to $31.00 unbacked dollars today, as pointed out recently by Dr. Thomas L. Hogan.

In contrast to today’s ubiquitous fiat currency, specie money was available to our recent ancestors and consisted of coins made of gold, silver, and copper that were stamped with a monetary value and deliverable to holders of paper bank notes when taken to a bank for redemption.

This historic form of money (i.e. commodity money or specie) dominated the world as the primary means of exchange while holding its value and helping provide economic stability.

As Austrian economist Carl Menger explained, specie money emerged spontaneously through the actions of individuals. It was not conceived by a single person or government, and no government compulsion was necessary to transition from a barter system to a sound money economy.

Coins minted in the United States, as well as those from countries like Spain, Mexico, Great Britain, France, and Portugal, contributed to the realm of specie money and were commonly used in global and domestic trade.

The Coin of the Realm in the United States

Article 1, Section 8 of the U.S. Constitution grants Congress the power to coin money and fix the standard of weights and measures.

Through The Coinage Act of 1792, Congress ordered the construction of the United States Mint and made it responsible for minting the coins of the United States.

Nine months later, Congress passed The Act of February 9, 1793, declaring that foreign coins would be legal tender within the United States of America for three years while its national mint produced sufficient coins for domestic circulation.

The foreign coins mentioned in this Act remained in use for much longer than three years, and privately minted coins, especially those minted of gold, also circulated in the United States until the latter half of the 19th century. (Ultimately, Congress banned the private coining of money in 1864.)

Other than a short period around the Civil War, American bank notes also remained formally tied to precious metals throughout the 1800s, exchangeable in specie coins minted of gold or silver bullion. This financial system backed by both gold and silver was known as bimetallism and was widely adopted across the globe.

Lasting remnants of readily available U.S. specie money include pre-1933 gold $20 Double Eagles, $10 Eagles, $5 Half Eagles, and $2.50 Quarter Eagles. Most of these items are sold today near their gold melt value – but some may command a higher collectible value if they are in excellent condition or minted in particular years.

Other Constitutional silver coins, commonly known as "junk silver," were minted before 1965 and are a great low-cost option for investing in silver specie coinage today.

These coins were minted of 90% silver and 10% copper in 1964 and prior (pre-1965), and include Half Dollars, Quarter Dollars, and Dimes. Peace Dollars and Morgan Dollars are commonly found as well.

Even copper pennies minted before 1982 (when virtually all of the copper was swapped out for cheaper zinc) are stockpiled by some value-minded savers.

Those looking to invest in specie can also look abroad, to French 20-Franc gold coins, British gold Sovereigns, Mexican 20-Peso gold coins, and more.

Fiat Money Drove Specie Money Out of Circulation

Gresham's Law predicts that "good money" will be driven out of circulation by "bad money."

Through government actions, specie money was systematically replaced by Federal Reserve notes and clad coinage throughout the 20th century.

The last link to gold was severed by President Richard Nixon in 1971 whereupon the United States “temporarily suspended” (i.e., “permanently defaulted on”) the convertibility of the dollar as prescribed by the Bretton Woods Agreement between the world’s major central banks.

Today’s unbacked Federal Reserve note – still referred to as a "dollar" even though it does not meet the historical definition (372.5 grains of silver or about 0.775 troy ounces) – has now lost a staggering 98 percent of its purchasing power since the establishment of the Federal Reserve in 1913.

Modern-day paper currency (and its electronic equivalents) have long since been irredeemable in specie, making it a cinch for the government to issue this fiat currency as legal tender with reckless abandon.

As we live in an Age of Inflation, specie money reminds us that a more stable and sound monetary system once existed – and is possible for us to return to once more.

Spain Faces Parliamentary Paralysis

The Kingdom of Spain held elections on July 23 and the resulting configuration of the lower house of Congress presents several challenges for governability. In Spain, the executive branch of government is not directly elected but is rather designated by the vote of elected representatives in a fashion comparable to the American Electoral College or the British Parliament. For a party or coalition to form a government they require at least 176 votes out of the 350 members. If none achieve the 176 votes, then it is possible to form a government by receiving more votes in favor than votes against. If, after two months from the first vote, no government is successfully formed, then the King must dissolve Congress and call for new elections.

The current challenge stems from the composition of Spain’s government. The incumbent left-wing coalition obtained 171 seats. The right-wing opposition obtained 172 seats. The remaining seven seats are held by Catalan secessionists, whose leader, Carles Puigdemont, has stated is only willing to support the formation of a government if they agree to a full amnesty for those prosecuted for the events of the 2017 failed secession attempt and to a binding independence referendum.

Puigdemont has also stated that he does not trust the incumbent left-wing President, Pedro Sanchez, to deliver on promises, which appears to outright preclude any support from the former for a government under the latter. On the other hand, a constituent party of the right-wing coalition, Vox, characterized by being conservative and unionist, is strictly opposed to any independence referendums.

There is a possible yet unlikely scenario in which the two largest parties from each coalition, which also happen to be the more moderate ones, form a centrist grand coalition. Such a coalition would be 258 seats strong. In such a case, it is probable that neither of the party leaders would become President, but rather a technocrat be selected in the Italian fashion. The main factors making this scenario unlikely are that the relevant parties clearly campaigned against each other, and a poor performance could result in a significant leakage towards the extremes for both parties in the next election.

The most likely outcome is a new election, as was the case in 2019. Government paralysis is not likely to have a significant impact on day-to-day life further than the perpetuation of issues that are yet to be addressed. Among the most pressing issues, the general housing situation can be highlighted, including the matters of high costs, low availability, and squatting. It is interesting to note that there are those who defend the squatters. Perhaps they overlook the fact that an institutional arrangement that is favorable to squatters is also necessarily prejudicial to renters. The increased costs from the increased squatter risk lowers the profitability of housing provision, which lowers housing provision itself, resulting in lower availability and higher costs to renters.

Should the U.S. Invade Belarus?

A couple of days ago, the New York Times published a story about the brutal authoritarian regime of Aleksandr Lukashenko, the leader of Belarus. The article points out that after winning a “widely disputed” election three years ago, Lukashenko has crushed dissent and “ushered in a chilling era of repression.” According to the article, “even the smallest sign of protest can land a person in jail.” Security forces are rounding up critics, journalists, lawyers, and dissidents. People are even being arrested for wearing red and white, which are considered to be symbols of the protest movement against Lukashenko.

This raises an obvious question: Should the U.S. government invade Belarus to free the Belarusian people? 

I suspect that most Americans, including even a large percentage of interventionists, would answer no. While we certainly can sympathize with the people of Belarus, we would not want the U.S. military to invade, attack, and bomb the country in an attempt to save the Belarusians from tyranny, especially since a large number of them would be killed or maimed in the process and have their homes and businesses destroyed.

However, an interesting aspect of this is that if the U.S. national-security establishment decided to invade Belarus to free the Belarusian people, a large percentage of Americans, especially the interventionists, would have a completely different mindset. In that event, they would immediately rally to the support of the Pentagon and the CIA and come up with all sorts of arguing points as to why it was necessary and beneficial for the U.S. to intervene on behalf of the Belarusian people. 

In other words, a certain percentage of American citizens, especially the interventionist segment, automatically looks to the Pentagon and the CIA for their cue as to what they should believe, and they meld their mindsets to the sentiments of these two agencies.

Consider Eastern Europe during the Cold War. Countries like Poland, Czechoslovakia, Hungary, and East Germany were under the iron grip of the Soviet Union, which was ruled by a brutal communist regime. For some 45 years, the people of those countries had to live their lives in that way. 

At no time did the U.S. government ever invade any of those countries to free them from communist tyranny. Moreover, the overwhelming sentiment of the American people, including the interventionists, was not to invade and free them.

But then consider Iraq in 2003. The people of Iraq had been suffering under the brutal dictatorship of Saddam Hussein, who ironically had been a partner and ally of the U.S. government. The U.S. government could have taken the same attitude toward that situation that it had taken with those Eastern European countries during the Cold War. 

Instead, the Pentagon and the CIA initiated their invasion of Iraq. Immediately, a large number of Americans, especially the interventionists, melded their mindsets to those of the Pentagon and the CIA and came up with all sorts of reasons why it was necessary and beneficial to invade Iraq, including the need to “free” the Iraqi people from the tyranny of Saddam Hussein.

Consider Hong Kong. Ever since the British relinquished control over Hong Kong, China has relentlessly established ruthless totalitarian control over the people of Hong Kong. Yet, the U.S. government has never come to the defense of Hong Kong by invading. Moreover, notice that there is no widespread sentiment among the American people, including the interventionists, to do so.

But then compare that to Taiwan. There, the U.S. national-security establishment has made it clear that the Taiwanese will be treated differently than the people of Hong Kong. If China attacks Taiwan, U.S. forces are likely to come to their defense. A large number of Americans, especially the interventionists, have come up with all sorts of reasons why the U.S. should do so.

Consider Ukraine. When Russia invaded Ukraine, the national-security establishment could have stayed out of the conflict, just as they did with Eastern Europe during the Cold War and have done with Belarus and Hong Kong. Instead, the Pentagon and the CIA decided to come to the active assistance of Ukraine, which caused a large number of Americans, especially the interventionists, to immediately meld their mindsets to those of the Pentagon and the CIA and, in the process, come up with all sorts of reasons why the U.S. should intervene in Ukraine.

Our nation’s Founding Fathers came up with the ideal foreign policy, which was expressed in John Quincy Adam’s famous Fourth of July address in 1821 entitled “In Search of Monsters to Destroy.” Adams pointed out that there are lots of bad things — monstrous things — that happen in the world — tyrannies, dictatorships, famines, wars, invasions, revolutions, and the like. But the U.S. government, Adams pointed out, should never send its armed forces into foreign lands to slay these monsters, in part because inevitably the United States would end up becoming like the monsters it was slaying. 

In other words, Adams was saying that the founding U.S. foreign policy of non-interventionism, which was applied to those Eastern European countries during the Cold War and that is being applied to Hong Kong and Belarus today should be the U.S. foreign policy across the board for all the monstrous things that happen in the world. 

Given the dark-side totalitarian-like powers (e.g., assassination, torture, indefinite detention, and mass secret surveillance) that have come with America’s conversion to a national-security state, one that wields the omnipotent power of foreign interventionism, who can deny that Adams has been proven correct, especially given that the U.S. government, in the immortal words of Martin Luther King, long ago became the greatest purveyor of violence in the world, even greater than the monsters it slays?

Originally published by the Future of Freedom Foundation. 

Study for a PhD at the University of Manchester

It’s no secret that Austrian economics is flourishing around the world and that more students than ever are searching for careers that will allow them to contribute to the Austrian tradition. However, students often ask where they can go to study Austrian economics at the PhD level in preparation for teaching and researching in academia, or for work in the non-profit sector or in business generally.

Thankfully, there are now a variety of options available, but one pathway that is especially important, and which is also one of the fastest-growing routes, is to pursue a PhD in management. Thanks to the pioneering work of people like Peter Klein, Austrian economics is flourishing in business schools, in entrepreneurship and in various other management disciplines, and Klein and scholars like Per Bylund now actively support doctoral research at their respective universities.

In addition to those programs, I want to invite prospective students to consider studying for a PhD at the University of Manchester in the UK.

Why study at Manchester?

Our doctoral program is open to students from anywhere in the world, and it offers a variety of advantages and benefits to graduates.

First, studying for a management PhD at Manchester gives you the opportunity to develop serious research within the Austrian tradition that is actually supervised or co-supervised by an Austrian. The PhD is in management, and there are many potential research topics related to Austrian economics that are well-suited to this line of study. (You can see some of my work here for a few examples.)

Second, the University of Manchester’s brand is strong and globally recognized: not only does it have an excellent reputation among higher ed institutions in the UK, it’s also usually ranked among the top 30-70 universities worldwide. A PhD from Manchester is thus highly valued, and it positions students quite well for careers in academia, non-profit work, or in business or finance.

Third, Manchester is a terrific place to live, especially for students: in addition to its historical significance as the cradle of the industrial revolution and the birthplace of the free-trade movement, today it’s a cultural and a technological center with all types of music scenes, night life, etc. (not supervised by me). It has an enormous student population and is substantially cheaper to live in than London, and it’s regularly voted one of the best cities to live in the UK and in Europe.

What are the entry requirements for the program?

One major difference between doctoral study in the UK as compared to the US is that in the UK you will develop a detailed (3,000 word) research proposal to be submitted with your application. This proposal will serve as the basis for your doctoral thesis should you be accepted to the program.

A second important difference is that applicants to the PhD program must generally hold a bachelor’s and a master’s degree from a suitably accredited university.

Funding is available for qualified students who apply early enough. Other details about admission requirements, costs, scholarships, and application deadlines can be found here.

If you are interested in studying at Manchester, please contact Matthew McCaffrey at matthew.mccaffrey@manchester.ac.uk to discuss the program and potential research proposals.

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Some Bank Depositors Get the Smoke, Others the Mirrors

07/12/2023Doug French

Over dinner the other night a business man mentioned that he had large amounts on deposit in the nation's banks and said words to the effect that there is no way the government will let those deposits which are various company operating accounts go “pfft.”

On that subject, while Silicon Valley Bank’s US deposits have been covered, SVB’s deposits in the Cayman Islands have gone “pfft '' or to be more clear those depositors have become unsecured creditors in the SVB bankruptcy. The bank’s foreign deposits totaled $13.9 billion at the end of last year. “The branch in the offshore tax haven was set up to primarily support the bank’s activities in Asia, according to SVB. Its depositors, which include multiple Chinese investment firms, haven’t been able to access their funds—and have been in limbo since SVB’s collapse,” reports the Wall Street Journal’s Frances Yoon.

Depositors are more than surprised, after all the Federal Reserve Board made a statement after the SVB failure, “After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that ”fully protects all depositors.” (emphasis added)

A spokesperson for Phoenix Property Investors, a Hong Kong-based private-equity firm that had funds in SVB’s Cayman Islands branch told the WSJ “We feel misled and are now doing what we can to recover our deposits.”

Now it’s worse than being misled. Those same deposit customers who have loans outstanding are being told to pay up by loan purchaser First Citizen Bank. Ms. Yoon and Serena Ng write in the WSJ, “Some of those same venture-capital and private-equity funds had previously drawn on credit lines that were linked to their SVB deposit accounts. Their outstanding loans were among the assets that were sold to First Citizens, customers of the bank told the Journal.” 

These credit lines are short-term and venture firms planned on paying off those loans with those Cayman deposits that are, for the moment, “pfft.” Customers have reasonably asked First Citizens if their loans can be set off with the deposits that the funds had in their Cayman bank accounts. A First Citizens spokeswoman said a setoff “isn’t legally possible in this situation” because First Citizens owns the capital-call lines while the Cayman deposits were with SVB Financial Group, the former holding company of Silicon Valley Bank, reports the WSJ.

Sounding just like an acquiring bank, First Citizens said requests for additional credit-line increases will no longer be approved by First Citizens. “First Citizens did not retain a banking presence in Asia, which is the basis for the decision on credit line increases,” a spokeswoman for the Raleigh, N.C.-based bank said very banker-like. Bankers alway have an excuse.

The FDIC can decide what deposits live and which ones die. For now, the deposit insurer has told SVB’s Cayman depositors they can file unsecured claims in the bankruptcy by July 10. The receiver (FDIC) has up to 180 days to determine whether to allow the claims, according to a notice sent by one of SVB’s customers to its investors.

Murray Rothbard wrote in The Case Against The Fed, “the Roosevelt Administration unsurprisingly went in the opposite direction: plunging into massive fraud upon the American public by claiming to rescue the nation from unsound banking through the new Federal Deposit Insurance Corporation (FDIC). The FDIC, the Administration proclaimed, had now ‘insured’ all bank depositors against losses, thereby propping up the banking system by a massive bailout guaranteed in advance. But, of course, it's all done with smoke and mirrors.”

Some depositors get the smoke and some get the mirrors. 

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