Thursday, September 3, 2015

Ex-Greek Finance Minister Yanis Varoufakis Talks About Going Up Against Germany Finance Minster Wolfgang Schäuble

Varoufakis admits Greece was bankrupt but that he didn't want the country to leave the euro. It was a terrible error. Greeks to this day continue to get squeezed in the euro/bankster vice.

Incredibly, Varoufakis says Greece never had a plan to launch its own currency. Apparently, the idea of issuing IOUs, denominated in euros, was as close as thay got.


Wednesday, September 2, 2015

A Cartoonishly Incompetent Businessman?

Don Boudreaux with yet another missive:

Dear Mr. Keener:
In your latest e-mail proclaiming the alleged merits of a government-enforced rise in the minimum wage, you quote Doug Havron, owner of Gabby’s Burgers and Fries in Nashville, as saying that “Raising the minimum wage is good business.  Paying people good money leads to better service and self-motivated behaviors.  It is smart in the short and long run.”
Because absolutely nothing prevents Mr. Havron from raising his workers’ pay now, and without being forced to do so by government, the fact that he evidently hasn’t yet done so means that Mr. Havron doesn’t really believe what he’s quoted as saying or that as a businessman he’s cartoonishly incompetent.  Either way, rather than Mr. Havron’s remarks serving to strengthen your case for a higher minimum wage, they do quite the opposite by revealing Mr. Havron to be someone whose advice should be completely ignored by everyone.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030
The above originally appeared at Cafe Hayek.

Regional Chinese Debt Issued to Fund Social Welfare Projects Climbs by 84%

Here are some simply stunning numbers out of China.

Moody's is out with a new report which reveals a dramatic explosion in debt in China at the regional and local levels.

According to Moody's, China’s National People’s Congress released the State Council’s update of debt statistics for regional and local governments. The update shows that RLG debt at the end of 2014
rose by more than one third to RMB24 trillion ($3.7 trillion), the equivalent of 38% of China’s 2014 GDP, from RMB17.9 trillion as of June 2013. The credit-negative rise in debt leaves RLGs more exposed to the effects of China’s slowing economy and the related weakening in revenues, against the backdrop of falling land sales.

Higher levels of both direct and indirect debt suggest that RLG indebtedness has increased on account of new borrowing since June 2013. Direct RLG debt obligations rose 41%, while indirect and contingent liabilities rose 23%. Debt issued for infrastructure purposes – the largest segment of direct debt – rose 24%,and debt issued to fund social welfare projects rose 84%.

Higher RLG debt, notes Moody's, leads to worsening credit metrics such as debt/GDP and debt/revenue. Between January, and July 2015, China’s slower GDP growth rates lowered the RLGs’ budget revenue growth to 9% from 11%a year earlier. Seven provinces reported falling revenues, while 18 reported single-digit revenue growth and only six achieved double-digit revenue growth. Meanwhile, land sales fell 38%, versus growth of 3% in 2014 and 45% in 2013.

China is in the early stages of a major economic collapse, the result of mad central bank money printing and out of control government financial operations such as that detailed above.


It's Time to Build a Welfare Wall

I have no objections to anyone entering the United States from anywhere, whether for work or vacation (See: Libertarianism. Immigration and Gentrification). However, I do stop at the subsidization, in any fashion, for those who enter the U.S.

This brings me to the just released report by the Center for Immigration Studies. According to the report, more than half of the nation's immigrants receive some kind of government welfare, a figure that's far higher than the native-born population's.

For certain, there will be objections to the  methodology used in the study, but such arguments are only debating at the edges of the problem. The real problem is ANY level of subsidization. It is bad enough that government welfare programs exist for natural born Americans, but subsidization of immigrants creates incentive for immigrants to come to the U.S. and live off the backs of current American taxpayers.

This must be stopped, not only becasue it is a burden on American taxpayers, but also becasue it fuels the anti-immigrant fever flamed by Donald Trump and the like. Caught up in this fever are the many hardworking immigrants.

It is time for a welfare wall.

As Alex Nowrasteh writes:
If you are really concerned about immigrant welfare use, you should be in favor of reforming welfare, eliminating it, or building a wall around the welfare state.

Building a welfare wall is an excellent first step toward eliminating welfare altogether.


The Caplan Conversion Effort (Part 2)

As a follow up to Walter Block: Bryan Caplan Beat Me in Debate on Austrian Economics, the following email exchange has taken place. (Note: Daniel  Rothschild is a PhD student at GMU, Bryan Douglas Caplan is professor of economics at George Mason University).

From: Daniel Rothschild
Sent: Tuesday, September 01, 2015 11:27 PM
To: Walter Block
Cc: Bryan D Caplan
Subject: Re: more debates?

Never admit defeat.


From: Daniel Rothschild
Sent: Wednesday, September 02, 2015 11:45 AM
To: Walter Block
Cc: Bryan D Caplan
Subject: Re: more debates?

If anyone is able to change someone's mind in the span of an hour I'm impressed (though at least for me, the goal is not to change anyone's mind but for both sides to make the best argument on their side and let the viewer decide for himself which is more persuasive). It took me 10 years to go from minarchy to anarchy.


Dear Daniel, Bryan:

I’m blogging this with Bob Wenzel, assuming no objections, and no requests for anonymity.

It took Murray about ten minutes to convert me from minarchism to anarchism. He used the arguments I had garnered from Hazlitt’s Econ in One Lesson to the effect that the market is better than government because of the weeking out system for failure in the former. He asked Why doesn’t this apply to armies, courts and police, and in about 10 minutes had me seeing the light. I just couldn’t “get” Austrianism; well the praxeology. I thought, just like Bryan now does, that if a claim was apodictically true it couldn’t be referring to the real world. It had to be a tautology. And, if it did refer to the real world, it could only be provisional, based on evidence, and not absolutely true. It took my thick head a half a decade or so to see that there are economic laws, not merely hypotheses: synthetic apriori statements that are undeniable, based on pure logic, not falsifiable. I tried three examples with Bryan: trade (or the barter of pens), tendency statements, the minimum wage. I failed on all three counts.

Here is the always brilliant Hans Hoppe on this matter. Bryan, please take a peek. We’re gonna get you, boy! (J)

For Fourth Month in a Row, U.S. Job Creation Index at Record High

Please note, it is a BOOM AND BUST business cycle that the Federal Reserve creates through its monetary manipulations. Be careful of Austrian Shallows who preach, everyday, that a bust is coming, and that it has arrived with every downturn in the stock market.

The Fed is creating a very unstable situation, but that doesn't mean the up indicators are bogus. The Fed has printed a tremendous amount of money since the 2008 financial crisis and that has resulted in the US moving from a bust phase to a boom phase. I am not forecasting that the boom phase will continue, just that we have been  in one, as evidenced by the climb in the stock market since 2008 and the improvement in unemployment since 2009.

Gallup's U.S. Job Creation Index registered +32 for the fourth consecutive month in August. This remains the highest score Gallup has recorded since it began to measure employees' perceptions of job creation at their workplaces in early 2008.

And, if for some reason you think employment numbers are distorted beyond recognition, checkout auto sales, since the financial crisis.

If you are, however, a perma-bear and still don't believe that it is a  BOOM AND BUST cycle, you can rest assured, I'm sure, that there is an Austrian shallow out there somewhere making the case that auto manufacturers are lying to the SEC about their sales.


Solar Industry Admits Green Energy Only Exists Thanks To Government Subsidies

By Jeffrey Dorfman

For at least the last thirty years the alternative energy industry has been claiming they are almost ready to be economically competitive with fossil fuel. Wind, solar, geothermal, and others keep begging for government subsidies to help them stay afloat until they can reach a size at which economies of scale kicks in, price per kilowatt hour drops, and then they can survive on their own. Now we are seeing this has been a blatant grab for taxpayer dollars and the subsidies were more about industry executives and shareholders getting rich than about reaching a green industry future.

For the past few years the United States has received a veritable flood of cheap Chinese solar panels, dropping costs by 99 percent over 36 years. According to the industry itself, solar installations have increased by a factor of 60 since just 2006 and for the first nine months of 2014 solar represented 32 percent of newly installed electric generating capacity.

You might think this means that solar has reached the point where it is ready to compete with fossil fuels. In fact, the industry has said so itself.

Read the rest here.

Walter Block: Bryan Caplan Beat Me in Debate on Austrian Economics

Dear Bryan:

I’m blogging this.

As far as I’m concerned, you won this debate

August 24, 2015. Debate: Walter Block versus Bryan Caplan on Austrian 

True, I set a bit of a high bar for myself. In my view, I could only win if I converted you to Austrian economics. I did not do that, so at least in my own mind I lost the debate. But, please, give me another shot at you re Daniel maybe in about a year (or better yet, let’s set up something in the refereed journal literature, where we can hack away at each other’s positions).

You mentioned monopsony. This was too technical an issue to discuss verbally, since it depends upon diagrams, but here’s my view on that:

Block, Walter and William Barnett. 2009. “Monopsony Theory.” American Review of Political Economy June/December, Vol. 7(1/2), pp. 67-109;

Also, that business of a backward bending supply curve of labor doesn’t really allow itself to be discussed in a verbal debate. It, too, relies on diagrams. My view on that is that as long as the demand curve is to the left of the BBSCL above the equilibrium point, the minimum wage still creates unemployment. And if it is not to the left, you have an explosive situation, where any deviation from equilibrium will lead either to a plus or minus infinity wage, and can be rejected on that ground. I really think I “got you” on that exchange of pens, and also on “tendency” concepts, of which there are plenty in economics.

We’ve already “had at” each other on indifference, heck, on lot’s of other stuff, see below (if I’ve forgotten anything, please let me know), but I’d really like to try to convert you to the one true cultish faith. I see in you a great potential convert. I wish we had offices down the hall from each other, and could have lunch with each other regularly. I really enjoy interacting with you.

Walter E. Block’s debate with Bryan Caplan on methodology

(Bryan Caplan's "Why I'm not an Austrian Economist" (Caplan, Brian. 1996. “Why I Am Not An Austrian Economist” was a first draft that evolved into his Southern Economic Journal article "The Austrian Search for Realistic Foundations.")

Round 1. Caplan, Bryan. 1999. "The Austrian Search for Realistic Foundations," Southern Economic Journal,April, Vol. 65, No. 4, pp. 823-838

Round 1. Block, Walter E. 1999. “Austrian Theorizing, Recalling the Foundations: Reply to Caplan,” Quarterly Journal of Austrian Economics, Vol. 2, No. 4, winter, pp. 21-39;; errata:;

Round 2. Caplan, Bryan, 2000. “Probability, Common Sense, and Realism: A Reply to Hulsmann and Block,”Quarterly Journal of Austrian Economics;;

Round 2. Block, Walter E. 2003.  “Realism: Austrian vs. Neoclassical Economics, Reply to Caplan,” Quarterly Journal of Austrian Economics, Vol. 6, No. 3, Fall, pp. 63-76;

Round 3. Caplan, Bryan. 2003. “Probability and the Synthetic A Priori:  A Reply to Block.” Quarterly Journal of Austrian Economics; Vol. 6, No. 3, fall, pp. 77-83;

Block, Walter E. 2005. “Rejoinder to Caplan on Bayesian Economics,” Journal of Libertarian Studies. Vol. 19, No. 1, Winter, pp. 79-95;

Block, Walter E. 2007. "Reply to Caplan on Austrian Economic Methodology" Corporate Ownership & Control,Vol. 4, No. 3, November, pp. 312-326.

Best regards,


Walter E. Block, Ph.D.
Harold E. Wirth Eminent Scholar Endowed Chair and Professor of Economics
Joseph A. Butt, S.J. College of Business                   
Loyola University New Orleans

EPJ Bestselling Books in the Month of August 2015

Combined list for and Target Liberty.

HOT 1.  Science, Technology, and Government by Murray Rothbard, Because of this and this. (First week on list)

2. The Pith of Life: Aphorisms in Honor of Liberty by Jakub Bozydar Wisniewski. Because of this. (First month on list)

3. Taking a Stand: Reflections on Life, Liberty, and the Economy by Robert Higgs. Because of this. (First month on list)

4. Thinking as a Science by Henry Hazlitt, Because of this(First month on list)

 5. Swords into Plowshares by Ron Paul- Because of this. Second month on list. Highly Recommended

6. Man, Economy and State by Murray Rothbard. Because of thisSecond appearance on list.

7. The Quotable Mises by Mark Thornton. Second appearance on list.

8. Ideal  by Ayn Rand-Because of this. Second month on list.

9.  The Secret of Selling Anything by Harry Browne --On list because of this: If You Want to Get a Great Job, Read Harry Browne and Network, Network, Network. 16th appearance on list.

10. The Fed Flunks: My Speech at the New York Federal Reserve Bank by Robert Wenzel Eleventh appearance on list.

The Economics of Bernie Sanders

By William L. Anderson

As the political campaign of Hillary Clinton continues to run aground, Democrats are flocking to the campaign of Bernie Sanders, the self-described “socialist” US senator from Vermont, who has been a fixture in that state for more than three decades. Not unlike the presidential campaign of Ron Paul, Sanders is drawing large, enthusiastic crowds who are very receptive to his message of increased state control of the US economy.
Obviously, when a person running a campaign based upon socialist principles is drawing attention and big crowds, we might ask just what does Sanders mean by “socialist,” and what would he do if he were elected president of the United States? To better answer that question, I am taking a closer look at what we would call the “economics” of Bernie Sanders.

What Do We Mean by “Socialism”?

Before looking at Sanders’s platform, however, I believe it is important to note that when socialists speak of “victories” in the economy, they are not talking about actual results, but rather political achievements in the forms of laws being passed that mandate certain policies. Whether or not these policies actually achieve what socialists claim will be accomplished is another story altogether, but results are irrelevant to socialists.
This should surprise no one because, after all, socialism is based upon political control of the economy. True (or at least original) socialists believe that state agents via the “magic” of their authority should allocate all resources to where there is the greatest need for them. Political representatives, not surprisingly, determine what constitutes the greatest need. The state would take ownership of all factors of production and then wisely determine the needs and how production of goods would fulfill them.

Tuesday, September 1, 2015

How to End a Conversation Gracefully

What Happens When A Real Casino Crashes——-Macau’s GDP Plunged 26% Last Quarter

Catherine Chen and Stephanie Wong at Bloomberg report:

Macau’s economy dipped to its lowest since 2011 as high-end gamblers avoided the world’s largest casino market amid a widening crackdown on graft in China.

The city where gambling accounts for four-fifths of economic output saw GDP tumble 26.4 percent in the last quarter, according to government data released Monday. The drop worsened from 24.5 percent in the first quarter.

The decline would take Macau’s GDP to about 77.5 billion patacas ($9.7 billion) at constant prices, making it the weakest since early 2011. 

The only Chinese city where casinos are legal, Macau has seen gross gaming revenue plunge 14 straight months due to the central government’s corruption crackdown that kept high-stakes bettors at bay. China’s slowing economy has further curbed visits by mass market gamblers and tourists...

The Truth About The Government's War on Cash