And no I’m not talking about the next generation playstation, and I’m not talking about trading in your vehicle the moment you pay it off and starting a new car loan all over again (what sort of bullshit is that anyway). 

I make money because other people engage in that superficial and trashy consumer behavior. If everyone took my advice, I wouldn’t stand to make any money. However I know very few will take my advice anyway, because most people are addicted to instant gratification. Consumerism is like masturbation— ten minutes of work with a two second payoff. You exerted effort to earn that money, and then blew it frivolously.

That fucking thing you bought on an impulse because it filled some sort of gratification, perhaps was used once and has sat forever since? That’s what I’m talking about. You could have been smarter than that.

People say that time is money, but really—is it? People dine out because they don’t want to take the time to learn how to prepare meals, and take the time to actually prepare them. But were you making money with that time anyway? No, you probably weren’t. 

The money you’ll save by not eating out is well worth the time. As the old saying goes, a penny saved is a penny earned. So if that time were unproductive/unpaid time anyhow, then using that time to save money is in fact, getting paid. You’re paying more for convenience in exchange for not being productive. As my grandfather would say, “Get with the program,” or as I would say, “Stop being a pussy and do it.”

I understand that there are different readers in different stages of life, so I can’t preach to everyone based on my situation today. But I was once well worse off than where I am now. As of now, I have an average income in my market. An average single income, but I support a family of five on that average single income. People tell me that’s impossible these days, but I’m doing it. I was also once well below the average income when I started building my family and making my goals, and getting smart with money.

For those of you who are unmarried, if you get married, for crying out loud do it cheap. I’m not saying have a shitty wedding, I’m just saying do it cheap and control your expenses. First off, don’t have a wedding planner. Wedding planners cost money, and they tend to network in their buddies in the business to perform services, who also cost a good deal of money. They also pay each other to refer each other, at your expense.

Yes, the “stop buying lattes” phrase that Leftists hate legitimately works. I used to drink 2 or 3 tall vanilla lattes from Starbucks everyday. I switched to home brewed black coffee. I’m just saying $280 a month adds up when you’re saving. These days I drink water instead of coffee (from the tap, because I’m not a pussy). 

I got married for the cost of a license and an officiant. Of course, that wasn’t the wedding, but already being married when we had the “for show” wedding took off a whole lot of pressure. We were able to put in the work for it to be fun, without being bent on having it be perfect. This easily saved us thousands. Starting a marriage in debt is pretty fucked up. An expensive and lavish honeymoon is also pretty dumb when you can literally have sex anywhere.

My wife and I found a small two bedroom duplex where we moved into, where we lived when all three of our kids were born. At the time we moved in, my income was only half my market average. Yet, it was still a single income. We sought out and found a good deal where rent was kept low in exchange for myself doing a good deal of maintenance. It’s amazing what happens when you can reset a water heater (and the neighbor’s), and dehumidifying spaces yourself to keep mold away in a humid environment. Keeping your landlord’s expenses low is a good way to see your rent not jump as high. Imagine that.

We were not only able to get by on my income, but we were also able to set aside money to invest. Because we’re badasses.

Economics isn’t a mathematical science. It’s a behavioral science. So put on your badass behavior. The badasses benefit and the pussies get left in debt. That’s how it goes. The pussies whine and complain about badasses like me while they spend their money on streaming subscriptions, video games, going to sports games, dining out constantly, attending concerts, etc. Shut up pussies.

Couple the money I invested with the new job opportunities I took from working my ass off (no college degree) and now we’re at the very end of 2019. I’m making about 80% of the average income in my market, but I have some badass money set aside, like a badass. COVID was breaking out in China. I decided now was the time to own my own place, as I anticipated COVID making it to America. Though, I had no idea it would turn into the bullshit fiasco it has. Also little did I know that the first COVID cases would be in my state. The feeling was in my gut that it was time to be a homeowner.

I did evening blitzkrieg tours with my realtor, visiting several homes on the market every evening. We found a good starter home that fit our immediate needs for a good price, and made an offer. They accepted our offer, but the roof was at the end of its life (we even had to nail a few new shingles up before moving in, before it started snowing). Ultimately, we asked the seller to leave money from the sale into escrow to pay for the roof as a condition of closing, and they did. They also got a little of that money back, because we got it done for cheaper than what they left. This is what being a badass looks like.

Today, I’m still supporting a family of five on my single income, right at the average single income level. We own our home. We own our cars. We have very little debt. I have an investment account, my kids have investment accounts that I contribute to every payday. Why? Because paying yourself first is badass. Spending your money and then complaining about not having as much money is for pussies.

My investment strategy relies on the fact most people won’t take my advice, which is a safe bet. McDonald’s is never going away. Walmart is never going away. People are always going to buy whatever gives them a sense of status, no matter how temporary or trivial. People will continue spending their money on frivolous shit that makes money for big companies. People who look at their paycheck and wonder how much they can spend instead of how much they can save/invest are pussies.

For those of you who want to be badasses, own a piece of those companies the pussies spend all their money on. Take money from the pussies. They weren’t missing it anyway.

The post Yes, Even You Can Build Wealth. Stop Being A Pussy And Do It. appeared first on The Libertarian Republic.

When states or local governments pass minimum wage increases, they typically structure the laws so the increases phase in over several years, often starting on Jan 1. With 2022 officially underway, minimum wage increases will take effect in 25 states, 58 cities/counties, and Puerto Rico, according to a new report from the Employment Policies Institute (EPI), a fiscally-conservative think tank that generally opposes minimum wage hikes. 

California leads the way among state-wide minimum wages, with a $15/hour minimum wage now in effect for large employers. Washington similarly increased its wage to $14.49, followed by Massachusetts at $14.25, Connecticut at $14, Oregon at $13.50, New York at $13.20, New Jersey at $13, Arizona at $12.80, Maine at $12.75, and Colorado at $12.56. 

Some places are raising the minimum wage even more sharply at the local level. West Hollywood, California is leading the way in 2022, with a $17.64 minimum wage specifically for hotel employees. Emeryville, California is also enacting an estimated $17.64 minimum wage this year, while in Washington, SeaTac is implementing $17.54 and Seattle is requiring $17.27 among large employers. 

Next up are more California localities, with Berkeley and San Francisco implementing a $17.16 minimum wage, while Mountain View and Sunnyvale go for $17.10 and Palo Alto and Milpitas enact minimum wages of $16.45 and $16.43, respectively. 

At first glance, this might all sound like good news. After all, doesn’t everybody want higher wages? Yet the truth is these mandatory wage increases will hurt businesses and employees alike. As EPI’s report notes, these increases would harm the economy in the best of times. And we are not, in fact, living in the best of times. 

“We know the damage that sharply rising minimum wage mandates have caused prior to the pandemic,” EPI Managing Director Michael Saltsman said. “Now, despite the track record of past harm, minimum wage advocates are instead moving the goal posts without assessing the extent of losses created by minimum wage hikes despite the hardship of the last two years.”

While some workers will see their wages go up as a result of these increases, many others will lose their jobs entirely or have their hours reduced and see a net reduction in earnings. Why? Well, because the real minimum wage is always zero: unemployment. 

“Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount—and, if it is not, that worker is unlikely to be employed,” famed free-market economist Thomas Sowell explained. “Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they either lose their jobs or fail to find jobs when they enter the labor force.”

Minimum wage increases can eliminate millions of jobs and lead to lower overall compensation, but that’s not it. Studies have also shown that mandatory wage hikes can lead to higher prices for food and childcare, more than negating any benefit.  

Of course, many of the minimum wage increases taking effect across the country are gradual. But their consequences are still very real—and they’ll still be felt by families already struggling with crippling inflation and a faltering recovery. 

WATCH: AOC’s 5 Worst Economics EPIC FAILS (Reaction)

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

Image: Employment Policies Institute

The post 84 Places in America are Raising Their Minimum Wages for 2022 appeared first on The Libertarian Republic.

Harry Wilmerding on November 23, 2021

Dollar Tree announced Tuesday it is raising its prices, bringing the cost of its products over one dollar for the first time in 35 years.

The dollar store will raise its prices by 25%, bringing the cost of its products to $1.25 as customers become accustomed to higher prices across multiple industries, the company announced in its third-quarter 2021 earnings report. Additionally, Dollar Tree said its decision to raise prices is permanent and “not a reaction to short-term or transitory market conditions.”

The company noted that 91% of customers surveyed said they would continue to shop at Dollar Tree with the same or increased frequency despite the price spike.

“We experienced a strong finish to the quarter, as shoppers are increasingly focused on value in this inflationary environment,” company president and Chief Executive Officer, Michael Witnyski, said in the press release.

“Our Dollar Tree pricing tests have demonstrated broad consumer acceptance of the new price point and excitement about the additional offerings and extreme value we will be able to provide. Accordingly, we have begun rolling out the $1.25 price point at Dollar Tree stores nationwide,” Witnyski added.

Keeping prices at $1 would have forced Dollar Tree to stop stocking shelves with multiple products that are popular with consumers, the company said in its earnings report. Additionally, the spike would allow the company to return to its historically high margin range by cutting higher costs.

“Lifting the one-dollar constraint represents a monumental step for our organization and we are enthusiastic about the opportunity to meaningfully improve our shoppers’ experience and unlock value for our stakeholders,” Witynski said.

Inflation hit a 30 year high in October, with the Consumer Price Index surging 0.9% on a month-over-month basis and 6.2% compared to the previous year.

Dollar Tree did not immediately respond to the Daily Caller News Foundation’s request for comment.

The post Dollar Tree Says It’s Raising Prices For The First Time In 35 Years Amid Surging Inflation appeared first on The Libertarian Republic.

Economics in One Lesson and Free to Choose, the classic works written by Henry Hazlitt and Milton Friedman, respectively, are on that list. A personal favorite is Thomas Sowell’s Basic Economics, a book that kindled my own interest in economics many years ago.

From The Wealth of Nations (1776) to Freakonomics (2005), there are many and more works in between that people would argue are must-read economics texts, including Ludwig von Mises’ Human Action.

Though I’d encourage people to read in full all the best economics books, it’s unlikely most will find the time. Fortunately, with David L. Bahnsen’s forthcoming book There’s No Free Lunch: 250 Economic Truths, they don’t necessarily have to.

The notion that free lunches don’t exist—TNSTAAFL, an idea popularized by the Nobel Prize-winner Friedman who used it as the title of a 1975 book—is both obvious and self-evident. Yet following a year that saw the Federal Reserve “flood the system with money” to fund an unprecedented government expansion—which included simply sending $1,400 checks to individuals—it’s a lesson that has never been more important.

Bahnsen’s book, scheduled for release on November 9, helps readers understand why there is no such thing as a “free lunch”—and much more. Exploring topics ranging from self-interest, free trade, incentives, credit and sound money, private property, and socialism (and many more), Bahnsen curates some of the most profound economic insights in history, adding his own reflections along the way.

While some of the reflections will be familiar to readers, many of them will not be—even for seasoned readers of economics. Here is just a small sampling of the insights you’ll find.

1. “The farmer and manufacturer can no more live without profit than the labourer without wages.” – David Ricardo
2. “The most basic question is not what is best, but who shall decide what is best.” – Thomas Sowell
3. “Nothing is more deadly to achievement than the belief that effort will not be rewarded, that the world is a bleak and discriminatory place in which only the predatory and the specially preferred can get ahead.” – George Gilder
4. “I prefer true but imperfect knowledge, even if it leaves much undetermined and unpredictable, to a pretense of exact knowledge that is likely to be false.” – F.A. Hayek
5. “Prices are important not because money is considered paramount but because prices are a fast and effective conveyor of information through a vast society in which fragmented knowledge must be coordinated.” – Thomas Sowell
6. “What one person disdains or values lightly is appreciated by another, and what one person abandons is often picked up by another.” – Carl Menger
7. “Demand and supply are the opposite extremes of the beam, whence depend the scales of dearness and cheapness; the price is the point of equilibrium, where the momentum of the one ceases, and that of the other begins.” – Jean-Baptiste Say
8. “The disdain of profit is due to ignorance, and to an attitude that we may if we wish admire in the ascetic who has chosen to be content with a small share of the riches of this world, but which, when actualized in the form of restrictions on profits of others, is selfish to the extent that it imposes asceticism, and indeed deprivations of all sorts, on others.” – F.A. Hayek
9. “All people, however fanatical they may be in their zeal to disparage and to fight capitalism, implicitly pay homage to it by passionately clamoring for the products it turns out.” – Ludwig von Mises
10. “Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone.” – Frédéric Bastiat
11. “Everything we get, outside of the free gifts of nature, must in some way be paid for. The world is full of so-called economists who in turn are full of schemes for getting something for nothing.” -Henry Hazlitt
12. “The principle that the end justifies the means is in individualist ethics regarded as the denial of all morals. In collectivist ethics it becomes necessarily the supreme rule.” – F.A. Hayek
13. “Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property.” – Milton Friedman
14. “All trades, arts, and handiworks have gained by division of labour, namely, when, instead of one man doing everything, each confines himself to a certain kind of work distinct from others in the treatment it requires, so as to be able to perform it with greater facility and in the greatest perfection. Where the different kinds of work are not distinguished and divided, where everyone is a jack-of-all-trades, there manufactures remain still in the greatest barbarism.” – Immanuel Kant
15. “It is not true that Congress spends money like a drunken sailor. Drunken sailors spend their own money. Congress spends our money.” – Dr. Art Laffer
16. “The message from history is so blatantly obvious—that free trade causes mutual prosperity while protectionism causes poverty—that it seems incredible that anybody ever thinks otherwise. There is not a single example of a country opening its borders to trade and ending up poorer.” – Matt Ridley
17. “Love locally, trade globally.” – Russ Roberts
18. “The great danger to the consumer is the monopoly— whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him.” – Milton Friedman
19. “People who lack the capacity to earn a decent living need to be helped, but they will not be helped by minimum-wage laws, trade-union wage pressures or other devices which seek to compel employers to pay them more than their [labor] is worth. The more likely outcome of such regulations is that the intended beneficiaries are not employed at all.” – James Tobin
20. “Nothing should be more obvious than that the business organism cannot function according to design when its most important ‘parameters of action’—wages, prices, interest—are transferred to the political sphere and there dealt with according to the requirements of the political game or, which sometimes is more serious still, according to the ideas of some planners.” – Joseph A. Schumpeter
21. “Failure is part of the natural cycle of business. Companies are born, companies die, capitalism moves forward.” – Thomas Sowell
22. “The way to maximize production is to maximize the incentives to production. And the way to do that, as the modern world has discovered, is through the system known as capitalism—the system of private property, free markets, and free enterprise.” – Henry Hazlitt
23. “A people averse to the institution of private property is without the first elements of freedom.” – Lord Acton
24. “Once the principle is admitted that it is the duty of the government to protect the individual against his own foolishness, no serious objections can be advanced against further encroachments.” – Ludwig Von Mises
25. “Citizens who over-rely on their government to do everything not only become dependent on their government, they end up having to do whatever the government demands. In the meantime, their initiative and self-respect are destroyed.” – Charles G. Koch

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

The post 25 of the Greatest Quotes on Economics and Capitalism appeared first on The Libertarian Republic.

Nigeria, the largest economy in Africa with a federal system of government, has a mixed economic system that includes personal freedom combined with centralized economic planning and government regulation. Nigeria has had its challenges as a developing country, but these have worsened since the coronavirus pandemic hit the nation. 

Presently, the nation faces a rapid increase in inflation reported to be 18.17% in the first quarter of 2021 compared with 15.75% in the last quarter of 2020. The inflation rate currently stands at 17.93%, with food inflation at 22.28%, crude oil price at $71.98, and Naira to Dollar exchange rate of ₦410.14 (CBN rate) and ₦502 in the parallel market. 

This inflation has resulted in a decline in the purchasing power of the nation’s currency drastically. As a result, the value of the naira is falling, and citizens can no longer save money, hold huge cash, or keep funds in current or savings accounts. In addition, the price of food is increasing as importation has become more expensive, the unemployment rate and the national debt continue to increase as oil prices crash. 

The government has tried to solve this problem by implementing a policy to close the country’s borders to the movement of goods. This policy hopes to reduce smuggling, position the country for better exports in West Africa, and encourage in-house production of goods and services. The CBN also devalued the country’s currency to reduce the country’s debt and maintain good monetary policies in Nigeria. 

Citizens have questioned the move of the government to devalue the naira and close importation borders because Nigeria has a high dependency on importation and barely exports anything except oil. Other sectors such as Agriculture and Tourism are also barely improving. Recently, the government issued new policies prohibiting the facilitation of cryptocurrencies by commercial banks and other financial institutions, a ban of Twitter, compulsory Sim card–NIN registration, and other similar policies. The implication of these policies on the economy is discouraging in terms of revenue. 

The Nigerian economy has suffered significant losses in various sectors due to the bans and suspensions. The telecommunication sector has suffered huge losses because of the suspension of Sim registration for several months. Other recent policies of the government could discourage prospective foreign investors from investing in Nigeria. Previous and current investors may start reconsidering their decisions of investing in Nigeria and therefore reduce the country’s Foreign Direct Investments (FDI), leading to more inflation and unemployment in the country. 

Before now, Nigeria was a country that had encouraged investments from other countries, and it had helped the economy of the country by boosting its Foreign Direct Investments (FDI). Still, to continue to enjoy this boost and its effect on the economy, the government must improve the state of the economy by making it freer.

A freer economy would encourage more foreign investments, increase economic liberation, promote public private partnerships, reduce strict government policies, and create a strategic alliance with foreign companies. Furthermore, as the global economy is now embracing the new changes in the digital world, the government of Nigeria should seek to do the same. It should accept the innovations and opportunities digital changes will create for the country and its citizens regarding job creation and investment opportunities. 

This period is a critical time for the nation, as it struggles out of the hands of the pandemic. Therefore, the leaders need to focus on improving the country and bringing in more revenue by keeping an open mind and creating a safe environment for foreign investors. In addition, the government should be adopting other relative fiscal and monetary policies that will attract new investors to the country, improve the country’s current state, improve the country’s employment rate, and drastically reduce inflation in the country. 

Focusing on issues and policies that do not bring positive long-term improvement and Gross Domestic Product (GDP) growth to the country should be discouraged. These moves have done more harm than good, especially in this pandemic era. Creating a freer economy where the government is not controlling the economy and the laws of demand and supply operate freely can help the economy boom and return to its flourishing state. The government should also seek to understand the influences of new opportunities in the global economy rather than control it, allowing for growth and development. As new investments flood into the country, Nigeria can get to the place of reducing dependence on importation and oil as other sectors develop with new investments. 

Nathaniel Luz is a Nigeria-based author and expert on African economic and political affairs. You can follow the author on Twitter @nathaniel_luz 

Image: Wikimedia

The post The Libertarian Solution to Nigeria’s Skyrocketing Inflation and Currency Devaluation appeared first on The Libertarian Republic.

What happened? It turns out, contrary to what minimum wage activists think, money does not grow on trees and wealth is not created out of nothing. The demand for higher wages did not just start within the past few decades. Its roots go back to 19th century Europe and then to the Great Depression when the minimum wage was introduced in the United States. Once people realized they could petition the government to force employers to give more “free” money, the troubles began.

The Beginning of a New Era

The first noticeable pushes for higher wages occurred in Europe and then spread around the world. In 1831, silk workers in the city of Lyon, France went on a strike and petitioned for a living wage. They were not able to achieve their desired goal, but this would be the catalyst for future events.

The first nation to actually pass such a law was New Zealand in 1894, which also banned worker strikes and lockouts by employers as part of the Industrial Conciliation and Arbitration Act. Employers were forced to negotiate with unions, and if an agreement could not be reached, then a local and then a national conciliation board would act as a judge and help resolve these disputes. The policy had mixed effects. In the short-term, it seemed to work, resulting in allowing hundreds of smaller unions to form and wages for workers did improve. The negative effects included a bogging down of the Arbitration Court due to the number of hearings, as well as backlash from larger unions due to them losing the right to strike.

Dissatisfaction soon settled in and led to the first strike in 12 years in 1906. The uptick in worker strikes showed that the arbitration system was inefficient and older tactics were much more effective. In 1898, Samuel Gompers, the founder and president of the American Federation of Labor published a key article which advocated not only for higher wages, but that they should be livable, which is a vague term to say the least, and still remains a buzzword in various liberal circles today.

Minimum Wage Comes to American Shores

The first actual American policy that forced businesses to pay a minimum wage was enacted in Massachusetts in 1912, which was soon followed by many more states in the next decade. In 1923, there was a key Supreme Court case which seemed to stall the enacted laws called Atkins v. Children’s Hospital of D.C. In 1918, Congress passed a minimum wage law in the District of Columbia for women and children, and the hospital in question chose not to enforce the law due to its large staff of female employees. What resulted was a ruling in which the law was ruled unconstitutional, as it violated the freedom of contract that employers have when negotiating with their employees. All minimum wage laws across the country were ruled as unconstitutional, and they became more like guidelines for a recommended wage rather than a legally enforceable law.

Turning Up the Heat

During the Great Depression, Franklin Delano Roosevelt pushed Congress to enact the National Industry Recovery Act (NIRA), which suspended various antitrust restrictions, as well as allowed industries to enforce their own codes, resulting in higher wages. The final Supreme Court case that would serve as blowback against the minimum wage laws was Schecter Poultry Corporation v. United States in which it was ruled that it was unconstitutional for Congress to give the President the legislative authority to regulate certain industries without any guiding standards.

The court case that would bring the end of the Supreme Court voting against regulation of business in the so-called Lochner era was West Coast Hotel Company v. Parrish, in which a female employee of the company sued for unpaid wages, as they were below the $14.50 per week as established by the state of Washington. It was narrowly decided after Justice Owen Roberts’ decision in favor of Parrish. As Justice Charles Hughes explained it, the re-election of Roosevelt and the impacts of the New Deal were the cause of Roberts switching sides. In a dissenting opinion by Justice George Sutherland, he wrote that personal opinion should not have an impact on the interpretation of the Constitution.

In 1938, Roosevelt signed the Fair Labor Standards Act, which would create the first federal minimum wage. Originally, it called for a 40 cent per hour wage, but was lowered to 25 cents so that the bill could pass. Over the next few decades there would be a variety of laws passed to expand the scope of the law, as well as raising the salary amount on many occasions. For instance, in 1963, John Kennedy signed the Equal Pay Act so that women were able to get the same pay as men, while in 1974, Congress declared that the minimum wage covers non-supervisory government workers.

What Is Happening Today and What Does the Future Hold?

The situation remains unchanged, today. In 2015, California and New York raised their own minimum wages to $15 an hr. Just four years later, a total of 29 different states would adopt laws which would raise the payment threshold above the current $7.25 per hr. The most recent push for the “Fight for $15” was part of Joe Biden’s COVID-19 relief bill, which was ultimately removed from the bill, as its provisions did not meet the definition of budget reconciliation.

With inflation hitting a 13-year high, there will no doubt be more supporters for a higher wage, with that number, no doubt, being pushed even further through the roof. We can only hope that pushback in Congress or by some other means can help stop these laws so that you are not stuck in a Wendy’s drive-thru paying more for poor customer service and a meager burger. 

The post Minimum Wage: A Historic Work Opportunity Cage appeared first on The Libertarian Republic.

This disabled Libertarian couldn’t be happier that the wage will not make it through the legislative process—at least for now—as minimum wage laws can trace their roots to racism and eugenics.

In this episode of Revolution’s Revival, I discuss the racist history of minimum wage laws and how progressive icon Woodrow Wilson used them to advance his interest in eugenics.

This critical piece of history is often overlooked when it comes to the discussion of the minimum wage. Not only is this horrible economic policy which deprives unskilled workers of a place to grow and learn new skills, but evil as it seeks to keep certain people groups wholly reliant on the government and barely able to exist!

Economist Milton Friedman agreed, calling the minimum wage “the most anti-black law on the books in America.”

The minium wage fight is one in which I have a personal stake as it would deprive disabled individuals like me from working jobs that would make it difficult to thrive in life. Don’t believe me? Read the words of Royal Meeker, the commissioner of labor statistics under President Woodrow Wilson.

“It is much better to enact a minimum- wage law even if it deprives the unfortunates of work…better the state should support the inefficient wholly and prevent the multiplication of the breed than subsidize the incompetence and unthrift, enabling them to bring forth more of their kind.”

For more, listen to my latest podcast:

Be sure to subscribe on Podbean for all my latest content. You can also subscribe to my YouTube channel.

In liberty,

Caleb

The post Biden Attempts to Keep Eugenics Alive with Economics appeared first on The Libertarian Republic.

While the Salesforce acquisition is one of the highest-profile deals in recent memory, it is only one of the latest in a long chain of consolidations that have occurred during the pandemic. Since the pandemic began, the pace of corporate mergers, acquisitions, and restructurings has been accelerating. Firms normally take such actions when they see an opportunity to increase profits––for example, via economies of scale or increased productivity––or when the buy versus build proposition for a sought-after brand or product shifts.

That being said, the recent wave of activity is almost entirely the result of the first and second order effects of government policies. There are three elements to this accelerated activity: the financial environment, lockdown effects, and varied commercial exposures.

Though the prevailing financial environment and commercial exposure always shape the pace and focus of corporate activity, the pandemic-era burst is driven by the asymmetric effects lockdowns have upon small firms and consumers––and comes at their expense.

The Financial Environment

Interest rates have been in historically low ranges for most of the last two decades, but with the stresses in the U.S. Treasury market (which soon spread to other markets, in later phases seeing a withdrawal of liquidity from both the commercial paper and revolving loan markets), the Fed tilted back to near-ZIRP mode. After lowering interest rates on Tuesday March 3rd, on Sunday, March 15, the Board of Governors of the Federal Reserve System dropped the Fed Funds rate from a target range of 1% to 1.25% to a 0% to 0.25% rate. This was not only the result of an emergency unscheduled meeting––a sign of the level of exigence and panic––but was also a 150 basis point reduction, six times the normal rate-shifting increment. The rate at the discount window was slashed from 2.75% to 0.25%, with the term length of loans secured by securities extended to 90 days.

After the stock market crash on March 16, 2020, and owing both to a tidal wave of liquidity and the realization that apocalyptic predictions never came to pass, an astronomical rise in U.S. equity markets began: Between March 16, 2020, and November 2, 2020, the S&P 500 rose 67.80%, the Dow Jones Industrial Average 57.66%, and NASDAQ a whopping 107.56%.

With interest rates at Great Recession-era lows and equity prices rising at rates comparable to the dot com era, the pandemic gave rise to an acquisitive frenzy. Large firms, both publicly-traded and private, seized upon opportunities to acquire particularly hard-hit companies in vulnerable sectors, spurred by the availability of loans at virtually 0 percent financing and/or pumped up stock values for equity-financed deals.

Just last week, for instance, Retail Ecommerce Ventures announced that it would buy Stein Mart for $6.02 million, with plans to relaunch the company online next year. Stein Mart filed for bankruptcy in August due to what CEO Hunt Hawkins called a “challenging” retail environment and “significant financial distress” brought on by the Covid-19 pandemic. After 112 years of operation, the company could not weather this storm.

According to Thomas Vaughn, co-leader of Dykema’s Mergers & Acquisitions practice, “…deal-makers see increasing opportunities for completing deals in the next 12 months” despite ongoing economic uncertainty. There are consolidation options open to many different types of actors, says Vaughn, “whether you’re a strategic or financial-focused buyer or a seller hoping to cash out.”

Lockdowns

Historically, bankruptcy and insolvency filings have closely tracked the business cycle; small businesses are, for obvious reasons, usually hit harder than their larger competitors. Not only are smaller firms thinly-capitalized and run on a shoestring budget, they are starkly undiversified as one-off establishments. The Covid-19 lockdowns, in part owing to their sudden imposition and in part due to their unique nature (namely, their not being driven by the liquidation of malinvestment), have been particularly devastating to small and micro-firms.

With the election threatening the introduction of a sharp break from current policy––in particular, President-elect Joe Biden has commented that he would back a federal mask mandate––there was a rush to get deals consummated. In the seven days prior to November 3rd,

[c]ompanies…announced $143.1 billion of mergers and acquisitions globally…the highest for any week preceding a U.S. presidential vote since Bloomberg started collecting data. It’s more than double the tally for the run-up to the 2016 election. 

The price exacted by lockdowns is still being tallied, but the American Institute for Economic Research has been keeping a record of those costs over time. Yet these, ruinous as they are, are only one factor..

Commercial Exposure

The Covid-19-era economy has put once-secure companies at risk as government restrictions and changing consumer habits exact their damage. In such economically upended times, new investors and pre-established heavy-hitters alike see mergers and acquisitions as an effective way to develop their presence in the business world.

Government reactions to the pandemic have been strong driving influences, particularly those centered on lockdowns. In some instances, as in the cases of Hertz, Brooks Brothers, Frontier Communications, Gold’s Gym, Ruby Tuesday, and Vision Group, firms that were formerly viable have become distressed owing to the effects of lockdowns or market reactions to lockdowns. That being said, firms in certain sectors have found new success in the pandemic economy.

Healthcare was an active field for corporate actions. Already a fragmented industry, pharmaceuticals saw some major mergers surrounding vaccine development efforts and the transforming medical landscape. Many companies have taken to selling off businesses to build their cash positions, creating speculation that some firms are gearing up to pursue acquisitions. Among them are giants like Pfizer and Sanofi. Drugmakers, emboldened by higher stock prices and considering the promise of the next Operation Warp Speed, have been snapping up competitors and complementary firms. Vaccines, testing kits, and treatment regimens are good business:

(Arthur) Wong expects to see more megamergers like drugmaker AbbVie’s (NYSE: ABBV) $63 billion acquisition of rival Allergan and Bristol-Myers Squibb’s (NYSE: BMY) $74 billion acquisition of biopharmaceutical company Celgene, which were both in 2019. A recent inquiry by AstraZeneca to rival Gilead Sciences Inc. (Nasdaq: GILD) about a potential merger, which would be the largest healthcare deal ever, reported by Bloomberg, is evidence that merger interest hasn’t died down with the pandemic, Wong says.

The oil exploration and drilling sectors were busy in the wake of the brief eruption of a free market in oil. In early March of 2020, Saudi Arabia and Russia engaged in a price war, effectively leading to a tidal wave of oil hitting the market at a time when Covid-19 lockdowns had driven demand for oil and petroleum products to its lowest level in generations (perhaps ever, indeed, in the modern world) with uncertain, varying reopening guidelines worldwide. With over 40 major oil exploration and production firms having filed for protection from creditors and vulture firms circling, a rapid decrease in the number of such firms is likely in the near- to medium-term.

Unsurprisingly, sectors that support today’s remote economy have seen some of the most drastic increases in mergers and acquisitions. Technology media and telecom saw the most deals of any sector in the third quarter, with 760 deals totaling $301.2 billion. These, too, owe almost entirely to the stay-at-home orders issued by governors and municipal officials.

Although firms in the restaurant, entertainment, and retail businesses have been hit hard by the restrictions, particularly in major cities, the impact on firms is “certainly not sector specific.” Not only are firms with razor-thin margins and meager savings being ordered to close with little notice, but the consumption volumes and patterns of patrons have been severely altered as well. U.S. Census Bureau data from the first half of 2020 verifies this: Between March and July 2020, 50 percent of consumers reported a loss of income; and between April and May 2020, 74 percent of small businesses reported revenue declines. Consolidation at the “top” has been accompanied by a depression-tenor winnowing at the bottom. This economic “extinction-level event” took root due to less competition and greater concentration.

Conclusion

This article is not a harangue against corporate size, the effects of consolidation, or the periodically tremendous rewards that accrue to investment banking, private equity, or vulture investment activity. Nor does it seek to criticize rapid and unpredictable changes of taste for their effects upon firms. It has, instead, to do with distortions caused by government tinkering in financial markets and unintended (however easily anticipatable) consequences of social policies.

The purchase of Slack by Salesforce may well have happened absent lockdowns, office closures, and waves of fear sent coursing through the economy. And in addition to what has been seen thus far, dealmakers project increasing opportunities in the coming year or two. Meanwhile, the impact of the restrictions has devastated small firms, the engine of employment within the U.S. economy. It has also given rise to an existential risk factor which both first-time and prospective entrepreneurs will face: The next time a nasty virus appears in the United States––or any pathogen, really, that is perceived to be dangerous––there is a nonzero possibility that their entire livelihood and their life’s work will be swept away with the proverbial stroke of a pen.

It’s a stupefying state of affairs: For decades, anti-wealth activists, disingenuous social scientists, and political agitators have been asserting that the gap between the rich and poor has been increasing (despite copious evidence to the contrary), ignoring two distinguishing features of the wealth gap in the United States and most advanced industrial economies. Not only is it not nearly as wide as alleged, but there is rapid turnover at the “top,” and a rising tide for all income levels.

In actuality, lockdown policies have deftly accomplished what the enemies of the market have long alleged capitalism and free markets do. Not only have the anti-Covid policies artificially expedited the consolidation of firms and the harvesting of market share lost by smaller firms, but the wealth gap has increased. Blue collar and administrative workers generally have fewer options for working at home than higher-paid, white collar and professional workers do.

Never before, even during periods where “corporate greed” or “predatory practices” have supposedly been out of control, has there been such a complete reversal of decades of economic progress made by lower income groups in such a short amount of time.

Nonpharmaceutical interventions––mostly lockdowns, which are structurally (if unintentionally) biased in favor of large businesses––alongside a sudden, vastly expansive wave of monetary policy initiatives have, in a way that no conniving billionaire ever could have engineered, thrust the rich and firms with existing economic heft upward while crushing the poor, struggling workers, and minorities. And with greater market power, barriers to entry will likely creep higher, making it more difficult for smaller or upstart firms to enter certain industries than prior to the policy-induced agglomeration of firms. Although it will be some time before the precise macroeconomic and social effects can be analyzed, the post-lockdown trend is empirically clear.

This article is republished with permission from the American Institute for Economic Research.

The post Covid Policies Have Increased the Wealth Gap appeared first on The Libertarian Republic.

With most of the news attention on Covid-19, the presidential election, and so on, it is understandable that the meteoric rise of Bitcoin may have slipped past casual observers as it did not receive the attention it received in 2017. However, what makes this rapid growth interesting is that there are a number of important circumstances that might be paving the way for Bitcoin to sustain its ongoing trend.

Quantitative Easing Worldwide

It is undeniable that the monetary limits of fiat currency are being tested around the world as governments print trillions of dollars for stimulus packages in reaction to Covid-19. The World Resources Institute writes 

“In response to the massive economic contraction stemming from the coronavirus (COVID-19) pandemic, some central banks — including those of the United States, European Union, Japan and other major economies — are engaging in “quantitative easing” (QE) programs on an unprecedented scale.” 

The United States alone has printed trillions of dollars and has far outspent what it has brought in with tax dollars, creating an unprecedented level of debt.

Forbes writes

“For the first time U.S. debt is now about equal to GDP (Gross Domestic Product), like the sound barrier we once thought if we hit it we might explode.”

This level of spending and money creation has likely driven many investors to Bitcoin, as it may serve as a safe haven as the value of fiat currencies like the US dollar comes into question. Furthermore, it is uncertain how the stock market, which has been the main beneficiary of quantitative easing, will react when such policies eventually subside.

Since the 2008 recession, money injections from the Federal Reserve have continued at a constant rate and the value of the S&P 500 has moved in step with spending. This creates a disconnect between financial markets and the actual productiveness of the economy. Bitcoin may serve as an alternative investment vehicle for those who are wary of an unsustainable securities market.

An article in MarketWatch explains that

“Worries that governments are printing heaps of money to paper over problems created partly by the 2008 financial crisis was at least part of the reason that bitcoins were created over a decade ago. That thinking is also the basis for this resurgence in bitcoin, crypto experts said, as the COVID-19 pandemic forces governments and central banks to spend to limit the economic hit.”

Such caution is not unfounded as the Federal Reserve’s balance sheet has ballooned to unprecedented levels in the past few months, going from $4.31 trillion to $7.18 trillion.

The monetary policies post-2008 kicked off interest in cryptocurrencies and it would not be irrational to assume that the current policies would be encouraging an accelerated timeline for the adoption of Bitcoin.

Mainstream Adoption of Cryptocurrencies

Perhaps the most significant development that may be supporting a potential sustainable growth trend for Bitcoin is the ongoing adoption of cryptocurrencies.

Market Insider reports that major companies like PayPal are making moves to incorporate cryptocurrencies into their services when they write 

“PayPal recently said that users on its platform will be able to purchase bitcoin, as well as other sister cryptos like ethereum, Bitcoin Cash and Litecoin. PayPal’s decision last month was a further recognition of the legitimacy of digital currencies, crypto enthusiasts say.”

“Today bitcoin has gotten to a place where institutional investors, banks, and family offices are legitimately pondering involvement as a defense against currency devaluation,” wrote Alex Mashinsky, CEO of Celsius Network, in emailed commentary.

“This isn’t a gold rush anymore, it’s a good investment,” he said. He predicts that bitcoin will hit $30,000 by the end of next year.”

Perhaps one of the main dangers of cryptocurrencies is the fact that at the moment they are difficult to use and are rarely accepted anywhere. A lack of mainstream adoption may have explained the rapid fall of Bitcoin in 2017 as market hype diminished and investors understood that there was not much real value at the time. With the ongoing adoption of Bitcoin by major firms like PayPal, the growing value of Bitcoin may actually be justified.

PayPal isn’t the only company to move towards cryptocurrency. CNBC reports 

“Payment company Square is buying a large block of bitcoin, an unusual use of corporate cash.

Square said Thursday it bought 4,709 bitcoins, worth approximately $50 million. This represents about 1% of Square’s total assets as of the end of the second quarter of 2020.

“Square believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose,” the company said in a release.”

Not only does Square’s investment in Bitcoin demonstrate ongoing adoption by relevant financial tech firms, it also highlights one of the key benefits of Bitcoin. This is that it provides a universal and discreet form of value that individuals all around the world can access. Bitcoin is not only easy to transfer, but it is largely immune to manipulation, which makes it ideal for those who live in countries with less reliable monetary regimes.

Even large established banks like JP Morgan are starting to experiment with cryptocurrencies as Yahoo Finance reports 

“Indeed, at the DealBook Summit on Nov. 18, (Jamie) Dimon said, “The blockchain itself will be critical to letting people move money around the world cheaper. We will always support blockchain technology.”

In May, JPMorgan went a step further when it began allowing customer transfers to and from Coinbase and Gemini, two U.S.-based regulated crypto exchange sites. And Dimon on Wednesday acknowledged that some “very smart people” are investing in bitcoin these days.”

This stands in contrast to his comments in 2017 where CNBC reports

“In September 2017, about three months before bitcoin hit an all-time high of nearly $20,000 per unit and crashed shortly thereafter, Dimon dropped a bomb on the crypto world. He called bitcoin a “fraud.””

Cryptocurrency and blockchain technologies seem to be demonstrating undeniable advantages that cannot be ignored for long. These technologies will likely continue to grow in use, which gives further support to the ongoing growth of Bitcoin. Market Insider reports that one person, in particular, billionaire Mike Novogratz, believes that Bitcoin could be heading as high as $65,000.

Words of Caution

With unprecedented levels of quantitative easing and debt, combined with gradual mainstream adoption, it should not be controversial to say that Bitcoin might have some substance to back its meteoric revival. It is highly likely that in 2017 the world needed a couple more years to get acclimated to the idea of cryptocurrencies. It seems that for the most part they are here to stay and they will likely see further use.

With that said, that does not mean that Bitcoin and cryptocurrencies, in general, are guaranteed or even likely to continue on their current growth path. Much like 2017, it is highly likely that market hype is a contributing factor to the growth of Bitcoin and it remains to be seen how far investors are willing to take this bull run. It is uncertain how much, if at all, the price of Bitcoin may drop or where its next peak will be. It could be at $20,000 or it could be at $65,000, or it could just keep going.

Market Insider cites billionaire investor Ray Dalio when he notes that cryptocurrencies are still far from attaining widespread adoption and that governments may pass regulations that cripple the value of Bitcoin and other cryptocurrencies.

As with all investments, there are risks involved, especially when there is the potential for great reward as in the rapid rise of Bitcoin. Regardless of what happens, the swift growth of Bitcoin signals a number of important financial milestones as well as warning signs. Signals that not only lend some support to the cryptocurrency’s value but also provide important insight into our current state of financial affairs.

Ethan Yang

This article is republished with permission from the American Institute for Economic Research.

The post Important Factors Driving Bitcoin’s Drastic Growth in 2020 appeared first on The Libertarian Republic.

Take a look at Supermarkets are the most common place to catch Covid, new data reveals. It’s a story on a “study” assembled by Public Health England (PHE) from the NHS Test and Trace App. Here is the conclusion. In the six days of November studied, “of those who tested positive, it was found that 18.3 per cent had visited a supermarket.”

Now, if the alarm bells don’t go off with that one, you didn’t pay attention to 7th grade science. If the app had also included showering, eating, and breathing, it might have found a 100% correlation. Yes, the people who tested positive probably did shop, as do most people. That doesn’t mean that shopping gives you Covid and it certainly doesn’t mean that shopping kills you.

Even if shopping is a way to get Covid, this is a very widespread and mostly mild virus for 99.8% percent of the population with an infection fatality rate as low as 0.05% for those under 70. Competent infectious disease experts have said multiple times that test, track, and isolate strategies are nearly useless for controlling viruses such as this.

This story/study was so poor and so absurd that it was too much even for Isabel Oliver, Director of the National Infection Service at Public Health England. She sent out the following note:

Thank you. One down, a thousand to go.

The New York Times pulled a mighty fast one with this piece: “States That Imposed Few Restrictions Now Have the Worst Outbreaks.” This would be huge news if true because it would imply not only that lockdowns save lives (which no serious study has thus far been able to document) but also that granting people basic freedoms are the reason for bad health outcomes, an astonishing claim on its own.

The piece, put together by two graphic artists and seemingly very science-like, speaks of “outbreaks,” which vaguely sounds terrible: packed with mortality. It’s odd because anyone can look at the data and see that New York, New Jersey, Massachusetts, and Connecticut lead the way with deaths per million, mostly owing to the fatalities in long-term care facilities. These were the states that locked down the hardest and longest. Indeed they are locking down again! Deaths per million in states like South Dakota are still low on the list.

How in the world can the NYT claim that states that did not lock down have the worst outbreaks? The claim hinges entirely on a trivial discovery. Some clever someone discovered that if you reflow data by cases per million instead of deaths per million, you get an opposite result. The reasons: 1) when the Northeast experienced the height of the pandemic, there was very little testing going on, so the “outbreak” was not documented even as deaths grew and grew, 2) by the time the virus reached the Midwest, tests were widely available, 3) the testing mania grew and grew to the point that the non-vulnerable are being tested like crazy, generating high positives in small-population areas.

By focusing on the word “outbreak,” the Times can cleverly obscure the difference between a positive PCR result (including many false positive and perhaps half or more asymptomatic cases) and a severe outcome from catching the virus. In other words, the Times has documented an “outbreak” of mostly non-sick people in low-population areas.

There are hundreds of ways to look at Covid-19 data. The Times picked the one metric – the least valuable one for actually discerning whether and to what extent people are sick – in order to generate the result that they wanted, namely that open states look as bad as possible. The result is a chart that massively misrepresents any existing reality. It makes the worst states look great and the best ones look terrible. The visual alone is constructed to make it looks as if open states are bleeding uncontrollably.

How many readers will even know this? Very few, I suspect. What’s more amazing is that the Times itself already debunked the entire “casedemic” back in September:

Some of the nation’s leading public health experts are raising a new concern in the endless debate over coronavirus testing in the United States: The standard tests are diagnosing huge numbers of people who may be carrying relatively insignificant amounts of the virus.

Most of these people are not likely to be contagious, and identifying them may contribute to bottlenecks that prevent those who are contagious from being found in time….

In three sets of testing data that include cycle thresholds, compiled by officials in Massachusetts, New York and Nevada, up to 90 percent of people testing positive carried barely any virus, a review by The Times found.

All of which makes one wonder what precisely is going on in this relationship between cases and severe outcomes. The Covid Tracking Project generates the following chart. Cases are in blue while deaths are in red.

Despite this story and these data, the graphic artists at the Times got to work generating a highly misleading presentation that leads to one conclusion: more lockdowns.

(My colleague Phil Magness has noted further methodological problems even within the framework that the Times uses but I will let him write about that later.)

Let’s finally deal with Salon’s attack on Great Barrington Declaration co-creator Jayanta Bhattacharya. Here is a piece that made the following claim of the infection fatality rate: “the accepted figure of 2-3 percent or higher.” That’s an astonishing number, and basically nuts: 10 million people will die in the US alone.

Here is what the CDC says concerning the wildly disparate risk factors based on age:

These data are not inconsistent with the World Health Organization’s suggestion that the infection fatality rate for people under 70 years of age is closer to 0.05%.

The article further claims that “herd immunity may not even be possible for COVID-19 given that infection appears to only confer transient immunity.” And yet, the New York Times just wrote that:

How long might immunity to the coronavirus last? Years, maybe even decades, according to a new study — the most hopeful answer yet to a question that has shadowed plans for widespread vaccination.

Eight months after infection, most people who have recovered still have enough immune cells to fend off the virus and prevent illness, the new data show. A slow rate of decline in the short term suggests, happily, that these cells may persist in the body for a very, very long time to come.

How is it possible for people to make rational decisions with this kind of journalism going on? Truly, sometimes it seems like the world has been driven insane by an astonishing blizzard of false information. Just last week, an entire state in Australia shut down completely – putting all its citizens under house arrest – due to a false report of a case in a pizza restaurant. One person lied and the whole world fell apart.

Meanwhile, serious science is appearing daily showing that there is no relationship at all, and never has been, between lockdowns and lives saved. This study looks at all factors related to Covid death and finds plenty of relationship between age and health but absolutely none with lockdown stringency. “Stringency of the measures settled to fight pandemia, including lockdown, did not appear to be linked with death rate,” says the study, echoing a conclusion of dozens of other studies since as early as March.

It’s all become too much. The world is being seriously misled by major media organs. The politicians are continuing to panic and impose draconian controls, fully nine months into this, despite mountains of evidence of the real harm the lockdowns are causing everyone. If you haven’t lost faith in politicians and major media at this point, you have paid no attention to what they have been doing for the better part of this catastrophic year.

Jeffrey A. Tucker

This article is republished with permission from the American Institute for Economic Research.

The post The Blizzard of Bogus Journalism on Covid appeared first on The Libertarian Republic.