Blogroll Category: Current Affairs

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More Laws Mean More Police Brutality

Mises Institute - Sun, 26/07/2020 - 12:30

Every law must ultimately be enforced using the police power of the state. For those who resist, this means violent arrest and imprisonment. Or worse.

This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.

Original Article: "More Laws Mean More Police Brutality​".

Categories: Current Affairs

Well, yes, this is a significant part of the point

Adam Smith Institute - Sun, 26/07/2020 - 07:01

A lament over the easing of planning permission:

“The new legislation fundamentally undermines the notion of a democratic, professional and accountable planning system,” says Dr Ben Clifford, professor at UCL’s Bartlett School of Planning, who co-led the research. “Not only will it continue to produce more tiny flats with poor living conditions, but it also means the developers are not required to provide any affordable housing or make any contributions to local infrastructure, like parks and playgrounds. It’s placing a huge burden on local communities, while at the same time making more profit for developers.”

That democratic, professional and accountable planning system is incapable - as the number of houses not being built shows - of producing the dwellings the nation desires in either number or type. Thus the idea that perhaps we should change it.

For example, if we desire housing to be built then perhaps we shouldn’t make permission to do so subject to having to bribe for the issuance of the permission. Sorry, we mean promises to build affordable housing and build local infrastructure.

One of the joys of the experiment being conducted at present being that house building numbers are going up as we dismantle that professional planning system. Of course, this will disgruntle those whose position relies upon the continued existence of the restrictive and counterproductive system - say, those who are professors in teaching people how to constipate the economy through planning - but the rest of us might rather like having more housing, at better prices, in the form people desire to live in in places people would like to live.

Categories: Current Affairs

Money-Supply Growth Hits New High For Third Month In a Row

Mises Institute - Sat, 25/07/2020 - 20:15

In June, for the third month in a row, money supply growth surged to an all-time high, following new all-time highs in both April and May that came in the wake of unprecedented quantitative easing, central bank asset purchases, and various stimulus packages.

The growth rate has never been higher, with the 1970s the only period that comes close. It was expected that money supply growth would surge in recent months. This usually happens in the wake of the early months of a recession or financial crisis. The magnitude of the growth rate, however, was unexpected.

During June 2020, year-over-year (YOY) growth in the money supply was at 34.5 percent. That's up from May's rate of 29.5 percent, and up from June 2019's rate of 2.04 percent. Historically, this is a very large surge in growth both month over month and year over year. It is also quite a reversal from the trend that only just ended in August of last year, when growth rates were nearly bottoming out around 2 percent. In August, the growth rate hit a 120-month low, falling to the lowest growth rates we'd seen since 2007.

tms1.png tms

The money supply metric used here—the "true" or Rothbard-Salerno money supply measure (TMS)—is the metric developed by Murray Rothbard and Joseph Salerno, and is designed to provide a better measure of money supply fluctuations than M2. The Mises Institute now offers regular updates on this metric and its growth. This measure of the money supply differs from M2 in that it includes Treasury deposits at the Fed (and excludes short-time deposits, traveler's checks, and retail money funds).

The M2 growth rate also increased to historic highs in June, growing 22.9 percent compared to May's growth rate of 21.9 percent. M2 grew 4.7 percent during June of last year. The M2 growth rate had fallen considerably from late 2016 to late 2018, but has been growing again in recent months. As of March, it is following the same trend as TMS.

Money supply growth can often be a helpful measure of economic activity. During periods of economic boom, money supply tends to grow quickly as banks make more loans. Recessions, on the other hand, tend to be preceded by periods of slowdown in rates of money supply growth. However, money supply growth tends to grow out of its low-growth trough well before the onset of recession. As recession nears, the TMS growth rate climbs and becomes larger than the M2 growth rate. This occurred in the early months of the 2002 and the 2009 crises. February 2020 was the first month since late 2008 that the TMS growth rate climbed higher than the M2 growth rate. The TMS growth rate again exceeded M2 in March and April 2020. As of mid-June 2020, it does appear that the decline in money supply growth has again preceded a recession. Although some observers will likely claim that the current economic crisis is a result solely of the COVID-19 panic and resulting government-forced shutdowns, several indicators do suggest that the economy was primed for a recession. The decline in TMS is one of these indicators, as is the late 2019 liquidity crisis in the repo markets. The Fed's moves to drop interest rates and to once again grow its balance sheet speak to the weakness of the economy leading up to April 2020.

After initial balance-sheet growth in late 2019, total Fed assets surged to over $7 trillion in June, setting a new all-time high and propelling the Fed balance sheet far beyond anything seen during the Great Recession's stimulus packages. The Fed's assets are now up more than 600 percent from the period immediately preceding the 2008 financial crisis.

assets.png asse

While Fed asset purchases are not solely responsible for the surge in new money creation, they are certainly a sizable factor. Bank loan activity has surged as well, also driving new money creation.

Dollar volume for M2 and TMS:

tmstotal.png tota

In terms of total dollar amounts now extant, the overall M2 total money supply in June was $18.1 trillion and the TMS total was $18.09 trillion. Since January, this is an increase of $2.7 trillion in M2, and $3.8 trillion in the TMS.

Categories: Current Affairs

From a Confederation to a National Government: Rothbard on the Early Republic

Mises Institute - Sat, 25/07/2020 - 20:00

[Adapted from the foreword to Conceived in Liberty, Volume 5: The New Republic: 1784–1791.]

What aroused the fears of those who sought through the Constitution to establish a strong national government? In part, the nationalists were afraid of tax resistance. Rothbard details the key libertarian uprising in Massachusetts, Shays’ Rebellion, a revolt against excessive burdens on the taxpayer for the benefit of public creditors, mainly eastern merchant-speculators who had purchased the state’s debt at a great discount. Oppressed by taxes and frustrated by the imprisonment of those who could not pay them, mobs throughout western Massachusetts and their supporters seized courthouses and closed the courts until a redress of the people’s grievances were achieved. Why the courthouses? Because that’s where creditors went to find friendly judges and secure orders to seize debtors’ properties and imprison the debtors themselves; and that’s where the state government pursued those who could not pay their taxes.

But this outburst of anarchist freedom had a counter-reaction. Shays’ Rebellion conservatized many state leaders who felt that the state governments and the Confederation were too weak to prevent such tax uprisings from recurring. Rothbard expertly demonstrates that such events served to spur nationalist sentiment by providing fuel for demagogic attacks about the dangers of weak government under the Confederation.

True, democracy may be turbulent, as presumably in the Shays episode, “But weigh this against the oppression of monarchy, and it becomes nothing … [and] even this evil is productive of good. It prevents the degeneracy of government and nourishes a general attention to the public affairs. … It is a medicine necessary for the sound health of government.” 

Urban merchants and artisans, as well as many slaveholding planters, came together in support of a strong nation-state that would use the coercive power of a distant central government to grant them privileges and subsidies. With such a backing, nationalist forces were able to execute a political coup d’état which illegally liquidated the Articles of Confederation and replaced it with the Constitution.

James Madison of all people—the scrivener of the Constitution and, later, the author of the Bill of Rights, the Federalist Framer who would become an Antifederalist president—began this coup when he pushed through the Virginia legislature a “proposal for a convention of commissioners from all states to provide for uniform commercial regulations and for ‘the requisite augmentation of the power of Congress over trade.’” 3 Madison was so cautious about what he was really planning for Philadelphia in the summer of 1787 that he revealed his true objectives only to his close personal friends. What were those plans? Not enhanced commercial arrangements, but instead the beginning of radical political reform. Rothbard explains that Madison called for an all-state convention in Philadelphia, to propose a comprehensive revision of the Articles of Confederation so as “to render the Constitution of the Federal Government adequate to the exigencies of the Union.” 4 He sounded here more like his successor Woodrow Wilson than his one day predecessor Thomas Jefferson.

The Constitutional Convention opened on May 25, 1787 in Philadelphia, and Rothbard methodically traces each topic of discussion and breaks down the debates between the major players, recounting their impassioned speeches and fascinating back-and-forth. He focuses on the recommendations from each of the state delegations regarding all the basic attributes of the Constitution that would form the basis of the nascent central government.

In particular, Madison and the Virginians meant political revolution rather than reform of the Articles of Confederation. They had wanted “not a ‘merely federal’ union, but a ‘national government …consisting of a supreme judicial, legislative, and executive.’” We learn that these revelations, to many, like Charles Cotesworth Pinckney of South Carolina and Elbridge Gerry of Massachusetts, were “illegal, revolutionary, and violated the express instructions of Congress.”  But nevertheless, eventually, those delegates who attended the Convention agreed on certain broad objectives, crucial for a new government, and designed to remodel the United States into a country with the British political structure; albeit, contrary to Alexander Hamilton’s wishes, without a monarchy.

Yet another crucially important point to settle was the procedure for ratification of the Constitution—submit the new Constitution to the state legislatures or to ad hoc popular state conventions? Not only does Rothbard detail the debate over the procedure, he then goes into detail about the negotiations and compromises that occurred behind the scenes to get the deal done—by bypassing the state legislatures.

Ultimately, we see that the nationalists, though forced to make a few concessions, carried the substance of their program: The creation of a supreme national government, supreme national judiciary with inferior courts established by Congress and appointed by the president all for life terms, and a bicameral Congress, with the lower house elected by those people who were permitted to vote.

The process was not, however, without its flaws. Rothbard identifies two deep failures of the Constitution from the standpoint of liberty. First, of course, “slavery was … driven into the heart of the Constitution: in the three-fifths clause, in the protection of slave importation for twenty years, in the fugitive slave clause, and even in the congressional power to suppress insurrections within the states.”  Citing Luther Martin, Rothbard notes that:

the American Constitution was a grave betrayal of the idea of natural rights set forth in the Declaration of Independence. The Revolution, Martin strikingly declared, was grounded in defense of the natural, God-given rights possessed by all mankind, but the Constitution was an “insult to that God … who views with equal eye the poor African slave and his American master.”

Second, the Constitution sent to the states for ratification failed to include a bill of rights—a prohibition against governmental interference with personal liberty. Although “libertarian restraints were placed on state powers, no bill of rights existed to check the federal government.”

...

[Rothbard] notes that Madison would become the reluctant author of the Bill of Rights. He was a strong nationalist and didn’t want the government to be limited. But he thought that a bill of rights would head off the call of the Antifederalists for a second constitutional convention by offering concessions.

Madison’s deft maneuvering succeeded in securing the ratification of the Constitution in Virginia, a matter Rothbard obviously regrets. Nevertheless, he praises the Bill of Rights:

Of the twelve amendments submitted to the states, the first two were not ratified; these were minor provisions dealing with the organization of Congress. The remaining ten amendments composed nine highly significant articles guaranteeing various personal liberties against the federal government, as well as one complementary structural amendment. None of the political and economic liberties desired by the Antifederalists (prohibition of direct taxes, standing army, two-thirds requirement for laws regulating commerce, etc.) were included, but the adopted bill of rights was significant enough, and all of their provisions were intensely libertarian.

Rothbard goes on to summarize the Bill of Rights, but he does more than this. He makes insightful remarks about each of the amendments. For example, he comments on the Second Amendment:

The Second Amendment guaranteed that “the right of the people to keep and bear Arms, shall not be infringed.” While the courts have enumerated the clause to apply only to Congress, leaving the states free to invade this right, the wording makes it clear that the right “shall not be infringed,” period. Since states are mentioned in the body of the Constitution and restrictions placed upon them there as well, this clause evidently also applies to the states. Indeed, the subsequent amendments (three to nine) apply to the states as well as to the federal government; only the First Amendment specifically restricts Congress alone. And yet the courts have emasculated the amendments in the same way, counting them as not applying to the invasions of personal liberty by the states.

No reader of Conceived in Liberty could miss the fact that Rothbard usually supported the states over the central government and personal liberty over all government. To me, the highlight of the entire volume was what Rothbard says about the Ninth Amendment. He first recognizes how nationalist judges derailed the Tenth Amendment’s limits on the power of the central government:

This amendment did in truth transform the Constitution from one of supreme national power to a partially mixed polity where the liberal anti-nationalists had a constitutional argument with at least a fighting chance of acceptance. However, Madison had cunningly left out the word “expressly” before the word “delegated,” so the nationalist judges were able to claim that because the word “expressly” was not there, the “delegated” can vaguely accrue through judges’ elastic interpretation of the Constitution. This loophole for vague “delegated” power allowed the national courts to use such open-ended claims as general welfare, commerce, national supremacy, and necessary and proper to argue for almost any delegation of power that is not specifically prohibited to the federal government—in short, to return the Constitution basically to what it was before the Tenth Amendment was passed. The Tenth Amendment has been intensely reduced, by conventional judiciary construction, to a meaningless tautology.

Rothbard goes on to highlight what I regard as the decisive point in the entire Bill of Rights:

Ironically, the most potentially explosive weapon of the anti-nationalists was ignored then and for the next 175 years by the public and the courts. This was the Ninth Amendment, which states: “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” With its stress on the rights of the people, rather than on state or federal power as in the Tenth Amendment, the Ninth Amendment is even more acutely the answer to the [James] Wilson argument than the Tenth. The enumeration of rights may not be so construed as to deny other unenumerated rights retained by the people.

The Ninth Amendment has unfortunately (a) erroneously been held to apply only to the federal government and not also to the states, and (b) has been reduced to a simple paraphrase of the Tenth Amendment by the courts. But then why have a Ninth Amendment that simply repeats the Tenth? In truth, the Ninth Amendment is very different, and no construction can reduce it to a tautology; unlike the formulaic Tenth Amendment, the Ninth emphatically asserts that there are rights which are retained by the people and therefore may not be infringed upon by any area of government. But if there are unenumerated rights, this means that it is the constitutional obligation of the courts to find, proclaim, and protect them. Moreover, it means that it is unconstitutional for the courts to allow a government infringement on any right of the individual on the grounds that no express prohibition of that act can be found in the Constitution.

In response to the famous dictum of Justice Holmes dissenting in Lochner v. New York (1905) that “The Fourteenth Amendment does not enact Mr. Herbert Spencer’s Social Statics,” Rothbard says:

The Ninth Amendment is an open invitation—nay, a command—to the people to discover and protect the unenumerated rights and never to allow governmental invasion of rights on the ground that no express prohibition can be found. … Moreover, if it is asked what “other rights” were intended, the context of the time dictates but one answer: they meant the “natural rights” held by every human being. But a commandment that the courts are duty-bound to protect all of man’s natural rights, enumerated or retained, would reduce the powerful scope of government action to such a degree as to give the last laugh to Herbert Spencer over Justice Oliver Wendell Holmes.

Toward the end of this work, Murray Rothbard wrote that the spirit of “the American Revolution was liberal, democratic, and quasi-anarchistic; for decentralization, free markets, and individual liberty; for natural rights of life, liberty, and property; against monarchy, mercantilism, and especially against strong central government.”

In a myriad of ways, many seemingly irreversible without bloodshed, and all in the name of the Constitution, that spirit has been negated.

Categories: Current Affairs

The Only Long-Term Solution to a Bust Is to Rebuild Savings

Mises Institute - Sat, 25/07/2020 - 17:00

Once an economy falls into a recession some commentators express concern that as a result there is now nonutilized capital and labor. Resources that can be used are now made unemployed. It is held that the key issue behind this is insufficient demand for goods and services.

Once it is accepted that the key factor is insufficient demand, these commentators are of the view that what is required is somehow to boost the overall demand in the economy. With a stronger demand, it is held, idle resources will be employed again. Hence, what is recommended is for the central bank to embark on very loose monetary stance to strengthen the overall demand for goods and services. If individuals are reluctant to increase their demand for goods and services, then the government and the central bank must step in to boost the demand to revive the economy. (Note that in this way of thinking spending by one individual becomes the income of another.)

But what is overlooked here that without adequate means it is not possible to exercise any demand. For instance, if an individual has a desire for a luxurious car such as a Mercedes 600 yet his means are sufficient only to secure a bicycle. Means, however, are not something that can be printed; they have to be produced.

Contrary to popular thinking, money is just a medium of exchange, not the means of payment. In a sense, individuals are paying for goods with other goods. All that money does is facilitate the payment of one good for another good.

Consequently, printing more money doesn’t generate more means but rather leads to an exchange of nothing for something, i.e., to the depletion of the pool of real savings. It leads to the diversion of real savings from those individuals who have contributed to this pool to those who made no contribution whatsoever.

How, then, can an economic slump be eliminated? By increasing as much as possible the pool of real savings—the increase in this pool is the key to the increase in the well-being of individuals.

What is required is to seal off all the channels that undermine the generation of real savings. This means that what is required is to close all the loopholes that enable monetary pumping and to cut the government outlays to the bone. (Observe that by cutting government outlays it will instantly be possible to lower all sorts of taxes on individuals.) These policies will put more real savings in the hands of wealth generators, which will help to revive the economy.

It must be understood that no central bank or government tampering with markets can make the overall “pie” bigger—all that such policies as a rule generate is a redistribution of a given “pie.” And over time these policies lead to the weakening of the amassing of real savings and to economic impoverishment. According to Mises in Human Action,

Out of the collapse of the boom there is only one way back to a state of affairs in which progressive accumulation of capital safeguards a steady improvement of material well-being: new saving must accumulate the capital goods needed for a harmonious equipment of all branches of production with the capital required. One must provide the capital goods lacking in those branches which were unduly neglected in the boom. Wage rates must drop; people must restrict their consumption temporarily until the capital wasted by malinvestment is restored. Those who dislike these hardships of the readjustment period must abstain in time from credit expansion.

Furthermore Mises argues in Human Action,

In the opinion of the public, more inflation and more credit expansion are the only remedy against the evils, of an economic slump….Here, they say, are plants and farms whose capacity to produce is either not used at all or not to its full extent. Here are piles of unsalable commodities and hosts of unemployed workers. But here are also masses of people who would be lucky if they only could satisfy their wants more amply. All that is lacking is credit. Additional credit would enable the entrepreneurs to resume or to expand production. The unemployed would find jobs again and could buy the products. This reasoning seems plausible. Nonetheless it is utterly wrong.

If commodities cannot be sold and workers cannot find jobs, the reason can only be that the prices and wages asked are too high. He who wants to sell his inventories or his capacity to work must reduce his demand until he finds a buyer. Such is the law of the market. Such is the device by means of which the market directs every individual's activities into those lines in which they can best contribute to the satisfaction of the wants of the consumers. The malinvestments of the boom have misplaced inconvertible factors of production in some lines at the expense of other lines in which they were more urgently needed. There is disproportion in the allocation of nonconvertible factors to the various branches of industry. This disproportion can be remedied only by the accumulation of new capital and its employment in those branches in which it is most urgently required. This is a slow process. While it is in progress, it is impossible to utilize fully the productive capacity of some plants for which the complementary production facilities are lacking.

 
Categories: Current Affairs

Gorging on Debt to Survive the COVID-19 Economy

Mises Institute - Sat, 25/07/2020 - 14:30

Our current position on debt seems to be akin to saying the only way to keep from drowning is pouring more water over the victim.

This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.

Original Article: "Gorging on Debt to Survive the COVID-19 Economy​".

Categories: Current Affairs

The Death Wish of the Anarcho-Communists

Mises Institute - Sat, 25/07/2020 - 12:30

Murray Rothbard explains that anarcho-communists' longing for a preindustrial primitivism would mean starvation and death for nearly all of mankind and a grinding subsistence for the ones remaining.

This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.

Original Article: "The Death Wish of the Anarcho-Communists".

Categories: Current Affairs

Are Universities Finished?

Mises Institute - Sat, 25/07/2020 - 12:00

Higher education in America today is in a crisis. The diversity thought police pounce on anyone who offers the slightest resistance to them. Here are a few examples “Students at pricey Marymount Manhattan College are demanding a veteran professor be fired for allegedly falling asleep during an anti-racism Zoom meeting. Students at the Upper East Side school claim Patricia Simon, a theater arts associate professor, took a snooze during the virtual town hall last month, and have collected 1,800 petition signatures. Petition organizer Caitlin Gagnon said ‘action has only capitalized on a pattern of negligence and disrespect that Patricia Simon has exhibited over and over again.’ Gagnon included a photo of the 30-year prof, and also accused her of enabling ‘sizeist’ staffers.” A “sizeist,” by the way, is someone who discriminates against people because of their physical size, e.g., requiring an obese person to pay for two seats. Of course, it doesn’t matter if the heavy person occupies two seats. If you charge more, you are still a sizeist.

If you dare to challenge the Black Lives Matter terrorists, you are dead in the water. “A longtime UCLA professor has been placed on leave after facing backlash over his response to a student’s request to postpone the final exam for African American students, considering the impact of George Floyd’s death. Gordon Klein received the email on June 2, and rejected the request. UCLA’s Anderson School of Management, where Klein has taught since 1981, said Klein’s classes have been assigned to other faculty, saying the following in a statement on Wednesday: ‘The lecturer is on leave from campus and his classes have been reassigned to other faculty.’”

Even if you like Martin Luther King, you can still get fired, if you say the wrong words. Look what happened to Ajax Peris: “In a virtual class lecture, Peris read a portion of King’s ‘Letter from a Birmingham Jail,’ which contains a couple of uses of the ‘N-word.’ On June 2, one UCLA student tweeted a video of Peris reading a passage from King’s letter, declining to omit the epithet, and expressed outrage at his uncensored reading and called for his termination. In short order, UCLA’s College of Letters and Science referred the matter to the Office of Equity, Diversity and Inclusion for review, and Peris’ department chair sent a letter to departmental faculty condemning his reading of the passage and noting that he had referred Peris to UCLA’s Discrimination Prevention Office. The chair also faulted Peris for showing portions of a documentary that included graphic images and descriptions of lynching, as well as narration that, the chair wrote, ‘quoted the n-word in explaining the history of lynching.’”

At Princeton, the situation is even worse. Matt Taibbi notes that “on July 4th, hundreds of faculty members and staff at Princeton University signed a group letter calling for radical changes….Much of…the letter read like someone drunk-tweeting their way through a Critical Theory seminar. Signatories asked the University to establish differing compensation levels according to race, demanding ‘course relief,’ ‘summer salary,’ ‘one additional semester of sabbatical,’ and ‘additional human resources’ for ‘faculty of color,’ a term left undefined. That this would be grossly illegal didn’t seem to bother the 300-plus signatories of one of America’s most prestigious learning institutions.”

When Joshua Katz, a classics professor at Princeton, protested against the letter’s demands, “University President Christopher Eisengruber ‘personally’denounced Katz for using the word “terrorist.” Katz was also denounced by his Classics department, which in a statement on the department web page insisted his act had ‘heedlessly put our Black colleagues, students, and alums at serious risk’ while hastening to add ‘we gratefully acknowledge all the forms of anti-racist work that members of our community have done.’”

One last example: BLM thugs are trying to oust the outstanding Austrian economist Walter Block from Loyola University in New Orleans, based on a demonstrably false claim that he supports slavery: “Walter Block is a professor in the Business school at Loyola University New Orleans. He has publicly stated that he believes slavery to be wrong because it goes against Libertarianism, not because it is morally wrong. He has justified women being paid less than men (see his book Building Blocks of Liberty) He is allegedly an ableist, too. While it is important to have professors with different views and opinions and beliefs, racist and sexist beliefs should not be a part of this. It is harmful to any non-men and any Black people to be taught that slavery isn’t morally wrong, to be taught that women don’t deserve to be paid and treated equally.

“Fight racism, end racism, fire the racists. Fire Walter Block.”

As if this weren’t bad enough, universities are taking advantage of the phony Covid-19 pandemic to offer worse service for about the same astronomical tutition: “After the sudden closure of college campuses across the country in March due to the COVID-19 pandemic, the fate of the fall semester was suddenly placed into question. All eight schools in the Ivy League have announced fall 2020 decisions as of early July. Penn, Brown, Cornell, Princeton, and Yale will all have hybrid modes of fall instruction, while Harvard will be completely online for the entire academic year. Each school has different decisions regarding which class years will come back to campus and where they will be housed during each school’s modified fall calendar.”

Professors have used the situation as an excuse to destroy already weakened academic standards. “As COVID-19 has forced classes online, colleges have eased up on graded assignments – even at the prestigious Ivy League schools. With professors and students advocating for automatic A’s or to be given passing grades at the minimum, many college administrations have surrendered highly generous grading policies to give students a break as coronavirus has taken its toll on the country.”

The crisis in higher education would not go away, even if we could get rid of COVID-19 and the PC thought police. Higher education has been in trouble for a long time. As the great economist Walter Williams has pointed out, “According to the Bureau of Labor Statistics, in 2016, only 37% of white high school graduates tested as college-ready, but colleges admitted 70% of them. Roughly 17% of black high school graduates tested as college-ready, but colleges admitted 58% of them. A 2018 Hechinger Report found, ‘More than four in 10 college students end up in developmental math and English classes at an annual cost of approximately $7 billion, and many of them have a worse chance of eventually graduating than if they went straight into college-level classes.’

“According to the National Conference of State Legislatures, ‘when considering all first-time undergraduates, studies have found anywhere from 28 percent to 40 percent of students enroll in at least one remedial course. When looking at only community college students, several studies have found remediation rates surpassing 50 percent.’ Only 25% of students who took the ACT in 2012 met the test’s readiness benchmarks in all four subjects (English, reading, math and science).

“It’s clear that high schools confer diplomas that attest that a student can read, write and do math at a 12th-grade level when, in fact, most cannot. That means most high diplomas represent fraudulent documents. The falling standards witnessed at our primary and secondary levels are becoming increasingly the case at tertiary levels. ‘Academically Adrift: Limited Learning on College Campuses’ is a study conducted by Professors Richard Arum and Josipa Roksa. They found that 45% of 2,300 students at 24 colleges showed no significant improvement in ‘critical thinking, complex reasoning and writing by the end of their sophomore years.’ Here is a list of some other actual college courses that have been taught at U.S. colleges in recent years: ‘What If Harry Potter Is Real?’ ‘Lady Gaga and the Sociology of Fame,’ ‘Philosophy and Star Trek,’ ‘Learning from YouTube,’ ‘How To Watch Television,’ and ‘Oh, Look, a Chicken!’ The questions that immediately come to mind are these: What kind of professor would teach such courses, and what kind of student would spend his time taking such courses? Most importantly, what kind of college president and board of trustees would permit classes in such nonsense?”

The dumbing-down process that Walter Williams talks about, though, was not the beginning of the attack on educational standards. The GI Bill, adopted after World War II, played a big role in lowering standards. As Tom DiLorenzo has pointed out, “The damage caused by the program was much more than fiscal. It made the centralization of education possible for the first time in American history. That in turn opened the door to the ruinous politicization of higher education that has marked the past half century.

“The tool used by government was the college accrediting agency. A network of them was originally established in the late 19th century to work as private buffers between academia and government. Their purpose was to insure high standards, and prevent government subsidies from leading to government control.

“After the second world war, the federal government used various college accrediting agencies to ostensibly guarantee a quality education for veterans. Only accredited schools could receive G.I. Bill funds, so the accrediting agencies quickly transformed themselves. They became the gatekeepers of the tax money and virtual adjuncts of federal power. This gatekeeper role expanded as federal funding of higher education escalated.

“‘Individual courses as well as whole curriculums’ must be ‘attuned to the new tempo of society,’ wrote J. Hillis Miller, the New York education commissioner. Traditionalists will fight ‘a losing battle’ because ‘any postwar nostalgic yearning for a college curriculum as it used to be is unlikely to be realized’ ‘Higher education may have to lose its life in order to find it again,’ he writes with glee, ‘and in its transformation it may well find that it has helped to create a new world of light and hope.’

“This new world arrived almost immediately, as virtually every college and university in the country clamored for money and students, and willingly threw out traditional standards. This infusion of tax dollars created, notes Robert Nisbet, ‘the single most powerful agent of change that we can find in the university’s long history.’ Had anyone objected at the time, he would have been put down as selfish and undemocratic.

Today, accreditation agencies, private in name only, have tremendous power over colleges and universities, and they are slavish to government’s agenda. Today, these agencies are the major source of political correctness and big-government ideology on college campuses.”

The destruction of higher education is a great tragedy, when one considers the role of the University in sustaining knowledge and culture. As Cardinal [now Saint] John Newman noted in The Idea of a University ( 1873) “The view taken of a University in these Discourses is the following. — That it is a place of teaching universal knowledge. This implies that its object is, on the one hand, intellectual, not moral; and, on the other, that it is the diffusion and extension of knowledge rather than the advancement. If its object were scientific and philosophical discovery, I do not see why a University should have students; if religious training, I do not see how it can be the seat of literature and science.”

In the face of this sad situation, should parents encourage their sons and daughters to enroll in college? I don’t know the answer to this. Studies do show that university graduates earn a substantial premium over those who look for work after high school. But I’d like to suggest that an alternative may be worth consideration.

Private educational institutions that insist on high standards, shun PC nonsense, and teach the values of a free economy and a free society may turn out to be a better investment for students than the conventional degree program. As the great educator and entrepreneur Robert L. Luddy has stated: “Our modern democratic market is a marvel catering to every need and whim of the citizens. Government has a measure of control over business, but the ultimate control and outcome is determined by the minute-to-minute decisions of the buyers, users, and customers.

“The market also reflects the values of our citizens, including fairness, equal opportunities, and the widest range of choice as companies compete. Citizens hold the fate of every business in their hands (iPhones) with a plethora of buying prerogatives. Buying habits, and thus the market, are rapidly changing as users abandon department stores in favor of online ordering and delivery without ever leaving the home. Even food and grocery providers now participate in this new landscape with cooked meals delivered at the precise location and time desired, as dictated by the buyer.

“America continues to demonstrate the wisdom of our Founders, exhibiting an extraordinarily high standard of living and decency in our society. Our private institutions and businesses solve most of the challenges that our political democracy fails to resolve.

“Private education and homeschooling are blossoming, creating a wide variety of choices for families and students. Private boards lead and manage public charter schools. Private companies provide drugs and healthcare technologies that save lives and solve complex medical challenges. MOOCs [massive open online courses] and distance learning (online universities) are becoming the norm, disrupting the expensive and lethargic colleges and universities.”

I confess that one such alternative institution is foremost in my mind. “A long-held vision of both Ludwig von Mises and Murray N. Rothbard is now a reality. Their vision? A graduate school of Austrian economics.

“Throughout its nearly forty-year history, the Mises Institute has been focused on providing support to students of other educational institutions. Helping students discover the economics of freedom and inspiring them to go on to teach at the university level is and has been a priority for the Institute. Excellent service that is personal, responsive, and geared towards assisting students in reaching their individual educational and career goals has been emblematic of all Mises Institute programs.

“The Mises Institute’s Master of Arts in Austrian Economics is unique. It is the first graduate program in the United States dedicated exclusively to the teaching of economics as expounded in the works and great treatises of Ludwig von Mises and Murray N. Rothbard. The goal of the program is to assist students in mastering the principles of this great body of work and putting these principles to use in their chosen endeavors.

“To this end, the Institute has carefully selected an outstanding faculty, with PhDs from prestigious universities including New York University, UCLA, Columbia University, Cal-Berkeley, Rutgers University, and Virginia Tech. All are accomplished scholars who have lectured or taught at Mises Institute events and published in its journals, books, or online publications. Many were personal friends or protégés of Murray Rothbard.”

Thanks to the generosity of the Mises Institute’s donors, the cost of the program is well below that of other MA programs in economics or the related social sciences, whether traditional or online.

I urge parents to consider our program. Will we succeed? Of that I can’t be sure. But I am sure of this: our current educational disaster cannot continue for very long. At the Mises Institute, we aim to continue the tradition of education so eloquently expressed by Cardinal Newman. Ludwig von Mises and Murray Rothbard were among the highest exemplars of the values of Western civilization, and this is what we endeavor to transmit to our students.

Categories: Current Affairs

Why is the US getting so tetchy about Big Tech taxes?

Adam Smith Institute - Sat, 25/07/2020 - 07:01

The general and public view of the taxation of the Big Tech giants is that upon their profits made here in Europe they pay no tax at all. Therefore lots of people are in favour of their being taxed by us here in Europe. Thus such things as digital services taxes and so on.

There is also some surprise when the US demurs and starts shouting:

America’s quest for technological supremacy has been mainly focused on punitive actions against China. But European attempts to boost tax revenues from the most successful Silicon Valley companies means this battle is now spreading to its allies.

Many Western countries believe they can overcome Washington’s resistance to taxing tech giants such as Google, Apple and Microsoft because it seems fair and just. But this underestimates the importance of Silicon Valley to Washington’s geopolitical ambitions. The US will not back down and tariffs on European goods are looking more likely by the day.

Silicon Valley behemoths are the front line in America’s battle for technological supremacy in the 21st century. China has already developed equipment for 5G systems that is superior to that produced in the US – and it appears to be getting ahead of Western nations on smart cities and other ways to exploit the “Internet of Things”. America has a fight on its hands.

The US Senate finance committee warned Britain this week that its digital service tax on American technology companies could put a post-Brexit trade deal at risk. However, the toughest action is likely to be taken against the European Union.

This is less than perceptive. For the American taxation system changed back in autumn 2017. Those European profits which pile up in tax havens are now not untaxed inside the United States. Instead they are taxed when earned. At special rates to be sure but they are still taxed.

The importance of this being that for a US corporation its American tax bill is whatever is the righteous amount to be paid minus foreign taxes already paid. So, if the EU, or European countries, or the UK, levies another tax upon the Big Tech companies this then just gets knocked off (not exactly but this is the net effect in the end) that US bill due.

The only purpose of going into politics is to get to decide how to spend great gobs of other peoples’ money. Thus American politicians are more than a little miffed that cash they think they should righteously spend is going to get spent by some bunch of foreigners.

We have no comment - here at least - upon the justice of either the practice or the general complaint. Rather, we just want to point out why the shouting is so intense. This isn’t about, any more, whether those profits should be taxed at all. It’s about who gets to spend the revenue from having done so.

However anyone dresses up their arguments that’s all it is about too. Uncle Sam is threatening a trade war and Tante Europa might well join in over which group of baby kissers gets to spend 0.05% of the economy. We can’t help thinking that there are more useful, let alone important, things for us all to be doing.

Categories: Current Affairs

Trinity seminary to offer in-person classes in the Fall

Anglican Ink - Sat, 25/07/2020 - 02:27

After taking into account multiple factors (i.e. our small size; our location; we are less likely to facilitate Covid-19 transmission [or other infectious pathogens for that matter] because unlike a residential campus we are not an incubator for infectious pathogens), the Deans Cabinet plans to resume in-person classes as scheduled on August 31, 2020. We will end residential face to face classes on November 24, two days before Thanksgiving to avoid possible heightened infection risk from returning staff, students, and faculty. The last week of class will be conducted online. In essence, what we are proposing is a hybrid model for the fall.

Of course, no one can predict with any degree of accuracy either the pattern of this Covid-19 pandemic or what the rate of infection in Beaver County (or anywhere else for that matter) will be in the fall. We believe we can, given today’s data points, resume face to face teaching safely. A level of risk is always present, and we believe that we will be able to implement the necessary changes to reduce our exposure to a manageable threshold. Additionally, we believe that if we can have face to face connections at the start of fall semester, even for just a few weeks, that will make transitioning to online (if that becomes necessary) more effective. Certainly our online experiences this past spring semester would have been radically different if we hadn’t had half a semester of residential instruction to get to know one another.

We will be putting a range of safety measures in place for fall semester to mitigate the risk of contagion. Plans on how to prepare for re-opening are being carried out by the Reopening Committee consisting of representatives from the various departments on campus as well as a student representative. Over these summer months, this committee has been implementing changes to class and campus operations such as (but not limited to) lunch, chapel, physical distancing, appropriate PPE, visitors, monitoring for cases of Covid-19, and contingency procedures for closing the campus should an outbreak occur.

Those who are immunocompromised or living in a household with such at risk individuals will be given off-site participation options. Trinity is investing in the technology that will allow immunocompromised students to join the residential classes remotely in real time if need be, as well as enable such faculty to teach a residential course remotely. This will be done via Smart Screens and web cameras.

The Deans Cabinet is aware of how limited our control is regarding how things will pan out in the fall. Government and health authorities could mandate that we go online before Aug 31 or anytime thereafter. Fortunately, we already had a significant online footprint before Covid-19 hit last semester and we demonstrated the capability to quickly pivot and shift modalities back in March. If need be, we can do so again.

Erika Moore, PhD
Academic Dean
Trinity School for Ministry
Ambridge, PA 15003
July 21, 2020

The post Trinity seminary to offer in-person classes in the Fall appeared first on Anglican Ink © 2020.

Man, Economy, and State: Interest Rates

Mises Institute - Sat, 25/07/2020 - 00:30

Kristoffer Hansen joins the show to discuss everything about interest rates, as detailed by Rothbard in Chapter 6 of Man, Economy, and State.

Hansen and Jeff Deist cover the "pure" rate of interest, expressed via time preference, and why the temporal nature of production helps us understand the premium for present goods relative to future goods. Far from exploiting workers or borrowers, capitalists actually advance money today in exchange for a more risky and uncertain return tomorrow—in the process making us all wealthier based on our individual subjective preferences.  At every stage of production, interest helps producers get the capital they need now to bring us, the consumer, all the goods and services we enjoy. This show explains why we can't understand the productive economy without understanding interest rates.

Read the book free of charge in searchable HTML format here.

Use the code HAPOD for a discount on Man, Economy, and State from our bookstore: Mises.org/BuyMES

Additional Resources

Dr. Joe Salerno's introduction to Man, Economy, and State: Mises.org/SalernoMES

Man, Economy, and State: Mises.org/MES

 

Categories: Current Affairs

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