Do the banking panics of the late 19th century prove that a safe and sound financial system requires government oversight of banks? Paul Krugman (and most every pundit) seems to think so. In his New York Times column of May 13, he writes: “Current right-wing mythology has it that bad banking is always the...
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On May 8th, five economists, including our Research Fellow Peter Klein, appeared in testimony before the U.S. House Committee on Financial Services Domestic Monetary Policy and Technology Subcommittee, chaired by Congressman Ron Paul. The panelists included two economists from the Austrian School, two Keynesians, and one monetarist: Peter G. Klein, Research Fellow, The Independent...
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Argentine president Cristina Kirchner recently caused an international uproar with her decision to expropriate 51 percent of YPF, Argentina´s main oil and gas producer, and a major affiliate of Spain´s Repsol, one of the world´s great energy concerns. As has so often been the case with Latin American nationalizations, the move was accompanied by...
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We are delighted to announce the publication of the Spring 2012 issue of the Independent Institute’s peer-reviewed journal, The Independent Review. This issue’s articles and book reviews deal with the following questions: What does evidence from hunter-gatherer societies suggest about whether human beings are better adapted for individualism or collectivism? Read the article. What...
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I am not a prophet, nor do I play one on TV. Nevertheless, I will hazard some conjectures here about certain likely legacies of the current crisis. I focus on fiscal and monetary matters. In a future post, I will deal with regulatory and ideological matters. I will try to avoid mere guesses or hunches...
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Some of you may recall that Lord Wolfson (of Next stores fame) launched a contest in Britain asking European economists to put forward proposals for an orderly exit of one or more members from the European Monetary Union—i.e. the euro. Now that the deadline for submissions is passed, some of the participants (620 teams...
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As I have noted previously, the Fed’s policy of acting to hold interest rates well below free-market rates in recent years has had the effect of greatly diminishing the earnings of people who rely on interest income. Such people include especially many retirees who do not wish to hold risky assets with substantial variability of...
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Many books and articles have been written about the financial crisis of 2007–2008. Unfortunately, much of this literature is deeply flawed, mistakenly treating, for example, unscrupulous mortgage lenders and securities dealers as the primary cause of the calamity rather than as factors subordinate to more fundamental causes. One book exempt from this criticism is...
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The Federal Reserve has announced what appear to be inconsistent policy targets for the upcoming year. The Fed says they want to keep interest rates low at least through 2013, meaning a continuation of easy money policy, and has also announced that their inflation target is 2%. The inflation rate for 2011 was 3.2%....
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[*UPDATE: Fed Joked About Housing Crash in 2006! Here is a good interview from PBS] “Tyranny is the exercise of power beyond right.” “Wherever law ends, tyranny begins.” —John Locke, Second Treatise of Civil Government “The historian is . . . one step nearer to direct power over public opinion than is the theorist.” —Friedrich A. von...
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