Peter Schiff thinks, but the market is clueless.
A couple of posts ago I wrote about the fetish with randomness that afflicts mainstream economics and finance. One result of that fetish is the dogma that no one should try to time the market; just pick good stocks and stay with them. The high priests ridicule those of us who make any effort at looking into the future.
Sunday, September 25, 2016
Monday, September 19, 2016
Economists of the mid-nineteenth century opposed slavery. The greatest, David Ricardo, was a Jew and knew something about racism and oppression. The advocates of slavery opposed the economists. Thomas Carlyle, a socialist, dubbed economics the “dismal science” because the freedom that economists demanded would create a “dismal” world in which white people were equal with the “inferior” races, such as the people of Africa.
Leftist regressives, who called themselves Progressives, invented the truly dismal science of eugenics in order to suppress the population of minorities in the UK and US and force them to reduce their birthrates. They introduced the minimum wage in the US to prevent minorities such as Jews, Africans, Chinese, Mexicans and Native Americans from getting jobs. Regressives assumed that if those minorities couldn’t get jobs then they wouldn’t marry and have children. For details check out Princeton scholar Thomas C. Leonard's book Illiberal Reformers: Race, Eugenics and American Economics in the Progressive Era.
Friday, September 9, 2016
The Atlantic offered another hymn to the goddess of luck. Not only is worshiping the goddess a good thing according to the author, but agnostics are stingy and selfish:
Seeing ourselves as self-made leads us to be less generous and public-spirited...
A recent study by the political scientists Benjamin Page, Larry Bartels, and Jason Seawright found that the top 1 percent of U.S. wealth-holders are “extremely active politically” and are much more likely than the rest of the American public to resist taxation, regulation, and government spending. Given that the wealthiest Americans believe their prosperity is due, above all else, to their own talent and hard work, is this any wonder? Surely it’s a short hop from overlooking luck’s role in success to feeling entitled to keep the lion’s share of your income—and to being reluctant to sustain the public investments that let you succeed in the first place.Traditionally, religion explained what we couldn’t understand. Today, it’s randomness. Choosing randomness, or luck, is a description, not an explanation of a phenomenon, and an admission of ignorance. There are quite a few books promoting the goddess of luck. Keynes blamed recession on the “animal spirits” of businessmen, an allusion to randomness and not pagan beliefs. Nassim Taleb’s books on black swans was my first introduction to her. Then I read Burton Malkiel’s A Random Walk Down Wall Street: A Time-Tested Strategy for Successful Investing. Recently, The Drunkard’s Walk: How Randomness Rules Our Lives by Leonard Mlodinow came out.
Monday, September 5, 2016
Wall Street Journal printed a report card of Fed activity for the new millennium. The writers think the Fed failed most of its curriculum.
"In the past decade Federal Reserve officials have been flummoxed by a housing bubble that cratered the financial system, a long stretch of slow growth they failed to foresee and inflation persistently undershooting their goal."Part of the Fed’s problem is that it believed the media’s hyperbole about former Fed chairman Greenspan, referring to him as the maestro during the “Great Moderation” of the decade of the 1990s. Fed officials didn’t comprehend that the mainstream media is very socialist and will grossly exaggerate every apparent success by a government agency. The Fed and most mainstream economists took the praise from the media to heart and began to believe they were invincible. They even announced that they had slain the dragon of business cycles. Meanwhile, Austrian economists warned that the corpse resembled a wind mill more than a dragon.
Friday, August 26, 2016
Saturday, August 20, 2016
Attacking the wealthy always inflames envy, draws a crowd and extorts campaign contributions. That’s why politicians use it so often, as Helmut Schoeck noted in his masterpiece, Envy: A Theory of Social Behavior.
The truth is that Bernie and Hill are half right: inequality is growing. They're just wrong about the reasons. However, free marketeers do a lot of damage to the cause by ignoring the issue or denying that anything is wrong. Worse, some even defend growing inequality.
Sunday, August 14, 2016
The Bureau for International Settlements (BIS), the central bankers’ bank, recently issued a report card on the efforts of their client central banks to boost growth since the last recession and given them a failing grade. In the report “Unconventional monetary policies: a re-appraisal,” the BIS economists wrote:
We reach three main conclusions: there is ample evidence that, to varying degrees, these measures have succeeded in influencing financial conditions even though their ultimate impact on output and inflation is harder to pin down;