Tuesday, April 28, 2015

As Baltimore Burns, the Unemployment Rate Among Black Youth in the City is...

The first minute of the below video, created by someone who is not unsympathetic to government intervention, lays out the facts of unemployment among black youth in Baltimore.

What did the recent governor of Maryland, Martin O'Malley, do to relieve the situation? In 2014, he signed into law, legislation that will raise the minimum wage over time from the the level of $7.25, at the time of signing, to $10.10 an hour.

Yup, poorly trained black youth, who aren't productive enough to find jobs at $7.25, will eventually not be allowed to work unless they can find jobs paying them $10.10 per hour.


Also see: An Excellent Explanation of Minimum Wage Math

Monday, April 27, 2015

Comments on the Gold Standard at the Cato Institute

Commentators like the two below hold the kinds of views that are now featured at the Cato Institute.

The first to speak is David Wessel of the Brookings Institute, followed by David Walker, the former US Comptroller General from 1998 to 2008.

There is nothing wrong with featuring opposing views, but there is little value in bringing in guests who spout the bankster line that can be heard anywhere, including at Harvard and Princeton and on CNBC.

The below dismissive comments on the gold standard are as mainstream and as useless as you can get -RW


Paul Krugman’s Love Affair with France

By Louis Rouanet
In recent years, Paul Krugman has incessantly defended France and its welfare state, even going so far as to pretend that the French economy was in fact in better shape than the British economy.According to him, “To an important extent, what ails France in 2014 is hypochondria, belief that it has illnesses it doesn’t.” However, except for some Keynesian propagandists, nobody believes that the French economy is not deeply in crisis and it is now more and more obvious that Krugman is wrong.

Ron Paul: Current Policies Will Cause a Major Economic Downturn that May Even be Worse Than the Great Depression.

The Real War on the Middle Class

By Ron Paul

One of the great ironies of American politics is that most politicians who talk about helping the middle class support policies that, by expanding the welfare-warfare state, are harmful to middle-class Americans.  Eliminating the welfare-warfare state would benefit middle-class Americans by freeing them from exorbitant federal taxes, including the Federal Reserve’s inflation tax.

Politicians serious about helping middle-class Americans should allow individuals to opt out of Social Security and Medicare by not having to pay payroll taxes if they agree to never accept federal retirement or health care benefits.  Individuals are quite capable of meeting their own unique retirement and health care needs if the government stops forcing them into one-size-fits-all plans.

Greece Dumps Finance Minister Yanis Varoufakis From Negotiating Team

Greece has announced a reshuffling of  its bailout-negotiating team, reining in Finance Minister Yanis Varoufakis, after three months of talks with creditors failed to unlock aid and a meeting with his euro-area counterparts ended with finance ministers throughout the eurozone heaping abuse on Varoufakis .

The coordination of the day-to-day efforts to strike a deal with creditors was handed to Deputy Foreign Minister Euclid Tsakalotos, a Greek government official said in an e-mail to reporters..

Varoufakis will continue to supervise political negotiations with euro-area member states and the International Monetary Fund.

“This move squares the circle, because it doesn’t look like [Greek Prime Minister Alexis] Tsipras is surrendering by firing Varoufakis, but it to some extent has the same result,” said Michael Michaelides, a strategist at Royal Bank of Scotland Group Plc in London, reports Bloomberg.

Varoufakis is no true friend of free markets, but the banksters will not put up with even a tiny bit of  insolence from a servant.

No doubt a call was made to Tsipras to ditch Varoufakis.


Where the Fed Manipulated Boom Is

Nine of the 10 large metropolitan areas with the highest rates of gross domestic product growth since 2008 are in the West or Southwest, led by Portland, Oregon, at 22.8 percent, according to the U.S. Bureau of Economic Analysis.

The Fed manipulated boom is across the country, but watch wage growth and housing prices to get a strong idea of where newly printed Fed money is flowing with intensity. -RW

(via Bloomberg)

The Myth of Global Gluts and the Reality of Market Change

Richard Ebeling emails:

Dear Bob,

I have a new article on the news and commentary website, “EpicTimes,” on, “The Myth of Global Gluts and the Reality of Market Change.”

News reports claim that the world is suffering from economic gluts of resource commodities, and capital and labor, which are languishing unused because of insufficient “aggregate demand.”

There are few worse fallacies that the notion of general gluts due to a lack of demand. All of this was refuted by economists of a much earlier time under the heading of “Say’s Law.”

As long as there are unsatisfied wants of any kind, there is always more work to be done, and thus there cannot be too much of everything relative to people’s demands. There can be too much of some goods compared to the greater demand for other desired goods, at the prices at which various goods are offered on the market.

If we see “excess supplies” of a number of commodities and types of labor and capital it is more do with distortions and imbalances between supplies and demands, and the misuse and misallocation of capital and labor caused by government interventions, monetary manipulation and taxing policies that have been and are preventing competitive markets and the price system from setting things right through appropriate market-guided rebalancing of supplies and demands.

In our new and ever-increasingly interdependent global market system, change and needed adjustments are inevitable and inescapable. But these will be prevented or made more difficult and delayed for as long as government policies get in the way.



Harvard’s Roland Fryer Wins John Bates Clark Medal

The American Economic Association has announced the awarding of the John Bates Clark Medal to Roland Fryer. The medal is given to who the AEA deems is the most promising American economist under 40 years old.

According to the AEA:
Fryer is the leading economist working on the economics of race and education, and he has produced the most important work in recent years on combating the racial divide, one of America’s most profound and long-lasting social problems.
I await the take of Thomas Sowell on this, author of:

Race And Culture: A World View
Inside American Education
Race and Economics
Black Education: Myths and Tragedies
Race, Culture, and Equality
Intellectuals and Race

who some might consider having a passing familiarity with the topics being investigated by this just revealed leading economist.


Sunday, April 26, 2015

What Is Fascism?

Brad DeLong has a post up: Weekend Reading: Benito Mussolini (1932): What Is Fascism?, which quotes Mussolini on some of the elements of fascism.

The quote by Mussolini does not provide a full accounting of what fascism is, still it is instructive.

That said, one part of fascism that I think has not been played up enough is the healthcare aspects of the doctrine. It appears that Obamacare is simply expanded Mussolini healthcare.

 From My Autobiography by Mussolini:
I have wanted the Fascist government, above all, to give great care to social legislation...I think that Italy is advanced beyond all European nations; in fact, it has ratified laws...for obligatory insurance against tuberculosis...All this shows how, in every detail in the field of labor, I stand by the working labor...from insurance against accidents to the indemnity against illness.

A Keynesian Knockout Punch By Paul Krugman

Left-wing Keynesian Paul Krugman has just taken a swing at right-wing Keynesian Greg Mankiw. The ounch connected.

These two have been going at it for a long time, I think they truly hate each other, Mankiw usually dominates these battles, but this time I am awarding Krugman a first round TKO for this.


Greece Talks With Eurogroup Hit “Complete Breakdown”

Euro-Finnace Ministers are now hurling public abuse at Greek officials, especially Yanis Varoufakis.

 From the Guardian:
Eurozone finance ministers have blasted Greece for failing to make more progress towards a bailout deal, at an acrimonious eurogroup meeting in Riga today.
Ministers laid into Greek finance minister Yanis Varoufakis for not having reached agreement with creditors, two months after being given a four month extension to Greece’s loan programme…
Dijsselbloem also warned that it is very hard to consider a new programme for Greece to cover its funding needs beyond June, given the lack of progress recently. And he ruled out giving Greece a slice of the €7.2bn bailout cash that is being held back until reforms are agreed.
ECB president Mario Draghi also showed exasperation over the slow pace, and warned that the ECB could potentially impose tougher conditions in return for keeping Greek banks afloat
 From a Bloomberg report:
Euro-area finance ministers hurled abuse at Greek Finance Minister Yanis Varoufakis behind closed doors as they shut down his bid to find a shortcut to releasing financial aid….
The 19-nation bloc’s finance ministers were riled after Greek Prime Minister Alexis Tsipras tried to bypass their veto on financial aid with an appeal to Angela Merkel on Thursday. Tsipras sought to circumvent the finance ministers’ authority, pleading his case with the German Chancellor and French President Francois Hollande on the sidelines of a summit on immigration in Brussels.
Under euro-area procedures, it’s the finance ministers who have to sign off on any aid disbursement and Merkel said last month she’s not prepared to override those controls.
“I would describe today’s meeting as a complete breakdown in communication with Greece,” Maltese Finance Minister Edward Scicluna said.
I'm not so sure, but Yves Smith thinks its likely over for Greece:
 It is hard to see how Greece squeaks through and makes its two early May debt payments to the IMF. A default may be imminent.

I have not verified it independently but a comment on the Spiegel article (search for “spookk3) said that many local officials were deeply upset that the national government was demanding that they make their funds be deposited at the Greek central bank so the national government could borrow them to make debt payments:

Today’s papers in Greece report that the Tsipras government has received a grand total of 430 million or so in “confiscated” money from local governments to fill the state’s till. Huge sum indeed. Given that the IMF is to receive 750 million on May 7 or thereabouts. Plus a few billion due here and there. A bunch of mayors and other local office holders are going to demonstrate in Athens,refusing to hand over their money to the state unless they receive guarantees that it will be paid back.

Greece has engaged in a game of brinksmanship for months, but it looks as if the wheels are about to come off. It’s too easy to second-guess outcomes, but cooler heads had suggested that if a Grexit looked to be inevitable, the Eurozone could take measures to ameliorate the pain. The relations between the two sides are so sour that this sort of conscience-assuaging sop seems inconceivable, unless Merkel insists on it as a statesman-like gesture.

Remember This The Next Time...

...a Keynesian argues that the thinking of Ludwig von Mises and Friedrich Hayek should be ignored because they are so 20th century, or even more to be ignored is the 19th century writing of Carl Menger.

Keynesian Nobel Prize winner Paul Krugman writes:
I’m pretty sure Roger Farmer is subtweeting me here, when he says
There are still a number of self-professed Keynesian bloggers out there who see the world through the lens of 1950s theory.

And it’s true! In fact, quite a lot of what I use is 1930s economic theory, via Hicks. And I should be deeply ashamed. I am, however, not the worst offender. After all, there are plenty of physicists who still use Newtonian dynamics, which means that they’re seeing the world through the lens of 17th-century theory. Fools!...

I’m all for new ideas, indeed for radical heterodoxy, if it solves some problem. Attacking ideas that seem to work pretty well simply because they’ve been around for a while, not so much.
Is this something Austrian school economists must be on guard against? Who would slyly imply that Austrian school economics has more to do with ancient history than current day America?

Here's Krugman in the debate he lost against Ron Paul:
You can’t leave the government out of monetary policy. If you think we’re going to let it set itself, it doesn’t happen. If you think you can avoid the government from setting monetary policy, you’re living in the world that was 150 years ago.... 
I’m not a defender of the economic policies of the Emperor Diocletion, let’s make that clear.
I’m a defender of the economic policies that we followed after World War II...

Oh Yeah, Wladimir Klitschko Pounds Former Federal Reserve Employee

In a heavyweight title match at Madison Square Garden,  Ukrainian Wladimir Klitschko beat former Philadelphia Federal Reserve employee  Bryant Jennings.

 It was a unanimous decision. Two judges scored it 116-111, while the third judge saw it 118-109. Klitschko landed 92 punches in the fight, compared with just 16 for Jennings.