Spoken Mises

Will Rogers wrote: "This country has come to feel the same when Congress is in session as when a baby gets hold of a hammer." Americans can breathe a sigh of relief that no new legislation is imposed upon them during Congress's summer break. Unfortunately, that relief is very temporary, since much of break time is used to promise constituents new legislative "solutions" at others' expense in exchange for votes. And then Congress returns. Bruno Leoni explains how it all works.

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No More Legislation (3.40 MB)

From the housing bubble to the latest brief upward explosion in the stock market, writes William Anderson, we are now faced with the hard reality that there is no place for this huge wad of cash to go. It is not the case that we have a "liquidity problem" because there is no money to lend; we have a "liquidity problem" because the outlets for borrowed money have shrunk drastically. It now seems that the authorities have learned nothing from the financial disasters of four decades ago: they are determined to make the rest of us repeat them.

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The Party is Over - Again (2.09 MB)

Today we remember the victims of Katrina, but, writes Mark Thornton, we should not forget that government levees have been failing in minor and major disasters throughout their history. Recall, for example, the Great Flood of 1927. The similarities are startling. A known threat was approaching and yet all the government spending and planning completely failed. In fact, in both cases the government turned a normal problem into a major disaster. The African American population was hurt disproportionately in both cases. In 1927 Herbert Hoover promised aid and assistance which failed to materialize (this was a major reason for the black exodus from the Republican to the Democrat party). In both cases it was individuals and organizations — both commercial and charitable — that did the real work of reconstruction.

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Katrina and the Great Flood of 1927 (1.47 MB)

A common argument against Austrian theory, writes Brian Stanley, is that entrepreneurs are too smart to be fooled by Fed intervention. The argument claims that entrepreneurs recognize the Fed actions and ignore the Fed by proceeding as if the interest rates were where they would be if they were set by the free market and not by Fed intervention. If this contention is true, the business cycle theory is wrong in its conclusions about what causes the boom and bust cycle. In fact, it isn't possible to determine what the natural rate should be. Small businesses particularly can't be expected to recognize and react to Fed intervention, and there is no evidence that even large, sophisticated businesses can perform any relevant and meaningfully accurate calculations and forecasts.

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Why Don't Entrepreneurs Outsmart the Business Cycle? (3.69 MB)

I live in Alabama, and my state's economic development agency is perhaps among the most active in the country. It is now certainly among the best funded, as voters here recently approved a referendum increasing a cap on the oil and gas royalties that fund its activities to $750 million. It will use this money (ostensibly) to generate jobs, retain existing jobs, attract capital investment, nurture nascent industries, and rescue stagnant ones. Since state governments waste millions of dollars a year with conscripted capital, it is hard to oppose this spending. After all, this is spending not for special interests, but for everyone. Right?

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The Dilemma of State Economic Development (1.24 MB)

Lots of people get interested in political ideas through political campaigns. Maybe this is because politics forces you to decide who you are and what you believe. I can vaguely recall when I was very young, perhaps 7 years old, that I discovered that my best friend's family considered themselves Democratic whereas I was pretty sure that my family was Republican. I asked someone what that meant and only received hazy answers that concerned seemingly big issues about government. I didn't think much about it but nonetheless, they were my first thoughts on the thing that would consume my life. So it is for lots of people: politics is the entry way into taking political ideas seriously. If your interest intensifies, you tend to go one of two ways: wonk or geek. These are terms that applies in many categories of life—Wikipedia gives serviceable definitions of both wonk and geek—but the terms take on new meaning in politics.

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A Political Theory of Geeks and Wonks (1.18 MB)

This year banana producers in China suffered a disastrous loss, writes Dean Peng. Banana prices plummeted in Canton and Hainan, the two tropical provinces that provide almost all the domestic bananas. Tons of ripe bananas rotted in their plantations. Almost all planters lost money; some went bankrupt. It soon became clear that the real cause for the fall in banana prices was overproduction. Bananas had been selling well in recent years, and many new producers moved to Hainan to open new plantations. The result was a serious over-supply. Thus arose calls for new regulations. For many people, the only reasonable resolution to imperfections in the market is more government regulation. In fact, the only problem with the market results from regulation against information sharing between producers.

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Government Regulation Goes Bananas (1,022.00 KB)

Faced with mounting public criticism over the Justice Department's decision to shutter several locally authorized California medical marijuana dispensaries, Drug Czar John Walters recently traveled to Northern California to oversee police efforts to eradicate clandestine marijuana crops growing on public lands, and to label California's pot farmers as "terrorists." According to a published report, writes Paul Armentano, the Czar proclaimed, "[T]he people who plant and tend [these marijuana] gardens are terrorists who wouldn't hesitate to help other terrorists get into the country with the aim of causing mass casualties." While Walters's hyperbolic statement was no doubt meant to piggyback on recent terrorism fears fueled by US Homeland Security Chief Michael Chertoff, the allegation nonetheless reeks of desperation and dishonesty.

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The Pot-Pushing "Terrorists" Under Your Bed (857.00 KB)

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A Policy of Unrelenting Force (1.31 MB)

If the Lord God Jehovah had not created Basil Zaharoff, some novelist sooner or later would certainly have got around to the job. Indeed, it is by no means certain that Zaharoff, as we have him, is not the joint product of God and the fiction writers.

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The Merchant of Death: Basil Zaharoff (14.71 MB)