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Friday, December 18, 2015

Big Business Cutting Capital Investment Plans

In review of Kent Hoover's article, "Why Big Business are cutting their capital investment plans", it simply supports the premise that Government Regulation and their Central Planning "solutions" are simply adding more costs to business.

According to Hoover, as he states the following: "Only 30 percent of CEOs plan to increase capital spending in the next six months, down 41 percent in the third quarter. Plus, 27 percent of CEOs plan to cut capital spending up from 20 percent last quarter.

This is not a shocking discovery, as the Federal Reserve is keeping interest rates low, yet the US Government increases the economic costs onto business. The Government increases these costs via increased regulations and taxation.

Per Hoover:

"A strong dollar, economic weakness abroad and increased international turmoil play a role in this decline in capital investment, since most BRT members(Business Round table) are heavy exporters. But, an uncompetitive[sic]corporate tax code and uncertainty over the future of tax incentives for business investment also are making CEOs more cautious about their capital spending plans. "

Recommendations

First of all, Congress needs to review current regulations, and begin the process of rolling the back for permanent removal. These regulations are restraints on current firms in the marketplace, and in many cases, they prevent new firms entering the marketplace since the economic costs are very high.

Secondly, Interest rates should not be fixed by the Federal Reserve. The natural rate of interest is a market set "price". In short, the actors in the marketplace are better suited in determining the price or "interest rate", as compared to the Federal Reserve.  With the Fed setting the interest rate, its tantamount to a price fixing scenario. Since rates are price fixed at a lower rate, this has caused asset bubbles to appear, thus the uncertainty for many of the CEOs for the capital investment plans.


Monday, December 14, 2015

Negative vs Positive Liberty: An Analysis

"Negative liberty is the absence of obstacles, barriers or constraints. One has negative liberty to the extent that actions are available to one in this negative sense. Positive liberty is the possibility of acting — or the fact of acting — in such a way as to take control of one's life and realize one's fundamental purposes. While negative liberty is usually attributed to individual agents, positive liberty is sometimes attributed to collectivities, or to individuals considered primarily as members of given collectivities."~Stanford Encyclopedia of Philosophy
Here is a video from George Smith regarding the notions of Negative and Positive Liberty. The video provides historical examples on these two concepts. Click here to watch.

Here is an analysis from Isaiah Berlin regarding Positive and Negative Liberty. Click here to read.

Sunday, December 13, 2015

It's Not Just a Supply Issue: Oil Price Falls to 35 Dollars per Barrel



Key excerpt from, "It's Not Just a Supply Issue: Oil Price Falls to 35 Dollars per Barrel" :


"A year ago, the oil price was more than 30 dollars per barrel higher, and came in around 70 dollars, although by that point, the price had already tumbled from a price of 105 dollars that had been reached during mid-2014.
The 2014 prices were not as high as they seemed, given the effects of price inflation. If we make a  mild adjustment based on the official CPI data, we find that 2014's peak levels had really only been matching the prices we saw during the early 80s. "



Friday, December 11, 2015

CBO Estimates That Obamacare Will Shrink Labor Force

An excerpt from the article from Reason.com titled, "CBO Estimates that Obamacare Will Shrink the Labor Force by the Equivalent of 2 Million Jobs":
"The debate flared up again this week after the Congressional Budget Office (CBO) released a report estimating that the law would shrink America’s by the equivalent of about 2 million jobs over the next decade."

Piketty Is Wrong: Markets Don’t Concentrate Wealth

Key excerpt from the article titled, "Piketty Is Wrong: Markets Don’t Concentrate Wealth ":


"Thus, contrary to what Piketty and other egalitarians think, unlimited wealth concentration is technically impossible in a market economy. This is the reason why a “one big cartel” controlling all the economy never appeared on the free market, and this is the reason why wealth concentration will always be limited."

Thursday, December 10, 2015

Tach V’Tat: A Historical Example of Nationalism

Intro to the article, "Tach V’Tat":

"The years 1648 and 1649 represent a watershed in Jewish history. In Jewish tradition they are referred to as “Tach V’tat” (which are the Hebrew letters representing the numbers 408 and 409, which correspond to the years 1648 and 1649 on the non-Jewish calendar). One can even say that Tach V’tat marks the beginning of modern Jewish history. It is certainly the harbinger of enormous changes in and enormous destruction of the Jewish world."

This is an example of Nationalism, as typically a charismatic leader rises up, as in this case, it was Bogdan Chmielnicki. As a solider of fortune, he was highly loyal to the Russian Orthodox Church. This passion fueled this massacre of many Jews and Polish Roman Catholics,

Human Nature has not changed.

Wednesday, December 9, 2015

Gun Control in Nazi Germany

Key excerpt from "Gun Control in Nazi Germany":

"As has been well documented, Jews were methodically attacked, their homes, businesses, and synagogues ransacked and burned. Upward of 30,000 Jews were arrested. Any Jews resisting arrest were ordered shot on the spot. Attacks on the Jews were to be carried out by the SA, with no interference by police. Jews arrested were to be sent to concentration camps for up to 20 years. The pogrom was so thorough that nearly all age appropriate, Jewish adult males in Stuttgart had been arrested. With the population afraid and disarmed, Hitler could proceed with little worry about resistance. The Court reinforced that there was no judicial review needed for activities of the Gestapo."

“Capitalism” Is the Wrong Word!

I agree with the author of this article. The notion of "Capitalism" was coined by Karl Marx in his work "Das Kapital". This article, “Capitalism” Is the Wrong Word | Foundation for Economic Education", breaks down why this term should not be used to describe the process of voluntary free exchange.



Cheers,



Robert

Wednesday, December 2, 2015

How Money Disappears in a Fractional-Reserve Money System | Mises Daily

This is an excellent article by Dr. Frank Shostak. This article hits directly to the point about how Economics is not a quantitative science, but a qualitative science. This does not mean there is no place for math in the science of economics, it just means that human behavior simply is something that is difficult to quantify in terms of calculus.

The notion of raising or lowering the money supply and its direct relationship with prices comes from Irving Fisher's famous equation of exchange, as it is the foundation of Monetary theory. This theory is widely accepted in the world of economics, policy makers, and the like. Yet, it is not on solid footing, as Dr. Shostak proves here in this article.



How Money Disappears in a Fractional-Reserve Money System | Mises Daily