Issue CCLXVIII

December 5-14, 2010

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Economics
Can the Fed Become Insolvent?:
Robert P. Murphy

December 5, 2010
In light of Bernanke's plans to purchase $600 billion of longer-term government debt, many academic economists are beginning to worry: Could the Federal Reserve itself become insolvent? In this article Dr. Robert Murphy explains these fears and argues that the Fed, with its printing press, cannot really go bankrupt the way other corporations can. However, if the Fed should become insolvent from an accounting standpoint, more of the public would begin to realize just how nihilistic our central-bank, fiat-currency system really is.

Nobel Committee in Search of Economists:
Robert P. Murphy

December 5, 2010
This year's Nobel Memorial Prize in Economics went to Peter Diamond, Dale Mortensen, and Christopher Pissarides, for their work on "search theory," especially as applied to labor markets. In the present article Dr. Robert Murphy explains the basics of their contribution but then points out the crisis in mainstream economics: even though these economists — especially Diamond — are very smart and productive, they and their colleagues have hardly helped the plight of the unemployed, as we stumble ever deeper into depression.

Never Accept an Interventionist Premise:
Robert P. Murphy

December 5, 2010
The people who design advertising and political campaigns know that if they can frame the issues, they've already won.  How can an Austrian economist fight back against the "planning" mentality when every PhD student has had pro-"planning" terminology burned in his or her mind? We see yet another example of this problem in a recent post from George Mason economist Bryan Caplan. Now Caplan is (famously) no longer an Austrian economist, but nonetheless by mainstream standards he is an extremely radical free-market guy. And yet as Dr. Robert P. Murphy shows, Caplan casually throws around a suggestion to impose a new tax, simply because that's the analytical framework in which today's professional economists have been trained.

Politics
Environmental Injustice en  Español:
Sam Rodriguez

December 5, 2010
Nineteen Latino activist groups recently asked Congress and President Obama to oppose any attempts to delay or scale back proposed Environmental Protection Agency air pollution and climate regulations. Rev. Sam Rodriguez's organization, the National Hispanic Christian Leadership Conference, represents over 25,000 congregations and 16 million Hispanic Evangelical Christians. They were not consulted or asked to sign the letter. If they had been, writes Rev. Rodriguez, they would have offered some very different insights and perspectives.

What Damages US Foreign Policy More Than Leaked Documents?:
G. Stolyarov II

December 13, 2010
What damages US foreign policy more than leaked documents? The reaction of prominent Americans to leaked documents.  Mr. Stolyarov writes that the reaction of American elites to the WikiLeaks releases has confirmed and reinforced the malfeasance that the releases exposed. It is not WikiLeaks that has “blood on its hands” – as certain Pentagon officials would have us believe – but rather the American global hegemony, with its military, political, and pundit wings each being culpable in the broad spectrum of atrocities which were committed under the assumption that they would be concealed from the sunlight of transparency.

A Greying World Need Not Be a Problem:
Bradley Doucet

December 13, 2010
A greying world, some warn, will be a poorer world. But Bradley Doucet asks us to wait a second: Why do elders have to be dependent? Savings can render them self-sufficient. The real problem is that many people are not saving a lot of their income for retirement, and "social security" and other pension schemes are only contributing to the problem.

A New Dark Age for Germany?:
Edgar Gaertner

December 14, 2010
Senators Bingaman, Brownback and Reid are contemplating how to ram renewable-energy standards through a lame-duck session. Edgar Gaertner writes that, if they’re wise, American voters and congressmen will pay extra careful attention to the awful dilemma of German climate and energy policy, as exemplified by recent events, and make sure their country doesn’t make the same “green” mistakes that Germany did.

French Students Should Celebrate Pension Reform:
François Meleise

December 14, 2010
To save the pension system, the French parliament is about to pass a law that forces workers to postpone retirement by two years. In an unlikely alliance, high school (lycée) and university students have joined France's powerful public unions in protesting the reform. Meanwhile, oil workers strategically blocked the country's refineries, creating a nationwide fuel shortage to force the government to rethink its policy. French media interviews reveal older workers are loath to accept later retirement, while students fear job losses if older workers are forced to postpone retirement. But François Meleise believes that, instead of protesting this pension reform, young people should celebrate pension reform. It reduces the future burden on today's young, and creates new and better job opportunities.

Focus on the Policy, Not WikiLeaks:
Ron Paul

December 14, 2010
Rep. Ron Paul argues that, at its core, the WikiLeaks controversy serves as a diversion from the real issue of what our foreign policy should be.  But the mainstream media, along with neoconservatives from both political parties, insist on asking the wrong question.  When presented with embarrassing disclosures about U.S. spying and meddling, the policy that requires so much spying and meddling is not questioned.  Instead, the media focus on how so much sensitive information could have been leaked, or how authorities might prosecute the publishers of such information.

Don't Raise the Debt Ceiling!:
Ron Paul

December 14, 2010
As of November 7th, the total U.S. public debt outstanding reached an astonishing $13.7 trillion. This means that although Congress just raised the debt ceiling to $14.3 trillion back in February, the new Congress will face another debt ceiling vote almost immediately next year. Otherwise, the Treasury will not be able to continue issuing debt to fund government operations. Rep. Ron Paul argues that Congress ought to refuse to raise the debt ceiling and find a way to reduce the scope of the U.S. federal government to a sane and reasonable one.


"What is tolerance? It is the consequence of humanity. We are all formed of frailty and error; let us pardon reciprocally each other's folly — that is the first law of nature." 
~ François-Marie Arouet de Voltaire