Economics

Crony unionism, coming soon to a hole in the ground near you

I had a shock recently when I read an article in the New York Times that wasn’t critical of Donald Trump. Not only was it on a subject other than Trump but it was a great piece of investigative journalism of the calibre that was once the mainstay of western journalism. The article was about the enormously extravagant cost of a new subway tunnel named the East Side Access project, which currently sits at $US3.5 billion per track mile, compared to a global average of $US500 million for the same distance. A similar project currently underway in Paris, for example, is being constructed for one-sixth the cost. And this isn’t the only New York tunnel project that has overflowed its financial banks in recent years. Two other recent projects were also way over the global average.

The reason for the extraordinarily high cost is Crony Unionism. A problem as much … Read the rest


Progressive globalism vs libertarian globalism

Present-day commentary abounds with discussions on the “new nationalism.” We all know the discourse; from Trump to Brexit to alleged hate-crimes, to fears about immigration, to discussion about how political correctness prevents certain policy debates, to the loss of manufacturing jobs in industrialized nations. The semi-Buchananite Donald Trump is often the central figure (hero or demon) of this discourse, but it commonly occurs in Europe as well (frequently with Angela Merkel as the central figure of good/evil).

The “new nationalism” seems to come in two flavors… the ethnonationalist “alt-right” and the civic nationalist, often libertarianism-inflected “alt-lite.” These two factions cannot be treated as the same; the former are (actual) racists, the latter at most tell a few nasty holocaust jokes on Twitter. As methodological individualists, libertarians must disavow the alt-right, but there is a broad spectrum of libertarian opinion on the alt-lite.

The “new nationalism” has one primary enemy: “globalism.” … Read the rest


Brisbane’s new green ghetto?

The Queensland Greens have announced what they euphemistically call a “Housing Policy“, called “a home for all”. This will cost (by Greens fuzzy maths) $60 billion, yes, billion with a “b”, and produce 200,000 “dwellings”. The numbers are rosy and utopia will arrive, although they forgot to tell everyone that they’ll be better looking, but I’m sure that will be coming in the “cosmetic surgery improvement” policy they’ll be announcing soon.

If there’s any doubt about what this will look like, just do an internet search for “Soviet housing projects”. Not the concept drawings, but the actual finished product and what it looks like after a few years. If you’re still curious, do a search for British council flats and have a look at how hideous government housing ideas really look like.

The stated intention of the Greens is to bring the wisdom and superior guidance of the … Read the rest


A low-wattage PM’s useless ‘guarantee’

According to Malcolm Turnbull, his National Energy Guarantee ‘will lower electricity prices, make the system more reliable, encourage the right investment and reduce emissions without subsidies, taxes or trading schemes.’ Every word is a lie.

The dust is yet to clear so we can judge how the National Energy Guarantee (NEG) will operate, but there is now enough clarity to be certain that the Wow!!!-infused exclamations of delight it received from sections of the mainstream media is totally unwarranted.  The wailing from the green lobby stems from its bringing down the curtain on new large scale wind and solar investments post 2020.

The Prime Minister said,

The National Energy Guarantee will lower electricity prices, make the system more reliable, encourage the right investment and reduce emissions without subsidies, taxes or trading schemes. It is truly technology-neutral, offering a future for investment in whatever technology the market needs – solar, wind,

Read the rest

Time’s up piggy! LibertyWorks’ appearance before Senate Enquiry into rural banking

LibertyWorks gave evidence to the Senate Select Committee on Lending to Primary Production Customers in Canberra on Monday 18 Sept 2017. Like many Australians, we have long been concerned that the banking system is a government protected oligopoly where competition is limited and heavily regulated. This has resulted in poor outcomes for bank customers and crony-capitalist “super profits” for the banks; profits our federal government now dips into specifically to fund an expansionary government agenda. 

At the hearing, LibertyWorks economist Darren Nelson made the following recommendations:

  1. By October 2018, complete a Royal Commission into the regulatory drivers of central banking, fractional reserve banking and banking cartelisation… with the aid of an Australian National Audit Office (ANAO) ‘blue team’ and an Austrian School free market ‘red team’; and
  2. by October 2019, legislate for a comprehensive reform agenda focusing on removal of regulatory barriers to sound money, free banking and banking competition
Read the rest

Blockchains, debt and globalisation: the limits to central banking in the 21st century

The global monetary system is currently subject to three major trends: high public and private debts, increasing globalisation and the emergence of blockchain technology. Models of economies as complex systems formed by individuals acting on the basis of their psychology and social position suggest it is unlikely central banks will be able to control the money supply to meet their objectives in the face of these trends. Central banks are likely to return to their original function of maintaining financial stability and acting as banker to the government.

The role of central banks is to control the money supply and influence the economy for political ends. These political ends may be financial stability, controlled inflation, strong GDP growth, low unemployment, a particular exchange rate, it really depends on the political zeitgeist. The central bank expands the supply of money or decreases the supply of money in an attempt to … Read the rest


Why the ‘Great Inflation’ didn’t happen

Along with many others, I expected that the great money printing binge that the US Federal Reserve kicked off in November 2008 to create massive inflation. As the Fed does, they came up with a great term to make it seem as if they knew what they were doing (Quantitative Easing, or QE for short, of which there have now been three programs, QE1 through QE3) and a rationale for it, based firmly in Keynesian economics: that triggering inflation would stimulate demand.

Those of us who consider classical (i.e. pre-Keynesian) economics to be a better depiction of reality took one look at this and either shook our heads sadly or laughed hysterically. Many of the classical (or Austrian economics) writers claimed this would inevitably lead to inflation, and probably hyper-inflation given the massive scale of the printing.

Why then have we not seen the prices of everyday goods spiralling upwards … Read the rest