News reports now indicate that WorldCom's overstatement of its profits in the last few years may exceed initial reports. But, writes George Reisman, whatever the ultimate figure may be—$7.1 billion or even $10 billion—it pales into insignificance in comparison with the overstatement of profits regularly engineered by the U.S. government.
Somehow, someway, it always comes back to the central bank. Alan Greenspan is letting it be known that rate cuts are not out of the question. The hint alone sent the financial markets soaring. Yet, writes Lew Rockwell, to attempt more artificial credit injections at this stage is extremely dangerous.
The same politicians who cannot remember the names of major corporations pretend to understand accounting while they are preening before the television cameras, writes James Sheehan. If these solons really knew how misleading corporate accounting was, surely they would have acted to correct the problem before now.
Argentina and now Brazil are the latest chapters in Latin America's long financial history of foreign debt and default, writes Antony Mueller. It is a consequence of bad policy, underwritten by international financial institutions and subsidized from a pervasive culture of debt.
Last week, headlines around the world were screaming out the sad tale of WorldCom and its $4 billion or so misstatement of earnings. But should we really be surprised that another poster child of the boom--especially one whose growth has come through rapid-fire acquisitions led by a rock star CEO--has been revealed to be a hotbed of malpractice?
The present unstable financial system cannot be fixed by means of a monetary policy that targets the price of gold, argues Frank Shostak. This framework, favored by supply-siders, is likely to further destabilize the economy. What is needed is not a reversion to the bankrupt Bretton Woods system, but a genuine gold standard, where gold is money.
Popular thinking about economic growth is still strongly influenced by the productivity theory of capital, which presumes that capital engenders a yield like the fruits from a tree, writes Antony P. Mueller. If it were merely aggregate investment that mattered, economic development and continuous wealth creation would be child's play.
The quirky nature of credit is that it is not necessarily better in abundance, writes Christopher Mayer. It's not like beer, butter, and bananas--where more means cheaper and cheaper is good. Credit is like money; it represents buying power. More credit means more buying power, which means a bidding up of assets and a spark for an unsustainable boom.
The well-being of the majority of any nation's economically disenfranchised citizens could be realized without any state control of the nation's money supply or state regulation of peaceful economic activity, writes Harry Valetine. It is a lesson that could inspire entire populations to wrest control of the economy away from the statist elitists.
Philadelphia was the home not only of the first two federal banks, but it was the home of the two libertarian political economists who introduced and defended the independent treasury idea into the public consciousness, and created public pressure for its enactment.
