The presence of unused capacity of inconvertible investments is an outgrowth of errors committed in the past. The assumptions made by the investors were, as later events proved, not correct; the market asks more intensively for other goods than for those that these plants can turn out. The piling up of excessive inventories and the catallactic unemployment of workers are speculative. The owner of the stock refuses to sell at the market price because he hopes to obtain a higher price at a later date. The unemployed worker refuses to change his occupation or his residence or to content himself with lower pay because he hopes to obtain at a later date a job with higher pay in the place of his residence and in the branch of business he likes best. Both hesitate to adjust their claims to the present situation of the market because they wait for a change in the data that will alter conditions to their advantage. Their hesitation is one of the reasons why the system has not reached the state of the evenly rotating economy.

Henry Ford is alleged to have said that “it is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

The real necessities are food, clothing, shelter and medical care, according to most people.
Well, food has gotten steadily cheaper – for everybody – over the last century. For instance, Perry calculates that eggs cost about one-tenth as much as they did at the beginning of the century. Moreover, Americans, with their allegedly stingy government, pay about half as much for food as Europeans do.
So, what has gotten more expensive? According to St. Lawrence University economist Steven Horwitz, there are only four areas that have become more expensive over the last century as measured in their “labor price”: housing, cars, higher education and medical care. With the arguable exception of a college degree, all are marked with wildly improved quality. And the main reason for rising medical and college costs (and to a lesser degree housing costs) is that the government has distorted the market by “helping.”

The wealth of nations, according to Adam Smith, the founding father of the market economy, is not measured in GDP or cash reserves. Rather, it “consists in the cheapness of provision and all other necessaries and conveniences of life.”
By that standard, American wealth in general, and the wealth of poor Americans, has skyrocketed in the last half-century, and the government had relatively little – though certainly not nothing – to do with it. And it’s not just that consumer items are cheaper than ever, they’re also better than ever. An iPhone today isn’t just better than yesterday’s phones, it’s better than yesterday’s cameras, calculators, portable stereos and computers. Many of the standard features on a 2010 Honda Accord were considered luxury items 10 years ago and almost unimaginable 20 years ago.

I want the word “reform” back. Between health care “reform” and financial services “reform,” Obama, his operatives, and media cheerleaders are trying to depict both initiatives as being far more salutary and far-reaching than they are. This abuse of language is yet another case of the Obama Adminsitration using branding to cover up substantive shortcomings. In the short run it might fool quite a few people, just as BP’s efforts to position itself as an environmentally responsible company did.

John Thacker writes:
The problem with our nation’s finances is two-fold:
1) A solid majority does not want to cut spending.
2) A solid majority does not want to raise taxes.

What would happen if the United States lost the sense of group solidarity that enables our government to use military force? One view is that this would bring more peace to the world. Another view is that it would actually encourage more violence in the world. I admit to leaning toward the latter view. I suspect that most people’s views on this topic are much stronger than any empirical proof that they can bring to bear.

The totalitarian socialists of the early 20th century understood that they could not succeed unless they first discredited the ideas of freedom. The only way to stop their intellectual descendants (“the totalitarians in our midst,” as Hayek would call them) is to counter their totalitarian ideas. Hayek was a hero of society for putting his career as a renowned economic theorist on hold (for most of the rest of his life, it turned out) to lay out one of the most articulate arguments for a free society ever made. We must revisit and strengthen these arguments if we are to choose capitalism and freedom over socialism and serfdom.

By a 48-37 margin, Americans see the government more as a threat to their rights than as their guarantor. Liberals view Tea Partiers as weirdos largely because they do not understand why Americans would see their government as a threat. To liberals, government represents all that is good about the human condition. (I might see it that way if, like so many liberals, I was living on government checks.) As the Rasmussen survey indicates, however, the idea that government represents a threat to our liberties is not a fancy of the lunatic fringe; rather, it is the view of a plurality of Americans. As it was, of course, the opinion of the founders.