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The White-Owned-Restaurant Outrage Is Wildly Misplaced – Article by Liz Wolfe

The White-Owned-Restaurant Outrage Is Wildly Misplaced – Article by Liz Wolfe

The New Renaissance Hat
Liz Wolfe
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The latest political correctness outcry is a series of “white-owned appropriative restaurants” in Portland. While there are legitimate grievances to be made against white people who mock other cultures and then use them to profit once they become trendy, tirades like this list don’t level the economic playing field. More often than not, they breed resentment as political-correctness fights tend to back people into their respective partisan corners.

I read all the articles listed on the first page of the list –I should educate myself about hardships other people face while I remain immune. I’ll give credit where it’s due: many of these articles center around the idea that systemic disadvantage creates poverty, and many people of color don’t have the same financial resources to open restaurants that their white counterparts have. It follows, then, that white people get to profit from rich cultural traditions while the people who have claim to that origin don’t. I see how that feels viscerally unfair.

But are white entrepreneurs really the culprits here, or is it a larger system of historic disadvantage that has created these differences in wealth? Which system should we rebel against?

Appropriating Tortillas and Hip-Hop

Portland’s Kooks Burritos food truck, one of the restaurants listed, recently closed their doors for good, presumably as a result of all the hate they’d been getting. In a profile by the Willamette Week, founders describe being entranced by the tortillas they had on a trip to Mexico. This inspired them to ask local ladies about the ingredients, but they would only reveal part of the recipe, not the techniques, leading the two Kooks founders to peek into windows of nearby restaurants attempting to learn the art of tortilla-making. Two white women spying on resistant Mexican cooks to open a trendy food truck sparked outrage.

There’s a tough balance between co-opting traditions and voluntarily sharing customs. Perhaps the owners of Kooks Burrito erred too far on the side of co-opting, as they attempted to steal recipes from locals instead of engaging in voluntary exchange. But demonizing them is yet another foolish battle that won’t right the wrongs of the past or teach fruitful lessons to white restaurant owners.

Cultural sharing isn’t something to be intrinsically discouraged. Appropriation, as a concept, often seems logically inconsistent. When an American university fraternity tried to throw a theme party with a play on the song “Bad and Boujee,” administrators objected, citing “cultural appropriation” as the problem. But which culture are we talking about? Which people are being subjugated and what is the true origin? “Latin, French, Marxist, Urban hip-hop?” suggested Catherine Rampell at The Washington Post. In other words, is any iteration apart from the true origin an offensive act?

I doubt it. When we wade down the slippery slope of condemning people for well-intentioned practices, we often create enemies and become a culture where people are brutally shamed for their missteps, never learning from their mistakes.

How does this work when practices like yoga come under fire? Is yoga a less heinous thing to take part in because the origin is often explained more thoroughly? Perhaps yoga classes in US-based ashrams should continue to exist, but what about my less-conscious local YMCA? And still, who should make these judgment calls?

Using these Opportunities for Good

There seems to be a lot of gray area, and I doubt attempts to exercise more control over the individual would create good outcomes. Generally speaking, let’s reserve use of authority and force for the direst situations in which people are directly harming one another.

A hardline reaction either way is misguided. The truth likely lies somewhere in the middle – marginalized groups have been historically disadvantaged, and that disadvantage often remains for many decades. But cultural appropriation isn’t necessarily bad, nor is it as easily defined, as social-justice advocates might hope. It’s through cultural sharing, in its many forms, that people are able to make a living, spread knowledge of a particular topic, and advance current practices.

If a white business owner is spreading popularity of Burmese food, for example, and creating more demand for it, could that be a good thing for hopeful Burmese immigrants intent on entering the industry?

I went to a white-owned Burmese restaurant in Thailand where the owners had pamphlets on current events – namely the ethnic cleansing that has gripped much of the country. Although my appetite was reduced, exposure to Burmese culture made me more invested in Burmese current events. Now, headlines stick out to me. I remind traveler friends that they should be conscious of where their tourism money goes, as much of it unintentionally ends up lining the pockets of corrupt government officials.

White ownership isn’t the problem in Portland. Instead, it’s a complex web of systemic disadvantage, fear of ignorance on the part of proprietors, and worries that hard-working immigrants will be shoved out of the market. Those are more than worth fixing, but filing this cleanly under the “cultural appropriation” label doesn’t give proper weight to the many sides of this important issue.

Let’s stop condemning the wrong practices.

Author’s Note: I reached out to the creators of the “white-owned restaurants” spreadsheet with several questions. They said, “We can answer questions off the record to further your own understanding, but we are uncomfortable providing a statement due to the news media’s tendency to offer racist counterpoints in the name of ‘fairness.’ Let us know if that is agreeable.”

Liz Wolfe

Liz Wolfe is managing editor of Young Voices. You can follow her on Twitter: @lizzywol.

 

This article was originally published on FEE.org and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author. Read the original article.

The Evidence Weighs in Favor of Immigration – Article by Luis Pablo de la Horra

The Evidence Weighs in Favor of Immigration – Article by Luis Pablo de la Horra

The New Renaissance HatLuis Pablo de la Horra
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In a previous article, I analyzed the economics of immigration from a theoretical perspective. I concluded that economic theory clearly supports immigration-friendly policies since they benefit all parties involved. In this article, I will examine the empirical evidence on the effects of immigration on host countries and immigrants themselves.

Effects on Employment, Wages, and Public Finances

High immigration rates are often associated with rises in unemployment. The logic behind this (flawed) reasoning is straightforward: if an economy can only absorb a fixed number of jobs and the labor force increases, the unemployment rate will inevitably rise. What’s wrong about this statement? Simple: the economy is not a zero-sum game.

In other words, the number of jobs available increases as the economy grows. After World War II, the US labor force increased dramatically due to immigration and the massive entry of women into the labor market. It moved from 60 million in 1950 to around 150 million workers in 2007. And yet, the unemployment rate in 2007 was as low as 4.6 percent, near full employment.

In a survey paper on the economic effects of immigration, published in 2011, Sari Pekkala Kerr and William R. Kerr concluded that the long-term impact of immigration on employment is negligible. In their own words,

The large majority of studies suggest that immigration does not exert significant effects on native labor market outcomes. Even large, sudden inflows of immigrants were not found to reduce native wages or employment significantly.

As suggested by the research conducted by Giovanni Peri, professor of Economics at UC Davis, immigration has positive effects on productivity since it expands the productive capacity of the economy, which in turn results in higher wages in the long run. Nonetheless, there are certain disagreements on how immigration affects native, low-skilled workers (mainly high school dropouts).

Different studies point at a wage decline between 0 (no effects at all) and 7 percent for this segment of population. Even when assuming the worst-case scenario of a 7 percent decline (which does not consider the investment in capital undertaken by companies to compensate for a decline in the capital-labor ratio), low-skilled immigration has net positive economic effects for host societies, allowing native workers to perform more productive jobs and increasing the specialization of the economy.

One of the most popular arguments against immigration is the issue of welfare benefits. Immigrants are believed to pose a burden on the host economy. Their net fiscal impact (defined as taxes paid by immigrants minus public services and benefits received) is thought to be overwhelmingly negative when compared with the fiscal impact of natives. Yet the evidence does not support this idea. As pointed out by Kerr and Kerr,

It is very clear that the net social impact of an immigrant over his or her lifetime depends substantially and in predictable ways on the immigrants’ age at arrival, education, reason for migration, and similar […] The estimated net fiscal impact of migrants also varies substantially across studies, but the overall magnitudes relative to the GDP remain modest […] The more credible analyses typically find small fiscal effects.

Therefore, there are no good reasons to impose tough restrictions on labor mobility in the name of fiscal sustainability.

The Place Premium: How to Reduce Poverty by Lowering Immigration Barriers

Wage differentials among countries can be explained by drawing on the concept of Place Premium, that is, the increase in earnings that a worker automatically experiences when moving to a high-productivity country. This increase is due to several factors: differences in capital stock, infrastructure, proximity to other high-productivity workers, etc.

The Place Premium of potential immigrants moving to the US has been estimated for a few countries. A Haitian worker that were to relocate to the US would see her PP-adjusted earnings automatically rise by 700% when compared to the same worker in Haiti performing an equivalent job (or a job that requires the same skills and education). Similarly, a worker from Guatemala or Nicaragua would more than triple her earnings, while a Filipino would increase her purchasing power by 3.5 times. In other words, relaxing barriers and letting more immigrants into higher-productivity countries seems to be one of the most effective ways to improve the life of millions of people worldwide.

All in all, the economic benefits of immigration seem obvious for both host countries and immigrants. The data shows that restrictive immigration policies have adverse effects on host economies and prevent would-be immigrants from increasing their income by migrating to higher-productivity countries. Thus, the path to take is clear: we should gradually reduce immigration barriers so that more and more people can take advantage of the benefits of capitalism.

Luis Pablo de la Horra is a Spanish finance graduate from Vlerick Business School.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

Economic Theory Really Is Pro-Immigration – Article by Luis Pablo de la Horra

Economic Theory Really Is Pro-Immigration – Article by Luis Pablo de la Horra

The New Renaissance HatLuis Pablo de la Horra
******************************

In his now-classic work The Myth of the Rational Voter, Bryan Caplan identifies four systematic biases about economics held by the average citizen: make-work bias (an inclination to overestimate the disadvantages of temporary job destruction due to productivity increases), anti-market bias (a tendency to overlook the benefits of the market as a coordination mechanism), pessimistic bias (an inclination to underestimate the present and future performance of the economy), and anti-foreign bias (a tendency to underestimate the economic benefits of interaction with foreigners).

Widespread biases on economics are far from being harmless. Wrong ideas held by voters usually lead to catastrophic policies due to the inherent nature of the democratic process. In other words, in most cases, politicians undertake those policies that they deem popular among voters in order to get reelected. If those policies beget pernicious consequences for the economy, harmless beliefs turn into lower living standards for all.

Of those four biases, the most potentially harmful is the anti-foreign bias. This inclination to underestimate the benefits of economic cooperation with foreigners manifests itself politically in two main ways: protectionism and anti-immigration policies. Despite the recent surge of protectionism in some developed countries, free trade is now the rule rather than the exception in most parts of the world. However, when it comes to immigration, only a few steps have been taken worldwide over the last few decades in a direction of liberalization (even though the consensus about the benefits of more open borders in the economics profession is probably as strong as the consensus around free trade).

As I will show in this series of two articles [see the second article here], anti-immigration policies reduce the well-being of both potential immigrants and host societies, as shown by economic theory and empirical evidence. Or, to put it differently: even a partial liberalization of immigration restrictions would, in the long-term, contribute to improving the standards of living globally.

Economic Theory Supports Immigration-Friendly Policies

The economic case against less restrictive immigration policies rests on shaky pillars. The most common anti-immigration arguments are related to the supposedly negative effects that immigration has on the host country’s labor market, and, more specifically, its impact on employment and wages. According to advocates of immigration restrictions, immigrants do not only take natives’ jobs, but also have a depressive effect on wages.

However, economic theory does not support these assertions. First, the economy is not a zero-sum game: the numbers of jobs available is not finite. As pointed out by Alex Tabarrok (here and here), immigrants are not only producers but also consumers, which implies that an increase in demand triggered by the expansion of the immigrant population goes hand in hand with an increase in total employment. Also – and contrary to conventional wisdom – not only highly-qualified immigrants create positive externalities on host economies. Low-skilled immigrants tend to take lower-productivity jobs (as they often either lack higher education or do not speak the language), allowing the native-born to access higher-productivity jobs (assuming free trade and a flexible labor market).

All said above can be also applied to wages. All else equal, the law of supply and demand says that an increase in the supply of labor would inevitably cause lower wages. However, more immigrants also mean a higher demand for goods and services, which in turn results in a higher demand for labor, preventing a generalized decrease in salaries. Even in those cases when wages in a particular sector are temporarily pushed down, lower wages lead to lower costs for companies, which usually results in lower prices for consumers due to the process of competition.

Immigration-friendly policies can also help tackle the demographic problem that many developed countries have been experiencing over the last years. For instance, the progressive demographic ageing of the American population is already having an impact on the US Social Security system. According to the Population Reference Bureau, the number of Americans over 65 years old will have moved from 15% in 2014 to 24% of the population by 2060. As a result,  the worker-to-beneficiary ratio will decrease by 32%, from 3.4 in 1990 to 2.3 in 2030. This problem could be mitigated by adopting a more flexible immigration policy that increases the working population, reversing the trend that will otherwise end up with significant spending cuts in Social Security benefits.

Benefits for the Sending Countries and Immigrants

The discussion so far has focused on the benefits of immigration for receptor countries. How do the sending countries and immigrants benefit from the migratory phenomenon? Immigrants usually transfer part of their income to their countries of origin with the aim of economically supporting their families and friends. These so-called remittances are flows of capital from developed to developing countries which assist in the economic development of sending countries.

The main beneficiaries of eliminating barriers to labor mobility would be, no doubt, immigrants themselves. This is due to the concept of Place Premium. This concept, first introduced by Michael Clemens, Claudio E. Montenegro, and Lant Pritchettin in a 2008 paper, refers to the automatic increase in earnings (PPP adjusted) that a worker experiences by moving from a low-productivity country to a high-productivity country, without increasing the worker’s human capital. The factors behind this phenomenon are multiple: differences in capital accumulation, quality of infrastructures, technology, proximity to high-productive workers, different legal frameworks, etc. The empirical evidence (which will be dealt with in the second and final article of this series) shows that wage differences among countries due to Place Premium are immense. The corollary is simple: more open borders would bring about a substantial reduction in poverty levels across the world.

Potential Gains from Reducing Global Migration Barriers

What would happen if migration barriers were partially or totally eliminated on a global scale? In his paper Economics and Immigration: Trillion-Dollar Bills on the Sidewalk, Michael Clemens, senior fellow at the Center for Global Development, reviews the academic literature on the topic. If all barriers to labor mobility were to be removed, world GDP would increase in the range of 50% to 150%.

Even partial liberalizations would bring about considerable gains. For instance, a reform that allowed 7% of the population to emigrate to higher-productivity countries would result in an efficiency gain of 10% of world GDP. To put this into perspective, if all remaining trade barriers were eliminated, world GDP would grow by just 2% or 3%. As shown, the impact of relaxing migration barriers on the world economy would be extremely positive, especially for the poorest segments of population.

The theoretical analysis above clearly supports the adoption of more immigration-friendly policies as a way of increasing economic growth and improving the welfare of millions and millions of people, including those in receptor countries. However, economic theory needs to be supported by facts. In my next article, I will provide empirical evidence in support of eliminating barriers to immigration.

Luis Pablo de la Horra is a Spanish finance graduate from Vlerick Business School.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

What the Atlanta Highway Collapse Signals about American Infrastructure – Article by Lili Carneglia

What the Atlanta Highway Collapse Signals about American Infrastructure – Article by Lili Carneglia

The New Renaissance Hat
Lili Carneglia
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Atlanta is already known for having some of the worst traffic in the world, and the recent collapse along a major interstate will only make congestion worse. On March 30, in the middle of rush hour traffic, a fire began under the I-85 Northbound that quickly erupted into a massive blaze, eventually causing a section of the bridge to collapse.

Less than 24 hours later, with the rubble still smoldering, the US Department of Transportation announced a $10 million award to begin emergency repairs. Despite the quick response from the DOT, it will take millions more dollars before I-85 can resume carrying 400,000 vehicles daily.

With the nation’s Highway Trust Fund rapidly approaching insolvency, the I-85 collapse and the subsequent Atlanta traffic chaos exemplify the overwhelming cost and inefficiency of public infrastructure in America.

Why So Expensive?

In the United States, transit projects are chronically expensive and time-consuming. The country’s outdated method of allowing most highways to fall under federal care, and cumbersome regulatory obstacles, is part of the reason that we continue to lag behind when it comes to international standards. Regulatory burdens also contribute to other countries’ outranking the US when it comes to securing construction permits, making new projects and maintenance even more complicated.

Policy relics of the Obama administration weigh particularly heavy on this type of progress. Specifically, Executive Order 13502, which encourages labor agreements for federal construction projects. Because these agreements require union labor, this E.O. severely limits the number of firms that can accept a federal contract, since only 13.9 percent of the construction workforce is unionized. Additionally, many researchers have found that this practice is estimated to increase the costs of projects anywhere from 13-18 percent.

As the small fraction of construction firms that benefit from this order continue to lobby for similar policies that land them more federal projects at the expense of taxpayers and industry innovation, we can expect the cost of infrastructure projects to continuously rise.

This issue is nothing new, with politicians from both sides of the aisle eager to point fingers and  offer their own solutions. President Trump is no exception. He has made a repeated pledge to invest $1 trillion in the nation’s infrastructure. While the Trump administration has announced that those plans will be revealed later in the year, the details, including the amount of federal funding available for the project, remain a mystery. In part due to this opacity, most people remain skeptical of promises, released alongside a proposed budget, that would cut DOT spending by 13 percent.

However, even if the Trump administration were to pump $1 trillion of pure federal funds into infrastructure projects, it would do little to fix the country’s severely broken system. The best chance of improving America’s infrastructure lies in removing the red tape standing in the way of private firms when it comes to federal projects – or better yet, ending the government monopoly on transit altogether.

Corporate Welfare

One of the most promising international trends in infrastructure development involves moving away from public transportation and towards private transit systems. The Organisation for Economic Co-operation and Development (OECD) reports that in many countries, private investment in infrastructure is on the rise as government investment declines due to “constraints on public finance and recognized limitations on the public sector’s effectiveness in managing projects.” The US should take note of the global trend.

Transitioning to privatization is quickly becoming a necessity in the face of rapidly-expanding maintenance costs and Trump budget cuts. Even without the option of public funding, privatization offers massive benefits for taxpayers.

Some of the biggest users of public roads, like logistics companies, create billions more dollars in transportation expenses than the average car-owner. However, road costs are passed on to taxpayers en masse, subsidizing companies that use public roads the most. The current system effectively results in corporate welfare. Private toll roads help mitigate the unfair cost burden and appropriately account for maintenance.

American infrastructure is on the brink of complete disaster. While the I-85 collapse was an unpredictable event, prior to last month, the road was not even listed among the 56,000 structurally deficient bridges in the country. Infrastructure expenses will continue to drain federal and state budgets until public funds can no longer keep up. Sudden highway collapses are a disquieting reminder of what is at stake if we fail to change the way the US approaches transportation.

Lili Carneglia is a student at the University of Alabama where she is getting a joint bachelor’s and master’s degree in Economics. She is a Young Voices advocate.

This article was originally published on FEE.org. Read the original article.

My Childhood as a Renegade Entrepreneur – Article by Derek Magill

My Childhood as a Renegade Entrepreneur – Article by Derek Magill

The New Renaissance HatDerek Magill
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For most of my life I wanted to be a businessman.

As early as preschool, I would insist on wearing only business attire to class every day. And by business attire, I mean I’d put on one of my father’s button-down shirts and tuck it in with a ridiculously oversized pair of slacks that my brother had worn.

When I got older this interest began to manifest itself in ways that caused conflict in class.

The Young Entrepreneur
In 4th grade, I made a little business out of reselling Livestrong wristbands after class. I made about $150 with this side business before the school told me I needed to stop. My classmates were disappointed because I was the only reliable source when it came to getting bands. Plus, I had recently started purchasing Freedom Bands, which were available in far more colors than the Livestrong yellow. Needless to say, my customers were always satisfied.

In 6th grade, I loaned a friend money for a cookie but insisted on there being a 25 cent interest fee tacked onto each day he failed to repay. It took him two weeks and he paid the amount he owed, plus interest, without complaint.

The school found out and my parents received a call home.

What I always found interesting was that there was never any sort of explanation offered as to why my behavior was “bad.” It was just simply against the rules.

My classmates loved my attempts at offering services, but there was always the ever-present, and often unseen, force of teachers and school administrators hovering nearby waiting to stop our transactions.

High School Antics
As the associated student body president, I was required to work in the student store. I developed a practice of accepting tips in the form of the spare change students didn’t want to carry around.

I had a jar on the counter, like any food establishment might, and I would casually suggest students leave their change after a purchase. This was an innocent, voluntary donation in which I’d make a little bit of money every day.

But of course, my teacher found out and her response was a swift write-up. Again, I was not told why my actions were wrong.

It’s Only Fair If Everyone Profits
One day, the administration decided to host a club fundraising festival where each club was allowed to sell one item purchased from a grocery store at lunch in order to raise funds for its club—the only time they ever broke the cafeteria monopoly.

I left campus to purchase 150 burgers from Wendy’s for $1 each. I then sold them for $5 per burger on campus, and gave away a free Arizona Iced tea with the burger, which undercut the two other vendors selling Arizona Iced tea.

We eclipsed the rest of the fundraising group that day by over 200 percent and the school accused us of cheating and being greedy.

They confiscated most of the funds and distributed it among the other students to make it more “fair.”

At last the truth had come out in full. It had taken almost eighteen years but I had the answer they had never given me before: my teachers hated the free market.

The administrators regarded commerce as dirty. They didn’t see the value I created for students who wanted something better than cafeteria food for lunch. They saw value that had been acquired at the expense of others.

As I look back now with more knowledge and experience, I’ve come to the conclusion that this experience was both beautiful and saddening.

As children, we are born capitalists. We have no deep philosophies or moralities but we organize ourselves naturally around mutual exchange because we recognize quickly that life gets better if we do.

We trade cards, toys, our lunches, and other things we value for the things our friends value and rarely do we have trouble working out disputes. We don’t do it because we care consciously about free markets — we don’t even know the concept. Nor do we need to. Markets don’t require everyone to know their importance consciously. They just require people to be left alone.

It takes a lot of schooling to kill these natural inclinations towards freedom. Teachers and administrators stop these interactions on the playground, and in the classroom they teach material that distorts and obfuscates the truth. The process of schooling is the process of taking our innate tendencies towards liberty and destroying them.

As my friend Isaac Morehouse wrote in a comment when I shared this story on Facebook:

Is it any wonder why Ayn Rand is making such a resurgence among high school students?

Derek Magill is a college dropout, marketer, business strategist and career expert. He is currently the Director of Marketing at Praxis and has consulted with companies such as Voice & Exit, the Foundation for Economic Education, Glockstore, Colliers International, Daily Caller, and Undertech.

Derek is the author of How to Get Any Job You Want.

This article was originally published on FEE.org. Read the original article.

The Federal Reserve Is, and Always Has Been, Politicized – Article by Ron Paul

The Federal Reserve Is, and Always Has Been, Politicized – Article by Ron Paul

The New Renaissance HatRon Paul
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Audit the Fed recently took a step closer to becoming law when it was favorably reported by the House Committee on Oversight and Government Reform. This means the House could vote on the bill at any time. The bill passed by voice vote without any objections, although Fed defenders did launch hysterical attacks on the bill during the debate as well as at a hearing on the bill the previous week.

One representative claimed that auditing the Fed would result in rising interest rates, a stock market crash, a decline in the dollar’s value, and a complete loss of confidence in the US economy. Those who understand economics know that all of this is actually what awaits America unless we change our monetary policy. Passing the audit bill is the vital first step in that process, since an audit can provide Congress a road map to changing the fiat currency system.

Another charge leveled by the Fed’s defenders is that subjecting the Fed to an audit would make the Fed subject to political pressure. There are two problems with this argument. First, nothing in the audit bill gives Congress or the president any new authority to interfere in the Federal Reserve’s operations. Second, and most importantly, the Federal Reserve has a long history of giving in to presidential pressure for an “accommodative” monetary policy.

The most notorious example of Fed chairmen tailoring monetary policy to fit the demands of a president is Nixon-era Federal Reserve Chair Arthur Burns. Burns and Nixon may be an extreme example — after all no other president was caught on tape joking with the Fed chair about Fed independence, but every president has tried to influence the Fed with varying degrees of success. For instance, Lyndon Johnson summoned the Fed chair to the White House to berate him for not tailoring monetary policy to support Johnson’s guns-and-butter policies.

Federal Reserve chairmen have also used their power to shape presidential economic policy. According to Maestro, Bob Woodward’s biography of Alan Greenspan, Bill Clinton once told Al Gore that Greenspan was a “man we can deal with,” while Treasury Secretary Lloyd Bentsen claimed the Clinton administration and Greenspan’s Fed had a “gentleman’s agreement” regarding the Fed’s support for the administration’s economic policies.

The Federal Reserve has also worked to influence the legislative branch. In the 1970s, the Fed organized a campaign by major banks and financial institutions to defeat a prior audit bill. The banks and other institutions who worked to keep the Fed’s operations a secret are not only under the Fed’s regulatory jurisdiction, but are some of the major beneficiaries of the current monetary system.

There can be no doubt that, as the audit bill advances through the legislative process, the Fed and its allies will ramp up both public and behind-the-scenes efforts to kill the bill. Can anyone dismiss the possibility that Janet Yellen will attempt to “persuade” Donald Trump to drop his support for Audit the Fed in exchange for an “accommodative” monetary policy that supports the administration’s proposed spending on overseas militarism and domestic infrastructure?

While auditing the Fed is supported by the vast majority of Americans, it is opposed by powerful members of the financial elite and the deep state. Therefore, those of us seeking to change our national monetary policy must redouble our efforts to force Congress to put America on a path to liberty, peace, and prosperity by auditing, then ending, the Fed.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Arizona Challenges the Fed’s Money Monopoly – Article by Ron Paul

Arizona Challenges the Fed’s Money Monopoly – Article by Ron Paul

The New Renaissance HatRon Paul
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History shows that, if individuals have the freedom to choose what to use as money, they will likely opt for gold or silver.

Of course, modern politicians and their Keynesian enablers despise the gold or silver standard. This is because linking a currency to a precious metal limits the ability of central banks to finance the growth of the welfare-warfare state via the inflation tax. This forces politicians to finance big government much more with direct means of taxation.

Despite the hostility toward gold from modern politicians, gold played a role in US monetary policy for sixty years after the creation of the Federal Reserve. Then, in 1971, as concerns over the US government’s increasing deficits led many foreign governments to convert their holdings of US dollars to gold, President Nixon closed the gold window, creating America’s first purely fiat currency.

America’s 46-year experiment in fiat currency has gone exactly as followers of the Austrian school predicted: a continuing decline in the dollar’s purchasing power accompanied by a decline in the standard of living of middle- and working-class Americans, a series of Federal Reserve-created booms followed by increasingly severe busts, and an explosive growth in federal-government spending. Federal Reserve policies are also behind much of the increase in income inequality.

Since the 2008 Fed-created economic meltdown, more Americans have become aware of the Federal Reserve’s responsibility for America’s economic problems. This growing anti-Fed sentiment is one of the key factors behind the liberty movement’s growth and represents the most serious challenge to the Fed’s legitimacy in its history. This movement has made “Audit the Fed” into a major national issue that is now closer than ever to being signed into law.

Audit the Fed is not the only focus of the growing anti-Fed movement. For example, this Wednesday the Arizona Senate Finance and Rules Committees will consider legislation (HB 2014) officially defining gold, silver, and other precious metals as legal tender. The bill also exempts transactions in precious metals from state capital-gains taxes, thus ensuring that people are not punished by the taxman for rejecting Federal Reserve notes in favor of gold or silver. Since inflation increases the value of precious metals, these taxes give the federal government one more way to profit from the Federal Reserve’s currency debasement.

HB 2014 is a very important and timely piece of legislation. The Federal Reserve’s failure to reignite the economy with record-low interest rates since the last crash is a sign that we may soon see the dollar’s collapse. It is therefore imperative that the law protect people’s right to use alternatives to what may soon be virtually worthless Federal Reserve notes.

Passage of HB 2014 would also send a message to Congress and the Trump administration that the anti-Fed movement is growing in influence. Thus, passage of this bill will not just strengthen movements in other states to pass similar legislation; it will also help build support for the Audit the Fed bill and legislation repealing federal legal tender laws.

This Wednesday I will be in Arizona to help rally support for HB 2014, speaking on behalf of the bill before the Arizona Senate Finance Committee at 9:00 a.m. I will also be speaking at a rally at noon at the Arizona state capitol. I hope every supporter of sound money in the Phoenix area joins me to show their support for ending the Fed’s money monopoly.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Jews As the Enemies of the Enemies of Liberty – Article by Steven Horwitz

Jews As the Enemies of the Enemies of Liberty – Article by Steven Horwitz

The New Renaissance HatSteven Horwitz
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Anti-Semitism, it’s often said, is the oldest prejudice. The hatred of Jews has waxed and waned over the centuries, but appears to be back with something of a vengeance over the last few years, and especially the last few months.

For example, on Monday, February 27, over two dozen Jewish institutions across the country received bomb threats by anonymous phone calls. These included Jewish Community Centers, synagogues, retirement homes, day care centers, and Jewish educational institutions. These threats are part of a pattern of such threats, including multiple cemetery desecrations, that has been ongoing over the last few months. There have been 100 such threats to Jewish institutions just since the beginning of 2017.

Every time such a threat is called in, these institutions have to clear the building to determine if it is just a hoax. This means rounding up children, infants, the elderly, the infirm, and the developmentally disabled, getting them out of the building and, often, out in the cold, for the hour or two it takes to confirm all is clear. Although, thankfully, these have all turned out to be hoaxes, they still are taking a real toll on the Jewish community and the non-Jews who make use of these institutions. They are, I would argue, a form of terrorism.

The Why of Anti-Semitism

There has been much debate over why these threats have increased in recent months, and it seems plausible that the increased brazenness of the “politically incorrect,” including the rise of the alt-right, in the wake of the Trump campaign is probably one key factor. But anti-Semitism is not solely a problem on the Right. The political Left has had its own history of hatred for Jews, manifested in the present by the increased anti-Semitism of the radical Left in the context of criticism of Israel, especially through the Boycott, Divestments, and Sanctions (BDS) movement.

The sources of anti-Semitism on both Right and Left are complicated, but one element on both sides is that Jews have historically been associated with important liberal ideas such as capitalism, entrepreneurship, cosmopolitanism, and free migration. These institutions have enabled massive social, cultural, and economic change, empowering the previously powerless all over the world, and threatening the old order.

The enemies of liberalism have problems with all of these, though the Right and Left differ on which bothers them the most. But for both, Jews can be easily seen as the enemies of those who find deep flaws with the classical liberal social order. When Jews are being threatened, it is usually a good sign that the foundations of liberalism are as well.

Jewish Anti-Capitalism

One point to note up front is that Jews themselves have a history of opposition to classical liberalism. Jewish intellectuals have had a long-standing attraction to socialism, starting of course with Marx himself. In particular, a number of the architects of the Russian Revolution were Jews or of Jewish heritage.

I raise this because I am not arguing that Jews were somehow reliably classically liberal over the last few centuries. And the fact that a good number of Jews were socialist, or that a good number of socialists were Jews, certainly doesn’t justify anti-Semitism by critics of socialism.

I do think that part of the attraction of socialism to Jews was its universalist aspiration in the form of the trans-national cosmopolitan vision of classical socialism along with its desire to “heal the world” and its strong ethic of concern for the least well-off. Those aspirations were shared by 19th-century classical liberals and were also part of Jewish practice. This universalism made Jews the target of the critics of classical liberalism from the Right, as well as the right-wing critics of socialism.

Jewish Pro-Capitalism

The association of Jews with capitalism, trade, and entrepreneurship is well known. The negative stereotypes of acquisitiveness, materialism, and selfishness that have long been part of anti-Semitism grew out of the truth that Jews were more likely to be traders and financiers than were other groups. Part of this was that as a nomadic people, Jews invested in their human capital rather than the physical capital they would have had to schlep around while getting kicked out of country after country.

(This might also explain why Jews have also been disproportionately entertainers and intellectuals. The skills for telling jokes, writing stories, making music, or working in the realm of ideas are ones that don’t require much in the way of physical capital in order to be successful.)

Jews were also often middlemen as a result of their nomadic existence and familiarity with so many parts of the world. Middlemen have always been suspect to the economically ignorant as far back as Aristotle, as they appear to profit by creating nothing tangible. This is particularly true when the middlemen are in financial markets, where they are not even trading something physical.

It’s no surprise, therefore, that hatred of capitalism has been accompanied by hatred of the Jews

Right-wing anti-Semitism, however, often draws upon these capitalist tropes as part of its hatred. But in this context, Jews are not so much seen as representative of capitalist exploitation that can be ended by socialism, but rather as an example of people who place love of money and their universalist aspirations above the love of their country and its citizens.

German anti-Semitism in the 20th century had roots in the argument that Jews had been “war profiteers” in World War I and had benefitted from the economic destruction that characterized the Weimar Republic period leading up to Hitler’s ascension to power. The Nazis, and other fascist movements, saw the Jews as the sort of rootless cosmopolitans who were unable to grasp the importance of blood and soil.

The modern version of this point, and one that is also found on the Left, is the “dual loyalty” charge laid upon pro-Israel Jews: they are beholden to Israel in ways that cause them to work against the interests of the United States.

The Why of Nationalism

One way to see the “national socialism” of various fascist movements is that they objected not to socialism per se, but to socialism’s attempt to put class ahead of race or ethnicity or nationality. To the fascists, German or Italian workers shared much more with German or Italian capitalists than they did with Russian or American workers. Marxian socialism drew the wrong battle lines.

And so it is today, as “economic nationalism” is on the rise globally and Jews have again become the most obvious target for an invigorated Right. Jews have always been the symbol of the cosmopolitan, the migrant, and the “rootless” trader. If you reject market-driven globalization, whether because you dislike markets or because you are a nationalist, you are going to have reasons to see Jews as symbols of what you reject. That opposition to immigration and global trade, and the market system that is at the root of both, would go hand-in-hand with anti-Semitism is hardly surprising.

The economic nationalism of Trump and a variety of European leaders is not inherently anti-Semitic, nor does it require that the leaders of such movements be anti-Semites, but the arguments of economic nationalism can easily empower the anti-Semitism of both the Right and Left. The leaders build in plausible deniability, knowing full well the nature of the forces they are unleashing but in ways that avoid direct responsibility.

How could they not know? We have centuries of experience to draw on, back to the ancient world through the Middle Ages all the way to the ghastly slaughter of the 20th century during which anti-Semitism nearly destroyed the whole of Europe itself. The costs have been unspeakable, and hence the vow to never forget. And yet, despite this history, the tendency to forget remains. To remember would require that we think more clearly about ideology and philosophy, human rights and dignity. Many people do not want to do that. It remains easier to scapegoat than to remember.

Admittedly, we liberals have a special grudge against anti-Semitism. It broke up the greatest intellectual society of the 20th century, shattering Viennese intellectual life, flinging even Ludwig von Mises out of his home and into the abyss. His books were banned, and those of many others too. He and so many fled for their lives but bravely rebuilt them in the new world that offered protection.

A Warning Sign

It has been said that Jews are the canaries in the coal mine of a liberal society: when they are under threat, it is a warning sign. The ongoing and increasing threats to Jewish communities here in the US, as well as similar trends across Europe, should have all of us worried. A world where Jews sing out in joy together and are unafraid to fly free is one far more safe from tyranny than one in which we Jews worry about dying in our own cages, as many of us are doing as the threats to our institutions have become more frequent and more brazen in recent months.

Watch how a society treats Jews and you’ll have an indicator of its degree of openness and respect for liberty. When Jews are being threatened, so are the deepest of our liberal values. The poisonous air from coal mining that killed canaries was invisible. The threats to Jews and to liberalism are not. Citizens of liberal societies dismiss or downplay those threats at our own peril.

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions. He is spending the 2016-17 academic year as a Visiting Scholar at the John H. Schnatter Institute for Entrepreneurship and Free Enterprise at Ball State University.

He is a member of the FEE Faculty Network.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author. Read the original article.

Alan Greenspan Admits Ron Paul Was Right About Gold – Article by Ryan McMaken

Alan Greenspan Admits Ron Paul Was Right About Gold – Article by Ryan McMaken

The New Renaissance Hat
Ryan McMaken
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In the next issue of The Austrian, David Gordon reviews Sebatian Mallaby’s new book, The Man Who Knew, about the career of Alan Greenspan. Mallaby points out that prior to his career at the Fed, Greenspan exhibited a keen understanding of the gold standard and how free markets work. In spite of this contradiction, Mallaby takes a rather benign view toward Greenspan.

However, in his review, Gordon asks the obvious question: If Greenspan knew all this so well, isn’t it all the more worthy of condemnation that Greenspan then abandoned these ideas so readily to advance his career?

Perhaps not surprisingly, now that his career at the Fed has ended, Old Greenspan — the one who defends free markets — has now returned.

This reversion to his former self has been going on for several years, and Greenspan reiterates this fact yet again in a recent interview with Gold Investor magazine. Greenspan is now a fount of sound historical information about the historical gold standard:

I view gold as the primary global currency. It is the only currency, along with silver, that does not require a counterparty signature. Gold, however, has always been far more valuable per ounce than silver. No one refuses gold as payment to discharge an obligation. Credit instruments and fiat currency depend on the credit worthiness of a counterparty. Gold, along with silver, is one of the only currencies that has an intrinsic value. It has always been that way. No one questions its value, and it has always been a valuable commodity, first coined in Asia Minor in 600 BC.

The gold standard was operating at its peak in the late 19th and early 20th centuries, a period of extraordinary global prosperity, characterised by firming productivity growth and very little inflation.

But today, there is a widespread view that the 19th century gold standard didn’t work. I think that’s like wearing the wrong size shoes and saying the shoes are uncomfortable! It wasn’t the gold standard that failed; it was politics. World War I disabled the fixed exchange rate parities and no country wanted to be exposed to the humiliation of having a lesser exchange rate against the US dollar than itenjoyed in 1913.

Britain, for example, chose to return to the gold standard in 1925 at the same exchange rate it had in 1913 relative to the US dollar (US$4.86 per pound sterling). That was a monumental error by Winston Churchill, then Chancellor of the Exchequer. It induced a severe deflation for Britain in the late 1920s, and the Bank of England had to default in 1931. It wasn’t the gold standard that wasn’t functioning; it was these pre-war parities that didn’t work. All wanted to return to pre-war exchange rate parities, which, given the different degree of war and economic destruction from country to country, rendered this desire, in general, wholly unrealistic.

Today, going back on to the gold standard would be perceived as an act of desperation. But if the gold standard were in place today we would not have reached the situation in which we now find ourselves.

Greenspan then says nice things about Paul Volcker’s high-interest-rate policy:

Paul Volcker was brought in as chairman of the Federal Reserve, and he raised the Federal Fund rate to 20% to stem the erosion [of the dollar’s value during the inflationary 1970s]. It was a very destabilising period and by far the most effective monetary policy in the history of the Federal Reserve. I hope that we don’t have to repeat that exercise to stabilise the system. But it remains an open question.

Ultimately, though, Greenspan claims that central-bank policy can be employed to largely imitate a gold standard:

When I was Chair of the Federal Reserve I used to testify before US Congressman Ron Paul, who was a very strong advocate of gold. We had some interesting discussions. I told him that US monetary policy tried to follow signals that a gold standard would have created. That is sound monetary policy even with a fiat currency. In that regard, I told him that even if we had gone back to the gold standard, policy would not have changed all that much.

This is a rather strange claim, however. It is impossible to know what signals a gold standard “would have” created in the absence of the current system of fiat currencies. It is, of course, impossible to recreate the global economy under a gold standard in an economy and guess how the system might be imitated in real life. This final explanation appears to be more the sort of thing that Greenspan tells himself so he can reconcile his behavior at the fed with what he knows about gold and markets.

Nor does this really address Ron Paul’s concerns, expressed for years, toward Greenspan and his successors. Even if monetary policymakers were attempting to somehow replicate a gold-standard environment, Paul’s criticism was always that the outcome of the current monetary regime can be shown to be dangerous for a variety of reasons. Among these problems are enormous debt loads and stagnating real incomes due to inflation. Moreover, thanks to Cantillon effects, monetarily-induced inflation has the worst impact on lower-income households.

Even Greenspan admits this is the case with debt: “We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.”

Certainly, debt loads have taken off since Nixon closed the gold window in 1971, breaking the last link with gold:

Ryan W. McMaken is the editor of Mises Daily and The Free Market. He has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre. 

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Remembering the Man Who Turned Numbers Into Hope – Article by Steven Horwitz and Sarah Skwire

Remembering the Man Who Turned Numbers Into Hope – Article by Steven Horwitz and Sarah Skwire

The New Renaissance HatSteven Horwitz and Sarah Skwire
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After the spate of celebrities who died in 2016, the death of a Swedish professor of international health might not seem very newsworthy. However, Hans Rosling, who died of pancreatic cancer on February 7th, was no ordinary or obscure professor.

The story of his life and career can be found both at Wikipedia and in this marvelous Nature profile. What those sources cannot quite convey is Rosling’s importance as a role model for intellectual honesty, personal warmth and charisma, and a willingness to go where the facts took him, regardless of whether those facts adhered to any simplistic political narrative of humanity’s past and future. Both Rosling’s intellectual fearlessness and the substance of his work have importance for those who care about human freedom and progress.

Intellect and Humanity

But it isn’t just the content of Rosling’s work that matters. He was an amazing rhetorician. He had a unique ability to use and present data in easy to understand and visually appealing ways that were very effective at conveying an argument. He also was able to think creatively about the linkages among the various causes of wealth and the improvements they made in human well-being. His natural storytelling ability gave him the capacity to put those complex historical factors into narratives that not only got the history right, but did so in a way that appealed to our shared humanity.

All of these skills are on display in his two most famous videos, both of which impart lessons in presenting ideas and interpretations of data that classical liberals will find very useful.

Underlying much of Rosling’s work as a public intellectual was a concern with how we enable all of humanity to share in the health and wealth that has come to characterize the Western world.

With his background in health and demographics, Rosling was interested in the factors that led to the rising health and longevity of the West. First, of course, he had to document just how much better things had become in the West, then he had to explore the causes.

Presenting the raw data about the improvement of the West was the centerpiece of his BBC video “200 Years, 200 Countries, 4 Minutes.” Using real-time data visualization techniques, he shows how every country in the world was poor and sick 200 years ago and then showed the path by which so many countries became wealthy and healthy. There is no better visualization of the progress of humanity than this one.

For those of us who work with students, this video gives us the opportunity to talk about the factors that made that growth happen, including the role of liberal institutions and the rising moral status of the individual in that process. It is a great complement to the work of Deirdre McCloskey.

The video also provides a way to talk about global inequality. What is clear from the visualization of the data is that 200 years ago, countries were far more equal than now, but they were equally poor.

It’s true that the gap between rich and poor countries is greater now than back then, but everyone has improved their absolute position. And two of the countries that have improved the most are two of the most populous: China and India. Rosling’s presentation opens up countless useful discussions of the importance of economic growth for increases in life expectancy, as well as what exactly concerns us about growing inequality.

As he concludes, the task before us now is to figure out how to bring the rest of the world up to where the West is. Though he does not discuss it, the economic evidence is clear that those countries that have experienced the most growth, and therefore the biggest increases in longevity and other demographic measures of well-being, are those that have the freest economies. By giving us the data, Rosling enables classical liberals to engage the conversation about the “why” and “how” of human betterment.

Inspirational ‘Edutainer’

But our favorite video of Rosling’s is definitely “The Magic Washing Machine.” Here Rosling uses the example of the washing machine to talk about economic growth and its ability to transform human lives for the better.

Rosling’s focus is on the way the washing machine is an indicator of a population that has grown wealthy enough not only to buy such machines, but also to provide the electricity to power them. The washing machine is a particularly valuable machine since it relieves most of the physical burden of one of the most onerous tasks of the household, and one that has historically fallen entirely to women.

No one who has seen the video can forget the story of Rosling’s grandmother pulling up a chair in front of the new washing machine for the sheer joy of sitting and watching while the clothes spin. Her excitement becomes even more poignant when one considers that this must have been the first time in her life when she was able to sit while laundry was done, instead of standing over a tub of hot water and soap.

Rosling points out, in a moment of calling his fellow progressives to task, that while many of his students are proud of biking to class instead of driving, none of them do their wash by hand. That chore, though green, is simply too onerous for most moderns to take on. He then goes on to discuss how we have to find ways to create the energy needed as billions of people cross the “wash line” and start to demand washing machines.

The video ends with him reaching into the washing machine and pulling out the thing that the machine really made possible:  books. The washing machine gave his mother time to read and to develop herself, as well as to read to young Hans and boost his education as well.

The visual image of putting clothes into a washing machine and pulling out books in exchange captures all that is good about economic growth in a succinct and unforgettable way. Rosling concludes the video with a heart-felt roll call of gratitude to industrialization and development that has been known to reduce free market economists to tears.

What Rosling does in that video is to effectively communicate what classical liberals see as the real story of economic growth. He gets us to see how economic growth, driven by markets, has enabled women to live more liberated lives. Classical liberals can talk endlessly about the data, but until we talk effectively about the way in which industrialization and markets have made it possible for women (and others) to be freed from drudgery that was literally back-breaking, we cannot win the war on the market.

Thank You

Bastiat said that “The worst thing that can happen to a good cause is, not to be skillfully attacked, but to be ineptly defended.” Hans Rosling’s work is the best possible example of the best kind of defense of a good cause. He was a model and an inspiration.

Rosling ends “The Magic Washing Machine” by saying “Thank you industrialization. Thank you steel mill. Thank you power station. And thank you chemical processing industry that gave us time to read books.”

We say, “Thank you, Dr. Rosling. Thank you, data visualization. Thank you TED talks. And thank you, Mrs. Rosling, for buying a washing machine and reading to your son.” We are richer for the work he did. We are poorer for his loss.

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions. He is spending the 2016-17 academic year as a Visiting Scholar at the John H. Schnatter Institute for Entrepreneurship and Free Enterprise at Ball State University.

He is a member of the FEE Faculty Network.

Sarah Skwire is the Literary Editor of FEE.org and a senior fellow at Liberty Fund, Inc. She is a poet and author of the writing textbook Writing with a Thesis. She is a member of the FEE Faculty Network. Email

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author. Read the original article.