KA-POW! #42 - Shostak

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Frank Shostak for “Is Deflation Really Bad for the Economy?” :

A general fall in prices can also emerge as a result of a fall in the money stock. An important cause for such a fall is a decline in fractional-reserve lending. The existence of a central bank and of fractional-reserve banking permits commercial banks to generate credit not backed up by real savings, i.e., credit created out of thin air. Once the unbacked credit is generated, it creates activities that the free market would never support — activities that consume, and do not produce, real wealth. As long as the pool of real savings is expanding and banks are eager to expand credit, various false activities continue to prosper.

Whenever the extensive creation of credit out of thin air lifts the pace of real-wealth consumption above the pace of real-wealth production, this undermines the pool of real saving. Consequently, the performance of various activities starts to deteriorate, and bank's bad loans start to rise. In response to this, banks curtail their loans by not renewing maturing loans and this in turn sets in motion a decline in the money stock.

KA-POW! #41 - Kelly

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Kel Kelly for “Give Capitalism a Chance” :

My main message is that most of our economic problems derive from previous government intervention in the economy. In its attempts to "help" us, the government has managed and regulated the economy, and passed laws that sounded constructive but that in fact hurt the economy and us.

Political economic reality is replete with the law of unintended consequences. Our economic problems are the natural result of political forces, not the natural result of (supposedly evil) market forces. We have voted our current problems into existence by electing politicians who promised to help us by means of economic intervention and regulation.

KA-POW! #40 - DiLorenzo

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Thomas J. DiLorenzo for “Our Totalitarian Regulatory Bureaucracy” :

It may sound shocking to some, but modern-day America compares "favorably" to fascist Germany of the 1930s with regard to the degree to which the state interferes with and controls economic activity. First of all, government expenditures at all levels of government account for about 40 percent of national income. ... This doesn't count all of the off-budget government agencies that exist at the federal, state, and local levels of government as James Bennett and I documented in our book, Underground Government: The Off-Budget Public Sector. If this is included, government expenditures as a percentage of national income would be at least 45 percent, which is not so far from the 53 percent in Nazi Germany that Hayek alluded to.

KA-POW! #38 - Rothbard

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Murray N. Rothbard (again) for “Carter's Energy Fascism” :

... Here, we must point to a vital distinction that lies at the heart of economic science: between "scarcity" and a "shortage." Not only are all forms of energy scarce, but all goods and services, without exception, are scarce as well. That is, people could always use more of them if available. We have always lived in a world of scarcity for all goods, and we always will, short of the Garden of Eden; economic development over the centuries has consisted in making goods relatively less scarce than heretofore. The test of whether or not any good or service is scarce is very simple: is its price greater than zero? If it is, then it is scarce. Happily, air is not scarce, and so its price on the market is zero (although this is not true of conditioned air.)

KA-POW! #37 - Rothbard

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Murray N. Rothbard for “Carter's Energy Fascism” :

... What the State, what every would-be tyrant wants, of course, is war. War, especially a war that the State is in no danger of losing, provides the perfect milieu for all power to redound to the State, for siphoning wealth from private into governmental hands, for 'making the bastards obey'. War, as Randolph Bourne so perceptively pointed out a half-century ago, "is the health of the State."

For, generally, in their private lives, people wish only to go about their business in freedom, to be left alone with the money they have earned to run their lives as they see fit. Throughout history, governments and their rulers have sought to pull the wool over the eyes of their subjects, to make them like, or at least be resigned to, the oppression and exploitation they suffer at the hands of the State.

KA-POW! #36 - Mises

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Ludwig von Mises for “The Market Economy as Affected by the Recurrence of the Trade Cycle” :

The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the malinvestment and the overconsumption of the boom period and that such an artificially induced boom is doomed. ...

...[W]e must call the boom retrogression and the depression progress.

“Beyond Columbia”

Big Tuck tapped the breast of his body armor and said...

[Sorry, the review period has ended.]

KA-POW! #34 - Rockwell

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Llewellyn H. Rockwell Jr. for “Freedom of Association” :

We live in antiliberal times, when individual choice is highly suspect. The driving legislative ethos is toward making all actions required or forbidden, with less and less room for human volition. Simply put, we no longer trust the idea of freedom. We can't even imagine how it would work. What a distance we have traveled from the Age of Reason to our own times.

KA-POW! #33 - Tucker

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Jeffrey A. Tucker for “A Society of Mutual Benefactors” :

When do we say, "you're welcome"? We say that when we give a gift (a good or service) to a person without receiving anything in return. For example, I might hold a door for a person. That person says, "thank you," and I say, "you're welcome." Another time might be at a birthday party when the recipient of a gift expresses thanks.

These are one-way examples of benefaction. We are giving but not necessarily getting anything tangible in return. What makes the case of the commercial exchange different? Why do both parties say, "thank you"? It's because each side gives a gift to the other.

KA-POW! #32 - Fedako

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Jim Fedako for “The New Bureaucratic Man” :

There is something to Trotsky's vision of man under communism. From all historical appearances, man under a totalitarian state functions differently than a man under liberty. And degrees of man exist as society slowly turns from liberty to slavery.

...

One year, at the beginning of spring, a duck built a nest in the moat, under one of the many bushes. As her ducklings hatched and grew, it came time for them to search for water. However, despite their repeated attempts, the ducklings could not jump from the moat to the walkway bridge.

KA-POW! #30 - Riggenbach

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Jeff Riggenbach for “John Holt: Libertarian Outsider” :

What Holt wanted, in a nutshell, was freedom for those being pushed around — freedom from interference by others. But, he wrote in Freedom & Beyond, "few of us really believe in freedom. As a slogan, it is fine. But we don't understand it as a process or mechanism with which or within which people can work and live. We have had in our own lives so little experience of freedom, except in the most trivial situations, that we can hardly imagine how it might work, how we might use it, or how it could possibly be of any use to us when any serious work was to be done."

KA-POW! #29 - Tucker

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Jeffrey A. Tucker for “Are We a Self-Hating Commercial Society?” :

I'm on a Sunday walk and a nice boy tries to sell me lemonade. A budding entrepreneur! Still, I decline. So he strengthens his pitch: "I'm donating the profits to stop child abuse."

...

This proves that the traditional rap on capitalism is false. It is not only about private gain for the few. Business can be as enlightened as the individuals running them. Note that all this praiseworthy other-directedness is being accomplished within the matrix of exchange, which has wrongly been maligned as selfish. As we can see, there is no contradiction between doing good and doing well. All these innovations that merge the third sector of charity with the first sector of profiteering illustrate that capitalism can adapt itself to an age of broad-minded social concern.

KA-POW! #28 - Mogambo

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to The Mogambo Guru for “No Cure for Government Spending” :

“Nothing can be done and you are a moron for trying” is a snotty-yet-unshakable Foundation Stone of the Mogambo Grandiose Economic Theory (MGET), which, as a corollary, also says that you should always bet against the government using a fiat currency over the long term because that particular bet has always paid off, paying out unbelievable odds, which means you should be buying gold, silver and oil with Both Freaking Hands (BFH).

KA-POW! #27 - Upshur

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Abel P. Upshur for “Our Federal Government” :

The principle that ours is a consolidated government of all the people of the United States, and not a confederation of sovereign States, must necessarily render it little less than omnipotent. That principle, carried out to its legitimate results, will assuredly render the federal government the strongest in the world. The powers of such a government are supposed to reside in a majority of the people; and, as its responsibility is only to the people, that majority may make it whatever they please.

...

But in a country so extensive as the United States, with great differences of character, interests and pursuits, and with these differences, too, marked by geographical lines, a fair opportunity is afforded for the exercise of an oppressive tyranny, by the majority over the minority.

KA-POW! #26 - Palmer

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Matt Palmer for “Rothbard and the Nature of the State” :

The Rothbardian perspective is distinctive because he refuses to interpret the actions of states as belonging to a special class of human action. Rothbard holds all people to the same standard of conduct, whereas others give the actions of states special moral considerations. For instance, if one person who is not designated as possessing state authority threatens another person with violence in order to take their property it is considered criminal. However, the very same action if committed by those with state authority is not considered criminal. Nobody can deny that the actions are the same, even if the intentions are different. The difference in these actions is simply a matter of how the actions are interpreted.

KA-POW! #25 - Read

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Leonard Read for “Find the Wrong, and There's the Right” :

Man, on the other hand, does not now possess a like set of instinctual do-nots: built-in prohibitions. Instead, he must enjoy or suffer the consequences of his own free will, his own power to choose between what's right and what's wrong. In a word, man is more or less at the mercy of his own imperfect understanding and conscious decisions.

KA-POW! #24 - Casey

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Doug Casey for “How to Survive Financial Collapse Right Now” :

Because governments are not living persons who care and can be motivated to do the right thing. They are collections of individuals — politicians and bureaucrats, not exactly the most desirable types — who pursue their own interests. Regardless of the rhetoric, their interests coincide with the public good only on occasion, like a broken clock being right twice a day. Even in the most enlightened times — even in the best of times — governments have huge incentives to spend more than they take in. These are not the best of times; the population has been trained for generations to expect subsidies and freebies as their due, without regard to who pays or how they will be paid.

KA-POW! #23 - LeFevre

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Robert LeFevre for “Self-Ownership” :

If one contemplates the situation, it will be seen that the slave relationship is wholly improper for it presumes to transfer the control of one living man into the hands of a second living man. The condition is contrary to nature and can only be maintained if both play their specific assigned roles. The slave must act as though he did not control himself, as though, indeed, the slave-master did control him. The slave-master must act as though he really could and did control the slave. But the slave always controls himself, even though he may do so in harmony with his owner's wishes.

KA-POW! #21 - Bonner

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Bill Bonner for “A Propensity to Screw Up” :

Price movements are neither good nor bad; it depends on the cause of them. In a properly functioning economy, prices go up and down. Rising prices suggest scarcity, signaling to consumers that they should switch to substitutes. And they tell producers to get on the ball and stock the shelves with new supply. Falling prices send the opposite message…trimming profit margins and telling producers to cut back.

Here at The Daily Reckoning, when we go into a liquor store and find lower prices, we are delighted. We stock up. But we are clearly out of step with mainstream economists.

KA-POW! #20 - Bonner

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to Bill Bonner for “The Expanding Industry of US Government” :

Have you wondered why the costs of running for public office have soared? That’s obvious too – because the stakes are higher. As the federal budget grows so does the pork that each member of congress can pull out of the barrel.

The number of congressmen is more or less constant (though it grows with population…after a 10-year lag for the census). But the amount of money given out increases…making each congressional seat more lucrative. You can do the math yourself, but the point is – crime pays. At least, for a while…

The trouble with crime is that it only makes the criminals rich. Everyone else gets poorer.