Monday morning ramble [update 2 + links fixed]
There’s a few things I’ve been lining up to talk about, but just haven’t had the time or space in the last week or so. Here’s a few of the things you ought to know about, in no particular order:
- Despite the fact that falling costs is the way to economic recovery, economists are worried about falling prices. Go figure. But as George Selgin argues, prices do need to fall, but it depends crucially why prices are falling . Read Deflation: The Good & the Bad.
(Such a shame he calls falling prices by the term “deflation,” which as George Reisman explains should be more accurately reserved for a contraction of the money supply. Read Falling Prices are Not Deflation but the Antidote to Inflation.)
- Want to know why Epic Beer is so flavourful? Find out here: How Many Hops In My Beer? - Epic Pale Ale.
- If you haven’t yet caught up with young Tim Geithner's Plan to
RuinSave the Economy, let Jeff Perren summarise it for you.
- And just to remind you again why governments around the world are rushing headlong down paths that responsible economists are telling them is destructive (shopping subsidies, yet!), then let Peter Boettke remind you of the reason: “Ultimately the stimulus bill[s] will not be determined on the basis of economics, but instead on ordinary politics. And that ladies and gentlemen is the problem.” [Hat tip Anti Dismal]
- The British government has banned Dutch MP Geert Wilders from entering Britain. The reason for the ban is Wilders’s tell-all film about Islam, Fitna. If you haven’t seen it already, see what all the fuss is about here: Fitna - see it here.
- How to Solve Economic Crisis in 5 minutes. How’s that for a public service! [Hat tip Titanic Deck Chairs]
- Brian Phillips presents "Practical" Arguments for Property Rights posted at Houston Property Rights, saying, "During my twenty years defending property rights, I have regularly encountered individuals who rely on economic and similar "practical" arguments in the defense of property rights. But these arguments are seldom effective, because people are ultimately moved by morality.” [Hat tip Titanic Deck Chairs]
- On the basis of disagreements between economists like Robert Barro and so called economists like Paul Krugman, Clive Crook worries that “those of no decided allegiance conclude that economics is bunk.” No, no, says Arnold Kling, it’s only macroeconomics that’s bunk. (I paraphrase just a little.) “Macroeconomics is only one area of economics,” he says. “In my view, it is the area with the highest ratio of unresolved issues to settled questions.” [Hat tip TVHE) In other words – this time the words of Ayn Rand, “Macroeconomics is a science starting in midstream: it observed that men were producing and trading, it took for granted that they had always done so and always would—it accepted this fact as the given, requiring no further consideration—and it addressed itself to the problem of how to devise the best way for the "community" to dispose of human effort….
The goods, they believe, are here and will always be here. Therefore, they conclude, the consumer—not the producer—is the motor of an economy. Let us extend credit, i.e., our savings, to the consumers—they advise—in order to expand the market for our goods.
But, in fact, consumers qua consumers are not part of anyone's market; qua consumers, they are irrelevant to economics. Nature does not grant anyone an innate title of "consumer"; it is a title that has to be earned—by production. Only producers constitute a market—only men who trade products or services for products or services. In the role of producers, they represent a market's "supply"; in the role of consumers, they represent a market's "demand." The law of supply and demand has an implicit subclause: that it involves the same people in both capacities.
When this subclause is forgotten, ignored or evaded—you get the economic situation of today.”
- If you haven’t already seen it, Cactus Kate has an unusual take on Wellington’s coffee, and a bright idea on how to get rid of most of Wellington’s useless public so-called ‘servants.’
- Stephen Franks points out that Roger Douglas is a “centrist” when it comes to compulsion – and so is he! Read Stimulus packages and a curious omission from Sir Roger’s plan
- The NZ Save the Humans blog takes the opportunity of the end of the silly “rubbish-free year” stunt from a couple of loony Christchurch environmentalists to point out just how little waste we each generate, and how many more important things there are on which to focus. Read One Cubic Metre of Waste Each - Get Over It!.
- Thomas Sowell’s website has a list of books you need to read. When someone like Sowell recommends a book, it’s worth serious consideration.
- If you still think Franklin Roosevelt’s profligacy and meddling rescued America from the Great Depression, if you haven’t already seen enough evidence, then here’s another nail in that particular coffin: FDR's policies prolonged Depression by 7 years, UCLA economists calculate.
- Thrutch points to “a nice post over at the New Clarion examining the vital role of property rights and lawfulness in creating wealth.” Read it: Cargo Cult Capitalism.
- Mr Dennis points to the The big Biblical Bailout of Egypt. The more things change …
- Meanwhile, as Mark Hubbard says, “If you want to know why we are doomed, economically and philosophically, just read the comments to this Bernard Hickey post - many of them are downright chilling.
- Go Roger Kerr: “Listening to some commentators, one would think the recession has given Governments the ability to produce wealth and jobs out of thin air.
The Government is being urged to increase its spending to "stimulate" economic activity.
What seems to be overlooked is that the huge rises in core Crown spending in recent years - some $25 billion since 2000 - saw New Zealand "lead the world" into recession. The Treasury has said "the overall fiscal stimulus is at the upper end of international reaction to the current situation."
More spending now would be like throwing petrol on a fire.” Bravo! Read on in this morning’s Herald: Roger Kerr: Like throwing petrol on fire.
- “Let's go back to the gold standard.” Says who? Says the Wall Street Journal, that’s who! Says the WSJ, “If the very idea seems at odds with what is currently happening in our country -- with Congress preparing to pass a massive economic stimulus bill that will push the fiscal deficit to triple the size of last year's record budget gap -- it's because a gold standard stands in the way of runaway government spending.”
You see why the politicians won’t like the idea?
Read Capitalism Needs a Sound-Money Foundation: Let's give the Fed some competition. Abolish legal tender laws and see whose money people trust.
Hat tip Thrutch, who picks a couple of small nits …