What If the New York Times Played a Major Role in Promoting Structural Racism?

By William L. Anderson

The New York Times has created a huge stir with its 1619 Project , which claims that the real founding of the United States was not the American Revolution, but rather slavery and racism. One might mistake the concept as one that said America’s political founders did not hold enlightened racial views, but still helped to create a country with the kind of ideals that finally led to the end of slavery and even undercut racism itself. After all, during the Civil Rights Era, Martin Luther King, Jr., himself appealed to founding documents such as the Declaration of Independence and the Bill of Rights in urging Americans to “live up to the ideals” of the nation.

This is What Bernie Sanders and AOC-Type Thinking is Doing To New York City

Bernie Sanders and Alexandria Ocasio-Cortez 

This shouldn't come as a surprise to anyone who understands basic economics.

New Report: 40 States Do Not Have Enough Money to Pay All Their Bills

Truth in Accounting has just published the Financial State of the States report, a regional analysis of the most recent state government financial data.

It is one of the most comprehensive studies of the economic conditions of all 50 states and includes the most up-to-date state finance and pension data, trends across the states, and key findings.

The study found that 40 states do not have enough money to pay all of their bills without more borrowing. In total the states have racked up $1.5 trillion in unfunded state debt.

New Jersey, Illinois and Connecticut are in the worst shape.

Here are the rankings (from less indebted to most indebted): 

Thomas DiLorenzo on Socialism and Fascism

-RW

Pope Francis Openly Challenged My Views on Economics

Pope Francis 

By Gary North

Pope Francis was in Mozambique earlier this month. He was talking with Jesuit priests on September 5. What he said was published on September 26. This is my response.

The Pope was in Africa to promote his view of theology: liberation theology. It argues for wealth redistribution by the state.

500 Scientists: “There Is No Climate Emergency”

More than 500 scientists and professionals in related fields sent the Secretary-General of the United Nations an urgent message: “there’s no climate emergency.”

“There is no statistical evidence that global warming is intensifying hurricanes, floods, droughts and suchlike natural disasters, or making them more frequent,” the European Climate Declaration stated. “However, CO2-mitigation measures are as damaging as they are costly. For instance, wind turbines kill birds and bats, and palm-oil plantations destroy the biodiversity of the rainforests.”

The Numbers: Under Elizabeth Warren's Wealth Tax, Jeff Bezos Would End Up Paying $86.8 Billion, Mark Zuckerberg $44.2 Billion, Bill Gates $36.4 Billion

This is positively evil and destructive.

It is a direct attack on capital accumulation which is at the heart of a climbing standard of living.

Source: @gabriel_zucman

-RW

Block-Wenzel Debate

I have put a notice up at Target Liberty on the debate I am having against Walter Block on Saturday in San Francisco.

In case some of you have missed it, the details are here:

Alexandria Ocasio-Cortez Rolls Out More Socialist Madness

Alexandria Ocasio-Cortez

This socialist congresswoman is extremely shrewd and knows how to frame issues in a way that nudges the country to more and more government interventionism.

Biden Considering Placing a Soros Tax on Wall Street

Advisers to presidential candidate Joe Biden are weighing the introduction of a new tax on Wall Street, reports The Washington Post.

The plan under consideration from Biden’s advisers would tax financial transactions such as the sale of stocks and bonds. Such a tax is often referred to as a "Tobin tax."

Taking on Bitcoin Supporters

Bitcoin has broken below $8,000, a drop of more than $1,500 since the start of the week.

Over the last three days, starting with bitcoin still above $9,500, I wrote in the EPJ Daily Alert:

A few weeks back an ALERT reader asked whether Bitcoin could be used as a hedge against inflation the way I am using gold, gold stocks and gold ETFs. I played down the idea based on the regulatory climate. Gold is simply a much purer inflation play than Bitcoin.

Now, I am beginning to see even greater deterioration in the technicals surrounding Bitcoin. I imagine that most ALERT readers are not holding any Bitcoin but if some of you are you may want to consider liquidating now.

After I wrote that I was challenged and had to go in for the heavy smash.

This is what one ALERT subscriber said about the smash:

Looks Like Trump is About to Declare "Victory" in His Trade War With China

In New York City at the United States Mission to the United Nations, President Trump on Wednesday told reporters that China wants to make a trade deal.

He said a deal with China could happen “sooner than you think.”

When Noam Chomsky Thanked F. A. Hayek

According to @TakingHayekSerioulsy, the paper was F.A. Hayek's paper, "Three Sources of Human Values."

-RW

Please Stop With The Claim That Unilateral Free Trade is a Problem If Foreign Governments Impose Tariffs

A Don Boudreaux letter to someone who takes “a scientific and non-ideological approach to public policy issues.”

Mr. Park:

Thanks for your e-mail.

I am indeed aware that foreign-government tariffs on American exports can “block American companies’ access to economies of scale.” But I disagree that this reality “makes a strong case against unilateral free trade.”

POLL: Democrats Turn Against Capitalism

In 2016, Democrats were about as favorable toward capitalism (58%) as socialism (56%). But after President Donald Trump took office, Democrats became more favorable toward socialism. Today, 64% of Democrats have favorable opinions of socialism and 45% are favorable to capitalism, according to a new Cato 2019 Welfare, Work,  Wealth Survey Report.

Fully 50% of Democrats say that President Donald Trump has made them “like capitalism less,” while 44% say he has had no impact on their perceptions.

My Life as an Austrian Economist and a Classical Liberal

Richard Ebeling

By Richard M. Ebeling
I suppose I can date my interest in both classical liberalism and Austrian economics to the day I was born. The doctor grabbed me by my little feet, turned me upside down and spanked my tiny bottom. 

I began to cry out. That is when I realized the fundamental “Austrian” axiom that “man acts.” In addition, I appreciated that what the doctor had done was in violation of the “non-aggression” principle. 

The rest is history. Well… maybe not quite. 

An Inquiring Young Mind Discovers Ayn Rand

For some reason, I had found history and current events interesting when I was in my early and middle teens in the 1960s. I had a part-time job at the Hollywood Public Library in Los Angeles when I was in high school. Part of my responsibilities was to maintain the magazine collections on a balcony in the building. I would finish my work, and hide up in the balcony reading new and old political and news publications. 

But I soon was confused. When I read “progressive” publications like the Nation or the New Republic, they always seemed to have the moral high ground, making the case for “social justice,” “fairness,” and morality. On the other hand, when I read conservative publications like Human Events or National Review the argument was made that all that “bleeding heart” stuff just did not work. There was a “bottom line”: it cost too much and screwed things up, and socialism and communism seemed to kill a lot of people. 

When I was about 17, and living in Hollywood, I met two men who

Now Bernie Sanders Proposes a Vicious Wealth Tax; Would Destroy Billionaire Wealth Over 15 Years

Bernie Sanders this morning unveiled a proposal to create a new tax on the wealth of the richest Americans, including a steep tax on billionaires that could greatly diminish their fortunes, reports The New York Times.

Notes NYT:

The Truth Behind the Collapse of the Venezuelan Economy

In just one generation, Venezuela has gone from being the 20th richest country in the world to 2nd to last, just above North Korea.

Jorge Jraissati explains why:



-RW

Sheldon Adelson Has Warned Trump About U.S.-China Trade War

Sheldon Adelson

Well, the billionaire casino magnate Sheldon Adelson has actually done something valuable, for a change, with his strong influence over President Trump.

Trump’s sudden escalation of the trade war with China last month triggered a telephone call from Adelson, who warned the president about the conflict’s impact on the U.S. economy and Trump’s re-election prospects, according to people familiar with the call, reports The Wall Street Journal.

The Washington Post Slams Bernie Sanders and Rent Control

This is the most promising editorial I believe I have ever seen from a powerful mainstream newspaper.

The Current State of Lefty Destruction of the San Francisco Economy

By Robert Wenzel

The number of attacks on the business sector in San Francisco, from capitalist-haters, progress-haters, change-haters and various other lefties, is just stunning.

These people just can't leave the private sector alone.

Every issue of the San Francisco Business Times is filled with story after story of businessmen battling ever more aggressive anti-free market laws and regulations.

The below stories all come from just one issue of SFBT, the September 20, 2019 issue.

A Comment from the GSIBer World on Excess Reserves

Kevin B. emails:

Bob,

Your article published today("The Absurd Fear Mongering Begins: 'One or more big financial companies have run out of cash to pay bills they owe.'") was excellent.  The analysis outlined is significantly better than the information being exchanged in the financial press, and it provides details into the world of excess reserves that is typically ignored.

I have spent the majority of my career working for GSIBs, and I found your analysis to be informative, direct and spot on.  Bravo.

Kevin

The Absurd Fear Mongering Begins: "One or more big financial companies have run out of cash to pay bills they owe."

Federal Reserve Bank

Update below.

By Robert Wenzel

A very technical thing is going on in the very technical overnight financial markets.

In response to the activity, I am seeing comments like these:

One or more big financial companies have run out of cash to pay bills they owe.

Walter Block in 'The Wall Street Journal' on Canadian Cruelty

U.S. Largess vs. Canadian Cruelty
By Walter E. Block

Canada doesn’t always live up to its reputation as kinder and gentler than the U.S. Consider the victims of Hurricane Dorian, which pulverized eastern North Carolina as well as the provinces of Nova Scotia and Prince Edward Island.

Billionaire Investor: If Elizabeth Warren Gets Elected the Stock Market Will Drop By 25%

Leon Cooperman 

The billionaire investor Leon Cooperman joked at the Delivering Alpha conference in New York this week that "They won’t open the stock market if Elizabeth Warren is the next president."

Then he got serious.

Why Are Overnight Interest Rates Out of Control?

As I have detailed, overnight rates such as overnight repo rates and even the Fed funds rate have been exploding to the upside.

The rates on overnight general collateral repos over the last couple of days have exploded to as high as 10%.   This is "not supposed to happen" with so much banker money sitting on the sidelines at the Federal Reserve as excess reserves and earning, as of today, only 1.8% and just before that 2.1%.

Why aren't bankers putting the money to work in the Fed funds market and the repo market?

This is How I Would Approach the Housing Affordability and Homelessness Issues in California

By Adam Summers 

I am honored to have been invited to join a group of policy experts in the SoCal Policy Forum, a project of the Southern California News Group—which consists of 11 Southern California newspapers, including the Orange County Register, (Riverside) Press-Enterprise, Los Angeles Daily News, (Torrance) Daily Breeze, and Long Beach Press-Telegram—and the University of California, Riverside. The experts, who have a diverse set of viewpoints and backgrounds, are asked on a quarterly basis to briefly weigh in on issues of the day, and their responses are published on the project’s website. Other project contributions include full-length columns in the newspapers and community forums with the experts and state and local stakeholders.

The SoCal Policy Forum recently kicked off with its first set of issues, tackling housing affordability and homelessness. My responses are available at the project’s site, but I am copying them below since it is easier to see them all in one place, since the site organizes the experts’ responses randomly for each question, rather than by author.

Question 1: From your perspective, how are the problems of housing affordability and homelessness linked, and how are they different?

FED PANIC? Another Special Money PumpTomorrow Morning by the Federal Reserve

This is a bit technical but over the last couple of days overnight interest rates have been soaring. I mean really soaring.

I ran the below chart in the EPJ Daily Alert yesterday. It shows the change in rates on a day to day basis over the last 10 years. That spike in the far right corner is what has been occurring over the last couple of days.

Trump Orders Substantial Increase in Sanctions Against Iran

President Trump tweeted this morning that he has ordered Treasury Secretary Mnuchin to increase sanctions on Iran, apparently as one step in retaliation against the country for allegedly attacking Saudi Arabian oil facilities:

A President Elizabeth Warren Would Be An Even Greater Calamity For the Economy Than Would a President Bernie Sanders.

Elizabeth Warren

By Max Gulker

In a Democratic primary field that looks like the cast of a Christopher Guest ensemble mockumentary, three candidates have established an early lead — Joe Biden, Bernie Sanders, and Elizabeth Warren. Sanders and Warren represent very distinct visions of the party’s left flank, but not in the way many assume.

Odds the Federal Reserve Will Cut Rates This Week is Collapsing

A week ago, based on trading in the Fed Funds futures market,  Fed Funds traders put the odds of a rate cut by the Federal Reserve this week at 94.6%.

Locked And Loaded In Behalf Of Empire First

By David Stockman.

American democracy and capitalist prosperity are dying on the vine of Empire. And this weekend's drone attack on the largest oil processing facility on the planet is a graphic case of why. So is the related picture below.

Keynesian and "Austrian" Speculation on the Nature of Recessions

Keynesian economist Nouriel Roubini writes at Project Syndicate:

Unlike the 2008 global financial crisis, which was mostly a large negative aggregate demand shock, the next recession is likely to be caused by permanent negative supply shocks from the Sino-American trade and technology war. And trying to undo the damage through never-ending monetary and fiscal stimulus will not be an option.

This, of course, is a type of Keynesian take on how a recession might occur.

It is an analysis almost as bad as some new "Austrian" commentary I am seeing that claims a recession could be started because of a downturn in one industry.

Oil Price Jumps the Most Ever After Attack Cuts Saudi Supplies

Brent crude has surged the most on record as markets opened for the first time since a drone strike on Saudi Arabian oil facilities removed about 5% of global supplies.

Why the Stock Market Went Up On Trump's Tariff Delay

As I have detailed in the EPJ Daily Alert, there are many reasons for the stock market to be climbing at the present time. One of the secondary reasons that the stock market went up last week is because of news on the tariff front.

Last week, the economically ignorant President Trump did something positive when he said he would be delaying a 5% tariff hike on $250 billion in Chinese goods by two weeks as a “gesture of goodwill” as negotiations between the two nations continue.

The Cleverness of an Entrepreneur Seeking Capital

As Israel Kirzner has explained, part of the skill set of an entrepreneur is to know where to find the money to launch an entrepreneurial project.

Johnson Products Co., a company that provided hair-straightening potions for blacks, was founded on $250 and eventually for a period was the biggest supplier of hair-care products for the African-American market, according to The Wall Street Journal.

As the afro became popular in the 1960s, the company launched Afro Sheen, which ended up being an even bigger hit than the straightener.

Saudi Oil Output Cut in Half After Drones Strike

Multiple updates including video below.

Saudi Arabia’s oil production was cut by half after a swarm of explosive drones struck at the heart of the kingdom’s oil industry, setting the world’s biggest crude-processing plant ablaze, reports Bloomberg.

Saudi Aramco has had to cut production by as much as 5 million barrels a day, roughly half their daily production, after the attack on the Abqaiq plant, according to reports.

Austrian School Hate at the Hoover Institution

I have already pointed out that Jennifer Burns, associate professor in the Department of History at Stanford University, had a skewed view of Murray Rothbard as a racist. But there is no indication that she is going to advance the theme in any of her writing.

The Recent Revival of Evil Rent Control

By Ryan Bourne

California has approved a statewide annual rent increase cap of 5 percent plus inflation for rentable accommodation in buildings more than 15 years old. Though technically an “anti-gouging” measure (it expires after 10 years), most would recognize this price cap for what it is: rent control.

Economists should be baffled about rent control’s recent revival. Controlling rental prices is one of those rare policies that practitioners of the dismal science overwhelmingly oppose. It’s even more troubling that it has been introduced in California. Recent academic evidence suggests that a 1994 San Francisco ballot initiative to introduce rent control for small multifamily housing built before 1980 actually led to:

Budget Deficit Climbs to Over $1 Trillion

This is a pure disaster.

The US budget deficit widened to $1.067 trillion for the first 11 months of the fiscal year, an increase of 19% over this time last year, reports the Treasury Department.

The government last saw this large of a fiscal deficit in 2012, when the gap was nearly $1.1 trillion.

Socialist Economist Piketty Says Billionaires Should Be Taxed Out of Existence

French socialist economist Thomas Piketty, whose 2013 book on inequality, “Capital in the 21st Century,” became a global bestseller, has just published a 1,200-page follow-up book called “Capital and Ideology.”

It won’t be published in English until March. But in an interview with the French magazine L’Obs, Piketty called for a graduated wealth tax of 5% on those worth 2 million euros or more and up to 90% on those worth more than 2 billion euros.

Krugman Catches Trump's Embarrassing Confusion About US Government Debt

Paul Krugman has this right:

In addition to demanding that the Fed cut interest rates below zero, Trump declared that “we should then start to refinance our debt,” because “the USA should always be paying the lowest rate.” Observers were left scratching their heads, wondering what he was talking about.

Bread Prices Soar 39% Overnight in Zimbabwe

Do you want to bet that the Zimbabwe central bank money printers have been working overtime?

Zimbabwean baking companies increased the price of bread by 39%, reports Bloomberg.

Gold Price Hits Record High in Terms of the Euro

The European Central Bank, earlier today, announced its biggest package of rate cuts and economic stimulus in three years.

This Is The Damn Scariest Thing I Have Heard Alexandria Ocasio-Cortez Ever Say

Alexandria Ocasio-Cortez

...she is calling, with passion, for universal rent control.

Notes Ben Steil:

Look at the conviction in her eyes, her entire body, as she tells us that "universal rent control" will fix a housing shortage.

More on Crashing Life Expectancy in the US

As a follow up to my post, Crashing Life Expectancy in the United States, Michael G. emails:

Bob –  When you write below that this is a result of the socialization of medicine you leave yourself open to the counterpoint that Europe has socialized medicine and is not experiencing this drop off in life expectancy.  In my view the largest reason for this is due to the American diet and resulting obesity levels.  The US has an obesity problem that far outstrips other first world nations.  The carb rich and erroneously dangerous USDA food pyramid is the primary culprit.  Worse, our medical community resorts to drugs to treat this epidemic (largely in the form of diabetes, high blood pressure and other cardiovascular drugs).

The ”socialization of medicine”, while a big problem in and of itself and the primary cause in rising healthcare costs, it is difficult to make that argument when other socialized medicine countries are not seeing the same reduction in life expectancy.

RW response:

Crashing Life Expectancy in the United States

Reminder: In 1980, life expectancy was the same in the US, UK, Germany, and France.

Now it's 3-4 years lower in the US.

And it is falling.

That's in a country that spends almost twice as much on health care than every other nation. pic.twitter.com/9ppnkvAo2p

— Gabriel Zucman (@gabriel_zucman) September 9, 2019

Who would have expected it?

Why Movie Theater Popcorn is So Outrageously Expensive

By Zachary Crockett

In March of 2012, Justin Thompson, a 20-year-old security technician from Livonia, Michigan, decided to go to the movies.

Inside, he encountered an atrocity we’re all familiar with: the movie theater concessions stand, with its $8 popcorn, $6 sodas, $5 candy bars.

New Hayek Material

F. A. Hayek

The Hoover Institution has announced that new digital materials from the papers of Nobel Prize winning economist and social philosopher, Friedrich A. von Hayek, are now available to researchers for the first time.

Digital archivists recovered files created by Hayek’s longtime secretary, Charlotte Cubitt, from 39 3.5 inch floppy disks.

Fighting the Minimum Wage: McDonald’s Makes a Move to Automate the Drive-Thru

McDonald’s has announced that it has agreed to acquire Apprente, a company that is trying to automate the drive-thru. It’s the fast-food giant’s third tech-focused deal this year, reports CNBC.

Why Did Gold Drop in Price in 2008?

Seth M emails:

Hi Robert, 

 I've been following SLV and GDX because, like you, I think that prices should increase in tandem with increases in money supply/inflation.

Gold and silver dropped with the market as the fed cut rates aggressively in 2008. I think the increases in money supply/inflation support a bull thesis for SLV and GDX, but I'm trying to reconcile that thesis with what happened in 2008. Are there any particular reasons why you think it's different this time?

Thank you,
Seth

RW response:

Russia’s Huge Gold Stash Is Now Worth More Than $100 Billion But What is the Deal With US Government Gold Holdings?

Russia has quadrupled its gold reserves in the past decade as it diversified away from U.S. assets, reports Bloomberg.