07 Jul 2014

Tom Woods Interviews Me About Private Defense

Shameless Self-Promotion 227 Comments

Here’s the YouTube version of my recent interview with Tom:

Like what you hear here? Then come to Nashville on August 15 to hear more of Tom and me, plus David Stockman! (And others.) Details here.

07 Jul 2014

Accounting for Capital and Income

Capital & Interest, Inequality, Piketty, Shameless Self-Promotion 90 Comments

In my latest EconLib article, I first walk through the basics of income and capital accounting. (Even if you think this is standard stuff, you might want to skim it because there are some subtleties.) Then I give three examples of how people often get mixed up about what the empirical evidence means. In particular, I offer a theory to explain why the new Saez-Zucman measure of wealth inequality departs so dramatically from what used to be the gold standard, the Kopczuk-Saez measure (based on estate tax returns).

07 Jul 2014

Murphy vs. Hank Paulson on Climate Change

Climate Change, Shameless Self-Promotion 7 Comments

I am working on a post that gets into the specifics, but my first reaction to Henry Paulson et al.’s recent evangelism on climate change policy. An excerpt:

In a sense, Henry Paulson actually is a great guy to be spearheading the movement to get the federal government heavily involved in the energy sector. He has a history of obfuscation and mafia tactics with which he showers his cronies with government-backed privileges.

07 Jul 2014

The Legendary Pat Murphy

All Posts 1 Comment

My dad had back-to-back gigs while I visit for the holiday, so I made a medley.

05 Jul 2014

The Founding Fathers and Moral Courage

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My latest LibertyChat article. The stirring conclusion:

So as I reflect this Fourth of July on the men we are taught to revere as our “Founding Fathers,” I celebrate not the willingness to kill for liberty, but instead the willingness to do what is right, regardless of the effects on popularity or even personal safety. On this score, few people in human history have performed better than the radical Thomas Paine.

05 Jul 2014

Mises Institute USA and Canada Events

Austrian School 1 Comment

From July 20 – 26 I will be in Auburn AL at the original Mises Institute for the famous “Mises University.” This is the flagship event for the Mises Institute in which we provide a comprehensive introduction to Austro-libertarian thought. I realize a week in Alabama in July doesn’t sound appetizing, but it is truly a life-changing experience, particularly for undergrad students (the primary target audience). Here’s a short video explaining it. I imagine they are all booked at this point, but here is a link to enroll for the live video feed.

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For those closer to Toronto, there is another option starting this year. Mises Canada is hosting a 3-day “Rothbard University” from July 16-19. (If you buy tickets here, use promo code “Murphy”.) Separately you can buy tickets to dinner with Walter Block.

(Just to be clear, I’m not teaching at the Mises Canada event this year, but they asked me to help get the word out since it’s a new event.)

I’ll be at FreedomFest next week with Mises Canada, if any of you are going to Vegas, baby…

04 Jul 2014

The Fed Flirted With Insolvency in December

Federal Reserve 9 Comments

For a while now I have been warning people that even a slight rise in interest rates could render the Fed technically insolvent, because the market value of its assets would be lower than its outstanding liabilities. In terms of accounting, therefore, it would have negative shareholder equity.

Now in early 2011, there was a rule-change that would possibly rescue the Fed from officially declaring bankruptcy: In the event of a big capital loss emanating from a crash in the bond market, the Fed could conceivably argue that it owed the Treasury a negative amount of money. I walk through all of this hocus pocus here.

Yet this had all been theoretical. I was just made aware that back in December 2013, the Fed in practice came very close to actual insolvency (if it marked its assets to market). Specifically, as of 12/31/2013, the Fed reported equity capital of $55.0bn and unrealized portfolio losses of $53.3bn, meaning there was a net (mark-to-market) equity of $1.7bn supporting $4 trillion of assets. (I have seen an official auditor’s report with these figures, but I can’t find an online source to link you to.) That’s pretty leveraged.

If you want to think through what it “means” if the Fed literally goes bankrupt, read my earlier article. By no means will the government say, “Aww shucks, I guess we’ll get out of the fiat money business.” But it might spook investors and pop what I believe is our massive bubble in dollars and Treasury debt.

04 Jul 2014

Getting My Hands Dirty in the Mud With Noah Smith

Austrian School, Noah Smith, Shameless Self-Promotion 43 Comments

Here’s my response to Noah Smith. An excerpt:

So note the contradiction: On the one hand, mainstream economists ridicule Misesians for their “medieval” approach to economic theory, in which they deduce results logically rather than producing falsifiable propositions. But then these same critics tell the world that the outcome of a CPI movement destroys the foundations of Austrian theory. Huh?