13 May 2017

Where Monetarism Goes Wrong

Austrian School, Chicago School 4 Comments

Jeff Deist had me on “Mises Weekends” to talk about Vienna vs. Chicago. Speaking of which, we’ll be in Chicago next week, and then Seattle.

13 May 2017

A Young Jon Stewart Interviews George Carlin

Humor 3 Comments

It was Friday night and I was procrastinating, so I stumbled across this interview. It was pretty touching; you see Carlin’s vulnerability (and also Jon Stewart himself was still trying to prove how cool he was with that get-up).

12 May 2017


Lara-Murphy Show, Potpourri 5 Comments

==> In Part 1 of our interview with Nelson Nash, Carlos and I focus on faith, family, and forestry. But Nelson also talks about his relationship with Leonard Read, so check it out.

==> Joe Salerno explains that a new econometric paper criticizes Friedman and Schwartz’s famous studies. I haven’t studied the original paper, I’m curious for other reactions.

==> The respectful von Pepe sends this obituary of Carl Christ.

==> I think the respectful von Pepe also sent me this obituary of Allan Meltzer.

11 May 2017

Contra Krugman Episode 85

Contra Krugman 1 Comment

This was a fun one. Krugman returns to his familiar theme of claiming that right-wing Republicans never admit when they’re wrong, a habit that apparently eludes left-wing progressives. Some highlights:

8:00 I point out that it’s odd that people are (a) flipping out about how horrible Trump is, including threatening the planet and (b) saying he hasn’t done anything in his first 100 days.

11:10 Tom points out examples of left-wingers who didn’t learn from their longstanding mistakes.

15:00 I talk about the awkward inflation prediction stuff.

18:10 I recall what the NYT Ombudsman said about Krugman’s willingness to admit he was wrong.

23:40 In the midst of talking about the Contra Cruise, Tom and I end up sharing funny stories about jokes blowing up in our faces.

26:18 I talk about GDP calculation and inventory adjustments.

Incidentally, my mises.org column “Inventories Don’t Kill Growth, People Kill Growth” is one of my all-time favorites. In particular, check out my numerical example; I think I isolated what was bothering me about the way the BEA reports on GDP.

10 May 2017

Another Slight Correction to a Boudreaux Anti-Tariff Argument

Trade 30 Comments

In my never-ending quest to get everything perfect, I once again must quibble with one of Don Boudreaux’s free trade (or anti-tariff) arguments. Now for context, Don publishes three of these a day, so the fact that I object once a month means I endorse just about everything the guy writes…

Anyway, here’s Don’s piece (in the form of a letter to the editor) that I think is a bit off:

Jeff Jacoby superbly analyzes the Trump administration’s proposal to slap punitive tariffs on softwood lumber imports from Canada – that is, the administration’s proposal to punitively tax Americans who buy softwood lumber from Canadians (“Trump’s tariffs will hurt Americans,” May 3). The goal, of course, is to reduce the amount of Canadian lumber that we Americans receive in exchange for our dollars.

Mr. Trump boasts about his mastery of the “art of the deal.” Given his administration’s approach to trade, we can therefore conclude that, in Mr. Trump’s mind, a truly masterful deal-maker is someone who, with each deal, commits himself to give to his trading partner as much as possible while he himself – the masterful deal-maker – gets in return as little as possible.

You’ll forgive me for being skeptical that such ‘artful’ deal-making will increase our prosperity and make America great again. [Bold added.]

So to reiterate, obviously I agree with Don that slapping tariffs on Canadian lumber makes Americans poorer, but I think his actual argument is wrong. (And so if Don hopes Trump sympathizers will come around, he might understand why they would reject his particular attempt.)

It’s the part I’ve put in bold that is wrong. And since that particular error is the whole crux of this letter, I think the whole thing blows up in Don’s face.

When the United States government puts a tariff on Canadian lumber, that doesn’t make Americans give more to Canadians for Canadian lumber imports. If you think the U.S. is a small player in the world market, it will have no effect on the price. Or, to the extent that reducing U.S. demand for Canadian lumber has an impact on price, it will actually cause the Canadians to give us more lumber per dollar we give to them.

Now the source of the error here is our usual notion of looking at the particular American importer. From his perspective, a tariff makes him pay more for Canadian lumber. But clearly Trump (and Don, since he’s trying to argue on Trump’s own terms) is thinking of it in terms of “us vs. them.” And clearly, the U.S. levying a tariff on Canadian lumber means that either the U.S. gets the same amount of wood per dollar we send them, or we get more wood per dollar. It’s true, the particular American importer gives up more dollars per unit of wood received, but it’s not all going to Canadians; some is getting redirected to Washington. To repeat, the amount “getting through” to Canada is at most the same (per cord of wood imported), or if anything lower.

In the big picture, the problem with a tariff on Canadian lumber is NOT that it forces Americans to give more resources (per unit of wood) to Canadians for the Canadian lumber that Americans continue to import, even after the tariff is levied. (To repeat, in general it’s possible that on this dimension the tariff IS beneficial.) Rather, the problem with this tariff is that it leads Americans to partially reduce the amount of wood obtained from Canada, and to replace it with domestic sources, even though the total resources expended “internally” vis-a-vis other Americans is more than what we’d have to send to Canadians for the same amount of wood.

08 May 2017

Fake News: How I Became Part of the Problem

Conspiracy 15 Comments

When I was doing research for an op ed on Venezuela, I came across a hilarious find and asked Natalie Danelishen to whip up a meme. Isn’t it perfect?

I posted this beautiful meme on Facebook and Twitter. People loved it. It was shared hundreds of times, the last I checked.

There’s just one problem. Bernie Sanders (almost certainly) didn’t write or say that.

How is this possible? Am I just a big fat liar?

Here’s what happened:

When I was doing research for my op ed, I knew that a lot of people had praised Hugo Chavez. So I googled something to that effect, and got some good hits. For example Joe Stiglitz said some awkward things (though go to the source to see exactly what he said).

But I also found a person who (somewhat recently) claimed that Bernie Sanders had praised Chavez’s policies back in 2011. I clicked on the link, and sure enough, it looked legit. It was hosted on Sanders’ official government website, and at the top of the article there was just a newspaper listed, with no author. So it certainly looked like it was an op ed that Senator Sanders had had published in the “Valley News” in 2011. I thought I had done my due diligence, and sent the text (with the year, to be fair to Bernie) and the link to Natalie to memefie.

And yet, my procedure wasn’t good enough. The “must read” section from Sanders’ website is clearly linking to other people’s stuff. And then when you find the original article, you see it is almost certainly an unsigned editorial from the Valley News, rather than something that a senator sent to the newspaper as an op ed piece.

So, my apologies for the wrong link I gave here at Free Advice back when I first stumbled upon the article, and my apologies to all internet users for unwittingly spreading fake news. (I took down the meme from my social media accounts and posted a follow-up warning once I realized it might be wrong.) Thanks to E. Harding who first warned me that Sanders probably didn’t write the article.

07 May 2017

Heaven on Earth

Religious 13 Comments

I was going over the “Our Father” very slowly with my son, since there is often a tendency for Christians to rush through it without really contemplating the words. When we got to “Thy kingdom come, thy will be done, on Earth as it is in Heaven,” I stopped to dwell on just how amazing the world would be, if everybody obeyed God.

I don’t think even standard libertarian anarchists realize just how destructive the State is, and how unimaginably prosperous the world would be as a stateless society.

However, although getting rid of major institutions of theft and violence would be great, that’s arguably a drop in the bucket compared to how inconceivably joyous life would be if nobody ever sinned. Can you imagine how different you would be, if your parents (assuming you knew them) never made a mistake in bringing you up, and none of your peers ever said an unkind word to you growing up? Imagine if you never had a teacher or boss who ever unfairly criticized you or quashed your legitimate ambition?

I’m not saying I can imagine it either. The closest thing I can do is remember how happy I was circa kindergarten. And then it was all downhill from there…

You may remember in previous posts that I suggested that perhaps hell is when, after you die, God shows you the full ramifications of your sins during your life. You see in exquisite detail just how much suffering YOU CAUSED. And then you just sit with that for eternity. I could see that being described as burning in fire forever, and yet it also being perfectly just. You would be in anguish because of your own value judgments, your own conscience applied to your life with razor sharp clarity.

So, if that is true, then take it the opposite. If the present world we live in–awash with sin–is full of the hell-like anguish caused by billions of people, then imagine if you ran it in reverse. Imagine if just one person had lived a sinless life; then all of the countless suffering HE caused would be gone. And so on and so on, billions of times over. (It’s not just the people alive today, but also the people from the past. After all, when Marx e.g. sees the ramifications of his actions, it’s not just going to be the paperboy whom he treated rudely.)

It’s possible that in a world free from sin, the material productivity of our resources would defy our current understanding. Even our bodies would perform at extraordinary levels if we never had a moment of anxiety or stress stemming from social factors.

It would be paradise.

And that makes it all the more heartbreaking that we so habitually ignore God’s rules.

03 May 2017

An Interesting Development in the Banking System

Banking 13 Comments

For a while I have been meaning to investigate the drop in reserve balances maintained with Federal Reserve banks, but I’ve been swamped with projects and traveling. But at least let me document it for you. Any ideas? (Click on image for full size.)