Global Economy

No amount of fantasizing can make fundamental economic realities go away, no matter how much we put our faith in central banks, government regulation, or technologies of the future.

It wasn't long ago that the pundits were talking about Venezuela's "economic miracle" which had proved all the anti-socialist naysayers wrong. But with soaring unemployment, inflation, and deficits, the Venezuelan people are unfortunately having to pay for years of ignoring economic reality.

Robert Shiller, in a new screed against capitalism in The New York Times, asserts that government regulation makes countries rich. He then bolsters this argument by making stuff up.

It was a big week for Bernie Sanders's brand of socialism, and millions of Americans already agree with him. Thanks to unquestioning acceptance of wild claims about the success of socialism in Europe, many Americans are now wishing for some European-style socialism themselves.

International trade grasped headlines with Monday’s announcement that twelve governments have agreement on the Trans-Pacific Partnership. While we should expect to see this celebrated in the editorial pages of the Wall Street Journal, it is unfortunate even libertarian organizations are praising the agreement.

Everywhere we look, governments are trying to enhance and extend their own power. So why are so many of those same governments eager to sign on to "free trade" agreements. It's because such agreements have nothing to do with free trade.

A real free trade agreement should be short and unilateral. It would then truly allow the market to bring about a pattern of international trade in line with the scarcity of resources and with entrepreneurial judgment about their most efficient international allocation. The TPP, on the other hand, was created to interfere with this pattern: to distort it for more political power or for more economic gain for some groups or others. It was created to take trade flows from the course prescribed by voluntary agreements and divert them into that prescribed by political agreements. 

Thanks to centuries of government interventionism, Brazil remains mired in a sluggish boom-bust economy, and the government has now squandered the benefits of decades of growth. Fortunately, free-market ideas are growing more popular in Brazil and may someday offer a way out.

Whether its drug prices, crushing debt, or unemployment, government can always come up with someone else to blame. Fortunately though, in spite of the lackluster economy the Fed and the government seem committed to giving us, there's hope for a much better future.