25 Jul 2014


Potpourri, Shameless Self-Promotion 24 Comments

==> Are there Mulligans in climate policy? I say yes.

==> An interesting interview on investors and Austrian economics.

==> David Stockman agrees that the stock market is poised to fall. By the way, come hear him in Nashville!

=> I write about gold as an inflation hedge. (And by “inflation” I mean “banana.”)

==> I had words of wisdom for the young radicals at Mises U last night. Everyone agreed that my conclusion was the best part.

24 Responses to “Potpourri”

  1. guest says:

    Ron Paul: “Free bananas!”:


  2. Transformer says:

    How would you compare investing in gold compared with investing in stocks ?

    http://en.wikipedia.org/wiki/Gold_as_an_investment seems to suggest that since 1980 the dow has done much better

    • guest says:

      One of the articles that Bob links to talks about that:

      Investors and Austrian Economics

      MI: In spite of lackluster growth on Main Street, Wall Street appears quite happy with growth over the past two years. For the casual observer, one might argue that the Fed has managed things well. What do you see as problematic with the current approach, and are there some in the finance world skeptical of the Fed’s current strategy?

      RB: The Fed has a series of mistaken theories supporting their belief that higher stock prices indicate the success of their policies.

      The first is the thinking that asset prices are actual wealth, when they are only the prices of the capital goods, which are a form of real wealth. Asset prices, in real terms, are the exchange ratios between consumption goods and capital goods. Artificially-boosted asset prices mean only that the owners of assets who bought them at lower prices have increased their consumption possibilities in relation to non-owners of assets. The owners of most assets, the so-called “1 percent” are the beneficiaries of Fed policies.

    • skylien says:

      Transformer, just a question. And this should not imply that stocks are bad, but don’t you think picking 1980 as starting point is not a bit biased in favor of stocks?

      Of course i think that usually stocks with reinvesring dividends should do better than gold on average, except when world monetary affairs get a bit unhinged, which of course according to one side is basically not possibly today anymore, while others think it is a sure thing but just a matter of time.

      And if you want to look at it only empirically, then i think 40 years since this system is in place is much too short to give any significant results on that question., do you agree?

      • Transformer says:

        Empirically both gold and stock prices appear to have been quite bubbly and prone to booms and busts – both likely driven by the same underlying bad monetary policy.

        I agree choosing 1980 is a bit unfair on gold – but I don’t think its that obvious that gold has done better even taking a longer time frame , is it ?

        • skylien says:

          I agree on both points. Right it is not obvious, but even if it would for me the maximum time frame of 43 years now is not statistically significant. Even for countries that are not backed by the IMF etc a full cycle can last decades, so for a worldwide regime i would at least want that Nixon would have closed the gold window in 1771. Then we could talk about gold vs stocks within a purely fiat world empirically.

      • Scott H. says:

        I don’t know about this analysis. Couldn’t we point to the nature and magnitude of “equity-like” returns versus “commodity-like” returns for capitalism? Those observations certainly go back further than 40 years.

        • skylien says:

          Gold still has monetary functions, and since golds performance strongly depends on the quetstion if the current world monetary configuration is viable or not, and this scenario obviously needs multiple decades to play out, 40 years in my view are clearly not enough.

          It is like trying to find out if water changes its aggregate form when cooled, and then calling the result early when at 5 degrees celsius it hasn’t done that yet.

          • skylien says:

            with aggregate form i mean the physical condition of water if that wasn’t clear.

  3. Z says:


  4. Tel says:

    If there were no Mulligans in climate policy, we would still be facing the “global cooling” claims from the 70’s.


    • Harold says:

      Why is this one coming up still? The scientific consensus in the 1970’s was about 6 to 1 in favor of global warming. There were a few papers speculating about global cooling. There were only a few tens of papers, compared to thousands today. There is NO valid basis fro your claim. Please stop trotting it out.

      • Tel says:

        The scientific consensus in the 1970′s was about 6 to 1 in favor of global warming.

        Can’t imagine where all those newspaper articles were coming from, not to mention the CIA report, NOAA, Time Magazine, Newsweek, The New York Times, Associated Press, Christian Science Monitor, various universities, etc.

        After a week of discussions on the causes of climate change, an assembly of specialists from several continents seems to have reached unanimous agreement on only one point; it is getting colder.

        Presumanly back in the 70’s “unanimous agreement” meant one person in 6 agreed. Funny how words change meaning over time.

        • Harold says:

          That’s because you are quoting newspapers and I am citing scientific papers. If you want to use mass media to inform yourself of the status of current (or past) scientific debate good luck to you.

          A survey of teh 68(yes, only 68) papers published before 1989 showed 10% predicting cooling, 62% predicting warming and 28% taking no stance.

          The media found the ice age stories more compelling, so focussed entirely in them at the time. The majoority opinion among climate scientists was that warming was more likely (by 6 to 1)

          • Major.Freedom says:

            Since when did “science” tell us to put equal weight on each and every paper on climatology?

            Just askin’

            • Harold says:

              I referred to the consensus, not the truth. The published literature may not be perfect, but is as good as we are going to get to establish the opinions at the time.

              You raise an interesting point, but not one that is relevant here. Where quantitative data is published, then a meta analysis can combine different results in a statistically valid way. This is why meta analyses are more convincing that reviews, which give an overview of published literature.

              • Major.Freedom says:

                How is it not relevant?

                If you have 99 papers predicting warming, and 10 papers predicting cooling, and most of the 99, or most of the 10, are bases on what are now known as dubious theoretical assumptions, then I fail to see why we should go by pure numbers of papers concluding this or that, as if truth itself is established by democratic vote.

              • Tel says:

                Newspapers, in case you haven’t figured it out are published literature.

                The articles linked to were generally quoting scientific opinion of the day, including conferences, etc.

                You might notice NOAA amongst the organisations who discovered cooling at the time, you know, the government funded research type NOAA.

  5. Tel says:

    On the subject of “Potpourri” here’s a young lady I have not heard of before, she also links through to “Public Banking” and some other interesting ideas.


    The Public Banking idea sounds like a bit of a variation from the Infinite Banking Concept, both are savings-based rather than debt-based banking, but Ellen is pushing for local government ownership, where Murphy prefers the private insurance contract. In a Libertarian world, both types of banking would be an option.

    • guest says:

      Ellen Brown’s Web of Debt Is an Anti-Gold Currency, Pro-Fiat Money, Greenback, Keynesian Tract. Here, I Take It Apart, Error by Error.

      Ellen Brown has thrown in the towel. She is no longer willing to argue with me. I finished my critique of her on November 17, 2010. On November 20, she publicly switched sides. She came out in favor of Bernanke, the Federal Reserve System, and quantitative easing.

      Economic Error #1: Governments Should Get Out of Debt by Printing Paper Money.

      Ellen Brown writes that governments can print money and buy whatever they need without going into debt to banks.

      Economic Error #13: The Government Can Pay Off Its Debt, Inflation-Free, by Printing Money.

      Ellen Brown believes that the Congress of the United States has the ability and the moral responsibility to create wealth by printing pieces of paper, so long as the pieces of paper have a statement on them that says that these pieces of paper are “legal tender.”

      Economic Error #19: If the Government Prints Money, There Will Be No Need for an Income Tax.

      Ellen Brown believes in something for nothing. Usually, we call this socialism. But Ellen Brown does not like to think of herself as a socialist, so she simply spouts the standard socialist line, expecting her readers to believe it. Do you believe it?

      • Tel says:


        Clearly, there are some who are upset by the Fed because they see it as the epiphany of profit seeking private enterprise, while others see the Fed as the dead hand of government interference in the market. Some would argue it is the worst of both worlds, and I have no doubt some would argue it is the best of both.

        I recognize that Ellen Brown feels attracted to the idea of a trustworthy government, while many of us are reluctant to believe there is such a thing. I’m certainly not saying I agree with her, but thanks for the links, I’ll see if I can make sense of it.


        I found that a deeply moving article, do you think Ellen would make sense of it?

        • guest says:

          That was a great article.

          I’m guessing that Ellen Brown would be ideologically opposed to corporatism, but would not realize, as the article points out, that her beliefs actually result in corporatism.

  6. John says:

    I found that article very interesting also, and I think it raises the fundamental question that Tel is getting at. The article seems to recognize that the free market was throwing off some scary consequences at the turn of the century, but indicates that government efforts to deal with these problems (and I know there’s a theory that the government actually caused these problems, but leaving that to one side) caused the rise of corporatism. I actually think many would agree with some variant of this argument. The question for me is, is it really true that government action must always be counter-productive or foolish? For example, the article criticizes affirmative action, and seems to adopt a version of Bob’s critique of anti-discrimination laws generally because the market will end job discrimination on its own. This is actually an area with which I have some personal familiarity, and the extent to which employers will “pay” to discriminate is quite stunning. It is worth a great deal to people and companies to discriminate. Doesn’t make a lot of sense economically, but it seems to be true anyway — I
    know many economists have that view — which is why Epstein’s arguments (which mirror Bob’s) regarding anti-discrimination laws have not been generally accepted. It looks to me like imperfections and problems in the market would (and perhaps have) allowed job discrimination to continue to this day and for a long time to come. I know others disagree. But if it’s true that the market can’t effectively or timely correct problems like this, then only government can (I think). Do we prefer the harshness of the free market (as described or perhaps implied to some degree in the article at issue) or can we insist instead on a more trustworthy government that could alleviate or correct some of these imperfections? I know many say, absolutely not, but then must we accept what we are left with — including discrimination and many of the other issues of the free market? It seems to me that to be honest, we cannot say, no, these problems aren’t real. For example, I’ve read Bob on child labor, and for me (and I suspect many others, including labor experts) his arguments are so optimistic as to be unrealistic. Is there really significant doubt that if child labor laws were repealed, there would be a substantial increase in the poorest children working in factories in awful conditions? Are we ready to accept that, and other similar results (including terribly long hours, much less safe work conditions, etc.) because we believe the freest market will grant the most prosperity to the most people? That’s the question for me. I just don’t think it can be avoided by claiming that these things simply aren’t likely to happen, or that the evidence that they happened to a greater or lesser degree in the past isn’t real. It’s like saying the air isn’t likely to get dirtier if we scrap the EPA. To me that argument has little grounding in the evidence and is a kind of wishful thinking. The air was becoming unbreathable before the EPA; it is largely unbreathable now in China, with no regulation. Are we ready to take the consequences of the free market with no one and nothing on the outside to say “hold on there?” That’s a question I think Ellen and others are struggling with. I know I am.

    • guest says:

      It looks to me like imperfections and problems in the market would (and perhaps have) allowed job discrimination to continue to this day and for a long time to come. I know others disagree. But if it’s true that the market can’t effectively or timely correct problems like this, then only government can (I think).

      Discrimination, per se, isn’t actually a problem at all, since people have a right to their opinions and, as a matter of ownership, have the right to prevent whoever they want from using their property, and for whatever reason, including racism.

      On the issues of discrimination against blacks and the disabled, these offer perspective regarding the superiority of free markets over regulation:

      A black man’s view on Ron Paul being racist Part 1

      [Time stamped]
      Thought Controllers Call Ron Paul “Extreme”

      On the issue of bad working environments, the environment, and child labor:

      The Sweatshop Issue

      [Time stamped]
      Classic Ron Paul – 1988 Campaign Interview (part 2)

      Defending the Undefendable (Chapter 26: The Stripminer) by Walter Block

      [Time stamped]
      Applying Economics to American History | Thomas E. Woods, Jr.

      Defending the Undefendable (Chapter 32: The Employer of Child Labor) by Walter Block

Leave a Reply