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If you want liberty, aim for success (and vice versa)

I don’t think I have to convince libertarians like myself that liberty often leads to more successful societies, but I’m not sure how many understand…

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This article was originally published by EconLog

I don’t think I have to convince libertarians like myself that liberty often leads to more successful societies, but I’m not sure how many understand that the reverse is also true.

It’s not possible to just wave a magic wand and call forth more liberty. Disasters such as war, depression and pandemics often lead to repressive government policies. Thus one way to promote a free society is to do the hard work promoting policies such as peace, prosperity and good public health.

For much of the Covid pandemic (not all), citizens of Australia had more freedom than Americans to live life as they wished (except for international travel).  That’s not because the Australian government is more committed to freedom than the US government, rather it’s because there was little or no transmission of Covid in most of Australia over the past 18 months.  Now that Australia is being hit by the highly contagious delta variant, however, their government has imposed domestic travel restrictions that are more draconian than anything contemplated in the US.

Over the past 18 months, my views have been somewhat orthogonal to the two sides debating freedom vs. public health, with the right supposed favoring freedom and the left supposedly favoring public health.  (In practice, both sides often failed to understand how to achieve those goals.) My view is better described as freedom through public health.

Tyler Cowen has a very good post on the situation in Australia.  He makes some of the same points that I’ve been making:

I would stress that if Covid risk has you with your back against the wall and the government is forcing extremely restrictive measures on your citizenry, you should be implementing the following in an urgent manner:

a. Twice a week rapid antigen tests for everyone.  (Plenty of time to prep for this one.)

b. Much stronger incentives to vaccinate people more rapidly, including with the large stock (six million or so?) of AstraZeneca vaccines.  Demand side incentives, supply side incentives, whatever can be done.  Let’s throw the kitchen sink at this one.  But as it stands, I just don’t see the urgency.

c. Mobile monoclonal antibody units, as they are used in Florida (modest progress here).

First a bit of context.  One can sympathize with the Australia government in one respect.  Australia has avoided the high rates of death experienced by the US, Latin America and much of Europe.  And then they were hit by the highly contagious delta variant just at the point where they were tantalizing close to the finish line with vaccination:

I’ve spent considerable time in both Australia and New Zealand, and the people in those countries seem more sensible than Americans.  Thus I expect their vaccination rates to exceed ours within a very short period of time.  But if their governments had placed a higher priority on vaccination earlier on, then they might have avoided much of the delta wave.  More specifically, they would have had fewer Covid deaths and less perceived need for restrictions on personal freedom.

Tyler alludes to the fact that the Australian government has been sitting on 6 million doses of highly effective AstraZeneca vaccine because of phony concerns about vaccination risk, which is a lot of doses for a country of only 25 million.  (Of course we also made many policy mistakes that led to needless deaths.)  Releasing those doses promotes both freedom and public health.

While America’s right claims to favor freedom, too often they act and speak in ways that reduce our freedoms.  In Florida, Governor DeSantis took away the freedom of businesses to set their own Covid policies.  More recently he put out a very harmful message on vaccines, which is also factually incorrect:

DeSantis claimed last week — as his state continued to experience a surge in the highly contagious delta variant ― that receiving the shot is “about your health and whether you want that protection or not” and “doesn’t impact me or anyone else.”

If DeSantis were merely trying to say that the decision to get vaccinated is a personal choice, then he’d be correct.  But what he actually said is false; high rates of vaccination do help society by slowing the spread of Covid.  Yes, most of the gains go to the person being vaccinated, but I personally feel that my freedoms are being restricted at least a little bit due to unfortunate government policies triggered by the decision by many other people not to get vaccinated, and my health risk is slightly higher.  That’s their right, but politicians should not be putting out false propaganda that a refusal to get vaccinated doesn’t hurt other members of society.  It does.  If politicians want to speak out on the issue, then do so in a constructive fashion. (Or just stay silent.)

The people that pushed us into WWI might not have believed that their action led to the loss of freedom of speech in America for a period of several years.  But in fact this foolish decision did lead directly to repressive actions by the federal government, including the imprisonment of people who spoke out against the war.  Conservative proponents of tight money in 1929 unwittingly ushered in a more statist policy regime in the 1930s.  Any government policy that creates war, economic depression, high rates of inflation, or a more severe pandemic will eventually lead to repressive government responses.

You may not like to think of it this way, but liberty is endogenous.  If it’s liberty that you seek, aim for success.  And yes, if it’s success that you seek, aim for liberty.  Those two sentences probably best encapsulate what I’ve been doing with my blogging over the past decade. Call it the neoliberal creed.

PS.  I’m not saying that politicians should scold people. I’m saying they should encourage people to get vaccinated by pointing out how it will help society as a whole.




This Has To Be A Mistake

This Has To Be A Mistake

While we were digging through the data for today’s household net worth report we stumbled upon something that seem…

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This Has To Be A Mistake

While we were digging through the data for today's household net worth report we stumbled upon something that seem beyond ridiculous: the ratio of Household Net Worth to Disposable Net Income. At 786% in the latest quarter, the chart at first appears to be a mistake but we triple checked it, and... well, here it is.

The latest, all-time high print is an increase from 698% in Q1 and also represents the biggest quarterly increase in history!

This number is so ridiculous, it is almost 50% higher than the long-term average of 540%. More importantly, it means that the total net worth number we reported earlier today, which in Q2 hit a record high of $142 trillion, is massively inflated on the back of what is obviously the biggest asset bubble on record.

It also means that if one were to strip away the asset bubble, and net worth was purely a reasonable function of disposable income, then total net worth worth be haircut by 31%, or some $43 trillion, which incidentally, is equivalent to the net worth of the top 1% of US society...

... and which as we showed earlier today is a record 32% of total household net worth.

As an aside, the fact that the top 1% have gained $10 trillion in wealth since the covid pandemic outbreak, is probably just a coincidence, and yet...

As for the chart which clearly has to be a mistake, we are sad to report that it isn't, and as politicians of both the Democrat and Republican party pretend to fight for the common man, all they are doing is enabling and accelerating the greatest wealth transfer in the world but not for nothing: they too want to be in the top 1%.

Tyler Durden Thu, 09/23/2021 - 22:00
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“Culture As An Asset”

#CKStrong Stunning. Hedge funds hoovering up trading cards as an “alternative to equities” with the same passion Brooks Robinson hoovered up ground…

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Stunning. Hedge funds hoovering up trading cards as an “alternative to equities” with the same passion Brooks Robinson hoovered up ground balls.

This is usually a sign of the endgame for markets, i.e,, the precursor to a bear market. Think the “Great Beanie Baby Bubble” of 1999.

In general, there are two types of assets,

  1. They can be rare—gold bars, diamonds, houses on Victoria Peak, bottles of 1982 Pétrus, Van Gogh paintings, stamps, beanie babies, or baseball cards or
  2. They can generate cash flows over time  – GaveKal

Creating An Illusion Of Scarcity

Scarcity relative to the money stock is what its all about now, folks. 

It probably won’t be long before the Fed has to bailout the baseball card market, no?

Full disclosure,  I do own a Mike Trout rookie card

Given the extreme valuations of all most all asset classes, coupled with the massive amount of money in the global financial system, markets are now really stretching, looking for, and actually attempting to create scarcity as a useful delusion to justify, rationalize, and drive speculation. 

Maybe I will start collecting poop as an “anthropological asset,” put it the blockchain and super charge the price ramp by snapping a few pictures of each sample, converting them to NFTs to load up to the internet.

Then again, maybe all this is signaling the start of a big, big inflation cycle and the markets are looking to get out of cash and protect their purchasing power.   But that’s too rational.  

Can you believe what markets have become, folks?   It is hard to see clearly when everybody is making money. 



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US Meat Prices To Remain Elevated Amid Depleted Reserves

US Meat Prices To Remain Elevated Amid Depleted Reserves

Beef, pork, and chicken in US cold storage warehouses have yet to recover from pandemic…

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US Meat Prices To Remain Elevated Amid Depleted Reserves

Beef, pork, and chicken in US cold storage warehouses have yet to recover from pandemic lows and could continue to support higher prices. 

New United States Department of Agriculture (USDA) data shows beef reserves dropped 7.7% from a year ago in August, poultry supplies fell 20%, and pork plunged 44% to their lowest levels since 2017, according to Bloomberg

Jim Sullivan, commercial director for Stable USA, said low meat inventories would suggest meat prices will stay elevated. 

"Prices remain very elevated compared to seasonal expectations," Sullivan said. 

Soaring supermarket prices have been on the radar of the Biden administration as working-poor families allocate a high percentage of their incomes to basic and essential items. Higher food inflation eats away their wages and is why Biden recently increased SNAP benefits by a quarter

Earlier this month, the Biden administration finally addressed inflation as a concern but didn't blame the trillions of dollars in fiscal and monetary policies and labor shortages on increased food inflation but instead placed responsibility on meatpackers. 

White House National Economic Council Director Brian Deese said "pandemic profiteering" food companies are driving up supermarket costs for Americans. This is nothing more than a blame game and failed government policies that have not just increased food prices but have left supply chains reeling due to stimulus checks that disincentivized workers from working. 

New data of low meat supply at US cold storage facility is more bad news for the Biden administration, who will have to develop a new narrative about why meat prices aren't going down. If food inflation remains elevated into early next year, Americans might vote with their wallets during next year's midterms. 

Tyler Durden Thu, 09/23/2021 - 20:00
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