Friday, May 25, 2018

It's Getting Insane: Trump's Top Trade Adviser Compares Treasury Secretary to Nazi Appeaser

Peter Navarro (left) and treasury Secretay Mnuchin
The tension between Donald Trump advisers Treasury Secretary Steve Mnuchin and Trade Aviser Peter Navarro is at an all-time high, reports The Daily Beast.

Mnuchin, correctly, believes Navarro to be a crank and a recurring nuisance, and Navarro is accusing the Treasury Secretary of trade capitulation akin to Nazi appeasement.

Navarro is a crazed nationalist, anti-trade protectionist hardline, especially when it comes to trade with China, and Mnuchin is part of the free-trade-lite camp.

 Trump, also from the dumb anti-trade camp, has dubbed Navarro “my Peter.”

Navarro has—according to multiple sources who spoke to The Beast on the condition of anonymity—privately nicknamed Mnuchin “Neville Chamberlain” (in reference to the Conservative British prime minister whose foreign policy position was, rightly or wrongly, seen as appeasement toward Nazi Germany and Adolf Hitler) and likened the economic threat from China to that of fascist dictator Hitler.

According to The Beast,  a senior White House official described the dynamic between the two as a “Cold War that became hot,” especially during the China visit....Navarro has privately fingered Mnuchin and his team—including Tony Sayegh, the Treasury Department’s assistant secretary for public affairs—as the ones orchestrating an aggressive leak and smear campaign against him in recent weeks.


Oxfam Is At It Again:This Time the Distortion Machine is in Overdrive


Thursday, May 24, 2018

Creating The "Height-Based" Balance of Payments

By Robert Higgs

Let us define the set of all human beings whose height is greater than 170 cm and less than 180 cm. Call this set A. Now let us collect data on all the dealings between members of set A and members of set B, which consists of all human beings whose height is less than or greater than those in set A. What economic significance can we ascribe to the aggregate of monetary flows between members of set A and members of set B? Correct answer: none. This aggregation of persons who trade with persons in the complementary set has no economic meaning; the sets are arbitrary so far as economic understanding is concerned. People—individuals, firms and other organizations, and governments—trade in order to improve their economic condition. Whether they trade with shorter or taller people or with people within a certain height range or outside this range has nothing to do with economics or human well-being. To draw up a balance of inter-set payments for set A and set B, or any given subset of B would serve no purpose. It would be a nonsensical exercise.

Now let us define the set of all human beings who

When Hyperinflation Mixes With Socialism

If only the masses understood the horrors of government money printing and socialism.


BREAKING U.S. Justice Department Opens Criminal Probe Into Bitcoin Price Manipulation

The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies, reports Bloomberg.

The investigation is focused on illegal practices that can influence prices -- such as spoofing, or flooding the market with fake orders to trick other traders into buying or selling.

So much for Bitcoin being an anonymous trading vehicle. The DOJ is going to rip into the big players and look deep under the hood.

Bitcoin extended its Thursday declines after Bloomberg News reported the investigation, and was down 3 percent in the last 24 hours to $7,409 as of 9:32 a.m. London time. In late December 2017, Bitcoin traded as high as $19783.06.

Although I have been highly suspicious of Bitcoin, I did advise it as

Trump Wants New 25% Tariff on Imported Automobiles

The Trump administration is using national-security laws to consider imposing new tariffs on vehicle and auto-parts imports, the Commerce Department said Wednesday, according to the Wall Street Journal.

Trump is asking for new tariffs of as much as 25% on automobile imports and  has asked his team to investigate using a legal provision of the 1962 Trade Expansion Act to find whether tariffs or other restrictions are needed on imported cars, according to WSJ. It is the same legal justification the administration used to impose tariffs on steel and aluminum imports in March.

In a Twitter message on Wednesday, Trump said, “There will be big news coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough!”

But it won't be so good for American buyers of foreign cars and for those who buy products once made by those workers in America who will now be shifted to automobile manufacturing.

In other words, such a tariff will shrink the economy in ways easily seen and not so easily seen.


Should Foreign Language Requirements be Abolished in US Schools?

Alex Tabarrok posts this podcast exchange between Bryan Caplan and Robert Wilbin:
Bryan Caplan: In the U.S. I’ve heard so many times – I learned Latin and it really improved my score on the SAT because of all the Latin roots of the English vocabulary words. How about you learn some English vocabulary words, wouldn’t that be a little easier?
Robert Wiblin: I’m just… I’m pulling out my hair here.
Bryan Caplan: Well if you wanna pull out your hair a little bit more. Out of all my ultra moderate reforms that I suggested, the one that I stand behind more strongly than any other is abolishing foreign language requirements in the United States. Because there, we’ve got a bunch of facts, which are: hardly any jobs use foreign languages, it takes a lot of time to get any good. And furthermore, in this book I’m able to go and snap together a bunch of pieces of data to show that virtually zero Americans claim to… even claim to speak a foreign language very well in school.
So I say, look, even if it did have these big payoffs, the system is just a waste of time, and people spend years doing it for nothing. And even here, I just run against a brick wall and people say, well in that case we should just improve the teaching of the foreign language.
Well, how about you do that and then get back to me, but continuing to fund the thing that we have, this is garbage!
And again, Washington state from what I understand, now allows kids to use a computer language in place of foreign language. Like, why not do that? Then it’s like, “No, no we need to do both.” People don’t have an unlimited amount of time, and shouldn’t teenagers be able to have a frigging childhood! Like how much of their childhood do you want to destroy with jumping through these stupid hoops?

Caplan is correct here but there is an additional reason that it makes no sense to learn a second language for most English language speakers. English is the global language of business. Nearly every businessman doing international business is going to speak English. It is a waste of time to learn another language for most English speaking businessmen since most business counterparts will be able to converse in English. And further, what if you study French and end up doing business with Russians or Chinese?

And Engish is not only the commanding language when it comes to business, as I have pointed out previously, English is the international language of love.

-Robert Wenzel  

Wednesday, May 23, 2018

Canada's Debt Spiral Intensifies

By Lee Friday
Living beyond our means requires us to borrow money to cover the difference between our income and our spending. Many Canadians now understand the financial consequences of this practice and regret the choices they’ve made. Unfortunately, Prime Minister Trudeau is not one of them, as evidenced by his government’s budget deficits which are further eroding the financial wellbeing of Canadians. He has broken a

Is the United States Taking Unfair Advantage of Hong Kong?

A Don Boudreaux open letter to the President:
22 May 2018
Mr. Donald Trump
1600 Pennsylvania Ave., NW
Washington, DC 20500
Mr. Trump:
You and your trade triumvirate regularly insist that China’s trade surplus with the U.S. reveals that China is taking unfair advantage of America and thereby damaging our economy. So tell me, is America taking unfair advantage of Hong Kong, the Netherlands, Australia, the United Kingdom, Guatemala, and the several other countries with which the U.S. is now running trade surpluses? Are we Americans abusing the citizens of these countries and damaging their economies by selling more goods to each of them than each of them sells to us? (And do note that some of these trade surpluses that the U.S. has with other countries are larger, as a percentage of those countries’ GDPs, than is the Chinese trade surplus with America. As of March 2018, for example, the year-to-date U.S. trade surplus with the Netherlands is 0.81 percent of Dutch GDP, while China’s trade surplus with the U.S. over that same period is only 0.47 percent of U.S. GDP.)
Given your repeated demands that justice requires that Beijing take steps to reduce China’s trade surplus with America by arranging for us Americans to sell more to the people of China without the people of China selling more to us, will you and your administration take steps to reduce America’s trade surpluses with the U.K., and with the many other countries with which we have a trade surplus, by arranging for the citizens of those countries to sell more to us Americans without us Americans selling more to them?
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.

Are Cryptocurrency Schemes Really That Much Different Than the Currency Scheme Launched by the Father of Socialism?

The "Time Money" currency created by the father of socialism.

Robert J. Shiller with some interesting observations and history:
One must bear in mind that attempts to reinvent money have a long history...As the sociologist Viviana Zelizer points out in her book The Social Meaning of Money:..."everywhere we look people are constantly creating different kinds of money.” Many of these innovations generate real excitement, at least for a while...
New ideas for money seem to go with the territory of revolution, accompanied by a compelling, easily understood narrative. In 1827, Josiah Warner opened the “Cincinnati Time Store” that sold merchandise in units of hours of work, relying on “labor notes,” which resembled paper money. The new money was seen as a testament to the importance of working people, until he closed the store in 1830.
Two years later, Robert Owen, sometimes described as the father of socialism, attempted to

Star Harvard Economics Professor Under Investigation

Economics Professor Roland G. Fryer, Jr. is being investigated separately by Harvard and the state of Massachusetts and has been barred by University officials from setting foot in the research lab he heads, reports The Crimson.

The Harvard investigation—led by the University’s Office for Dispute Resolution, which investigates allegations of sexual and gender-based harassment—is based on at least one Title IX complaint filed with the office. Fryer is the subject of at least two Title IX complaints, reports the University newspaper.

One of the complaints specifically alleges

Stephen Hawking Was Not a Very Good Economist

A Don Boudreaux letter to reader Rhonda Foley, who has long worried about the effects on human employment and wages of artificial intelligence:
Ms. Foley:
Thanks for sharing the late Stephen Hawking’s 2016 Guardian essay in which he argued that “the rise of artificial intelligence is likely to extend this job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining.”
Mr. Hawking was a great physicist. He was not, alas, a great economist. And so to answer your question: No; Mr. Hawking’s essay does not cause me to worry that artificial intelligence will lead to ever-increasing joblessness.
Consider this: However impressive artificial intelligence might be, and however close science gets to creating machines that are as intelligent as human beings, each and every human being is an instance of real, authenticintelligence. With the birth of each baby, the world’s stock of real intelligence rises. Should we worry that this daily rise in real intelligence will heave most human beings into the ranks of the impoverished unemployed? It hasn’t yet. Why, therefore, worry that the rise of artificial intelligence will create a problem that the dramatic rise in real intelligence has yet to create? Note that during Mr. Hawking’s own 76 years of life the amount of real intelligence on earth increased by 280 percent, and yet the number of jobs – for workers of all skill levels, including the lowest – impressively increased during those years, as did average real wages.
We humans have from our time in caves found ingenious non-human means of doing work once done by humans. Thus far, such innovation has elevated – enormously – both our material and non-material standards of living. I see absolutely no reason to worry that the labor-saving innovations of today, even though they be called “artificial intelligence,” will lead to any less-happy outcome.
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