Angst Over High Price-Earnings Levels Likely Misplaced

– January 8, 2021

“Despite the severe disruptions and ‘creative destruction’ that occur from time to time, the returns to capital that fuel innovation and prosperity remain strong. The market is always efficient and fairly priced relative to what is known, but the market can also be above or below its long-term enduring norms for good and rational reasons. In the end the historical norms prevail.” ~ Gregory van Kipnis

READ MORE

Dry Tinder at the Fed

– January 7, 2021

“A more significant stash of dry tinder lurks in the Federal Reserve computers (hat tip: Cathie Wood). I refer to the reserves that commercial banks hold in their accounts at the Fed. At one time, they were required to hold balances equal to 10% of their demand deposit liabilities and were free to hold more—excess reserves. As banks chose to hold reserves far in excess of requirements, the Fed removed the nonbinding requirement. Bank reserves have risen above $3 trillion, nearly double the year-ago level.” ~ Warren Gibson

READ MORE

Carl Menger and the Sesquicentennial Founding of the Austrian School

– January 5, 2021

“Carl Menger remains a towering figure, not only for the development of his variation on the ‘marginalist’ theme, but for originating a still unique and distinct and highly relevant approach to economic and social analysis that still rightly bears the name, the ‘Austrian School.'” ~ Richard M. Ebeling

READ MORE

China Was More Dangerous When It Was Poor

– January 4, 2021

“In an economic sense, similarities between the U.S. and China are greater than some want to believe. Thank goodness they are. Unlike when China was poor, nowadays its people have a rooting interest in our success. And our people benefit from their success.” ~ John Tamny

READ MORE

Freedom versus Paternalism in the Coming Decade

– January 3, 2021

“There appears to be a groundswell of economic ignorance and stupidity facing us, and even more than usual. What this means for friends of freedom and practitioners of sound, free market economics, however, is a need to redouble our efforts, and not wallow in despair and disappointment. Bad policies inescapably bring about undesirable and counterproductive effects. But their very failures can serve as openings to more reasonable and rational policies looking to the future.” ~ Richard M. Ebeling

READ MORE

Here’s Why We Tolerate Fake Check Scams

– January 2, 2021

“Solving the problem of job scam checks isn’t as easy as one might think. Changes to a tightly-wound system like the check system involve tradeoffs. You don’t get something for nothing.” ~ J.P. Koning

READ MORE

Ten Remarkable Financial Events of 2020

– January 1, 2021

“A year like 2020 educates another generation of traders and corporate managers, contributes to more robust market and exchange designs, and draws in innovators and risk-takers seeking to capitalize on the next crisis opportunity. Whatever 2021 has in store, it is unlikely to replicate financial market conditions witnessed throughout 2020.” ~ Peter C. Earle

READ MORE

When I Knew More Than Hayek

– December 31, 2020

“The main problem with central planning is that a great many dispersed individuals have local knowledge that cannot be collected and processed even by the most noble, intelligent, and hard-working planner. Progress against Covid-19 requires respecting the message of Hayek’s paper, by heeding the local knowledge of doctors fighting Covid-19 in their clinics and hospitals.” ~ Arthur M. Diamond, Jr.

READ MORE

Feelings Over Facts Is Dangerous to Human Liberty

– December 31, 2020

“If we redefine “harm” to mean whatever we want it to mean, we can rule over others. If your speech causes me discomfort, that’s harm. If your clothes offend me, that’s harm. If your moral or political opinions are different from mine, you’re harming both me and everyone else that I am angelically trying to help. If you’re objecting to my spending of the public money, you’re harming the people I say I intended to help.” ~ Joakim Book

READ MORE

What Will The Stimulus Stimulate?

– December 31, 2020

“We shouldn’t be surprised that what ultimately emerged was a dog’s breakfast of giveaways for special interests. That’s the nature of the political beast. As we continue to cede power to enormous rent-creating operations called governments, we shouldn’t be surprised by the results.” ~ Art Carden

READ MORE

Knowledge Problems With Discretionary Central Banking

– December 29, 2020

“You need to make some truly heroic assumptions in order for discretionary monetary policy to outperform rule-bound policy. Rarely do any of those assumptions hold. Never do they all hold. If we want a well-functioning central bank, the best we can do is to have rules.” ~ Alexander W. Salter

READ MORE

Ronald Coase: A Birthday Appreciation

– December 29, 2020

“Like Adam Smith before him, Ronald Coase remains highly cited but still underrated. His ideas on transaction costs, rules, and organizations were influential, but as I wrote when he passed in 2013, ‘a few minutes with the ‘externalities’ section of almost any principles book, or a few seconds watching and listening to TV and radio discussions of environmental policy — suggests that it [“The Problem of Social Cost” specifically] is not influential enough.'” ~ Art Carden

READ MORE