Rand Paul Condemns Budget Deal, Declares Tea Party Dead

Senator Rand Paul

Today, U.S. Senator Rand Paul (R-KY), chairman of the Federal Spending Oversight and Emergency Management Subcommittee, took to the U.S. Senate floor to condemn the big spenders’ latest budget-busting funding deal.

Federal Reserve Cuts Interest Rates

As expected, the Federal Reserve has announced that it has cut the key interest rates it controls by 25 basis points. It was the Fed’s first rate cut in more than a decade.

Specifically, it has cut the target rate for the Fed Funds rate to 2.0%-2.25%. The previous range was 2.25% to 2.50%.

This is a developing story. Return to this post for updates.

UPDATE 1

Even Paul Krugman Thinks Elizabeth Warren's Medicare For All Position is Insane

Elizabeth Warren

He tweets:

IT'S OUT: Socialism Sucks: Two Economists Drink Their Way Through the Unfree World

 The new Robert Lawson, Benjamin Powell book, Socialism Sucks: Two Economists Drink Their Way Through the Unfree World, is out.

From the blurb:

Two semi-sober economists have toured the socialist world so you don’t have to. And they’ve come back with this stunning report: Socialism Sucks!

Along the way, you’ll learn:

• Why the so-called Swedish model might be attractive, but sure isn’t socialism (Sweden is capitalism with a big welfare state)

• How socialist Venezuela went from being the toast of liberals everywhere—Viva Venezuela!—to being just toast

• Why you never see new cars in Cuba

• Why no one forgets to turn out the lights in North Korea (hint: there aren’t any)

• Why American socialists have no idea what socialism really is

From the book:

What a Sound Gold Standard Would Really Look Like

I continue to see economic commentators write that President Trump's likely nominee to the Federal Reserve Board of Governors, Judy Shelton, is in favor of the gold standard. This is incorrect. Her version of the gold standard is about as sound as Gideon Gono monetary policy.

To understand what a sound gold standard would look like, we need only turn to the 1978 Henry Hazlitt book, The Inflation Crisis and How to Resolve It:

This brings us to gold. It is the outstanding merit of gold as the monetary standard that it makes the supply and the purchasing power of the monetary unit independent of government, of office holders, of political parties, and of pressure groups. The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice.

This is not what Shelton wants.

Was Abraham Lincoln Really Into Karl Marx?

By Phillip W. Magness

Did Abraham Lincoln share a common economic vision with Karl Marx?

That’s the thesis of a recent article in the Washington Post, which claims that the 16th president and the socialist philosopher “were friendly and influenced each other.” According to an essay by Gillian Brockell, “Lincoln was regularly reading Karl Marx” and appears to have adapted a Marxist conceptualization of the labor-capital relationship to the discussion of slavery in his first annual message to Congress.

This is the Damn Nuttiest Take on Trade I Have Ever Seen (A Trump Take, Of Course)

China has lost 5 million jobs and two million manufacturing jobs due to the Trump Tariffs. Trumps got China back on its heels, and the United States is doing great. @AndyPuzder @MariaBartiromo

— Donald J. Trump (@realDonaldTrump) July 30, 2019

This is nothing to cheer. It is the shrinking of international trade which results in the lowering of the standard of living across the areas of the former trade and increases tensions between countries.

In the end, this comment reflects the lack of deep intellectual understanding by Trump and his bullying style.

I discussed the problems with Trump's perspective on trade two years ago in this video:

Mad Green Policy in Switzerland is Causing Those Suffering Dementia to Strip Naked in Swiss Hospitals

By Andrea Seaman

Climate change has recently made people suffer in Switzerland, with areas of Zurich reaching 45.2 degrees Celsius, and other parts of Switzerland 42.3 degrees. Some people have complained that they are struggling to work, while others have been reportedly close to collapsing in the heat. At the University Hospital Zurich, the 40-degree heat has made patients’ lives a misery, stopping many from sleeping despite there being given sedatives. Some patients with dementia reportedly stripped naked to cool down.

And yet the strange thing is that this summer the maximum outside temperature in Switzerland stands at 37 degrees Celsius, in a place called Sitten, which is on the other side of Switzerland to Zurich. So what’s going on?

US Government Borrowing on Steroids

Borrowing by the federal government is set to top $1 trillion for the second year in a row. And this is occurring during the boom phase of the business cycle!

The Treasury Department said Monday it

"I Don't Want Solutions That Make Sense"

-RW

Elizabeth Warren's Just Released Trade Policy Plan is a Prescription for Disaster

 Elizabeth Warren 

Democratic presidential candidate Elizabeth Warren is taking President Trump's wrongheaded mercantilist trade perspective to an exponentially wacky new level.

She just released a new plan revealing how she’d handle trade policy as president.

On the Historical Accuracy of the Hit Musical "Hamilton"

Jeff Hummel, professor of economics at San Jose State University, emails:

Earlier this month Lynda and I finally saw the musical “Hamilton.” At one level, I enjoyed it. It measured up to its rave reviews with respect to lyrics, music, singing, and performances.

Is This a Serious Study or a Spoof From the "The Onion"?

A Don Boudreaux open letter:

Mr. Michael Stumo, President

Coalition for a Prosperous America

Mr. Stumo:

Richard Rahn forwarded to me a recent study done by your organization – a study co-authored by Jeff Ferry and Steven Byers – purporting to find that a permanent, across-the-board tariff of 25 percent on all U.S. imports from China would, after five years, “result in a “$167 billion boost to GDP and 1.05 million additional jobs” (“Update: Across-the-Board Tariffs on China with Retaliation and Federal Spending Create Over 1 Million Jobs in Five Years”).

Quite honestly, after reading your study I had some trouble coming to the realization that it’s not a spoof by “The Onion.” Here are only some of the many flaws of your study, any one of which is fatal to its veracity.

New York Federal Reserve Comic Book Propaganda

Dan S. emails:

Hi Robert,

Long time subscriber here. I came across these federal reserve comics. Would be interesting to have you review them on EPJ.  Check link below.  Also, when is the next time you will be in Dallas?

Internet Archive Search: creator%3A%22Federal Reserve Bank of New York%22

RW response:

More Proof That Alexandria Ocasio-Cortez is Clueless as to What Happens When You Give Away Money

AOC thinking hard

On Monday, Equifax settled with the US Federal Trade Commission over its 2017 data breach, which affected 147 million Americans.

The settlement of up to $700 million includes as much as $425 million for individual compensation including $30 million for "Alternative Reimbursement Compensation."

So naturally, AOC sent out this absurd tweet:

Ten Things You Should Know About Socialism

This is great stuff from Tom DiLorenzo.

This is how you battle socialism, find the time to watch.





-RW

Trump Warns China May Delay Trade Agreement Until After US Election

Good for the Chinese.

President Trump is warning that China may not strike an agreement to end the more than year-long trade war between the two countries until after the US presidential election in November 2020.

IRS Sending Warning Letters to More Than 10,000 Cryptocurrency Holders

The Internal Revenue Service has begun sending letters to more than 10,000 cryptocurrency holders, warning about penalties for failing to report income and pay tax on transactions involving virtual currencies, reports The Wall Street Journal.

The agency expects its mailing to be completed by the end of August, according to The Journal. It is sending three variations of one letter, depending on the information it has about the recipient.

The $100 Bill Overtakes $1 Bill as the Largest Circulating US Currency

The $100 bill, the largest denomination actively printed banknote in the United States, has also become the most widely circulated currency unit.
The hundred, aka the privacy note, has overtaken the ubiquitous $1 bill in circulation volume, for the first time in history, according to the IMF.

The IMF’s Finance & Development magazine reports that there are more $100 bills circulating now than ever before, roughly doubling in volume since the global financial crisis.

Does New York Fed President John Williams Even Understand Basic Math?

John Williams

On Wednesday, I published an exchange I had with New York Federal Reserve President John Williams at the Strategies for Monetary Policy conference at the Hoover Institute that took place in May of this year (SEE: Wenzel Questions the New York Federal Reserve Bank President On Inflation Targeting).

I published the exchange without comment because I wanted it to stand on its own and I have a feeling it will be something I will want to reference in the future.

The Rise of Woke Capitalism

By William L. Anderson

In preparation for the inauguration of President Barack Obama, who recently had won re-election, Washington, DC, was festooned in flags, including the so-called Betsy Ross Flag, with 13 stripes and 13 white stars in a circle against a blue background. But that was sooo 2013, which was still an “unwoke” era by today’s “higher” standards.

The Nike Company recently planned to unveil a new sneaker in time for the July 4 holiday, a red, white, and blue air-shoe that had the image of the Betsy Ross Flag on the back. The company manufactured and shipped the shoes, but before their release date, suddenly Nike recalled all of them. Colin Kaepernick, the former quarterback for the San Francisco 49ers who became a counterculture star because he kneeled during the playing of the National Anthem before professional football games, is now on the Nike payroll, and he objected because the flag was created in 1776 — and slavery in the 13 Colonies at the time was legal. Thus, he argued, Nike would have been endorsing an era of slavery.

HEROIC: House Democrats Join Republicans to Repeal Obamacare’s ‘Cadillac tax’

By Robert Wenzel

Well, there is one thing to cheer about that the House of Representatives did right in the current 116th Congress.

House Democrats joined with Republicans to repeal the “Cadillac tax” on high-cost employer health insurance.

The Bernie Sanders Presidential Campaign Hit With Unfair Labor Practices Complaint

Bernie Sanders

Oh, this is good.

The socialist Bernie Sanders, who has never seen a government interventionist labor policy that he didn't like, is getting smacked over the head by the National Labor Relations Board.

Sanders’ 2020 presidential campaign has been hit with an unfair labor practice complaint alleging illegal employee interrogation and retaliation against staffers, reports Bloomberg Law.

Boris Johnson Names a (Former?) Randian as Chancellor of the Exchequer

Sajid Javid 

Boris Johnson's first big move as he settled in as the United Kingdom's  Prime Minister was to name Sajid Javid as chancellor of the Exchequer.

Javid, 49, has described himself as a “low-tax person.”

He studied Economics and Politics at the University of Exeter.

He has worked at Chase Manhattan Bank and then later Deutsche Bank.

He then moved on to politics where he was Home Secretary from 30 April 2018 to 24 July 2019.

He was Secretary of State for Housing, Communities and Local Government from 8 January 2018 to 29 April 2018, and Secretary of State for Communities and Local Government from July 2016 to January 2018.

Wenzel Questions the New York Federal Reserve Bank President On Inflation Targeting

John Williams 

I have just been informed that my questions to New York Federal Reserve President John Williams and his response will be published by Hoover Institution Press in a volume of the proceedings from this year’s Strategies for Monetary Policy conference which I attended and where I asked two questions of Williams. It will be in the volume under the section "Tying Down the Anchor: Monetary Policy Rules and the Lower Bound on Interest Rates." (To be published in 2020).

Here is the exchange:

If Trump Puts Tariffs on Guatemala Over Migration Will It Backfire in His Face?

In a couple of tweets, President Trump said yesterday that Guatemala could face new U.S. tariffs or remittance fees after declining to sign an agreement to force some U.S. asylum seekers to first seek protection in Guatemala.

Bernie Sanders Runs Into Socialist Reality

By Marc A. Thiessen

Sen. Bernie Sanders (I-Vt.) proudly announced this year that his presidential campaign would be the first in history to have a unionized workforce. Well, he just became the first presidential candidate in history to face a labor revolt from his unionized workforce.

According to The Post, the Sanders campaign workers union, United Food & Commercial Workers Local 400, complained that field organizers are “making poverty wages” and that “many field staffers are barely managing to survive financially.” Because field organizers are working 60 hours a week, according to the union, their annual salary of $36,000 works out to $13 an hour — well below the $15-an-hour federal minimum wage Sanders has called for.

It gets worse.

Trump Fed Pick Judy Shelton Calls for 50-Basis-Point Cut to Interest Rates in July

Judy Shelton

Judy Shelton, President Trump’s intended nominee to fill an open seat on the Federal Reserve Board, is calling for a large interest-rate cut at the Fed’s July meeting, reports Heather Long at The Washington Post.

When asked whether she would support reducing interest rates by half a percentage point in July, Shelton said she would and indicated she would have voted for that size of a cut in June had she been on the Fed board, according to Long.

Rep. Rashida Tlaib Calls for $20-an-Hour Minimum Wage

Rashida Tlaib

Rep. Rashida Tlaib, D-Mich., called for a federal minimum wage of $20 per hour at an event in Detroit on Sunday night, reports Fox News.

Tlaib strikes me as the intellectual lightweight of The Squad. They are all shaky but she must put extra effort into it.

This is how she justified the $20  minimum wage:

Committee for a Responsible Federal Budget: New budget “may end up being the worst budget agreement in our nation’s history”

By Robert Wenzel

Congressional and White House negotiators have reached a budget deal. Crony America is celebrating.

The deal announced Monday evening would increase spending caps by $320 billion relative to the limits prescribed in the 2011 Budget Control Act.

It also would suspend the debt ceiling and permit more government borrowing until July 31, 2021 -- after the next presidential election.

Tulsi Gabbard Co-Sponsors Audit the Fed Bill

Tuilsi Gabbard

Representative Tom Massie during an interview in Las Vegas with Luke Rudkowski told him that Democratic presidential candidate Tulsi Gabbard has signed on as a co-sponsor of the Audit the Fed bill, officially known as H.R.24 The Federal Reserve Transparency Act of 2019.

While I am sympathetic to the underlying effort of Massie and Gabbard to expose the Federal Reserve with this bill, I personally see it as strategically dangerous.

CNN Goes Hardcore Promotion of Socialism; The Right Goes Anti-Free Market

By Robert Wenzel

It has finally happened, CNN this Sunday promoted all-out socialism, the US-based socialist magazine, Jacobin, and its founder Bhaskar Sunkara.

CNN's Brian Stetler on his show, "Reliable Sources," under the guise of examining the frequent (correct) Fox News claims that the Democratic Party was socialist-leaning, brought Sunkara on the show.

But instead of proving Fox News wrong, that the Democratic Party is socialist-leaning, Stetler spent most of the segment getting Sunkara to state that there was nothing wrong with the socialist-leaning programs advocated by the Democrats such as universal healthcare, government-financed education, government-financed childcare, and government-subsidized housing.

Rent Control in New York City: The Coprolite Hits the Fan

Stuyvesant Town

The below report reminds me of a friend who had moved to rent-controlled Boston from no rent-control Dallas.

After leasing an apartment on Commonwealth Avenue in the city and with keys in hand she was ready to move in but called the landlord first and asked, "When are you going to put a fresh coat of paint on the walls?"

She quickly learned that what always occurred before moving into an apartment in Dallas never happened under rent-control in Boston.

The David Stockman Warning: 'We're Going to Have 80 Million People Retire Within a Decade'

This is David Stockman at his best, explaining how  and why things are going to get very bad:






-RW

Does Alexandria Ocasio-Cortez Even Know What Socialism Is?

On Twitter, Alexandria Ocasio-Cortez (now with nearly 5 million followers) has this pinned to the top of her page:

House Passes Bill That Would Create More Unemployed Black Teenagers

UPDATE BELOW: Thomas Sowell on black teenagers and the minimum wage.

The House passed a bill today to hike the federal minimum wage to $15 per hour.

The Democratic-controlled House passed the plan in a 231-199 vote. Six Democrats opposed it, while three Republicans supported it.

The measure would gradually hike the U.S. pay floor to $15 by 2025, then index further hikes to median wage growth.

BREAKING: Seizure of British Tanker by Iran

This is a developing story. Return to this post for updates.

UPDATE 1

Filed For Future Reference

....Fed: There is almost no inflation!

— Donald J. Trump (@realDonaldTrump) July 19, 2019

-RW

Bernie Sanders: Minimum Wage Hypocrite

Bernie Sanders

Wherein Bernie discovers the concept of anti-central planning competitive market wage rates.

The Washington Post's Matea Gold reports:

"For years, Bernie Sanders has traveled the country advocating for a $15 per hour minimum wage. His campaign organizers say they aren’t making that much, and they're using his words to protest for higher wages."

Bernie is apparently, lol, justifying the below $15 per hour rate that he is paying by stating he is meeting market competition.

From the Post:

Are the Boeing 737 Max Crashes a Case of Market Failure?

Boeing Max 737

Kevin emails:

Hi Bob,

Regarding the Boeing 737 Max crashes, if I have my facts correct, there were 2 crashes (one in October 2018 that killed 189 people in Indonesia and another in March 2019 that killed 157 people in Ethiopia) that killed 346 people in total before the plane was officially grounded.  According to the article below, "Boeing cut corners to save money".  

My question is, wouldn't "free market capitalism theory" (not sure what the correct terminology is) tell us that Boeing wouldn't want to risk its reputation (as it would affect the company's bottom line) and, therefore, would only produce products that it believed were safe to its customers?

RAND PAUL IS HOT: Blasts Jon Stewart; "Really Isn't Using His Brain"

Senator Rand Paul

I have never seen Rand Paul so hot.

He is boiling.

In an interview this afternoon on Fox News’ Your World with Neil Cavuto, Rand blasted the dishonest claims being made regarding his efforts to have a debate in Congress over spending and paying for legislation.

Rand specifically called out Jon Stewart:

Iran Says It Has Seized Foreign Oil Tanker in Persian Gulf

Iranian state TV says Revolutionary Guards forces have seized a foreign tanker with 12 crew accused of smuggling oil.

Thursday’s report says the tanker was taking fuel from Iranian smugglers to foreign customers and was intercepted south of Iran’s Larak Island in the Strait of Hormuz.

This is a developing story. Return to this post for updates.


UPDATE 1

NYC Apartment Building Sales Crashing Because of New Anti-Free Market Rent Regulations

The 1970s Bronx

Are we about to see a recurrence of crushing rent regulations that once resulted in the abandonment of many multi-family apartment buildings in parts of New York City and the collapse in the upkeep of most other New York City multi-family rental apartments in the 1970s and early 1980s?

Has Treasury Secretary Mnuchin Formed a Working Group To Takedown Bitcoin and Other Cryptocurrencies?

Treasury Secretary Mnuchin

UPDATE BELOW: Attacks escalate

By Robert Wenzel

US Treasury Secretary Steve Munchin held a press conference at the White House on Monday to discuss cryptocurrencies.

It was not a press conference designed to comfort those using any cryptocurrencies in a manner that hides user identities.

"We will not allow digital asset service providers to operate in the shadows," he said.

Mnuchin stated that billions of dollars worth of bitcoin are being used in illicit ways. He specifically cited:

Alexandria Ocasio-Cortez Becomes a Rothbardian For an All Too Brief Minute

Alexandria Ocasio-Cortez

Martin Sandbu at the Financial Times sets the scene:

Incongruous does not even begin to capture the sudden outbreak of harmony between President Donald Trump’s economic policy adviser and a star of the Democratic party’s left wing.

Walter Block on Defending the Word "Capitalism"

Dr. Walter Block

As a follow-up to my post, Reisman vs. Bylund: Should We Continue to Use the Word 'Capitalism'?, Dr. Walter Block emails:

Reisman vs. Bylund: Should We Continue to Use the Word 'Capitalism'?

This exchange recently took place on Twitter:

Koch Executive Temporarily Banned From Leaving China

In early June, a Chinese-American executive at Koch Industries was told he could not leave the immediate vicinity of his hotel in southern China, reports The New York Times.

According to The Times,  he was then interrogated for multiple days, with the discussion hitting on the trade war and souring relations between the United States and China.

More:

Paul Krugman's Asinine Take On Supporters of the Gold Standard

Paul Krugman

Paul Krugman has outdone himself.

He specializes in writing columns for The New York Times that don't pass the logic test but his July 13, 2019 column puts him at an entirely new level that makes him appear like the Sentinelese when they fired arrows at a helicopter.

He writes of those supporting the gold standard:

Yemeni Government Warns of a Looming Huge Oil Spill into the Red Sea; Maritime Routes Threatened

Hmm,

For the record.

Yemeni Government warns of a looming Huge Oil Spill into the Red Sea due to Houthis’ obstruction to maintenance works of crude oil tanker carrying more than a million barrel of crude oil. pic.twitter.com/Aiz1qwNeFH

— رئاسة مجلس الوزراء اليمني (@Yemen_PM) July 13, 2019

-RW

Murray Sabrin Banned From Tea Party Group For Bashing Trump's Desire For an Aggressive Money Printing Fed

Murray Sabrin

Murray Sabrin emails:

They can't handle the truth.

After I posted my published letter today on FB the admin for a North Jersey Tea Party group wrote:

"So your article Murray is about 'The Gold Standard' which is fantastic but you could not help yourself from throwing a knife at Trump. I may leave this up for a few mins but eventually today, your gone from this group. You’ve been warned many times about Trump bashing on this page. Go join a democrat page where you’ll find synergy. "
- Admin

See my letter below.  The non-thinking Trumpsters don't get it.  The Fed is goosing the economy, which is what both Democratic and Republican presidents want in an election year.  Trump is god to these people.

Serving Humanity in the Name of Greed

Some excellent observations here by Walter Williams.



-RW

AOC's Chief-of-Staff Admits That the Green New Deal is Really a Plan to Turn the US Economy Socialist

 Saikat Chakrabarti

By Robert Wenzel

I have already warned about Alexandria Ocasio-Cortez's chief-of-staff, Saikat Chakrabarti (SEE: The Brains Behind Alexandria Ocasio-Cortez).

In February, I wrote about him:

 He graduated from Harvard's John A. Paulson School of Engineering and Applied Sciences.

Government Spending is Out of Control

 The federal government spent a record $3.4 trillion in the first nine months of fiscal 2019 (October through June), according to the Monthly Treasury Statement released Thursday.

Prior to this fiscal year, the most the federal government had ever spent in the October-through-June period was last year, fiscal 2018, when the Treasury spent $3.2 trillion.

Before last year, the most the federal government had ever spent in the first nine months of the fiscal year was in fiscal 2009, when it also spent $3.2 trillion.

This is not how you drain a swamp. This is feeding the alligators the limbs and torsos of the average American.

-RW

Harvard Suspends Economist For Two Years Without Pay

Roland G. Fryer

They got him.

Harvard University suspended economist Roland G. Fryer for two years without pay and will close Education Innovation Laboratory, his off-campus research facility, reports The New York Times.

Frye has been the subject of several concurrent university investigations, which concluded that

Trump's Signals He May Start Going After Bitcoin

The below seemingly came out of the blue, but really not surprising.

Trump's controls do not want paper currency competition.

The regulations are coming.