Many people, even sophisticated political commentators, think that libertarianism is internally inconsistent. How else could you assess this philosophy, they plaintively ask? After all, supporters of this view favor the legalization of prostitution, certainly a left-wing position, as well as elimination of the minimum wage law, a stance not only associated with conservatives, but the far right. Libertarians favor the legalization of gay marriage, again a left-liberal position, alongside opposition to rent control, a view held by most right-wingers. These seeming contradictions can be multiplied almost without end. For example, supporters of the freedom philosophy want to legalize drugs, all of them, pornography (except for children) and gambling, along with their “progressive” cousins, and, also, in step with the right, get rid of the Federal Reserve, the FDA, and privatize the post office.
Political scientists have concocted a left-right spectrum according to which libertarians register as moderates. This is because they tend to answer all the personal liberties questions as do those on the left, and all economics queries along with members of the right. And, yet, take it from me, libertarians are not moderates by any stretch of the imagination. Rather, they are extremists on both sides of this political spectrum.
What is going on here? What is going on is that libertarians are the only logically consistent group in the entire realm of political economy. They support liberty in both the personal and the economic realms, whereas socialists and conservatives register on the liberty scale in only one of these dimensions, one each.
Oregon is the only state to have legalized addictive drugs, in addition to marijuana. They vote overwhelmingly blue. They see so clearly that it is unjust to stop adults from placing substances in their bodies which may well be harmful. But they do not at all appreciate the fact that prohibiting consenting adults to enter into a labor contract stipulating pay of less than $7.25 per hour is also a violation of liberty. Red state voters see so clearly that it is impermissible to prevent consenting adults from conducting commercial exchanges through the financial intermediation of gold, not fiat currency. They appreciate that profit maximization benefits society and that forced redistribution of money from rich to poor does not. But when it comes to the right to provide sexual services for pay, these insights pale into insignificance. Only libertarians favor all sorts of economic and personal rights without exception.
But are not some of these practices vices? Of course they are. Some people consider excessive profit making and addictive drug taking as evils. But the law, at least from the libertarian point of view, is not supposed to stop all of immorality. We all have iniquitous thoughts do we not? If the police could require all of us to be entirely moral in thought and deed, we would all be in jail, including them, of course. Mere vices should not be considered crimes. Our legal system should be a more limited one; it should only stamp out crimes with victims, such as murder, rape, arson, theft, assault and battery, etc.
Another problem with the one-dimensional left-right spectrum is that it is supposed to place people and institutions whose views are similar close to each other, and place great geographical distance between those who diverge in this manner. But what to do about Hitler an extreme rightist, and Stalin, a man of the left? There may not be a “dime’s worth of difference” between the two of them in terms of rhetoric, but on the basis of action, they are identical twins in terms of mass murder. Mother Teresa must be placed on the left side of the one-dimensional left-right spectrum. So must we place her cheek by jowl with Stalin? Perish the thought. Ditto for Ron Paul and Hitler; both can be placed on the right, an inaccurate a placement as can be imagined.
A much better way of looking at political economy than a one-dimensional left right spectrum is a two dimensional cross. The vertical axis indicates “good” at the top (adherence to libertarian principles) and bad at the bottom (utter rejection of them). The horizontal axis is the usual left right spectrum. Then, we can place Stalin at the lower left, Mother Teresa at the upper left, Ron Paul in the upper right, and Hitler at the lower left. Then and only then can geographical placement be congruent with political philosophy and behavior.
Chemists have a table of the elements. Biologists divide up what they study into genus and species. Political scientists need a far more accurate organizational tool than the one which now misleads them.
Walter E. Block is Harold E. Wirth Eminent Scholar Endowed Chair and Professor of Economics at Loyola University New Orleans
Are These The Charts That Spooked Jerome Powell?
#CKStrong Fed Chair, Jerome Powell finally admitted today there is too much stimulus demand (in the macro context) in the global economy and the Fed will…
Fed Chair, Jerome Powell finally admitted today there is too much stimulus demand (in the macro context) in the global economy and the Fed will have to accelerate its tapering.
The following charts clearly illustrate the U.S. economy is overheating and a major contributing factor to inflation. Nominal retail sales and core capital good shipments remain 15 percent above and years ahead of their pre-COVID trend. Think of the trend line as the supply curve.
In hindsight, it is easy to say the global policymakers overshot with their stimulus, but it is certainly better than the alternative and a deep recession/depression. Just as you and I, policymakers make decisions with imperfect information. Counterfactuals don’t go a long way in the political arena.
We think it is about time the FOMC finally starts to focus on the problems caused by the “monetary supply chain,” rather than blaming the economic imbalances on “supply chain issues,” and it appears they have. If demand were not so strong, the supply chain issues would have worked themselves long ago, and the Port of Los Angeles and Long Beach wouldn’t look the 405 freeway during rush hour.
As reflected in the charts below, the supply chain broke early during the pandemic as upstream suppliers were “bullwhipped” by the massive volatility in point-of-sale or end demand.
We believe the next inflection point, where the Fed keeps tapering and then tightening until something breaks, which leads to reversal and a new monetary regimes, is a long way off.
Financial Markets and Omicron and Powell
Five year inflation breakeven (unadjusted) down, 10yr-3mo term spread down, VIX and EPU up, and S&P 500 down. Figure 1: Five year inflation breakeven…
Five year inflation breakeven (unadjusted) down, 10yr-3mo term spread down, VIX and EPU up, and S&P 500 down.
Figure 1: Five year inflation breakeven (blue), ten year – three month Treasury spread (red), both %. Source: Treasury via FRED, and author’s calculations.
Ignoring adjustments for inflation risk term and liquidity premia, implied expected 5 year inflation is down to 2.8%, while growth prospects also revert back to September levels.
Figure 2: VIX (blue, left scale), and Economic Policy Uncertainty index (red, right scale). Source: CBOE via FRED, policyuncertainty.com.
Risk and policy uncertainty are also at recent highs, but still are dwarfed by Trump era highs (83 for VIX at 27.2; 862 for EPU at 180 on 11/29).
Figure 3: S&P 500 index (blue, log scale). Source: S&P via FRED.
Given this backdrop (lower expectations for growth and presumably profits, due to Omicron, and higher interest rates from Powell’s statement re: inflation persistence), it’s not surprising to see a drop in stock indices.
Retailers Open Pop-Up Container Yards To Bypass Savannah Port Jams
Retailers Open Pop-Up Container Yards To Bypass Savannah Port Jams
By Eric Kulisch of American Shipper,
Overflow lots set up by large retailers…
Retailers Open Pop-Up Container Yards To Bypass Savannah Port Jams
By Eric Kulisch of American Shipper,
Overflow lots set up by large retailers this month as temporary staging areas for imported containers have helped bring down congestion levels at the Port of Savannah, and Georgia officials expect further efficiency gains with this week’s opening of two more port-sponsored pop-up sites.
The Georgia Ports Authority, in partnership with the Norfolk Southern, will start accepting loaded containers on Monday at the freight railroad’s nearby Dillon Yard and later this week will begin routing shipping units to a general aviation airport in Statesboro, located about 60 miles west of Savannah, Chief Operating Officer Ed McCarthy told FreightWaves.
Moving containers to off-port properties is part of the recently announced South Atlantic Supply Chain Relief Program designed to reclaim space at the Garden City Terminal, where container crowding is making it difficult for vessels to unload and for stacking equipment and trucks to maneuver. In October, Savannah handled an all-time record of 504,350 twenty-foot equivalent units for a single month, an increase of 8.7% over October 2020. The volume surpassed the GPA’s previous record of 498,000 TEUs set in March.
Port officials began testing the Dillon Yard and Statesboro locations last week after renting top loaders for stacking and truck transfers, installing computer lines in order to track containers entering the gate with radio frequency identification, and laying extra pavement at the rail facility, McCarthy said.
Four or five more pop-up container facilities are scheduled to open around Georgia by mid-December and the port authority is talking with freight railroad CSX about an auxiliary storage site in Rocky Mount, North Carolina, the COO said in an interview.
The sites are mini-versions of inland ports where containers are brought to strategically located sites by intermodal rail, shortening the distance trucks have to travel to collect imports or drop off exports and reducing traffic in and around busy seaports. The concept essentially brings the seaport closer to manufacturing, agriculture and population centers.
The GPA currently operates a large inland intermodal rail terminal in Murray County, Georgia, as well as an inland dry bulk facility. Construction on a second inland rail link for containerized cargo in northeast Georgia is scheduled to begin in April and be completed by mid- to late 2024, spokesman Robert Morris said. South Carolina also operates two inland ports, Virginia has one in the northwestern part of the state and the Port of Long Beach in California recently launched an effort to quickly flow cargo to Utah for distribution by converting truck traffic to rail.
Several users of the Port of Savannah this month have opened pop-up yards of their own where they can directly flow import containers to avoid waiting for longshoremen to sort through shipping units for their cargo and then retrieve them when space opens at one of their distribution centers. Each of the private spillover yards can accommodate 2,000 to 3,000 containers.
“We’re starting to see some of our customer base do their own pop-ups. They’re contracting with some folks who have capabilities in the Savannah region and … taking their long-term destiny in their own hands,” McCarthy said in an interview.
The Rocky Mount intermodal facility being discussed with CSX will probably be used as an alternative storage location for empty containers. It could be running by early December, the COO said. Whether containers are diverted from other locations or whether empties are loaded up in Savannah and sent there remains to be determined.
The Biden administration, which is focused on alleviating a nationwide supply chain crisis that is creating product shortages and contributing to inflation, helped fund the GPA’s emergency storage yards by reallocating $8 million in federal funds. Additional flexibility recently granted by the Department of Transportation allows port authorities to redirect cost savings from previous projects funded by port infrastructure grants toward mitigating truck, rail and terminal delays that are preventing the swift evacuation of containers from ports.
White House port envoy John Porcari, the liaison between industry and the White House Supply Chain Disruptions Task Force, said the government is looking to create more inland ports.
“We’re encouraging other ports to do the same [thing as Savannah.] I think you’ll see a generation of projects in the short term around the country that will help maximize the existing on-dock capacity through interior pop-up sites,” Porcari said on Bloomberg’s “Odd Lots” podcast last week.
“The fundamental issue is that the docks themselves are such valuable pieces of real estate that you don’t want the containers dwelling there a second longer than you have to. You want to get them to the interior or back on ships to their target markets overseas,” he said.
Improvements in rail handling, a dip in import volumes in line with seasonal patterns and the customer pop-up yards have combined to improve cargo flow and reduce the number of ships waiting for a berth at the Port of Savannah, McCarthy said.
The port authority released an operations update last week showing the average dwell time for a container moving by rail after vessel unloading is two days, and that the average resting time within the terminal for import and export containers is about eight days, down from 11 and 10 days, respectively. The backlog of empty containers remains a problem, with boxes lingering an average of 17.8 days.
The improved performance is helping personnel work vessels faster and reduce Savannah’s cargo backlog. The number of ships at anchor in the Atlantic Ocean declined to 15 as of Monday morning from 22 two weeks ago, Morris said. There were 24 container vessels at anchor in mid-October. Total containers on the terminal also declined 13% and are down 16% from the peak of 85,000, according to the update.
McCarthy said there are about 225,000 TEUs currently on the water, a 10% to 12% reduction from early November that indicates “we are over the hump of the peak season.”
Last week, ocean carrier CMA CGM said its Liberty Bridge service from northern Europe to the U.S. East Coast would temporarily skip Savannah due to the congestion. According to the revised schedule, seven stops between late December and early February will be omitted. Shippers can send Savannah cargo to the Port of Charleston, South Carolina, until then, it said.
The GPA also noted that providers have increased the supply of chassis, the wheeled frames on which containers rest when pulled by truck, and are increasingly able to repair more chassis to help meet demand for cargo deliveries.
The Port of Savannah increased its near-dock rail capacity by 30% with the commissioning two weeks ago of a second set of nine tracks at the Mason Mega Rail Terminal. The port moved 550,000 containers by rail last year and now has more than 2 million TEUs of capacity with an eye toward future growth. The ability to discharge cargo from a vessel and ship it out by train in less than two days is best in class for the U.S., McCarthy noted.
A huge new container yard will come online in phases starting in December and culminate with about 820,000 TEUs of additional capacity by March. The project includes rubber-tired gantry cranes for sorting, stacking and transferring containers.
Construction of another berth is underway and scheduled to be complete in 2023.
Meanwhile, the federal dredging project to deepen the Savannah River to 47 feet (54 feet at high tide) is expected to be completed in the first quarter of 2022. It has already allowed vessels with deeper drafts to enter the port, McCarthy said. The deepening translates to about 200 extra loaded containers per foot and a total of 1,000 per vessel when the project is finished.
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