U.S. Economy

William Anderson examines the common myths of the gas price increase, and then turns to the question of why prices are as high as they are.

So Greenspan says that Freddie Mac and Fannie Mae are so big and so out of control that they represent a threat to the whole financial system. Well, asks Frank Shostak, just how does Greenspan think they got to be that way? Might it have something to do with a central bank that guarantees the life of not only these two institutions but every bank in the US?

The U.S. Department of Labor's Bureau of Labor Statistics (BLS) recently announced that the Consumer Price Index (CPI) rose 0.5 percent in January, its biggest increase in nearly a year. The CPI core rate, which excludes energy and food prices — like any of us can go without gasoline or food — rose 0.2 percent. Both increases surprised analysts, but normal people — people who actually pay money for goods and services — weren't surprised.

Recorded at Mises University 2001.

Ryan McMaken provides a sweeping roundup of false perceptions of the American West. The story is not one of unrelenting violence but of hard work, trade, peace, and the tedium of daily life. The development of the West was not dependent on the soldier with the rifle, but on the blacksmith, the school teacher, and the saloon owner.

An unfortunate consequence of learning Bastiat's "Broken Window Fallacy," writes Jude Blanchette, is the accompanying frustration of seeing this age old economic fallacy reappear ad nauseam. One of the latest, and indeed most vocal rock throwers, is the United States manufacturing sector.

If the ruling elite has its way, writes Scott Trask, we are to be faced with at least half a century of intermittent war and a further augmentation of the national security state that has been draining our wealth like a voracious vampire since 1950. There is no secret as to how they will finance it—by borrowing and inflating. If the Democrats are the party of "tax and spend," the Republicans are the party of "borrow and spend."

If the benefiting consumers from an innovation are largely outside of a given country, writes Robert Murhpy, then it is indeed true that the people in that country might actually be poorer as a result of the innovation. But in that case, no trade policy can change things. On the other hand, if enough of the benefiting consumers are inside a particular country, then the people in that country are helped (on net) by the innovation.

Beware of trade restrictions, writes N. Joseph Potts; they are often followed by war. Iraq is only one case. The United States embargoed sales of scrap iron to Japan before the war with that country began in 1941, and probably worse, secretly colluded with Britain, China, and the Netherlands (which at the time controlled oilfields in Indonesia) to deny petroleum resources to Japan, a step still cited today in Japanese accounts of the causes of its war with the United States.

Modern arguments for tariffs smack of the same old mercantilist arguments that have been refuted by economists going back to Adam Smith.