Feeds:
Posts
Comments

Archive for the ‘Economics’ Category

Lew Rockwell_LRCLewRockwell.com was at it again this weekend, publishing another hit piece on the Reformation.

Now some readers may be asking themselves, just what on earth is LewRockwell.com and why should I care what they publish or whether they attack the Reformation.

Fair questions, those. So before talking about their latest attack on the Reformation, a little explanation is in order.

By number of unique monthly visitors, LewRockwell.com (LRC) is one of the largest, perhaps the largest, Libertarian website in the world. Now by percentage of the population, Libertarians are a fairly small group, so it may be tempting to dismiss LRC as a big fish in a small pond and move on.

The LRC website describes itself thus, “The daily news and opinion site LewRockwell.com was founded in 1999 by anarcho-capitalists Lew Rockwell and Burt Blumert to help carry on the anti-war, anti-state, pro-market work of Murray N. Rothbard.”

From this description, we see that LRC, in addition to being Libertarian also calls itself “anarcho-capitalist, anti-war, anti-state, and pro-market,” and indicates that Murray N. Rothbard is its primary intellectual influence.

So why should you care about any of this? For one, in spite of their relatively small numbers Libertarians are a vigorous intellectual force in the fields of economics and politics. Unlike most schools of thought in our decadent age, Libertarians actually take logic seriously. Further, they defend individualism and private property against the statist big-government philosophies that dominate our age.

A second related reason is that although Libertarianism ultimately fails the test of Scripture – central to Libertarian thought is the ethical doctrine known as the Non-Aggression Principle; Christians, on the other hand, locate their ethics in the Law of God, and these two systems are incompatible – its respect for logical consistency and individual liberty make it attractive to Christians.

And it is because Libertarianism in general and LRC specifically take ideas and liberty seriously, that I have read the website for years, and know of other Christians who do so as well.

(more…)

Read Full Post »

Fed Speak: A Translation

Eccles Building

The Eccles Building in Washington D.C., home office of the Federal Reserve.

“We have a 2 percent symmetric inflation objective. For a number of years now, inflation has been running under 2 percent, and I consider it an important priority to make sure that inflation doesn’t chronically undershoot our 2 percent objective.” So said outgoing Federal Reserve chair Janet Yellen last week in the course of assessing her on the job performance over the past year.

According to her, everything else is pretty awesome. Unemployment’s down. The economy’s growing at a 3 percent clip. The stock market may be a little pricey but it’s really nothing to get too excited about.

Why, if it weren’t for that persistently low inflation, she’d be batting close to 1.000 and having an all around MVP year here in 2017.

What shall we say to all this? It seems to me that the first order of business is to translate Yellen’s inflation comments into plain English. Academics, politicians and others who wish to hide their meaning from the general public love to use obscure language. But one of the chief jobs of any Christian teacher, whether he’s a blogger or a preacher it makes no difference, is to penetrate the fog to permit a fruitful discussion.

That said, here’s my translation of Janet Yellen’s Fed Speak: “Our objective here at the Fed is to steal 2 percent of the value of the deplorables’ savings each year by creating credit a pace that is faster than the actual rate of growth of the economy. This, combined with our holding interest rates near 5,000 year lows to keep the rubes from earnings any interest in their savings accounts, represents a one-two punch to the middle class. By employing these policy tools, we enlightened folks here at the Fed can strip mine wealth from unsuspecting nobodies, who don’t deserve what they have anyway, and put it into more worthy hands, namely, those master of the universe types who own the banks and pay our salaries. Unfortunately, I was not as successful in this regard as I would like to have been.”

Now that’s more like it. We’re finally getting somewhere. No doubt, Janet Yellen would be greatly offended by my translation, as would pretty much any other central banker, mainstream economist, investor, or financial commentator. Perhaps some of the defenders central bank orthodoxy in academia, the press and in government really do honestly think that debt-based, central bank issued, fiat currencies actually serve the public interest. But that hardly gets them off the hook. They should know better, for the evidence is overwhelming that the current system – which is of, by and for the bankers – is a massive, and profoundly immoral, wealth transfer mechanism.

(more…)

Read Full Post »

Read Full Post »

Money, so they say, is the root of all evil today.

– Pink Floyd

An email came to my inbox recently claiming that people who hold to the Scriptures think “money is the root of all evil.” The notion that the Bible teaches money is evil is quite common. Pink Floyd referenced this idea in their hit “Money,” and people often repeat this idea in everyday conversation.

goldBut as is the case with other popular ideas ascribed to the Bible – for example, most Americans mistakenly think “God helps those who help themselves” is a Bible verse; and how many times have you heard someone take Jesus’ words “Judge not” as a general prohibition against making necessary ethical distinctions? – this one is also wide of the mark. And it is wide of the mark in at least two ways. First, the quote itself is not accurate. And second, when the quote is presented accurately, the true meaning of this verse is seen to be quite different from what is in the popular mind.

The actual quote is found in 1 Timothy 6:18 and reads, “For the love of money is a root of all kinds of evil” (New King James). The language of the Authorized Version is “For the love of money is the root of all evil.” When comparing either of these two translations with the popular version of the quote, it becomes readily apparent that the big difference is that the Bible identifies, not money itself, but the love of money as the root of all sorts of evil.

(more…)

Read Full Post »

uncle_sam_supplying_federal_reserve_fiat_debt.jpg

Ever since the spring of 2009 when The-Powers-That-Be (TPTB) were out there claiming to see “green shoots” everywhere, the public has been treated to a non-stop propaganda campaign pushing the narrative of economic recovery.

President Obama himself proclaimed his belief in the strength of the American economy, stating for all the world to hear in his 2016 State of the Union Address that anyone who doubted everything was awesome in the main street economy was, to use his words, “peddling fiction.”

And surely Obama couldn’t be wrong. After all, good doctor Ben Bernanke spent several years injecting the US economy with his concoction of Zero Interest Rate Policy (ZIRP) and three rounds of Quantitative Easing (QE). How could anyone doubt but that the wise heads at the Fed have cured what ails us? The stock market just set a new record!

But if you dig down beneath the surface, you’ll find that everything is not awesome. Corporate earnings are down for the fifth quarter in a row. According to the report on Factset, “The second quarter [2016] marks the first time the index has recorded five consecutive quarters of year-over-year declines in earnings since Q3 2008 through Q3 2009.” In other words, corporate earnings haven’t had a losing streak this long since the height of the last financial crisis.

Or take worker productivity, a measure of hourly output per worker, which has declined now for three straight quarters. As the Reuters article pointed out, “U.S. nonfarm productivity unexpectedly fell in the second quarter, pointing to sustained weakness that could raise concerns about corporate profits and companies’ ability to maintain their recent robust pace of hiring.” No kidding.

But why is worker productivity in the US declining? The Reuters article fails to provide a reason. So let me suggest one possibility: businesses are no longer investing in property, plant and equipment, the very things that drive productivity. As Forbes reports, “Corporate executives now shy away from capital spending. Companies are spending money to cut costs – labor cost especially, and also electricity – but few companies are increasing productive capacity.”

So what have executive been spending on if not new productive capacity? Stock buybacks that serve to boost earnings per share and increase bonuses. “Stock buybacks by big American companies are near a historical peak [as of May 2014], but the practice appears to do little to improve their underlying operations and robs them of money for research and future growth. USA Today’s John Waggoner calls stock buybacks a ‘sugar high’,” as John Morgan reports.

Morgan goes on to cite a 1999 quote from Warren Buffett, who said, “Repurchases are all the rage, but are all too often made for an unstated and, in our view, an ignoble reason: to pump or support the stock price.”

Let’s see then, we have stock markets at near record levels, while at the same time corporate earnings are on the decline as worker productivity erodes, which very likely is a consequence of businesses showing greater interest in engineering stock buy-backs rather than in capital spending. Sure sounds like a plan for long-term economic success to me.

I’ve mentioned only a few data points to illustrate that the economy, far from being robust, is in reality quite weak. But for more of the same, consider the following nine ugly charts. Obama’s term in office is highlighted in red.


Things that should be going up in a healthy economy – Labor Force Participation Rate, Median Family Income, Home Ownership – are all going dramatically down. Those items that one would expect to see going down if the economy really were as good as The-Powers-That-Be tell us – Food Stamps, Federal Debt, Money Printing, Healthcare Costs – are going straight up.

These charts tell a very different story from what Obama’s putting out. Maybe he’s the one peddling fiction.

(more…)

Read Full Post »

Elisha Prophesies the End of Samaria's Siege

Elisha Prophesies the End of Samaria’s Siege by Nicolas Fontaine, 1625-1709.

 

When beginning the Siege of Samaria series on Biblical economics, I never intended it to go on for more than two or perhaps three posts. Due to an embarrassment of material and positive response from the readers of this blog, the series stretched into five posts.  In no small part the success of this series has been due to the generous support of Sean Gerety over at the God’s Hammer blog, who has been kind enough to republish my posts.

It’s certainly been an encouragement to me to see so many people interested in what the Bible has to teach us about economics. Most of the economic talk one hears in the mainstream media is misleading, and, I suspect, it’s designed to be that way. After all, if too many folks were to get wise to the economic evil troika of central banking, fiat currency and demand-side Keynesian economics, it would be a lot harder for the financial masters of the universe to loot the poor and middle class of the world for their benefit.

The lies of the statists enslave, but the truth of God’s Word makes men free. And it is to the end of furthering this truth that I have presented the series on Biblical economics.

And because Biblical economics is both a fascinating and worthwhile study, it seemed good to me to take this opportunity to share with others the intellectual ammunition I’ve found helpful in developing my understanding of the subject. Below is a list of resources along with my comments.

(more…)

Read Full Post »

Elisha Prophesies the End of Samaria's Siege

Elisha Prophesies the End of Samaria’s Siege by Nicolas Fontaine, 1625-1709.

 

Inflation – What it is and what it isn’t (continued)

In the last installment of this series, I mentioned that the big takeaway point was the definition of inflation. As you may recall, we defined inflation a bit differently than is commonly understood. Most people, when they talk about inflation, mean to say that prices – the amount we pay for items such as gas or bread or rent – have gone up.

The most common statistic used to report rising prices is the Consumer Price Index (CPI). The CPI measures the cost of a representative basket of goods and services, comparing the average price of these items in one period with their average price in the following period.

When the CPI shows average prices going up from one reporting period to the next, the rising prices are reported in the news as inflation. Occasionally, average prices fall. When this happens, we are told that deflation has occurred.

But the definition of inflation that was presented in Part 4 of this series did not rely on measuring the average cost of goods. Instead, inflation was defined as the increase in the supply of money. Conversely, deflation was not defined as decreasing prices, but rather the decrease in the supply of money.

But even though inflation and deflation are not the same thing as rising and falling prices, there is a relationship among them. When the money supply increases, assuming the amount of goods and services in the economy remain the same, prices go up. Conversely, when the money supply falls, prices go down. As Peter Schiff puts it, “The money supply expands and contracts. Prices go up and down. Inflation and price increases are not the same thing. One is cause. The other is effect” (Crash Proof, 69).

Now you may be asking yourself why I bother to define inflation as I do. Isn’t the common definition of inflation good enough as long as we all agree that inflation is rising prices? Why confuse things be bringing in the concept of money supply?

The best argument for defining inflation as the increase in the supply of money is that it clearly identifies the cause of rising prices: central banks creating too much money, usually in response to governments spending too much money.

If we are satisfied with the usual definition of inflation, government officials can easily fool us into thinking that prices are going up for reasons that have nothing to do with their own policies. Bad weather, profiteering by greedy speculators and lack of sufficient governmental regulations are common scapegoats for rising prices, even though prodigal politicians and the central bankers that fund their wasteful spending are the real culprits.

(more…)

Read Full Post »

Older Posts »

%d bloggers like this: