Many prominent economists believe the Fed should stimulate the economy by committing to an inflation target like 5 percent, rather than the current 2 percent. These economists argue that higher expected inflation means a lower real interest rate which can stimulate investment and hiring, thereby speeding up the economic recovery. This policy recommendation is logical as far as it goes. But it may not work, and it carries its own risks.

Higher inflation will not necessarily stimulate the economy because interest rates are not the only, and likely not the most important, factor that is limiting investment and hiring. Instead, pessimistic expectations by businesses about consumer demand, concern about an anti-business tilt in government policy, and fear of large tax increases to pay for entitlements, are plausibly playing larger roles. Thus raising the Fed's inflation target might generate higher inflation, with no other benefit to the economy.

CITE THIS

Sans Serif

Serif

Share with your friends:

We should give it to the GOP presidential candidates.

Call it the broccoli test.
During oral arguments before the Court of Appeals for the District of Columbia Circuit on the constitutionality of Obamacare's health-insurance mandate, the Obama administration's lawyer, Beth Brinkmann, was asked whether a federal law requiring all Americans to eat broccoli would be constitutional.
"It depends," she replied. But she could certainly envision cases where it would be.

[I]f a government can order you to buy insurance, what can't it do?

That makes her only slightly less certain than Supreme Court justice Elena Kagan, who was asked the same question during her confirmation hearings. Kagan, who will help decide the fate of Obamacare's mandate, had no doubts that a broccoli mandate would be constitutional.

The "Great Leaders" Were Mass Murderers. by Anthony Gregory

[Great Wars and Great Leaders: A Libertarian Rebuttal • By Ralph Raico • Auburn, Alabama: The Ludwig von Mises Institute, 2010 • 246 pages. This review originally ran on LewRockwell.com.]

The greatest leaders, according to conventional appraisals, are usually those who draw the most blood. Most opinion makers distance themselves from Hitler, Mao, Stalin, and their ilk, although even here who can doubt they tower over modern history precisely because of their bloodletting? But in the West and especially the United States, historians, journalists, pundits, and especially politicians tend to admire leaders in proportion to the powers they claimed and exercised, which almost always corresponds with war making and killing.
"One of the most pernicious legacies of Hitler, Stalin, and Mao," writes Ralph Raico, "is that any political leader responsible for less than, say, three or four million deaths is let off the hook. This hardly seems right, and it was not always so" (p. 163). This is an astute observation, and it has relevance even in considering the "civilized" leaders of the United States and its allies, to say nothing of the second-tier communist butchers who continue to enjoy a cult following.

[The Capitalist and the Entrepreneur (2010)]

While Schumpeter, Kirzner, Cantillon, Knight, and Mises are frequently cited in the contemporary entrepreneurship literature in economics and management, much of this literature takes, implicitly, an occupational or structural approach to entrepreneurship. Any relationship to the classic functional contributions is inspirational, not substantive.
The most important exception is the literature in management and organization theory on opportunity discovery or opportunity identification, or what Shane (2003) calls the "individual–opportunity nexus." Opportunity identification involves not only technical skills like financial analysis and market research, but also less tangible forms of creativity, team building, problem solving, and leadership (Long and McMullan, 1984; Hills, Lumpkin, and Singh, 1997; Hindle, 2004). While value can, of course, be created not only by starting new activities but also by improving the operation of existing activities, research in opportunity identification tends to emphasize new activities. These could include creating a new firm or starting a new business arrangement, introducing a new product or service, or developing a new method of production. As summarized by Shane (2003, pp. 4–5),

14 Reasons Why We Should Nationalize The Federal Reserve

One of the most important steps that we could take to bring prosperity back to America would be to nationalize the Federal Reserve. Doing so would allow the federal government to quit borrowing money, dramatically reduce taxes and eventually pay off the entire U.S. national debt. Instead of inheriting the largest debt in the history of the world, future generations would actually have a chance at economic prosperity because they would not be forced to pay off the horrific debt of previous generations. The Federal Reserve is a perpetual debt machine, it has almost completely destroyed the value of the U.S. dollar and it has an absolutely nightmarish track record of incompetence. There are no good reasons to keep the status quo. Our current debt-based monetary system will inevitably lead to a complete and total economic collapse. We desperately need to make a change while we still can. As you will see below, there are a ton of good reasons why we should nationalize the Federal Reserve.

12 Facts About Money And Congress That Are So Outrageous That It Is Hard To Believe That They Are Actually True

Do you want to get rich? Just get elected to Congress. The U.S. Senate and the House of Representatives are absolutely packed with wealthy people that are very rapidly becoming even wealthier. The collective net worth of the members of Congress is now measured in the billions of dollars. The people that we have elected to the House and Senate are absolutely swimming in money. Unfortunately, it is not easy to get elected to Congress. In this day and age you generally have to be heavily connected to those that are very wealthy to get into Congress because it takes gigantic amounts of cash to win campaigns. But if you can get in to the club, you pretty much have it made. The numbers that you are about to read are very difficult to believe and they should deeply sadden you. They show that Congress has become all about money. Congressional races are mostly financed by wealthy people, most of the people that we elect to Congress are very wealthy, and they rapidly get wealthier after they are elected. All of this money has turned our republic into something far different than our founding fathers intended.
The following are 12 statistics about money and Congress that are so outrageous that it is hard to believe that they are actually true....

The Police State Vs. Occupy Wall Street: This Is Not Going To End Well For Any Of Us

Right now, we are watching the early rounds of a heavyweight fight between two extremely determined opponents. Occupy Wall Street has no plans of losing this fight and neither do law enforcement authorities. Perhaps those running the show actually believed that raiding Zuccotti Park and more than a dozen other "Occupy camps" around the nation would end these protests, but that is just not going to happen. Whatever your opinion of Occupy Wall Street is, everyone should be able to agree that this is one dedicated bunch. They are absolutely obsessed with their cause and in response to the recent raid on Zuccotti Park organizers are calling for “a national day of direct action” on Thursday. But if Occupy Wall Street protesters want to take things to "the next level", they should not underestimate the resolve of the police state. Over the past decade, the homeland security apparatus of the federal government has been slowly but surely turning this country into a "Big Brother" police state. Today, our law enforcement authorities are obsessed with watching us, listening to us, tracking us, recording us, and gathering information on all of us. We are constantly reminded that we live in a prison grid (just think about what they do to you before you are allowed on an airplane) and they are not about to put up with anyone challenging their authority or their control. Have you even known parents that constantly feel the need to prove that they are "the boss" of their children? Well, that is essentially what the homeland security apparatus in this country has become. All over the United States, law enforcement personnel are taught that every American is a potential terrorist and they are actually trained to "act tough", to bark orders at us and to not let anyone question their authority. If Occupy Wall Street believes that it can get the police state to "back down", they are sorely mistaken. Hopefully everyone will cool off a bit as the temperatures go down this winter. But if we do see a "cooling off", it probably will not last for long. As the U.S. economy continues to get worse, these kinds of protests are going to keep growing and they will become even more intense. Eventually, mass civil unrest will cause the streets of many of our major cities to closely resemble war zones. When it is all said and done, this is not going to end well for any of us.

17 Quotes About The Coming Global Financial Collapse That Will Make Your Hair Stand Up

Is the world on the verge of another massive global financial collapse? Yes. The western world is drowning in an ocean of debt unlike anything the world has ever seen before, and our financial markets are gigantic casinos that are dependent on huge mountains of risk and leverage remaining very stable. In the end, this house of cards that has been built on a foundation of sand is going to come crashing down in a horrifying manner. Usually in this column I go on and on about why things will soon get much worse. But today I am going to take a bit of a break. Today, I am going to let some of the top financial professionals in the world tell you why things will soon get much worse. Many of the quotes that you are about to read just might make the hair on the back of your neck stand up. Most people out there have no idea what is about to happen. Most people out there are working hard and are busy preparing for the holidays and they are hopeful that the economy will turn around soon. But that is not going to happen. We are heading for another major global financial collapse, and when it happens the U.S. economy is going to get even worse.

25 Bitter And Painful Facts About The Coming Baby Boomer Retirement Crisis That Will Blow Your Mind

For decades we were warned that when the Baby Boomers started to retire that this country would be facing a retirement crisis of unprecedented magnitude. Well, that day has arrived ladies and gentlemen. Back on January 1st, the Baby Boomers began to retire and more than 10,000 of them will be retiring every single day for years to come. Most of them have not saved up nearly enough money for retirement. At the same time, private sector pension plans are failing all over the place, hundreds of state and local government pension plans from coast to coast are woefully underfunded, and the Social Security system is on the road to complete and total disaster. A massive wave of humanity is hitting retirement age at a moment in history when the U.S. economy is coming apart at the seams. We do not have the resources to keep the promises that we made to the Baby Boomers, and most of them have not made adequate preparations for retirement. What we have is a gigantic mess on our hands, and millions of Baby Boomers are going to find retirement to be very bitter and very painful.

Black Friday Violence Worse Than Ever As American Consumers Fight Over Deals Like Crazed Animals

We all knew that this was coming, didn't we? Each year Black Friday violence just seems to get worse and worse. What does it say about American consumers when they are willing to fight like crazed animals just to save a few bucks on cheap plastic crap made in China? Not that retailers are innocent in any of this. It certainly seems as though many of them purposely create wild situations on Black Friday where customers will rush like crazy people into their stores and nearly riot as they fight over discounted merchandise. The more Black Friday madness there is, the more of an "event" it becomes, and the higher the profits of the retailers go. This year there was more Black Friday hype than ever and there was also more Black Friday violence than ever. It is being projected that this year a record-setting 152 million Americans will go shopping between Thanksgiving and Sunday night. That may be good news for the big corporate retailers, but the shocking lack of character being displayed by American consumers all over the country this weekend is very bad news for the future of this nation.

Trouble. Economic Collapse Blog

The global economy is heading for a massive amount of trouble in the months ahead. Right now we are seeing the beginning of a credit crunch that is shaping up to be very reminiscent of what we saw back in 2008. Investors and big corporations are pulling huge amounts of money out of European banks and nobody wants to lend to those banks right now. We could potentially see dozens of "Lehman Brothers moments" in Europe in 2012. Meanwhile, bond yields on sovereign debt are jumping through the roof all over Europe. That means that European nations that are already drowning in debt are going to find it much more expensive to continue funding that debt. It would be a huge understatement to say that there is "financial chaos" in Europe right now. The European financial system is in so much trouble that it is hard to describe. The instant that they stop receiving bailout money, Greece is going to default. Portugal, Italy, Ireland, Spain and quite a few other European nations are also on the verge of massive financial problems. When the financial dominoes start to fall, the U.S. financial system is going to be dramatically affected as well, because U.S. banks have a huge amount of exposure to European debt. The other day, I noted that investor Jim Rogers is saying that the coming global financial collapse "is going to be worse" than 2008. Sadly, it looks like he is right on the money. We are in a lot of trouble my friends, and things are going to get really, really ugly.

Whose Fuse Is Shorter?. by Peter Schiff

With fiscal time bombs ticking in both Europe and the United States, the pertinent question for now seems to be which will explode first. For much of the past few months it looked as if Europe was set to blow. But Angela Merkel's refusal to support a Federal Reserve style bailout of European sovereigns and her recent statement the she had no Hank Paulson style fiscal bazooka in her handbag, has lowered the heat. In contrast, the utter failure of the Congressional Super Committee in the United States to come up with any shred of success in addressing America's fiscal problems has sparked a renewed realization that America's fuse is dangerously short.

Doug Casey on Fresh Starts. Interviewed by Louis James

L: Doug, we've had a lot of requests from younger readers asking for advice on how they should tackle the world, starting out amidst a crisis. We've also had questions from older readers asking what you might do differently if you were 21 again – or if you were suddenly unemployed and had to start from scratch. What do you think? Can you stroke your long, white beard and give us some practical guru wisdom for today's world?
Doug: I keep telling people I have no crystal ball, but they don't listen. Nobody has a crystal ball. But, perhaps paradoxically, I also keep giving people advice because they ask; and like anyone, I'd like to help – but those people rarely listen either.
Giving advice is temporarily gratifying to the giver, because it makes him feel like he knows something – for that moment. But it's ultimately frustrating because few receivers ever use advice. People generally have to make their own mistakes. I believe it was Stalin who said that even those few people who learn from their own mistakes weren't all that smart; he preferred to learn from other people's mistakes… not that Stalin should be considered a generally sound source of advice. It's odd, actually – one of history's great sociopaths dispensing words of wisdom…

No Lehman on the Aegean

By Desmond Lachman

Can we be spared a Lehman-style crisis when Greece’s hard default occurs?

After two years of denial about the European periphery’s solvency problem, European policy makers are finally, albeit grudgingly, facing up to reality. Indeed, they are now privately recognizing that Greece is very likely to default by year-end. And they have also come to the conclusion that such an eventuality makes it imperative both that an effective firewall be erected around Spain and Italy and that Europe’s banks need to be recapitalized.

Merkel’s Moment

By Desmond Lachman

If past is prologue to the future, there is little reason to believe that Merkel will allow the ECB to provide unlimited support to the periphery.

As Europe’s sovereign debt crisis now envelopes Italy, Spain, and even France, one has to pity Angela Merkel, the doughty German chancellor. She now finds herself helplessly caught between two irreconcilable forces.

By Lee E. Ohanian

There is much less competition in the public sector than the private sector and that has made all the difference.

Since the Great Recession began in 2008, there has been a growing criticism of public sector unions, reflecting taxpayer concerns about union compensation and unfunded pension liabilities. These concerns have led to proposals to change public sector union policy in very significant ways. Earlier this month, voters in Ohio defeated by a wide margin a law that would have restricted union powers, although polls showed broad support for portions of the law that would have reduced union benefits. In Wisconsin, a state with a long-standing pro-union stance, Governor Scott Walker advanced policy in February that would cut pay and substantially curtail collective bargaining rights of many public sector union workers. In Florida, State Senator John Thrasher introduced legislation that would prevent governments from collecting union dues from union worker state paychecks. And it is not just Ohio, Wisconsin, and Florida that are attempting to change the landscape of public unions. Cash-strapped governments in many states are considering ways to reduce the costs associated with public unions.

President avoids political hot potato

By Dave Boyer

** FILE ** In this Nov. 22, 2011 file photo, President Barack Obama gestures while speaking at Central High School in Manchester, N.H. The failure of Congress’ supercommittee adds a new dimension to the 2012 political contests by drawing political battle lines around broad tax increases and massive spending cuts that are now scheduled to begin automatically in 2013. (AP Photo/Charles Krupa, File)

President Obama has distanced himself from the congressional supercommittee — politically and geographically — in a strategy aimed at avoiding political risk rather than putting his leadership on the line for a long-shot deal, analysts say.

Principle should trump any effort to ‘just get along’

By Thomas N. Tripp

Illustration: Bipartisan by Linas Garsys for The Washington Times

While some in Washington try to solve and others obstruct fixing our fiscal mess, we hear the liberal lament: “Our political system is broken because of partisanship.” This is untrue, even absurd. This argument tries to pit politics against principle. Democrats are using their own convoluted brand of partisanship, a cynical, feel-good version of “Can’t we all just get along?” after they already have stacked the deck against reform. They assert there is something wrong with the political system, rather than with their policies, when they don’t get their way. The political claim prevents discussion of the real problem the nation faces: insolvency. The liberal hypocrisy finally has been brought to trial.

No budget deal just might be a good deal for U.S. economy. Patrice Hill

The reaction to the supercommittee’s epic failure this week to address the spiraling debt has been surprisingly muted on Wall Street and Main Street, in part because astute observers there have concluded that Congress may accomplish more by doing nothing when it comes to the deficit.
If partisan gridlock prevails in the next year or so, as seems likely in a presidential election year, about $7 trillion in tax cuts and spending programs will expire under current law — enough to eradicate the deficit problem by 2014 — well ahead of the most ambitious plans offered in Congress.

Armed illegals stalked Border Patrol. Jerry Seper

Five illegal immigrants armed with at least two AK-47 semi-automatic assault rifles were hunting for U.S. Border Patrol agents near a desert watering hole known as Mesquite Seep just north of the Arizona-Mexico border when a firefight erupted and one U.S. agent was killed, records show.
A now-sealed federal grand jury indictment in the death of Border Patrol agent Brian A. Terry says the Mexican nationals were “patrolling” the rugged desert area of Peck Canyon at about 11:15 p.m. on Dec. 14 with the intent to “intentionally and forcibly assault” Border Patrol agents.

American tax law

Congress creates a bureaucratic nightmare for fund managers

Paperboarding

CATCHING tax cheats is well and good in theory. Achieving that feat in practice is another matter. As fund managers are finding, the latest effort from the American authorities to root out those of their citizens who have been hiding their assets overseas is creating a bureaucratic nightmare around the world.

THE LIBERTARIAN

Friday, November 25, 2011

Bush's Thanksgiving in Iraq

Republicans Get More Worldly

Japan Adds to Drag on Global Growth

Another Nasty Tumble for the Euro

Can Inflation Kickstart the Economy without Killing It?. by Jeffrey A. Miron

The Broccoli Test . by Michael D. Tanner

The "Great Leaders" Were Mass Murderers. by Anthony Gregory

Opportunity and the Entrepreneur. by Peter G. Klein