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Why Good Economics Matters Now More Than Ever

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In a newsletter published in 1970, economist Murray Rothbard wrote, “It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

This is an oft-quoted platitude within circles of libertarian philosophy and Austrian economics.

Today, we are seeing the embodiment of Rothbard’s fears. The woeful state of economic understanding has reached a critical mass. Economics has taken a back seat to issues deemed more important. What’s worse is that when economics is discussed, millennials tend to lean socialist.

I have a vested interest in seeing economics and sound money flourish as I work in the field. Yes, I believe that tying a nation’s currency to gold keeps government spending in check. This is hardly professional bias though, as we all have a vested interest in seeing economics and sound money championed, many just don’t recognize it. This piece is aimed at anyone with a vested interest in maintaining a standard of living higher than that of the depression-era breadline vagabond. Economics transcends race, gender, and political identification.

Let’s begin by examining the first of two reasons that good economics is paramount.

Good Economics Is Important Because We Are Seeing a Rise in Bad Economics

Despite the corruption and backhanded actions of Hillary Clinton’s 2016 campaign to win the Democratic nomination, Bernie Sanders experienced a meteoric rise reminiscent to that of Ron Paul’s, whose 2008 presidential campaign trained his supporters’ focus on economics. Paul championed policies in the spirit of economists that I personally revere: Ludwig von Mises, Murray Rothbard, and Nobel Prize Laureate Friedrich Hayek, among others.

Bernie Sanders’s 2016 campaign had an equal but opposite effect. From teenagers to senior citizens, many loved Sanders’s critique of the broken system that favors the wealthy and stifles the poor. His “solutions” are abysmal, yet despite the countless examples of current (and more importantly, collapsed) socialist-Marxist/Leninist calamities, a self-described socialist found a foothold in the United States.

The revolution inspired by Sanders is anti-intellectual. The “economics” that stemmed out of the Sanders campaign was not economics at all. His school of economics was built on people shouting about their feelings and promoting egalitarianism for the sake of egalitarianism.

Good economics is grounded in axiomatic truths and empirical facts about the world around us. Sound money keeps governments and central banks (called the Federal Reserve in the US) from endless money printing and devastating inflation. Yes, that means the government won’t be able to provide every service that one desires. That is a good thing. Government is the bastion of inefficiency and the epitome of waste. Strictly from an economics standpoint, the market is far better suited at providing products and services.

The espousal of socialist policies in economics is dangerous and irresponsible. Fortunately, it doesn’t take much intellectual firepower to write off socialism as wildly inefficient. But it does take some. Socialism falls apart quickly when one understands the economic calculation problem, which explains the importance of prices based in subjective value in a free market system and explains how centrally planned economies, devoid of market prices, are doomed to suffer from inefficiencies in the form of widespread shortages and surpluses. Without these rudimentary economic blocks, “free college, health care for everyone, and massive taxation on the 1 percent to pay for these policies” sounds desirable.

We must learn, though. We must strive for intellectual growth. We must take the lessons we’ve learned from history and apply them to the word we live in today: socialism does not work. Socialism kills. (Even Scandinavian socialism isn’t as great as socialists say it is).

Socialism has been proven to be a terrible economic policy repeatedly. At some point, the value of human lives outweighs the desire for a politician to conduct a social experiment on how quickly he or she can rid their country of any and all valuable resources. That point is now. We must understand that socialism is an exercise in futility and inefficiency. Understanding good economics kills off the allure of central planning that continues to be peddled by politicians on the left. In fairness, understanding good economics helps wade past the bad economics posited by the right as well.

For a multitude of reasons, it’s a good idea to take a politician’s statements with grains of salt. As far as economics goes, economist Thomas Sowell said it better than I ever could.

The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.

Sound economics based in sound money policies make it possible to eat reasonably priced meals because inflation tends to be lower in countries that practice these policies. Sound money policies make enacting socialist policies difficult. Understanding fundamental economics is the linchpin to cultivating an environment conducive to having meaningful debate on other social issues. Which brings us to the second reason why economics is crucial.

Economics Is the Most Important Social Issue of Our Time

We should start by understanding that economics is a social issue. In fact, economics is the social issue. No issue influences individuals (read: all the individuals) within a society more than its economic practices.

Living in the United States in 2017 means exposure to all sorts of social issues including – but not limited to – same sex marriage, police brutality, safe spaces, drug legalization, and firearms ownership. To be sure, these issues are important and should be examined with sober eyes. But the issue of economics supersedes this list and every other list.

I believe consenting individuals should be allowed to do whatever their hearts desire so long as they aren’t violating the rights of another. I stand in solidarity with those who favor legalized same-sex marriages. I stand with those who want to see marijuana legalized nationwide and those who want to own automatic weapons.

But herein lies the danger of ignoring economics at the expense of other issues: Being “allowed” to smoke marijuana legally seems insignificant when a loaf of bread costs a month’s salary and your loved ones are dying of starvation, doesn’t it? I concede the subjective nature of this evaluation, but if I had to choose between the legality of same sex marriages and economic stability, I would choose economic stability without pause. Not because I don’t value personal freedom to do as one wishes, but because I understand that with economic stability comes the ability to fight another day for other issues.

Brazil, according to Bloomberg, was the second-worst economic performer of 2016. The other side of the coin is more uplifting: Brazil recognizes same-sex unions; allows same-sex marriages; allows adoptions by same-sex couples; allows individuals who identify as LGBT to serve in the military; and so on. Brazil’s removal of the proverbial shackles on homosexuals to live as they see fit is a big win for personal liberty, undoubtedly.

But one can’t help but wonder if the married same-sex couple in Brazil suffering from the terrible economic policies enacted by their country thinks, “13.2 percent of our entire country’s population is unemployed. That’s close to what the US faced between 1930-1931 as the Great Depression destroyed their economy. We can’t afford to feed ourselves or our family and we’re subjected to danger and crime as others are desperate to obtain food and money. But hey, at least the government recognizes our marriage!”

Greece is another example of the result of poor economic policies. Riots and crippling tax hikes to pay for irresponsible economic policies are commonplace in Greece, but hey, at least small amounts of cannabis have been decriminalized, right?

I don’t mean to belittle the importance of issues such as these. But as millennials, as members of the citizenry, and as people with a stake in the economic health of the nation we inhabit, our efforts are often misplaced. Sound economic policies should be pursued with at least the same amount of fervor as the myriad issues that don’t potentially end in economic collapse, death, crime, and general hysteria.

America finds itself on the cusp of revolution, but not necessarily the kind you might imagine. The revolution we are headed towards is an intellectual one. Good economics lies at the heart of this revolution.

Without good economics, we are powerless against the abuses of the Federal Reserve, the central bank that intentionally devalues the money in your bank account while it finances foreign wars and domestic programs that the government wouldn’t have the means to pay for otherwise. Without good economics, we are defenseless against the bad economic policies that lead to extreme levels of pillaging that socialists lovingly refer to as taxation. Without good economics, we subject ourselves to tangible, real-life danger and lose the opportunity to bring about the changes we wish to see. (For more from the author of “Why Good Economics Matters Now More Than Ever” please click HERE)

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Obamanomics Cost Now Tops $5,000 Per Family

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Photo Credit: Yin Bogu / Xinhua / Photoshot / NewscomThat is to say the average family would have about $5,000 more income each year to spend if it were not for this slow recovery. The Census Bureau reports that median household income is down by $1,800 since this so-called recovery began.

Worse, investment plummeted in the first quarter of 2014 by 11.7 percent from the same period in 2013. That was the biggest decline since the recession ended in 2009. Without investment, businesses can’t grow and wages won’t rise. Capital investment by businesses is a strong leading indicator of future prosperity.

The administration was quick to blame the dismal numbers on the cold winter and blizzard conditions in the Midwest and Northeast. But he 2013 growth rate was 1.9 percent, and the rate has been less than 2 percent for more than a year. Under Reagan, the growth rate during the expansion was more than 4 percent.

Read more from this story HERE.

Joe Miller Offers Mark Begich An Economics Lesson

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Fairbanks, Alaska. October 10, 2013 – Senator Mark Begich is currently running ads in Alaska questioning the intelligence of those who do not see matters as he does regarding the economics of Obamacare and the National Debt. Joe Miller thought it might be helpful to ensure the junior senator is fully apprised of some important facts concerning both.

“Obamacare is not only bad public policy, it is bad economics,” said Miller who received his masters in economics from the University of Alaska, where he also taught as an adjunct professor in political science. “Mr. Begich would do well to exercise a little independence and just do the math.”

When Democrats pushed the so-called Patient Protection and Affordable Care Act through on a straight party-line vote in 2010, they told us that the ten-year projected cost to taxpayers was $900 billion. The CBO has now projected those costs have doubled to $1.8 trillion. And just as Senator Begich is doubling down on his vote for the ill-conceived program, it was reported this week that by some projections it may cost up to $3 trillion.

Not only is the price tag astronomical, virtually every promise made about the program is already proving to be false. Instead of “bending the cost curve” as the President promised, insurance premiums have skyrocketed. Instead of Americans being able to “keep the coverage you have,” a recent survey finds up to 30 percent of employers plan to drop coverage in 2014. Further, instead of having no detrimental economic impact, many employers plan to freeze hiring or cut back on their number of full-time employees to avoid the law’s onerous mandates.

This unneeded stifling of job creation comes as our nation continues to experience unemployment numbers well above historic averages. The current unemployment rate of 7.3 percent does not include millions of Americans who have left the workforce altogether. Four years into the “Obama recovery,” only 63.2 percent of Americans are employed in full-time work, which matches numbers not seen since the severe recession of the early 80s and harkens back to the Great Depression.

And this all comes against the backdrop of the largest and most reckless spending spree in American history. During Mr. Begich’s short 5-year tenure in the United States Senate, the deficit nearly quadrupled, and the national debt has risen by $7 trillion, more than 60 percent.

This unprecedented deficit spending coupled with no will to address it has resulted in exactly what Miller predicted in 2010: the downgrading of our nation’s credit rating. The Federal Reserve, in turn, has engaged in massive quantitative easing, to the tune of over $3 trillion, to buy up treasury notes with money printed out of thin air, which has led to the devaluing of our currency. This insidious, unseen tax on all Americans is felt everywhere from the gasoline pump to the grocery store. Yet the junior senator continues to march in lock-step with Harry Reid and Barack Obama as they bring us ever closer to fiscal collapse. And he has the audacity to call the adults in the room “knuckleheads”?

“If Senator Begich cannot see the dire economic consequences of Obamacare and profligate federal government spending with all the facts in plain view, he never will,” said Miller. “If Mark Begich is more interested in serving the flawed economic policies of Barack Obama and Harry Reid than the people of Alaska, it is time for him to find a new line of work. I believe Alaskans will assist him in that endeavor in 2014.”

Pope Attacks Global Economics for Worshipping ‘God of Money’

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Photo Credit: Reuters

Photo Credit: Reuters

Pope Francis made one of his strongest attacks on the global economic system on Sunday, saying it could no longer be based on a “god called money” and urged the unemployed to fight for work.

Francis, at the start of a day-long trip to the Sardinian capital, Cagliari, put aside his prepared text at a meeting with unemployed workers, including miners in hard hats who told him of their situation, and improvised for nearly 20 minutes.

“I find suffering here … It weakens you and robs you of hope,” he said. “Excuse me if I use strong words, but where there is no work there is no dignity.”

He discarded his prepared speech after listening to Francesco Mattana, a 45-year-old married father of three who lost his job with an alternative energy company four years ago.

Mattana, his voice trembling, told the pope that unemployment “oppresses you and wears you out to the depths of your soul”.

Read more from this story HERE.

Bernanke Out by August, QE Ends, Rates Up; Prepare for Crash Now Because Easy Money Will Dry Up

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Photo Credit: Getty ImagesHis clue? Consumer sentiment: “Harris estimates that in the next five years, catch-up consumption will boost annual consumer spending growth by a half point to above 3% from about 2%.”

Reassuring? No, wishful thinking. Be very skeptical. As Robert Kuttner, author of the new “Debtors’ Prison: The Politics of Austerity Versus Prosperity” once wrote in BusinessWeek, “What do you call an economist with a prediction? Wrong.”

Harris is bucking the headwinds of history. As Jeremy Grantham, chief strategist of the $100 billion GMO money managers, recently told InvestmentNews, the newspaper of record for America’s 90,000 professional investment advisers, “3% annual GDP growth is history.”

Here’s why you better be preparing today for a crash dead ahead. As Pimco’s Bill Gross warned in his recent newsletter: “You’re going to lose money investing … because the central banks say so.” That’s right, this is a Fed-driven rally. Soon the Fed will be forced to stop printing cheap money.

Read more from this story HERE.

Video: Ted Cruz On America’s Economic Problems – ‘An Awful Lot of Republicans Failed To Stand For Principle And Contributed To Getting Us In This Mess’

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Photo Credit: Gage Skidmore Sen. Ted Cruz: We’ve got a job and right now I think the U.S. Senate is the battlefield. Unfortunately, Republicans are in the minority. This last election did not turn out as I had hoped, but I nonetheless think that if we had principled, effective conservatives who make the case that the most effective engine, for economic opportunity, the most effective engine for climbing the economic ladder, for helping those with nothing to achieve anything has been free markets, has been limited government has been the incredible, American system. If we make that case, we can preserve that system. And I think that’s what the stakes are.

And so, my focus every day is on the substance of winning the fight, stopping the out of control spending and deficits and debt so that our kids aren’t crushed with those debts and getting the economy growing again. You know in the last four years under President Obama, our economy has grown 1.5 percent a year. That’s less than half the historical average. The historical average since World War II has been 3.3 percent. If we can’t get the economy growing, we can’t solve any of these problems.

If you want to get the 23 million people who are struggling to find jobs back to work, get the economy growing. If you want to transform our federal balance sheet, change it from the train wreck it is right now, get the economy growing.

Watch video here:

Read more from this story HERE.

Happy-Face Statism

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Photo Credit: Dancing TunaFor the last decade, some social scientists have been arguing that “happiness measurements” should replace or supplement established economic standards to judge a society’s “success.” Many environmentalists also support the idea as a way of putting lipstick on policies that could slow down economic growth. And now, the idea is deemed ready to leave the ivory tower for implementation as government policy.

One can understand the appeal for the ruling elite and their camp followers of consultants and lobbyists. If government assumes the power to promote happiness, officials would have to “consult with experts” to figure out criteria by which a society’s “gross happiness index” could be measured. (As we will see below, that process has already started.) Once these standards were determined, a new bureaucracy would have to be established—let’s call it HAA, the Happiness Advancement Administration—to promote happiness goals and enforce happiness regulations. One could even imagine a presidential debate, in which the challenger looks into the camera and earnestly asks, “Has your government made you happier today than you were four years ago?”

We have already started down Happiness Road. Bhutan recently established a National Happiness Commission, chaired by the prime minster, which must give all legislation a happiness seal of approval before it can become law.

One could shrug off Bhutan’s law as a consequence of the altitude. But the United Nations General Assembly unanimously passed a resolution in 2011 calling on all member states to promulgate national standards of happiness. The resolution states that “gross domestic product . . . does not adequately reflect the happiness and well-being of people in a country” and that “sustainable development” and a “more inclusive, equitable and balanced approach to economic growth” will best encourage the “happiness and well-being of all peoples.” Sounds like a prescription for wealth redistribution and rationalizing reduced prosperity to me.

An article published in National Affairs reported that “the twenty-seven nations of the European Union also plan to move ‘beyond GDP,’ complementing their official measures of economic output with measures of well-being drawn from happiness literature.” What better way to divert our attention from declining standards of living than to have government and the media trumpet proud claims of improved collective happiness?

Read more from this story HERE.

FDR: “The only thing we have to fear is fear itself”; Barack Obama: “I am not a Dictator” (+video)

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Back when being an American meant believing in America, FDR rallied the nation in his first inaugural speech in 1933 with his famous admonition that

“the only thing we have to fear is fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

Fast forward to today when an economic malaise grips our nation, and the words choked out by our current president are: “I am not a dictator.” Translation: “I am not a leader.”

In the nadir of the Depression, FDR spoke solemnly to the nation:

This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper.

In Obama’s world, his message to the nation is “I am not a leader dictator”. Here’s the text of this portion of his lecture to discussion with the press:

“Uh, ye ye ye you know . . . the uh . . . ih ah I mean Jessica, I . I . . I am not . . uh . . ah ah a dictator. I’m the President. So, ultimately if Mitch McConnell or John Boehner say, uh, we need to go to catch a plane, uh, I can’t have Secret Service block the doorway, right?”

FDR continues to elevate the nation’s morale despite what seemed like a hopeless situation:

In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days.

Meanwhile, President Obama invokes Star Trek Star Wars:

“Most people agree that I’m being reasonable, that most people agree that I’m presenting a fair deal. The fact that they don’t take it means that I should somehow, uh, you know, do a Jedi mind-meld with these folks and convince them to do what’s right.”

.

If only Barack Obama had studied FDR’s speeches, or possibly JFK, who in his inauguration uttered his famous challenge:

And so, my fellow Americans: ask not what your country can do for you—ask what you can do for your country.

My fellow citizens of the world: ask not what America will do for you, but what together we can do for the freedom of man.

Finally, whether you are citizens of America or citizens of the world, ask of us the same high standards of strength and sacrifice which we ask of you. With a good conscience our only sure reward, with history the final judge of our deeds, let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.

FDR’s “nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance” now has a name – Barack Hussein Obama.

God help us.

Video: Walter Williams On the Morality of the Free Market

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Economist Walter Williams dispels the myth of the zero-sum game, and in so doing presents a simple and straightforward exposition of free market economics.

Far from being a system based upon greed and selfishness as some claim, Williams ably demonstrates how free exchange is a way of service and mutual benefit to all, and as such is invested with a moral quality.

And it is upon such a view of reality that free market economics reposes.

Video: Economist – Dow Should Be Down 50% on Obama’s Reelection; Buy Machine Guns

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Contrarian Investor Marc Faber, also known as “Doctor Doom,” was born and educated in Switzerland, where he raced for the Swiss National Ski Team. At age 24, he earned a Phd at the University of Zurich in Economics where he graducated magna cum laude.

Faber says he’s very surprised as he believes the market on Obama’s reelection “should be down 50%.” He contends that Obama is “a disaster for business, a disaster for the U.S.”

He adds that Romney “wouldn’t be much better.” However, he believes that the GOP has a better grip on what the nation needs to get back on track.

His advice for investors is typically “Doctor Doom” contrarian: buy a machine gun if you can.