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Author Topic: Re: Recommended Libertarian reading list?  (Read 11222 times)

BigJoe

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Re: Recommended Libertarian reading list?
« on: June 04, 2010, 09:06:47 pm »

Intellectuals and Society by Thomas Sowell, might be the smartest guy on the planet. I like Economics in One Lesson too, by Henry Hazlitt. I stay sharp with economics because that's where big government lefties are weak, and free market economics is the best way to battle their emotion based arguments. Walter E. Williams is the man too, tune in to the Rush Limbaugh show when he subs, plus he props the FSP which is great.   :)

I wouldn't call Thomas Sowell a free market economist. He is just a free-ish market economist

Instead I would recommend Faustino Ballvé's Essentials of Economics or Bob Murphy's The Politically Incorrect Guide to Capitalism

"Epstein compares Murphy's Guide to Thomas Sowell's Basic Economics, noting that,
I only wish Sowell were as informed about the economics of the Austrian school as author Robert Murphy. While Basic Economics and The Politically Incorrect Guide to Capitalism work well as companion volumes, in the few cases where they seem to disagree—as in the discussion of money and business cycles—Murphy's version is the more trustworthy."

More on Sowell not seeing the whole picture when it comes to the business cycle:   http://mises.org/daily/3572
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rossby

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John Edward Mercier

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Re: Recommended Libertarian reading list?
« Reply #2 on: June 05, 2010, 12:42:24 am »

That is a lot of BS. Housing markets, even in a steady rate environment, move up and down...
Its the lack of capital investure in the properties that resulted in the correction.

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rossby

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Re: Recommended Libertarian reading list?
« Reply #3 on: June 05, 2010, 01:40:51 am »

That is a lot of BS. Housing markets, even in a steady rate environment, move up and down...
Its the lack of capital investure in the properties that resulted in the correction.

Are you referring to the video, JEM?
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John Edward Mercier

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Re: Recommended Libertarian reading list?
« Reply #4 on: June 05, 2010, 06:44:41 am »

Nope the article.

People that write articles for mises, always denote some superficial effect of the Federal Reserve on interest rates... but that isn't what caused this crash. The lack of equity, and loss of social stigmatism to default, is.
The world went from 20% down payments w/closing costs and absolute fear of default... to no money down w/ seller covering closing costs and default is the result of the lender trying to defraud you.



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BigJoe

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Re: Recommended Libertarian reading list?
« Reply #5 on: June 05, 2010, 11:07:46 am »

Nope the article.

People that write articles for mises, always denote some superficial effect of the Federal Reserve on interest rates.


uhhh maybe because the Federal Reserve basically sets interest rates?
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John Edward Mercier

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Re: Recommended Libertarian reading list?
« Reply #6 on: June 05, 2010, 11:47:03 am »

Not quite. The FOMC sets interest rates for the Federal Reserve System... but its not the only global player in that game.
The point is that interest rate changes didn't lead to the crisis. A lack of equity, and social acceptance of default did.
 
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rossby

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Re: Recommended Libertarian reading list?
« Reply #7 on: June 05, 2010, 02:30:55 pm »

The lack of equity, and loss of social stigmatism to default, is.

The basis of our monetary system is quite problematic...
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10stateswithnh

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Re: Recommended Libertarian reading list?
« Reply #8 on: June 05, 2010, 03:26:09 pm »

I thought the crash was caused by the federal government pushing lending institutions to use unwise lending practices, plus the quasi-government agencies Fannie Mae and Freddie Mac, through their purchase of standard mortgages, assuming all the risk (meaning the taxpayers assume the risk) of bad mortgages.
I hadn't heard that this real estate crash was caused by the artificially low interest rates, though I am sure others have been.
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BigJoe

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Re: Recommended Libertarian reading list?
« Reply #9 on: June 05, 2010, 03:48:59 pm »

I thought the crash was caused by the federal government pushing lending institutions to use unwise lending practices, plus the quasi-government agencies Fannie Mae and Freddie Mac, through their purchase of standard mortgages, assuming all the risk (meaning the taxpayers assume the risk) of bad mortgages.
I hadn't heard that this real estate crash was caused by the artificially low interest rates, though I am sure others have been.

those things by themselves did not cause the recession.  The boom-bust cycle is caused by an artificial increase in the amount of credit available.  This leads to lower interest rates, which leads to large scale malinvestment.  This malinvestment diverts more real resources to high ordered stages of production than would otherwise be demanded, and businesses that would be unprofitable at low interest rates appear to be profitable during the boom.  The policies of the government (Freddie, Fannie, community reinvestment, etc.) simply guided a lot of the resources into housing, creating a bubble.  But a bubble was going to be created once the FED lowered interest rates so much in response to the dot com crash (which was also caused by the FED), it was only a matter of where.

seeing the housing boom coming in 03:   http://mises.org/daily/1177
and in 04:  http://mises.org/daily/1670

http://mises.org/daily/2728

http://mises.org/daily/2936

http://mises.org/daily/3252


a little more in depth:
http://mises.org/journals/scholar/Thornton13.pdf
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John Edward Mercier

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Re: Recommended Libertarian reading list?
« Reply #10 on: June 05, 2010, 08:58:54 pm »

Not quite. What is failing here is the understanding that fractional reserve banking is a natural process... not a government induced one. The Federal RESERVE System is designed to limit fractional reserve banking... not expand it.

10states is correct. Because of the desire to broaden home ownership (American Dream)... low equity (higher risk) was incentivized.
Market manias existed prior to the FED, and while on the Gold Standard.
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BigJoe

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Re: Recommended Libertarian reading list?
« Reply #11 on: June 05, 2010, 10:52:50 pm »

Not quite. What is failing here is the understanding that fractional reserve banking is a natural process... not a government induced one. The Federal RESERVE System is designed to limit fractional reserve banking... not expand it.

10states is correct. Because of the desire to broaden home ownership (American Dream)... low equity (higher risk) was incentivized.
Market manias existed prior to the FED, and while on the Gold Standard.

banks can only get away with operating with fractional reserves if all banks in an area lower their reserve ratios in concert, and that requires government.  Otherwise, when a bank issued fiduciary media and those notes made it to other banks, those banks, the banks who issued more fiduciary media would see gold flow out of their vaults and into the vaults of banks that were more sound, eventually this would lead to a run on the bank and it would go out of business.

yes there were speculative bubbles before the FED, but governments and central banks had ways of artificially increasing the amount of credit available before the FED as well.



http://www.amazon.com/Early-Speculative-Bubbles-Increases-Supply/dp/B00268P2E8

intro to the book:  http://mises.org/daily/3356

more in depth:  http://mises.org/daily/2564
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John Edward Mercier

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Re: Recommended Libertarian reading list?
« Reply #12 on: June 06, 2010, 11:31:31 am »

No. Banks outside the system were operating at as high as 24 times leverage... so it didn't take government.
Also the Gold Standard takes government... as its fiat (by decree).
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CurtHowland

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Re: Recommended Libertarian reading list?
« Reply #13 on: June 11, 2010, 09:08:09 pm »

No. Banks outside the system were operating at as high as 24 times leverage... so it didn't take government.

Ah, there are no banks outside the system. Just running a bank means abiding ugly levels of State and Federal regulation and requirements.

One of those requirements is minimum standards of fractional reserve. The banking regulations REQUIRE it. (or, at least according to interviews I've heard, the banking regulators require it)

Quote
Also the Gold Standard takes government... as its fiat (by decree).

Again, no. Commodity money such as gold and silver exist separate from governments. Governments, like the US, certainly standardized a measure to be enforced as uniform within that country, but the "gold standard" does not refer to those standardized measurements. It refers to the universal acceptance of certain commodities (gold, silver, copper) as money.

For example, the Spanish 1-oz silver coin, the doubloon, was the standard in the United States prior and through its founding and well into the 19th century. Recognizing this pre-existing condition is why the US dollar was set in silver. To this day we refer to one quarter of a dollar as "two bits", a reference to the fact that doubloons were cut into eighth-pieces, "pieces of eight", also called "bits", to provide small change in a coinage starved environment.

When the US went "off the gold standard", it wasn't gold that was de-monetized, it was the US dollar that was cut loose. Owning gold was made legal for Americans again, and the only reason anyone continued to trade in dollars is the legal tender laws. Without those laws, the "gold standard" would be in daily practice again.

John, you might find Rothbard's "History of Money and Banking in the US" interesting:

http://mises.org/books/historyofmoney.pdf

Speaking of Libertarian reading lists, Walter Block posted this list to LewRockwell.com:

http://www.lewrockwell.com/blog/lewrw/archives/49731.html

under the title, "Created A Monster".

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BigJoe

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Re: Recommended Libertarian reading list?
« Reply #14 on: June 11, 2010, 11:58:33 pm »

No. Banks outside the system were operating at as high as 24 times leverage... so it didn't take government.

Ah, there are no banks outside the system. Just running a bank means abiding ugly levels of State and Federal regulation and requirements.

One of those requirements is minimum standards of fractional reserve. The banking regulations REQUIRE it. (or, at least according to interviews I've heard, the banking regulators require it)

Quote
Also the Gold Standard takes government... as its fiat (by decree).

Again, no. Commodity money such as gold and silver exist separate from governments. Governments, like the US, certainly standardized a measure to be enforced as uniform within that country, but the "gold standard" does not refer to those standardized measurements. It refers to the universal acceptance of certain commodities (gold, silver, copper) as money.

For example, the Spanish 1-oz silver coin, the doubloon, was the standard in the United States prior and through its founding and well into the 19th century. Recognizing this pre-existing condition is why the US dollar was set in silver. To this day we refer to one quarter of a dollar as "two bits", a reference to the fact that doubloons were cut into eighth-pieces, "pieces of eight", also called "bits", to provide small change in a coinage starved environment.

When the US went "off the gold standard", it wasn't gold that was de-monetized, it was the US dollar that was cut loose. Owning gold was made legal for Americans again, and the only reason anyone continued to trade in dollars is the legal tender laws. Without those laws, the "gold standard" would be in daily practice again.

John, you might find Rothbard's "History of Money and Banking in the US" interesting:

http://mises.org/books/historyofmoney.pdf

Speaking of Libertarian reading lists, Walter Block posted this list to LewRockwell.com:

http://www.lewrockwell.com/blog/lewrw/archives/49731.html

under the title, "Created A Monster".




sorry, but there is no requirement to to use fractional reserves.  See:    but when you are legally allowed to operate with fractional reserves, it is (almost always) to your advantage to have the least amount of reserves as possible.


and the gold standard is declared by the government.  In a truly free market, there would likely be one or two monies that emerge as most commonly used, but a gold standard means that the notes issued by government are backed by gold, and that payments to and from the government are done in gold, or gold-backed paper. A true Austro-libertarian, would not call for the government to 'bring back the gold standard' but instead to get rid of all legal tender laws.  In the 19th century, the government tried fixing the exchange rate between gold and silver, and when the market prices would change, there would be big influxes of the overvalued metal and an exodus of the overvalued metal.  This lead to a lack of silver and therefore small change, which can cripple business
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