The Fed Passes the Buck: Blame Oil and China

C. Jay Engel

There are a handful of themes out there on recent market action that are either totally wrong or otherwise highly misleading. For instance, regarding the recent calamity in the capital markets, one especially apparent dichotomy has presented itself as offering two choices as to what, exactly, is causing the painful turbulence.
There are some who, in a complete echo of the news headlines, are quick to point the finger at both oil and China. And yet there are others who point the finger at the Fed for “raising rates too early.” Along with the second is the observation that “inflation is totally MIA” and therefore it was ludicrous that the Fed felt the need to “raise interest rates.” Both of these tend to express anguish over the “strong dollar.”

The Market Doesn't Solve Problems; People Do

January 28, 2016Louis Rouanet

It is wrongly accepted by many liberals (i.e., libertarians) that most, if not all, social problems can be “solved by the market.” But clearly, the “market” cannot magically solve our problems. Let it be clear that there is no doubt that the best way to have social progress is to have a free market economy. However, free markets are not solutions to problems, per se, but are rather what gives us the opportunity to find our own solutions to our own problems by finding the most valuable way to serve one another. For example, Frédéric Bastiat famously wrote in The Law that: “At whatever point of the scientific horizon I start from, I invariably come to the same thing — the solution of the social problem is in liberty.”

The Cozy Relationship between the Treasury and the Fed

David Howden

Last year was a tough one for investors. Gold was down 10 percent. The Dow Industrials fell 2.5 percent, and most bond indexes finished down by at least that much.
One institution that performed remarkably well in 2015 was the Federal Reserve. It just finished its most profitable year on record. The $100 billion in net income earned last year was a slight improvement over the previous year. That total was also roughly three times higher than the Fed’s income from 2007, the last year before it initiated its Quantitative Easing programs in the wake of the financial crisis.

Three Reasons to Be Worried About the Economy

Yonathan Amselem

On January 12, America’s central planner-in-chief gave his State of the Union address. The president promised nothing less than to feed the hungry, create jobs, shape the earth’s climate, and make everyone a college graduate. There’s nothing new here, though. We’ve heard variations of this silly song and dance every year under both Democrats and Republicans. The president lambasted naysayers as fear-mongers that were too partisan to admit we have a booming economy. The fact that the Dow Jones cratered roughly 9 percent in the same thirty-day period President Obama gave his address did nothing to quell Obama's optimism about America’s future. In fact, he labeled the US economy “the strongest and most durable in the world.”

2016's Economy Begins with a Whimper

David Haggith

January was the winter of our discontented stock market. It was the worst January since 2008, when the Great Recession officially began. It was, in fact, the worst January in the history of the New York Stock Exchange. According to Citigroup, Inc., it was also the worst January ever for credit markets.
During many Fed tightenings, the stock market and overall economy improved for years afterward because the Fed stimulus had actually brought a temporary form of economic recovery. But rarely, if ever, has the mood turned dark so fast after the Fed officially announced that the recovery is sound and the life support can be removed.

Why I Have Hope

Ron Paul

[This article appears in the January-February 2016 issue of The Austrian.]
I think the most exciting message for me today is that things are changing.
Often, when I come to these events, people ask me, “isn’t this grueling, isn’t this very tough?” It’s not, though, and it’s actually a little bit selfish on my part, because I get energized when I meet all the young people here. It’s true there is a spread of ages here, but there are a lot of young people and some of them even come up to me and say “you introduced me to these ideas when I was in high school a few years ago.”

By Doug Bandow

The Obama administration has continued its effort to expand contact between the U.S. and Cuba by easing restrictions on travel, exports, and export financing. Commerce Secretary Penny Pritzker spoke of “building a more open and mutually beneficial relationship.”
However, the administration expressed concern over Havana’s dismal human rights practices. Although Raul Castro’s government has continued economic reforms, it has maintained the Communist Party’s political stranglehold. Indeed, despite the warm reception given Pope Francis last fall, the regime has been on the attack against Cubans of faith.

By Richard W. Rahn

A major reason for the growing distrust of government is the double standard whereby government officials and employees often suffer no consequences from incompetence, misbehavior and even criminal violations of the law. In the common law, there is a general principle that if a person is damaged by the actions of others through negligence or illegal behavior, he or she has a right to redress.

By David Boaz

Sen. Rand Paul’s presidential campaign has ended, like most presidential campaigns, short of the White House. The Republican debate will be poorer without him.
Polls show substantial support for libertarian ideas in the Republican Party. Gallup found that libertarian strength in the GOP had risen from 15% in 2002 to 34% in 2012. In two surveys in 2012 and 2013, David Kirby, then at FreedomWorks, found libertarians were 35% or 41% of the party.

By Ted Galen Carpenter

Just a few years ago, drug-related violence in Mexico had reached such alarming levels that some experts worried the country was on the brink of becoming a failed state. The decision by President Felipe Calder&oacuten (2006-2012) to launch a full-scale military offensive against the drug cartels backfired badly. Violence soared, and in portions of Mexico, one or more drug cartels challenged the legal government for preeminence. By the time Calder&oacuten left office, more than 60,000 Mexicans were dead from the fighting and another 25,000 were missing.

By Richard W. Rahn

What does a “progressive” stand for? How does this differ from what a liberal, conservative or libertarian stands for? More so than in most years, the presidential candidates are debating about labels. Hillary Clinton and Bernie Sanders got into an argument last week about what a progressive is, and Mrs. Clinton enlightened everyone by telling us “the root of that word, progressive is progress.”

By David Boaz

As he moved from evangelical Iowa to fiscally conservative New Hampshire, Sen. Ted Cruz didn’t waste a minute in changing his tune.
In his Iowa victory speech Cruz gave a shout-out to libertarians, who are thick on the ground in New Hampshire. He declared, “That old Reagan coalition is coming back together, … conservatives and evangelicals and libertarian and Reagan Democrats all coming together as one, and that terrifies Washington, D.C.”

By Daniel J. Mitchell

Taxpayers don’t like coughing up big amounts of money so other people can choose not to work. And they really get upset when welfare payments are so generous that newcomers are encouraged to climb in the wagon of government dependency.
This has an effect on the immigration debate in the United States. Most Americans presumably are sympathetic to migrants who will boost per-capita GDP, but there is legitimate concern about those who might become wards of the state.
Welfare migration also has become a big issue in Europe.

By William Poole

The Bank of Japan recently announced that it would follow the European Central Bank’s lead and implement a “negative interest rate” policy. Reducing interest rates is supposed to increase spending and investment, spurring growth.
It won’t work. Negative central-bank interest rates will not create growth any more than the Federal Reserve’s near-zero interest rates did in the U.S. And it will divert attention from the structural problems that have plagued growth here, as well as in Europe and Japan, and how these problems can be solved.

By Michael D. Tanner

Less than three decades after the fall of the Berlin Wall, socialism seems to be undergoing something of a revival.
A self-professed “democratic socialist” is running for the Democratic presidential nomination, and he is running neck and neck with a party icon. Polls show that more than a quarter of Americans have a favorable opinion of socialism, which might not sound so bad until you learn that that includes 43 percent of those under age 30, and 42 percent of Democrats. Meanwhile, barely half of Americans have a favorable view of capitalism. Democrats, in fact, are as likely to view socialism positively as they are capitalism.

The Simple Solution to America’s Deteriorating Fiscal Outlook

By Daniel J. Mitchell

The Congressional Budget Office has just released its new 10-year fiscal forecast and the numbers are getting worse.
Most people are focusing on the fact that the deficit is rising rather than falling and that annual government borrowing will again climb above $1 trillion by 2022.
This isn’t good news, of course, but it’s a mistake to focus on the symptom of red ink rather than the underlying disease of excessive spending.
So here’s the really bad news in the report.

By Alan Reynolds

Among Democrats seeking their party’s nomination, all candidates have proposed raising the highest tax rates to a least 43.6% (Clinton) or 45% (O’Malley). Sanders famously admired Ike’s top tax rates of 91-92% from 1951 to 1963, but later suggested he’d settle for keeping top brackets of 43, 48 and 52% (including capital gains) while raising all the lower rates by 2.2%. Clinton and O’Malley assert or assume that raising only tax rates on the highest incomes would raise vast sums, enough to finance their many proposed new spending plans for various grants and benefits.

Conservatives and a Lone Libertarian Take on Donald Trump

By David Boaz

Today I join some 20 other writers in making the case against Donald Trump’s presidential candidacy. The venerable National Review, founded by William F. Buckley, Jr., assembled a group of diverse critics to argue that Trump is not a conservative, not an advocate of limited government, but rather (as the editorial asserts) “a philosophically unmoored political opportunist who would trash the broad conservative ideological consensus within the GOP in favor of a free-floating populism with strong-man overtones.”
The symposium is understandably being described in the media as “conservative thought leaders take on Trump.” I of course consider myself a libertarian, as my book The Libertarian Mind would indicate, and not a conservative. But part of the impact of this symposium is that people of such widely varying views – I have a lot of disagreements with religious rightist Cal Thomas and neoconservative Bill Kristol – nevertheless regard Trump as dangerous.
In my own contribution I emphasize two points:

By David Boaz

We’ve heard a lot about democratic socialism lately, as the self-described socialist Sen. Bernie Sanders poses an ever-bigger threat to Hillary Clinton. But what is democratic socialism?
Wikipedia defines it as “a political ideology advocating a democratic political system alongside a socialist economic system, involving a combination of political democracy with social ownership of the means of production.” The Democratic Socialists of America explain that “democratic socialists believe that both the economy and society should be run democratically.” That doesn’t sound so bad — running things “democratically.” But what it means is that the government would run the entire economy and society, and all decisions would be made by the political process.

A lot of Americans think it would be better to have a businessman than a politician as president, and I sympathize with them. Alas, the only businessmen crazy enough to run for president seem to be, well, crazy. At least Ross Perot kept his craziness confined mostly to private matters, such as the looming disruption of his daughter’s wedding. Donald Trump puts it front and center.
From a libertarian point of view — and I think serious conservatives and liberals would share this view—Trump’s greatest offenses against American tradition and our founding principles are his nativism and his promise of one-man rule.

By Richard W. Rahn

Committee on Oversight and Government Reform
House of Representatives

Mr. Chairman and Members of the Committee:
Thank you for inviting me to testify today on the important subject of capital formation and SEC regulation. I am Richard W. Rahn, a Senior Fellow at the Cato Institute and a syndicated weekly economic columnist. My testimony today reflects my own opinions and views and not necessarily those of any organization with which I have an affiliation.
Over the last few decades, I have served as head of a graduate school of business, a professor of economics, executive director of the American Council for Capital Formation, Vice President and Chief Economist of the U.S. Chamber of Commerce, an economic advisor to political leaders in a number of countries, including the U.S., and as a financial regulator. In addition, I have been an entrepreneur and raised capital for several start-up companies, one of which, Sterling Semiconductor, was sold to a publicly-held company.
In my view, the Securities and Exchange Commission is in need of a drastic restructuring and downsizing, because it has done considerable damage to the U.S. economy:

By Richard W. Rahn

There will be a recession in the United States and much of the rest of the world in 2016. After reading the above sentence, you should be thinking, what possibly could the writer know that the International Monetary Fund, the Federal Reserve and the Obama administration do not know given all their resources and all of their professional economic forecasters?
If one looks at the forecast record of the IMF and the Fed over the past several decades, one will not find any case in which a year of positive growth was followed by a year of contraction in which the IMF or Fed anticipated the recession in April of the growth year. Given the evidence, economic forecasting is far from an exact science, and forecasters and model-builders have much to be modest about. In fact, I do not know for certain that my opening sentence is true or not, but the following is my case for why my assertion is more likely to be true than the various official forecasts.

By Richard W. Rahn

Do you know what socialism is? Hillary Clinton struggled to find an answer when recently asked. Socialism is a system in which the government owns or controls the means of production, and allocates resources and rewards.
Sen. Bernie Sanders proudly proclaims himself a “democratic socialist,” and many in the Democratic Party seem to have no problem with it and, in fact, are embracing him and his ideas. Listening to all of this, one gets the feeling that for a significant portion of the population, history began in the year 2000. Where have been the great socialist success stories? Much of the world’s population greatly suffered under various forms of socialism in the 20th century. Not one of the various socialist models proved to be a success.

By Gerald P. O'Driscoll Jr.

Are we headed for another global financial crisis? The market convulsions of the past week reflected a continuation of a market selloff that began on the first trading day of 2016. Investors have reasons to be fearful—but not terrified.
This year is likely to be one of financial crises in industries and countries around the world. Whether those turn into a global financial crisis is an open question, and the answer will likely turn on the health of the U.S. financial industry and broader economy. No crisis is global if American financial markets hold up. The best I can foresee, at this moment, is that a true global financial crisis is not likely.

By Michael D. Tanner

There’s been a lot of talk about populism in this year’s presidential campaign. In particular, Donald Trump and Bernie Sanders are, we are told, populist candidates. But what exactly does populist mean in this context, with these candidates?
To some, populism means trusting the people. But does either Trump or Sanders really trust people to make decisions in their own lives? From the type of health insurance you have to the types of products you buy, both Sanders and Trump believe that government should make decisions for you. They may pay a lot of lip service to the common sense of common people, but when it comes right down to it, both candidates apparently think people are too stupid to make their own choices.

Cato Institute Scholars Respond to Obama's Final State of the Union Address

Wednesday, January 13, 2016

Obama Admin Makes Move To HIDE Info About 113 Terrorists Arrested Inside America

The United States, along with the rest of the world, has been on edge recently as radical Islamic terrorists become a greater threat and attacks become more likely.
President Barack Obama and liberals have assured us that the radicals are “contained” and that refugees brought into this country from the Middle East pose no danger, but recent discoveries have, once again, proven those claims to be completely untrue.
It was previously believed that approximately 72 people in the United States had been involved in terrorist plots against the country since 2014, but the Washington Free Beacon recently uncovered information that showed an additional 41 terrorists have been implicated since that time. This brings the total number to 113, according to information provided by Congressional sources.

Minimum Wage Is Not Only Bad Economic Policy, But Racist As Well

BY WALTER E. WILLIAMS

Warner Massey, right, an employee with the Goodwill, and other low-wage employees strike after a new contract failed to meet the $15 per hour demand... View Enlarged Image

Michael Hiltzik, a columnist and Los Angeles Times reporter, wrote an article titled "Does a minimum wage raise hurt workers? Economists say: We don't know."
Uncertain was his conclusion from a poll conducted by the Initiative on Global Markets at the University of Chicago's Booth School of Business of 42 nationally ranked economists on the question of whether raising the federal minimum wage to $15 over the next five years would reduce employment opportunities for low-wage workers.
The Senate Budget Committee's blog says, "Top Economists Are Backing Sen. Bernie Sanders on Establishing a $15 an Hour Minimum Wage." It lists the names of 210 economists who call for increasing the federal minimum wage.
The petition starts off: "We, the undersigned professional economists, favor an increase in the federal minimum wage to $15 an hour as of 2020."

Wednesday, January 6, 2016

Ayn Rand: 100 Años Después

David Boaz es Vicepresidente Ejecutivo del Cato Institute.

El interés en la novela bestseller de la filósofa y novelista Ayn Rand continua creciendo, 20 años después de su muerte y 60 años después que tuvo su primer bestseller con El Manantial. Rand nació en Febrero 2, 1905, en San Petersburgo, Rusia.
En el oscuro año de 1943, en las profundidades de la Segunda Guerra Mundial y el Holocausto, cuando EE.UU. estaba aliado con un poder totalitario para derrotar a otro, tres mujeres admirables publicaron libros que dieron a luz al movimiento liberal moderno. Rose Wilder Lane, la hija de Laura Ingalls Wilder, quien había escrito La Pequeña Casa del Bosque y otras historias del individualismo estadounidense, publicó un ensayo apasionado llamado El Descubrimiento de la Libertad. La novelista y crítica literaria Isabel Paterson produjo El Dios de la Máquina, el cual propuso al individualismo como la fuente de progreso en el mundo.

Más información »

Derechos de propiedad: La clave del desarrollo económico

Lee Hoskins es académico titular del Pacific Research Institute.

Gerald P. O'Driscoll Jr. es ex-vicepresidente del Banco de la Reserva Federal en Dallas y académico asociado del Cato Institute.

Este estudio es una traducción del Policy Analysis no. 482 publicado por el Cato Institute el 7 de agosto de 2003. También puede leer este documento en formato PDF aquí.

Resumen ejecutivo

La prosperidad y los derechos de propiedad son conceptos absolutamente inseparables. En la actualidad, la importancia de que haya derechos de propiedad bien definidos y fuertemente protegidos cuenta con amplio reconocimiento por parte de economistas y autoridades responsables del diseño de políticas. Un sistema de propiedad privada otorga a los individuos el derecho exclusivo a usar sus recursos como ellos deseen. El dominio sobre lo propio hace que los usuarios de la propiedad tomen plena conciencia de todos los costos y beneficios de emplear sus recursos de una determinada manera. El proceso de ponderar estos costos y beneficios produce lo que los economistas denominan “resultados eficientes”, los cuales luego se manifiestan en estándares de vida más elevados para todos.

Más información »

EE.UU.: Los Republicanos pro-empresa versus los Republicanos liberales

David Boaz es Vicepresidente Ejecutivo del Cato Institute.

Los Republicanos que no buscan favorecer a corporaciones están en la mira durante esta temporada de elecciones primarias.
Las empresas grandes sufrieron una gran pérdida (en inglés) en Virginia, conforme el líder de la mayoría en el congreso, Eric Cantor, perdió su curul ante el poco conocido David Brat, un favorito del Tea Party y quien había criticado a Cantor por sus lazos con las empresas grandes e hizo la siguiente promesa (en inglés): “Lucharé por acabar con los programas propios del capitalismo de compadres que benefician a los ricos y poderosos”.
Alrededor del país, sin embargo, las grandes empresas están destinando una sorprendente cantidad de esfuerzos a tratar de derrotar al limitado número de miembros del congreso y de las legislaturas a nivel de los estados que tienen posiciones liberales. ¿Por qué, por ejemplo, las grandes empresas gastaron tanto dinero para derrotar a un legislador del Partido Republicano en Georgia?

Más información »

Masones eran los de antes

Alberto Benegas Lynch (h) es académico asociado del Cato Institute y Presidente de la Sección Ciencias Económicas de la Academia Nacional de Ciencias de Argentina.

La masonería dieciochesca y sus continuadores hasta bien entrado el siglo decimonónico, se estableció principalmente para combatir a gobiernos autoritarios, por ello es que eran sociedades secretas y como muchas de las iglesias se plegaron al poder político del momento, aquellas asociaciones se tomaron como antirreligiosas cuando en verdad la mayor parte de ellas hacía jurar a sus miembros no solo la enemistad con toda manifestación de gobiernos totalitarios sino su creencia en Dios, tal como lo documenta la copiosa bibliografía disponible en la materia. Hasta principios del siglo veinte muchos mantuvieron su afiliación a la masonería como un modo de advertir contra posibles abusos del Leviatán, pero con el tiempo esas entidades fueron en gran medida deteriorando su sentido y renunciando a sus propósitos originales para convertirse en una asociación de mafiosos.

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Mito: El liberalismo clásico es anarquista

Carlos Federico Smith es un frecuente colaborador de la Asociación Nacional de Fomento Económico de Costa Rica (ANFE).

En un ensayo previo en que analicé la crítica de que “el liberalismo es anarquía” concluí en que “el liberalismo no es sinónimo de anarquía, pues juzga indispensable la existencia del Estado, si bien hay diversos criterios entre pensadores liberales acerca de cuáles son los alcances o roles concretos que puede desempeñar en una sociedad liberal”.
No era posible adscribirle al liberalismo clásico la creencia en un sistema político con ausencia del Estado o del gobierno (definición sencilla de anarquía), aunque había una gama amplia de posiciones de pensadores liberales acerca de las funciones propias que puede desempeñar el Estado o el gobierno. Los liberales clásicos suelen creer en un gobierno limitado, en donde el grado de restricción aplicable es tema abierto a diferentes criterios entre pensadores liberales clásicos.

Más información »

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Monday, January 23, 2017

The Fed Passes the Buck: Blame Oil and China

The Market Doesn't Solve Problems; People Do

The Cozy Relationship between the Treasury and the Fed

Three Reasons to Be Worried About the Economy

2016's Economy Begins with a Whimper

Why I Have Hope

By Doug Bandow

By Richard W. Rahn

By David Boaz

By Ted Galen Carpenter

By Richard W. Rahn

By David Boaz

By Daniel J. Mitchell

By William Poole

By Michael D. Tanner

Wednesday, January 27, 2016

The Simple Solution to America’s Deteriorating Fiscal Outlook

By Alan Reynolds

By David Boaz

By Richard W. Rahn

By Richard W. Rahn

By Richard W. Rahn

By Gerald P. O'Driscoll Jr.

By Michael D. Tanner

Thursday, January 14, 2016

Wednesday, January 13, 2016

Obama Admin Makes Move To HIDE Info About 113 Terrorists Arrested Inside America

Wednesday, January 6, 2016

Resumen ejecutivo

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