100 MAY BE TOO MANY:It's always something new...no stress, anyone.
Price Controls May Be On the Way
If you thought negative interest rates were as bad as it could get with central banks, you might be in for a surprise. Central banks have been so spectacularly unsuccessful with their accommodative monetary policies that they are discussing pulling out all the stops to get the results they want. They fail to realize that the reason prices aren’t rising is because they really want and need to fall. Bad debts weren’t liquidated during the last financial crisis, the debtors were merely bailed out. Overpriced assets weren’t allowed to be reduced in price. Central banks pumped trillions of dollars into the economy to attempt to paper over the recession. Market forces want to drive prices down, while central banks attempt to prop them up. So what to do when central banks aren’t getting their way?
Central bankers may very well recommend price controls in an attempt to “jolt the economy out of its doldrums.” Of course, economies don’t go into doldrums and they can’t be jolted out of them. Recessions are not something endemic to the economy but are rather the result of central bank monetary intervention. Because central banks refuse to acknowledge their culpability for causing recessions, their methods for responding to recessions end up being more of the same thing that caused them in the first place: monetary easing. And now that those methods are proving ineffective, more drastic measures might be on the way. Remember that the last time all-out wage and price controls were implemented in the United States was in the early 1970s, also a time of great monetary turmoil. In fact, the price controls were instituted by President Nixon at the same time as he closed the gold window in 1971.
As Ludwig von Mises pointed out many decades ago, once you begin to institute price controls, you inevitably lead to socialism.
It must add to the first decree concerning only the price of milk a second decree fixing the prices of the factors of production necessary for the production of milk at such a low rate that the marginal producers of milk will no longer suffer losses and will therefore abstain from restricting output. But then the same story repeats itself on a remoter plane. The supply of the factors of production required for the production of milk drops, and again the government is back where it started. If it does not want to admit defeat and to abstain from any meddling with prices, it must push further and fix the prices of those factors of production which are needed for the production of the factors necessary for the production of milk. Thus the government is forced to go further and further, fixing step by step the prices of all consumers’ goods and of all factors of production — both human, i.e., labor, and material — and to order every entrepreneur and every worker to continue work at these prices and wages.
That is why no one should be surprised that the governments of Japan, Europe, and the United States might resort to price controls to try to achieve what monetary policy could not. It follows logically, after all, since central bankers are in the price-setting and price control game to begin with. The interest rates that central bankers target or set are themselves prices, prices of money being loaned overnight or of money being deposited with the central bank. The aim of targeting or setting those interest rates is to influence interest rates and prices in the broader economy. So if that limited price-fixing doesn’t work, governments will expand their efforts to fix even more prices. It may not come directly, at least at first, but rather through some sort of incentivization. Pressure may be brought to bear to raise wages, using tax policy as either a carrot or a stick. The aim and the effect, though, will be to move prices to where the government thinks they ought to be, not what the market can actually bear.
If price controls are in fact enacted, it will make it all the more obvious that economic planning on the parts of central banks and governments must be firmly opposed. It will separate the wheat from the chaff, those who actually support economic freedom from those who are willing to rationalize central planning. Anyone who claims to stand for free markets, free trade, and limited government but who attempts to defend the existence or importance of the Federal Reserve or central banking is a liar. Either you support free markets and freedom of pricing or you support central bank price-fixing and creeping socialism. There is no third way or middle road — socialism and the free market are mutually incompatible. A little bit of socialism in the form of price-fixing is like a little bit of gangrene, if left unchecked it will eventually infect and kill the whole. Now that governments and central banks may endorse further price controls as a remedy, the monetary policy facade has been torn away to reveal the reality that it is just another tool that leads to intensified central planning. Will enough people rise to the occasion to oppose further transgressions against monetary and economic freedom, or will they shrug their shoulders as our society continues to slouch toward socialism?
CRONY CAPITALISM IS ANTI COMPETITION: All this is straight out of the Austrian economists playbook. Very important to make markets competitive in order to stop the concentration of wealth at the top at the expense of everyone else. All this has nothing to do with socialism which does not and cannot work.It has to do with putting competition back into capitalism and making the free markets work more to everyone's benefit. Lobbying associations are not necessarily good for free markets. Their activities should be severely restricted and their political influence eliminated.vReturn laissez-faire to do positive things for markets.
THERE ARE TWO SETS OF RULES: One for democrats and one for republicans; one for VIPs and one for the rest of us, And people wonder why Trump strikes a chord. His underlying message that everyone understands is throw all the bums out and start over. Ted Cruz offers the same message just without all the bombast, insults, and ignorance. Both parties are self serving, non-representative, and corrupt. Both. A pox on both houses.
THIS LEAVES ANYONE SPEECHLESS: Hard to believe this clown can say all this in seriousness. Obama was probably the one candidate with the most unvetted past in the history of the Republic and he has the chutzpah to stand before the world and make these idiotic remarks. There has to be a school out there looking for a president with his chops to lead it once he is retired from making a fool of all of us all the time.. Probably more than imaginable.
NOTE THE COMPENSATION FOR THIS DEAN: Want to know why tuition costs 60K and up. One has to seriously wonder what is going on at institutions of so-called "higher learning" these days. This Dean's action and language describing the event is a major embarrassment to this school and for that matter all universities engaged in this sort of foolishness. That would include most all universities today. It is long since time for a major reform of the administrations of all these schools, but how does that happen Considering the makeup of the Boards of Trustees at these institutions (politically correct selection of elites who nest in the dominant liberal philosophy of the day) there is little chance of reform. Plus the endowments (huge) of many schools insulate the administrations from annual fund-raising revolts. Finally, when the faculties of most schools vote 80-85% democrat, the indoctrination is overwhelming. Probably a good idea for parents of college age children to begin looking for the handful of really conservative schools (Grove, Hillman, etc) left in the US and maybe find a few in England or elsewhere that are into education of the mind as opposed to indoctrination.
BUT WHERE DOES ALL THIS LEAD?: Microaggression? Oh puleez! This is dancing around the real issue which is the attempt to equalize education for unequal people. This has to stop.
OH MY GOD: This is really all there is to this fraud. It was apparent in 2007 that Obama was a fraud, that he had no idea of how the economy worked, that he had never worked in the private sector, that he was an ideologue of the first order. Here he is about 8 years later pontificating about Marxism and Capitalism as though they were two sides of the same coin. Clearly he has never read any von Mises, Hayek, or even Henry Hazlitt, nor has he read Keynes, nor Adam Smith for that matter. It is clear he's read Karl Marx and a boatload of communist apologists, fellow travelers and lightweight Marxist philosophers like Chomsky, and lightweight thinkers like William F Buckley's foil back in the '60's, 70'd sonf 80's. That well over 50% of the American voters choose this economics illiterate to be their President tell you a lot more about the education of the average American than it does about anything else. By and large the United States is a country of illiterates, which is a reflection of the state run education system that is controlled and directed by all powerful teachers unions. When students should be learning about the benefits of capitalism and how the division of labor, competition and free markets and trade result in abundance and wealth, they are learning about the unfairness of capitalism, the unequal distribution of wealth, the positive role of the state in controlling and managing free markets and the players in it. As one liberal friend once told me, " I believe in capitalism but fettered capitalism": and there you have it in a nutshell. When I said the state understands "fettered" to mean control and managed by government agencies who are nothing but out-of-control bureaucracies bent on accruing power and growth, kinda like a deadly, viral cancer cell, we had nothing more to discuss. It all boils down to liberals are socialists whose understanding of economics, human nature, incentives, competition, supply and demand, entrepreneurship and prices is simply not a part of their world view of social justice. They cannot be engaged in a serious discussion about human action in economic terms because they have never learned why capitalism emerged and became the magnificent force for improving living conditions for literally millions of people. Unfortunately these very same liberals dominate the academic, political, entertainment and media worlds. The road ahead will be rocky.
A PC VIEW FROM A FORMER PROFESSOR:When you're outnumbered 10 to 0ne, what chance do you have?
