Posted in Currency Manipulation, Dependency, Economic Issues, Education, Free Society, Liberty, Neo-conservatism, Philosophy, Policy Issues, Progressivism, Representative Republic vs. Democracy, Rule of Law, U.S. Constitution, U.S. Security, Uncategorized

The Battle Isn’t Right vs. Left. It’s Statism vs. Individualism – Foundation for Economic Education

Given the expanding role of government and erosion of individual liberty that occurs under both fascism & socialism, and the murderous history of each, why is communism/collectivism so much more palatable than National Socialism?

https://fee.org/articles/the-battle-isnt-right-vs-left-it-s-statism-vs-individualism/

Posted in Dependency, Disease Prevention, Economic Issues, Education, Free Society, government incompetence, Government Regulations, Influence peddling, Job loss, Liberty, NIH, Organizational structure, Patient Safety, Policy Issues, Poverty, Prevention, Rule of Law, Stress, Uncategorized, Unemployment, Wealth

Coronavirus and the Two Americas | International Liberty

“…the coronavirus has exposed the fault line between those who are subsidized by government and those who pay for government.

In her Wall Street Journal column, Peggy Noonan opines about how the “protected” don’t have to worry about the consequences of economic shutdowns.

…Since the pandemic began, the overclass has been in charge—scientists, doctors, political figures, consultants—calling the shots for the average people. But personally they have less skin in the game. The National Institutes of Health scientist won’t lose his livelihood over what’s happened. Neither will the midday anchor. I’ve called this divide the protected versus the unprotected. …

https://danieljmitchell.wordpress.com/2020/05/25/coronavirus-and-the-two-americas/

Posted in American Presidents, Bailouts, big government, Dependency, Disease Prevention, Economic Issues, Government Regulations, Government Spending, Government Stimulus, Leadership, Organizational structure, outcomes measurement, Patient Safety, Policy Issues, Poverty, Prevention, Representative Republic vs. Democracy, Rule of Law, U.S. Constitution, Uncategorized, Unemployment

Coronavirus and Federalism | International Liberty

John Daniel Davidson of the Federalist echoes the benefits of having choices made at the state and local level.

The founders wisely chose a federal republic for our form of government, which means sovereignty is divided between states and the federal government. The powers of the federal government are limited and enumerated, while all powers not granted to the feds are reserved for the states, including emergency police powers of the kind we’re seeing states and localities use now. …Much of the media seems wholly unaware of this basic feature of our system of government. …Trump explained that many governors might have a more direct line on this equipment and if so they should go ahead and acquire it themselves, no need to wait on Washington, D.C. This is of course exactly the way federalism is supposed to work. …We should expect the government power that’s closest to affected communities to be the most active, while Washington, D.C., concern itself with larger problems.

Source: Coronavirus and Federalism | International Liberty

Posted in Bailouts, Currency Manipulation, Dependency, Economic Issues, Federal Reserve, Government Regulations, Government Spending, Interest on the Debt, Keynesian Economics, Policy Issues, Tax Policy, Uncategorized

Economic Lessons from Coronavirus: Government-Subsidized Private Debt Creates Macro Vulnerability | International Liberty

Little more than a decade after consumers binged on inexpensive mortgages that helped bring on a global financial crisis, a new debt surge — this time by major corporations — threatens to unleash fresh turmoil.

The root cause of the debt boom is the decision by the Federal Reserve and other key central banks to cut interest rates to zero in the wake of the financial crisis and to hold them at historic lows for years.

https://danieljmitchell.wordpress.com/2020/03/20/economic-lessons-from-coronavirus-government-subsidized-private-debt-creates-macro-vulnerability/

Posted in Economic Issues, Free Society, Free-Market, Leadership, Liberty, Philosophy, Policy Issues, Poverty, Rule of Law, Subsidies, Uncategorized, Wealth

Why Hong Kong’s Economy Has Grown 7x Faster Than Cuba’s Since Since the 1950s – Foundation for Economic Education

By Dan Mitchell

“Communists claim that their ideology represents the downtrodden against the elite, yet the evidence from Cuba shows wretched material deprivation for most people.

In Hong Kong, by contrast, incomes have soared for all segments of the population.”

How important are key individuals in shaping the success or failure of economies? …Neil Monnery’s A Tale of Two Economies is in some sense a polemic against historical determinism, at least insofar as promoting economic reforms is concerned.It stresses the importance of two single individuals, one a great man for many, one an obscure official and political unknown to the most, in shaping the destiny of their respective countries. …Ernesto “Che” Guevara and John Cowperthwaite. …Monnery insists that both of them were “deep and original thinkers.” …The key difference between the two was perhaps that Cowperthwaite had a solid education in economics… Neither the way in which Hong Kong progressed, nor Cuba’s, were thus inevitable.

Monnery points out that Hong Kong’s success happened not because Cowperthwaite and his colleague were trying “to plant an ideological flag,” but because they were “professional pragmatists.” …Then the success of relatively libertarian arrangements in Hong Kong perpetuated itself. …Cowperthwaite tested what he knew about classical economics when he “first arrived in Hong Kong, in 1945” and “was put in charge of price control.… He soon realized the problems with attempting to set prices low enough to meet consumer needs but high enough to encourage supply, and in a dynamic environment.” He opposed subsidies that he saw as “a brazen attempt to feed at the trough of government subsidies.” …Cowperthwaite is a hero to Monnery, who emphasises his competence, and even more, his integrity.

https://fee.org/articles/why-hong-kongs-economy-has-grown-7x-faster-than-cubas-since-since-the-1950s/

Posted in Economic Issues, Government Spending, Government Stimulus, Job loss, Keynesian Economics, News From Washington, Organizational structure, Policy Issues, Uncategorized

Government Shutdowns and Economic Activity | International Liberty

Dan Mitchell

From a microeconomic perspective, there is some genuine disruption for affected federal bureaucrats, even if they eventually will get full – and lavish – compensation for their involuntary vacations. And some federal contractors are being hit as well.

There’s also a debate about the macroeconomic impact, with some making the Keynesian argument that government spending is somehow a stimulant for the economy.

I’ve endlessly explained why Keynesian argument is bad in theory and a joke in reality.

In this interview, I tried to make a more nuanced point, explaining that we should focus more on gross domestic income (GDI), which measures how we earn our national income, rather than gross domestic product (GDP), which measures how we allocate national income.

I’m not sure I got my point across effectively in a 30-second sound bite, but it’s a point worth making since people who understand GDI are much less susceptible to the Keynesian perpetual-motion-machine argument.

But enough from me.

Harold Furchtgott-Roth, in a column for the Wall Street Journal, analyzes the potential macroeconomic consequences of the shutdown.

Does the U.S. government shutdown endanger economic growth? It has led to missed paychecks… Yet these employees represent approximately 0.5% of all American workers… The effect of the furloughs on gross domestic product is likely small. …U.S. GDP is more than $20 trillion annually, or approximately $55 billion daily. The daily compensation of furloughed federal workers is about $52.5 million, or less than 0.1% of GDP.

Source: Government Shutdowns and Economic Activity | International Liberty

Posted in Cost of labor, Economic Issues, government incompetence, Government Regulations, Job loss, outcomes, Policy Issues, Uncategorized

More and More Evidence that Higher Minimum Wages Mean Fewer Jobs and Less Opportunity | International Liberty

Dan Mitchell

No matter how often new research is produced showing that low-skilled workers are hurt when politicians cut off the bottom rungs of the economic ladder, politicians persist in pushing for bad policy.minwage

Many state already have increased minimum wages, and the “Fight for $15” crowd wants a nationwide increase.

So let’s explain, for the umpteenth time, why this is misguided.

We have lots of data and anecdotes to review, so let’s begin with some scholarly research from Europe.

Here are some results from a study in Denmark, where the minimum wage increases when workers reach age 18, at which point many of them lose their jobs (h/t: Marginal Revolution).

This paper estimates the long-run impact of youth minimum wages on youth employment by exploiting a large discontinuity in Danish minimum wage rules at age 18 and using monthly payroll records for the Danish population. …On average, the hourly wage rate jumps up by 40 percent when individuals turn eighteen years old. Employment (extensive margin) falls by 33 percent and total labor input (extensive and intensive margin) decreases by around 45 percent, leaving the aggregate wage payment nearly unchanged. Data on flows into and out of employment show that the drop in employment is driven almost entirely by job loss when individuals turn 18 years old.

Source: More and More Evidence that Higher Minimum Wages Mean Fewer Jobs and Less Opportunity | International Liberty