==> This article about “how modern men are trained to hate women” is actually really insightful. It’s supposed to be entertaining and has lots of absurd photos, but I actually think the guy makes some good points.
==> Even though he and I don’t see eye-to-eye on everything in the “free banking” argument, I must admit George Selgin has a fantabulous critique of Bernanke on the history of the Fed here.
==> Tom Woods jumps on the clicking-Like-on-Facebook-does-nothing bandwagon. But actually, I think we need to be more specific. “Raising awareness” actually is tremendously important; that’s all Tom and I do, for heaven’s sake! In other words, we agree with Mises that public opinion ultimately determines what the government can get away with, and so that’s why Tom and I (and just about all of our professional colleagues) devote our lives to educating the public. As far as I know, we’re not going to intercept funds flowing to the IRS and return them to their rightful owners. So I think the scorn heaped on the “Kony 2012” crowd, if it’s to stick, has to be more accurately defined. It’s not that “just telling people how you feel about something” is a waste of time, but rather, “telling people how you feel about something that you’ve spent 20 minutes investigating” is a bit silly.
==> It was pledge week at my NPR station and holy cow, this piece on Texas secession almost made me donate. Of course they ultimately make it a criticism, but tell me the first 3 minutes aren’t awesome! I’m moving to Texas, baby! (It’s also funny that when they start discussing the problems of Texas secession, the first thing that actually makes any sense is that they say the feds would retaliate. Yeah, that’s what happened the last time, too.)
==> So if I’m interpreting this article correctly, in 2011 fully 61% of the new debt issued by the Treasury, was picked up by the Fed. At what point will people stop saying, “IF then Fed ever started monetizing the debt, then we’d be in trouble”?
Let me elaborate on this theme: If I understand Scott Sumner’s worldview, he is saying that our ultra-low interest rates right now are a sign of “tight money.” So let’s say starting Monday, the Fed began selling off $1 trillion of its Treasury holdings, and Bernanke promised that he wouldn’t let the Fed’s balance sheet rise more than a 3% rate per year, thereafter. Does Scott think yields on Treasury securities would go down because of this move? In other words, does Scott actually think if the Fed suddenly dumped one trillion dollars (at current prices) of an asset onto the market, and promised that it wouldn’t buy it back anytime soon, that the new market price for this asset would go up?
Let me also turn this question over to the Keynesians: If I understand them, they are saying that the big problem right now is that people are trying to save (particularly in safe assets like Treasury securities) way more than people want to borrow. The only way to get that market to clear, at full employment, would be to have a negative nominal interest rate. So from that perspective, the absolute worst thing the Fed could do, would be to buy up a trillion dollars of Treasury securities, right? I mean, injecting new reserves (through open market operations) per se might be OK, but it would be far far better if the Fed created money out of thin air in order to, say, hire people to dig ditches and fill them back up, right? But given that Bernanke is going to issue a new trillion dollars, the single worst thing (from a Keynesian perspective) he could do with that new money, is go buy U.S. Treasuries, right?