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Understanding the Fed’s Real Mandate

Understanding the Fed’s Real Mandate

by | Oct 10, 2022 | ,

The Federal Reserve has a legal dual mandate to minimize unemployment and price inflation. The current “dual” between the two mandates is to reduce price inflation by increasing interest rates to increase unemployment and kill businesses to choke off aggregate demand. This has been the most important economic and investment issue this year and this dual minimization procedure has dominated Fed policy for at least three-quarters of a century. This is odd given that the Fed is in the business of creating money, the cause of price inflation, and it is responsible for all the largest surges in...

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They Never Learn: National Review Demands Marijuana Criminalization

They Never Learn: National Review Demands Marijuana Criminalization

by | Aug 31, 2021 | ,

Aron Ravin, a self-described “nudnik,” who writes for National Review thinks so and I suspect others do as well. This thinking, however, is that of an ever-shrinking minority and it is hard to imagine the pro-legalization trend being reversed. Nevertheless, let’s look at the arguments and why he claims libertarians are so wrong on this issue. Before we press on, it is important to remember that cannabis legalization is basically citizens of individual states standing up to federal authority and flipping it the bird. Ravin claims, “I do not, and do not plan to, partake in the devil’s...

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Rothbard’s Rules for Crisis

Rothbard’s Rules for Crisis

by | Jun 13, 2020 | ,

When an economic crisis hits, everybody from the Fed chairman to the man on the street knows that the Fed must print more money and reduce interest rates and that the government must spend more money and go deeper into debt. This is seen as necessary to “fill the gap” left by the private sector. This approach is entirely wrong. In fact, it is highly counterproductive. Murray Rothbard’s number one rule in an economic crisis is for the government not to interfere with the market’s adjustment process, or, in Wall Street terms, “the correction.” The more government intervenes in the economic...

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This Bust Wasn’t Caused by a Virus

This Bust Wasn’t Caused by a Virus

by | Apr 27, 2020 | ,

On February 10 the stock markets were at all-time highs, with the Dow 30 at almost 30,000. The unemployment rate was at an all-time low and interest rates around most of the world were at all-time lows. With interest rates near zero for an entire decade, the value of stocks, bonds, real estate, land, and virtually any asset was artificially inflated. As a result, total household net worth doubled, increasing from $60 trillion to $120 trillion! People were saying that things were too good to be true. Everything from giggling about personal finances at the gym to people embarking on unlikely...

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The Fed Can’t Save Us

by | Mar 12, 2020 |

Beltway libertarian economists are today hailing the Fed’s efforts to cure the economic crisis or are even suggesting they intervene to a greater extent to quell fears in markets. That is like saying we need to spread the coronavirus to more people to stop the pandemic. The Fed created the economic crisis with its more than a decade–long campaign of ultralow interest rates and quantitative easing policy that injected massive liquidity into financial markets. This unprecedented monetary policy caused companies to become more leveraged and to embark upon capital spending programs on a...

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The Next Curse

The Next Curse

by | Nov 26, 2019 | , ,

Zero Hedge reports “China’s Skyscraper Boom Comes Crashing Down Amid Developer Default,” noting reports that construction work was recently halted on the nation’s potentially tallest skyscraper, after the developer defaulted on a payment to the construction company. They then invoked the Skyscraper Index which they describe: “The index is simple; the world’s tallest buildings are often constructed or completed at economic turning points, right before or just as the downturn gets underway.” The Skyscraper Curse is the economic crises that ensues with every new world record. As I describe in...

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Scott Sumner Wants to “Modernize the Fed” — This is What He Gets Wrong

Scott Sumner Wants to “Modernize the Fed” — This is What He Gets Wrong

by | Jul 26, 2018 | ,

Scott Sumner recently penned  an article suggesting that the Federal Reserve needs to modernize its approach to monetary policy, a sentiment shared by many economists and policymakers. The Fed certainly has made a series of changes and adjustments to increase its transparency and its credibility after President Nixon took the world off of the Bretton Woods era gold standard in 1971. However, in Sumner’s case, he is asking for a modernization of the monetary policy schedule. The Fed’s monetary policymaking body—the Federal Open Market Committee—meets approximately every 6 weeks, takes a vote...

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The Drug War Is Pushing More Migrants to Our Borders

by | Jun 28, 2018 | ,

Over the last couple of weeks we have been bombarded by news coverage of the US government handling of foreigners illegally crossing the southern border and having their children separated from parents by our government. At first I tried to avoid subjecting myself to this circus, but I have been paying close attention for about a week. I describe it as a circus because of the hysteria involved. Everyone from the Know- Nothing wing of the Trump party to the ultra-PC progressives, and the libertarians, and even the First Lady Melania Trump have jumped on the emotional roller coaster. The story...

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Mark Thornton

Mark Thornton is a Senior Fellow at the Mises Institute and the book review editor of the Quarterly Journal of Austrian Economics. He has authored seven books and is a frequent guest on national radio shows.


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Israel Winner of the 2003 Iraq Oil War

Israel Winner of the 2003 Iraq Oil War

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From the Foreword by Lawrence B. Wilkerson: “[T]he debate over whether oil was a principal reason for the 2003 invasion has waxed and waned, with one camp arguing that it absolutely was, while the other argues the precise opposite.” “Mr. Vogler, himself a former...

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