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This warning offers a painful reminder of how price inflation hurts everyday Americans.

American families are already struggling amid mounting price inflation that’s eating away at their budgets, with higher costs for housing, vehicles, and more. Yet a top CEO is warning that the growing inflation problem facing Americans could get much worse in the coming months.

The latest June data already show price inflation at a 13-year high, with prices having risen 5.4 percent year-over-year. Proponents of the big-government policies driving much of this increase insist the uptick in prices is only temporary. But billionaire and grocery chain CEO John Catsimatidis just predicted that overall price inflation, for consumer goods generally, will hit a 6 percent annualized rate by October.

In an interview with Fox Business, the CEO warned that his industry is seeing skyrocketing costs on the supply chain side, and that businesses will have to raise prices for consumers as a result.

“Food prices are getting higher, and we expect even more increases by October,” Catsimatidis said. “You have to pass [those extra costs] on [to consumers] or you’re not doing your duty to God, your country, your employees, and your company.”

While we can’t know for certain, Catsimatidis said rising costs could mean an astounding 10 to 14 percent specific increase in grocery prices by October. That’s truly a shocking amount. But this warning offers more than insight into the grocery industry. It’s a painful reminder of how price inflation hurts everyday Americans.

When we hear terms like “Consumer Price Index” or “expansionary monetary policy,” the conversation surrounding inflation quickly becomes inaccessible for many people, whose eyes understandably glaze over amid discussion of the abstract-seeming phenomenon…

…click on the above link to read the rest of the article…

The Origins of the Thought Police—and Why They Scare Us

November 22, 2019

The Origins of the Thought Police—and Why They Scare Us

In a sense, “1984” is largely a book about the human capacity to maintain a grip on the truth in the face of propaganda and power.

There are a lot of unpleasant things in George Orwell’s dystopian novel 1984. Spying screens. Torture and propaganda. Victory Gin and Victory Coffee always sounded particularly dreadful. And there is Winston Smith’s varicose ulcer, apparently a symbol of his humanity (or something), which always seems to be “throbbing.” Gross.

None of this sounds very enjoyable, but it’s not the worst thing in 1984. To me, the most terrifying part was that you couldn’t keep Big Brother out of your head.

Unlike other 20th-century totalitarians, the authoritarians in 1984 aren’t that interested in controlling behavior or speech. They do, of course, but it’s only as a means to an end. Their real goal is to control the gray matter between the ears.

“When finally you surrender to us, it must be of your own free will,” O’Brien (the bad guy) tells the protagonist Winston Smith near the end of the book.

We do not destroy the heretic because he resists us: so long as he resists us we never destroy him. We convert him, we capture his inner mind, we reshape him.

Big Brother’s tool for doing this is the Thought Police, aka the ThinkPol, who are assigned to root out and punish unapproved thoughts. We see how this works when Winston’s neighbor Parsons, an obnoxious Party sycophant, is reported to the Thought Police by his own child, who heard him commit a thought crime while talking in his sleep.

“It was my little daughter,” Parsons tells Winston when asked who it was who denounced him. “She listened at the keyhole. Heard what I was saying, and nipped off to the patrols the very next day. Pretty smart for a nipper of seven, eh?”

…click on the above link to read the rest of the article…

UN Climate Change Report: A Choice between “Mad Max and Hunger Games”

October 16, 2018

UN Climate Change Report: A Choice between “Mad Max and Hunger Games”

Humanity, we’re essentially told, is doomed lest people concede their freedom to the experts, lawmakers, and bureaucrats who can save us.

The Intergovernmental Panel on Climate Change (IPCC) this week released a special report detailing all the ways climate change is predicted to wreak havoc on humans.

The report is about 800 pages long, so I’ll offer a summary to save you some time:

Global temperatures today are 1.0°C above pre-industrial temperatures.
We’re seeing an increase in extreme weather and other negative consequences as a result of the increase, including receding sea ice in the Arctic and rising global sea levels.
A 1.5°C increase will be (much) worse than a 1.0 increase; 2°C would be much worse than that.
We’re currently on track to exceed 3°C.
Only broad and drastic changes in the world economy can prevent global calamity.

The report’s glum findings were announced at a press conference by a United Nations panel in Incheon, South Korea. Panelists tried to sound optimistic, but there was no sugar-coating the report’s key finding.

“If you would like to stabilize global warming to 1.5°C, the key message is that net CO2 emissions at the global scale must reach zero by 2050,” said panelist Valerie Masson-Delmotte, a French climate scientist and research director at the French Alternative Energies and Atomic Energy Commission. “That’s the most important finding of the report.”

Barring these substantial reductions, we’re told, millions will die. Literally.

The report made it clear that fossils fuel—oil, gas, and coal—which the world heavily depends on, must be phased out to achieve this goal: especially coal.

“Coal will have to be reduced very, very substantially by the middle of the century,” said Jim Skea, a Scottish academic and IPCC panelist. “Coal has the highest carbon content of all the fossil fuels.”

…click on the above link to read the rest of the article…

Ethanol Is Terrible for Health and the Environment, but Government Keeps Backing It

August 20, 2018

Ethanol Is Terrible for Health and the Environment, but Government Keeps Backing It

The US federal government still strongly pushes corn- and soy-based ethanol despite the EPA’s new study showing its harmful effects.

When the elected officials and bureaucrats who run a government want to stack the deck in favor of a politically connected special interest, they have three main ways that they can go about it:

They can subsidize the special interest, often using taxpayer cash.
They can penalize the competition of the special interest, often through tariffs.
They can mandate that people do business with the special interest.

Each of these actions is economically harmful as government-backed subsidies, penalties, and mandates all impose unnecessary costs on regular people. Worse, they often lead to predictable, if often unintended, consequences that do serious damage beyond what they do to personal finances.

In the case of ethanol in the United States, the federal government has employed all three measures over the years, frequently with bipartisan political support. Its subsidies keep afloat politically connected businesses that wouldn’t otherwise be able to keep themselves in business. Its tariffs have kept consumers from being able to buy cheaper sources of ethanol on the global market. And its mandate to put an increasing amount of corn-based ethanol into fuel makes food more expensive.

As an example of an unintended-yet-predictable consequence, it turns out that those actions by the U.S. government to push ethanol production and use in the United States are doing serious damage to the environment. The Daily Caller‘s Jason Hopkins reports on a new study from the Environmental Protection Agency:

In a study titled “Biofuels and the Environment: The Second Triennial Report to Congress,” the Environmental Protection Agency (EPA) determined that ethanol derived from corn and soybeans is causing serious harm to the environment. Water, soil and air quality were all found to be adversely affected by biofuel mandates.

…click on the above link to read the rest of the article…

How Democracies Turn Tyrannical

August 6, 2018

How Democracies Turn Tyrannical

Both monarchs of the past and dictators more in the present have denied limits on their power to command and coerce those under their control.

For most of the last three centuries, the ideas of liberty and democracy have been intertwined in the minds of both friends and foes of a free society. The substitution of absolute monarchies with governments representative of the voting choices of a nation’s population has been considered part and parcel with the advancement of freedom of speech and the press, the right of voluntary and peaceful association for political and numerous social, economic and cultural reasons, and the guarding of the individual from arbitrary and unrestrained power. But what happens when an appeal to democracy becomes a smokescreen for majoritarian tyranny and coalition politicking by special interest groups pursuing privilege and plunder?

Friends of freedom, including many of those who strongly believed in and fought for representative and democratically elected government in the eighteenth and nineteenth centuries, often expressed fearful concerns that “democracy” could itself become a threat to the liberty of many of the very people that democratic government was supposed to protect.

The Tyrannies of Minorities and Majorities

In his famous essay “On Liberty” (1859), the British social philosopher John Stuart Mill warned that tyranny could take three forms: the tyranny of the minority, the tyranny of the majority, and the tyranny of custom and tradition. The tyranny of the minority was represented by absolute monarchy (a tyranny of the one) or an oligarchy (a tyranny of the few). The tyranny of custom and tradition could take the form of social and psychological pressures on individuals or small groups of individuals to conform to the prejudices and narrow-mindedness of wider communities who intimidate and stifle individual thought, creativity, or (peaceful) behavioral eccentricity.

…click on the above link to read the rest of the article…

What Ayn Rand’s “Atlas Shrugged” Teaches Us About the Insufficiency of Good Intentions

June 11, 2018

What Ayn Rand’s “Atlas Shrugged” Teaches Us About the Insufficiency of Good Intentions

The book is an extended lesson in what happens when we focus only on what we see.

The search for the Great American Novel should have ended in 1957 when a Russian immigrant named Ayn Rand published Atlas Shrugged. Arresting in its breadth, depth, and style, Atlas Shrugged is a manifesto on politics, philosophy, and economics wrapped up in a compelling narrative featuring larger-than-life (and smaller-than-life) characters.

Atlas Shrugged has shaped the worldview of many devotees of liberty, and it surged in popularity in the wake of the recent financial crisis since it became clear that the government’s response to crisis and recession would not be to learn from its mistakes and recede but to expand its reach.

I first read Atlas Shrugged during my fourth year of graduate school. On one hand, I wish I had read it much earlier. On the other, I feel like I appreciate it on a much deeper level than I would have had I read it in high school or college. Atlas Shrugged is my favorite novel for two reasons.

Atlas Shrugged has shaped the worldview of many devotees of liberty, and it surged in popularity in the wake of the recent financial crisis.

The Beauty of Human Potential

The first is its treatment of human potential. Atlas Shrugged is a brilliant exposition of the things that are made possible by the rational, thinking human mind. A lot of things that we take for granted are the product of free markets harnessing the power of free minds. Something as mundane as a hot cup of coffee, for example, embodies innumerable decisions by innumerable people, each with their own specialized knowledge. We see what happens throughout the book when people are unshackled and allowed to pursue their own goals. Production increases. Lives are saved. Life is meaningful.

…click on the above link to read the rest of the article…

The Federal Reserve’s Shell Game

June 8, 2018

The Federal Reserve’s Shell Game

Inflation, wealth redistribution, and the subtle art of misdirection

The Federal Reserve is a key component of the US government’s wealth redistribution apparatus. Under the guise of “macroeconomic management,” it redistributes vast amounts of wealth on an ongoing basis through inflation. The victims of these transfers are ordinary Americans. The beneficiaries are the government and its elite cronies.

The Fed masks the nature of this surreptitious taxation and corporate welfare by performing a simple shell game that is just complicated enough to confound the general public.

First, let’s imagine the government performing this kind of inflationary transfer without the shell game.

Let There Be Money

Imagine Uncle Sam sitting at a desk, representing the Federal government. His right hand is the Treasury. It has the government’s main bank account, represented by a ledger on the desk. Uncle Sam also has revenue collecting powers, represented by a gun resting on the desk, which he uses to extort taxes from the public. Whenever he confiscates money, the cash balances of the public decline, and Uncle Sam’s ledger increases by the same amount.

As the God of the Bible could say, “Let there be light” (in Latin, fiat lux) and it was so, the State can say, “Let there be money” (fiat pecunia) and it is so.

Now let’s say Uncle Sam wants to raise $200 million for current expenditures: bureaucrat salaries, weapons purchases, welfare payments, etc. The problem is, the public has a limited tolerance for overt taxation. So, at a certain point, if Uncle Sam simply gestures to his gun again to levy the funds, he might face a tax revolt.

…click on the above link to read the rest of the article…

How Mises Explained the Fall of Rome

June 8, 2018

How Mises Explained the Fall of Rome

An excerpt from Mises’ classic work, ‘Human Action’.

Observations on the Causes of the Decline of Ancient Civilization

Knowledge of the effects of government interference with market prices makes us comprehend the economic causes of a momentous historical event, the decline of ancient civilization.

It may be left undecided whether or not it is correct to call the economic organization of the Roman Empire capitalism. At any rate it is certain that the Roman Empire in the second century, the age of the Antonines, the “good” emperors, had reached a high stage of the social division of labor and of interregional commerce. What brought about the decline of the empire and the decay of its civilization was the disintegration of this economic interconnectedness.

Several metropolitan centers, a considerable number of middle-sized towns, and many small towns were the seats of a refined civilization. The inhabitants of these urban agglomerations were supplied with food and raw materials not only from the neighboring rural districts, but also from distant provinces. A part of these provisions flowed into the cities as revenue of their wealthy residents who owned landed property. But a considerable part was bought in exchange for the rural population’s purchases of the products of the city-dwellers’ processing activities. There was an extensive trade between the various regions of the vast empire. Not only in the processing industries, but also in agriculture there was a tendency toward further specialization. The various parts of the empire were no longer economically self-sufficient. They were mutually interdependent.

What brought about the decline of the empire and the decay of its civilization was the disintegration of this economic interconnectedness, not the barbarian invasions. The alien aggressors merely took advantage of an opportunity which the internal weakness of the empire offered to them.

…click on the above link to read the rest of the article…

Debt Doesn’t Matter, Because “We Owe It to Ourselves”? Why Krugman and Keynes Are Wrong about This

June 6, 2018

Debt Doesn’t Matter, Because “We Owe It to Ourselves”? Why Krugman and Keynes Are Wrong about This

It is an undeniable fact that debt, whether private or public, must, eventually, be repaid.

Creditors have better memories than debtors. This elegant line was coined by Benjamin Franklin—political philosopher, prolific writer, humorist and American ambassador to France. Mr. Franklin also was one of the Founding Fathers of the United States of America. A true polymath and a man of great common sense.

Austrian Economics Is Essential to Understand Booms, Busts, and Money Itself

May 25, 2018

Austrian Economics Is Essential to Understand Booms, Busts, and Money Itself

The boom-and-bust business cycle is a natural result of free-market capitalism, but rather of government intervention.

Looking to the next few years, will America and the world continue to ride a wave of economic growth, improved living standards, and technological changes that raise the quality of life? Or will this turn out to be, at least partly, an artificial economic boom that ends in another economic bust?

Reading the economic tea leaves is never an easy task. But the Austrian theory of the business cycle offers clues of what may be in store. In 1928, the famous Austrian economist Ludwig von Mises published a monograph called Monetary Stabilization and Cyclical Policy. It was an extension of his earlier work, The Theory of Money and Credit (1912).

Many things have happened, of course, over the last nine decades—the Great Depression, the Second World War, the Cold War, the end of the Soviet Union, roller coasters of inflations and recessions, replacement of gold with paper monies, the dramatic expansion of the welfare state, and an era of government debt fed by deficit spending to cover the costs of political largesse.

Then, as today, many governments were busy manipulating the supply of money and credit.

Yet, the laws of economics have not been overturned. As a result, like causes still bring about like effects. Minimum wage laws still price some workers out of the labor market whose value added to the employer is less than what the government dictates he must be paid. Rent controls and restrictive zoning laws create housing shortages when government interferes with market-based pricing.

Mises’ Monetary and Business Cycle Analysis Still Relevant Today

This is no less the case in the area of money and banking. When Mises published Monetary Stabilization and Cyclical Policy in 1928, most of the major countries of the world where still on some version of the gold standard.

…click on the above link to read the rest of the article…

Italy’s Countdown to Fiscal Crisis

May 23, 2018

Italy’s Countdown to Fiscal Crisis

Italy’s current scheme of piling unfunded government spending on top of an already-huge debt is a recipe for disaster.

As a general rule, we worry too much about deficits and debt. Yes, red ink matters, but we should pay more attention to variables such as the overall burden of government spending and the structure of the tax system.

That being said, Greece shows that a nation can experience a crisis if investors no longer trust that a government is capable of “servicing” its debt (i.e., paying interest and principal to people and institutions that hold government bonds).

This doesn’t change the fact that Greece’s main fiscal problem is too much spending. It simply shows that it’s also important to recognize the side-effects of too much spending (if you have a brain tumor, that’s your main problem, even if crippling headaches are a side-effect of the tumor).

Anyhow, it’s quite likely that Italy will be the next nation to travel down this path.

This is in part because the Italian economy is moribund, as noted by the Wall Street Journal.

Italy’s national elections…featured populist promises of largess but neglected what economists have long said is the real Italian disease: The country has forgotten how to grow. …The Italian economy contracted deeply in Europe’s debt crisis earlier this decade. A belated recovery now under way yielded 1.5% growth in 2017—a full percentage point less than the eurozone as a whole and not enough to dispel Italians’ pervasive sense of national decline. Many European policy makers view Italy’s stasis as the likeliest cause of a future eurozone crisis.”

Why would Italy be the cause of a future crisis?

For the simple reason that it is only the 4th-largest economy in Europe, but this chart from the Financial Times shows it has the most nominal debt.

So what’s the solution?

…click on the above link to read the rest of the article…

3 Stoic Lessons That Can Help Heal Our Toxic Political Culture

May 18, 2018

3 Stoic Lessons That Can Help Heal Our Toxic Political Culture

Back in the days of Ancient Rome and Greece, the founding fathers of the stoic school of philosophy taught the importance of rationalism.

Emotional. Tribal. Irrational. These are just three adjectives which could be applied to the political discourse of the 21st century. Both in the United States and Europe, discussions have reverted from constructive criticism and mutual understanding to name-calling, de-platforming, and retreats into echo chambers. None of this is particularly useful for a pluralistic society.

Fortunately, it doesn’t have to be this way. Back in the days of Ancient Rome and Greece, the founding fathers of the stoic school of philosophy taught the importance of clear-mindedness and rationalism in the development both of the self and of society. Here a three of these lessons which now, more than ever, need to be relearned.

1. “The nearer a man comes to a calm mind, the closer he is to strength.”

One of the great stoic thinkers, Roman emperor Marcus Aurelius, argued that emotional reactions to opposition were signs of weakness; to become enraged is to become a slave to emotions, surrendering your logic as you do so. In this way, once one has allowed himself to become angry at his opponent, he has lost the battle.

Instead, one should take the time to face problems and antagonism logically, and with a clear mind. For instance, anger at the ideas of a political opponent does little to highlight the flaws in their argument and even less to demonstrate the superiority of your own. Remaining calm and controlled in the face of opposition allows one the strength needed to change the situation, whether this is through changing the mind of the opponent or through gaining a deeper understanding of the issue yourself.

…click on the above link to read the rest of the article…

Michael Cohen, Tony Podesta, and the Nauseating Corruption Enabled by Big Government

May 15, 2018

Michael Cohen, Tony Podesta, and the Nauseating Corruption Enabled by Big Government

Corruption and big government have always gone hand-in-hand.

Ordinary Americans have a low opinion of Washington, but they’re underestimating the extent of the problem.

The nation’s capital is basically a playpen for special interests. It’s now the richest region of the country, with lobbyists, bureaucrats, contractors, politicians, and other insiders and cronies getting fat and happy thanks to money that is taken from people in the productive sector of the economy.

Republicans play the game and Democrats play the game, with both sides getting undeserved wealth at our expense.

Let’s take an up-close look at how this sordid game is played.

Here are some excerpts from a column by Catherine Rampell in today’s Washington Post.

The GOP is no longer the Party of Reagan. It’s the Party of Michael Cohen. …the Cohen blueprint for achieving the American Dream: Work minimally, if you can, and leverage government connections whenever possible. …following Donald Trump’s unexpected presidential victory, Cohen cashed in. …Cohen told companies that he could provide valuable “insights” into the new administration. Huge multinational corporations lined up to purchase these “insights,” dumping millions into Essential Consultants LLC… Cohen is hardly the only prominent Trumpster invoking White House connections… Cabinet members and other senior government officials, too, have enjoyed a sweetheart apartment deal, lobbyist-arranged vacations and private jet rides. These are not amenities secured through brains, honesty and hard work, the virtues that Republicans traditionally say are required for upward mobility and financial comfort. They are the fruits of luck, cronyism and a loose approach to ethical lines.”

This is disgusting. Republicans often come to Washington claiming they’re going to “drain the swamp.” Many of them, however, quickly decide it’s a hot tub.

But don’t forget that sleaze is a bipartisan activity in Washington.

Here are excerpts from a Wall Street Journal report about influence-peddling on the other side of the aisle.

…click on the above link to read the rest of the article…

Illinois Politicians Are Doubling Down on Failure

May 7, 2018

Illinois Politicians Are Doubling Down on Failure

In the face of a fleeing population, politicians in Illinois are doubling down on the policies that are driving people away in the first place.

When I did a poll earlier this year, asking which state would be the first to suffer a fiscal crisis, I wasn’t terribly surprised that Illinois wound up in first place.

But I was surprised by the margin. Even though there’s a good case to be made for basket-case jurisdictions such as New Jersey, California, and Connecticut, Illinois not only got a plurality of votes, it received an absolute majority.

Based on what’s happening in the Land of Lincoln, it appears that state politicians want to receive a supermajority of votes. There’s pressure for ever-higher taxes to finance an ever-more-bloated bureaucracy.

And taxpayers are voting with their feet.

The Wall Street Journal editorialized about the consequences of the state’s self-destructive fiscal policy.

Democrats in Illinois ought to be especially chastened by new IRS data showing an acceleration of out-migration. The Prairie State lost a record $4.75 billion in adjusted gross income to other states in the 2015 tax year, according to recently IRS data released. That’s up from $3.4 billion in the prior year. …Florida with zero income tax was the top destination for Illinois expatriates… What’s the matter with Illinois? Too much for us to distill in one editorial, but suffice to say that exorbitant property and business taxes have retarded economic growth. …Taxes may increase as Democrats scrounge for cash to pay for pensions. …Illinois’s unfunded pension liabilities equalled 22.8% of residents’ personal income last year, compared to a median of 3.1% across all states and 1% in Florida. …Illinois’s economy has been stagnant, growing a meager 0.9% on an inflation-adjusted annual basis since 2012—the slowest in the Great Lakes and half as fast as the U.S. overall. This year nearly 100,000 individuals have left the Illinois labor force.

…click on the above link to read the rest of the article…

Why We Don’t Have Principled Politicians

May 3, 2018

Why We Don’t Have Principled Politicians

Politicians choose their stances on issues based on public opinion, not principles.

Recently, Senator Chuck Schumer introduced a bill that would decriminalize marijuana on the federal level. He stated that the legality of marijuana should be a matter left up to individual states. This ringing endorsement of federalism might carry a little more weight if Senator Schumer hadn’t spent a large part of his political career trying to micromanage Americans’ behavior at the national level. Hillary Clinton is widely considered to be a staunch supporter of the LGBT community; however, she was publicly opposed to marriage equality until 2013. These are just two of the innumerable examples of politicians changing their stances on policy issues in the face of evolving public opinion. This is not a new phenomenon or exclusive to a single political party. Not only is it common for politicians to modify their positions of political principles to match changing public opinion, you’d be hard-pressed to find one who doesn’t. We are dealing with political followership, not political leadership. So, what does that get us? Antony Davies and James Harrigan talk about this and more on this week’s episode of Words and Numbers.

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