No, Melissa, There Isn't a Santa Claus

By D.W. MacKenzie

 

Political Scientist and MSNBC contributor Melissa Harris-Perry has called for renewed faith in democracy. According to Harris-Perry, recent events have damaged public confidence in the democratic process.

 

Our faith has been badly damaged by governors who crush unions, by a Congress that will not govern, by a military that tortures, … by CEOs who slash jobs as profits rise, by a system that seems irreparably broken. But building a country requires investment in one another, hope that we can be better tomorrow than we are today and faith that our failures are not definitive. In these final days before we enter the 2012 election year, it is time to ask, "Do you believe?"

 

In this article, Harris-Perry makes timely reference to stories about those who question the existence of Santa Claus. In Miracle on Thirty-fourth Street and the famous "Virginia" editorial in The Sun people were exhorted to have faith in Santa Claus. As the character Fred Gaily put it, "Faith is believing when common sense tells you not to." Harris-Perry wants to apply this sentiment to democracy… (Read more)

 

Source: Mises.org

The Example of the Strike

By Eugen Bohm-Bawerck

 

What I have to say may, I think, best be developed by looking at a typical instance that illustrates price determination through social control in a particularly noticeable manner: the case of the settlement of wage disputes by means of a strike.

 

According to the accepted formula of modern wage theory, based on the marginal-utility theory, the amount of wages in case of free and perfect competition would be determined by the "marginal productivity of labor," i.e., by the value of the product that the last, most easily dispensable laborer of a particular type produces for his employer. His wages cannot go higher, for if they did, his employer would no longer gain any advantage from employing this "last" laborer; he would lose, and consequently would prefer to reduce the number of his workers by one; nor could the wages be substantially lower, in the case of effective competition on both sides, because the employment of the last worker would still produce a substantial surplus gain. As long as this is true, there would be an incentive to the further expansion of the enterprise, and to the employment of still more workers. Under an effective competition among employers this incentive would obviously be acted upon, and could not fail to eliminate the existing margin between the value of the marginal product and the wages in two ways: by the rise of wages, caused by the demand for more workers; and by a slight diminution of the value of the additional produce, due to the increased supply of goods. If these two factors are allowed to operate without outside interference, they would not only delimit wages, but actually fix them at a definite point, owing to the nearness of these limits, let us say for instance at $5.50 for a day's labor.

 

But let us now assume competition to be not quite free on both sides, but that it be restricted, or eliminated, on the side of the employers… (Read more)

 

Source: Mises.org

GE Funding Capital Market Services Inc. Admits to Anticompetitive Conduct by Former Traders in the Municipal Bond Investments Market and Agrees to Pay $70 Million to Federal and State Agencies

WASHINGTON – GE Funding Capital Market Services Inc. entered into an agreement with the Department of Justice to resolve the company’s role in anticompetitive activity in the municipal bond investments market and agreed to pay a total of $70 million in restitution, penalties and disgorgement to federal and state agencies, the Department of Justice announced today.

 

 As part of its agreement with the department, GE Funding admits, acknowledges and accepts responsibility for illegal, anticompetitive conduct by its former traders.  According to the non-prosecution agreement, from 1999 through 2004, certain former GE Funding traders entered into unlawful agreements to manipulate the bidding process on municipal investment and related contracts, and caused GE Funding to make payments and engage in other related activities in connection with those agreements through at least 2006.  These contracts were used to invest the proceeds of, or manage the risks associated with, bond issuances by municipalities and other public entities.

 

 “GE Funding’s former traders entered into illegal agreements to manipulate the bidding process on municipal investment contracts,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Justice Department’s Antitrust Division.  “This anticompetitive conduct harmed municipalities, as well as taxpayers.  Today’s resolution requires GE Funding to pay penalties, disgorgement and restitution to the victims of its illegal activity.  We will continue to use all the tools at our disposal to uphold our nation’s antitrust laws and ensure competition in the financial markets.”

 

Under the terms of the agreement, GE Funding agreed to pay restitution to victims of the anticompetitive conduct and to cooperate fully with the Justice Department’s Antitrust Division in its ongoing investigation into anticompetitive conduct in the municipal bond derivatives industry.  To date, the ongoing investigation has resulted in criminal charges against 18 former executives of various financial services companies and one corporation.  Nine of the 18 executives charged have pleaded guilty.   

 

The Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS) and 25 state attorneys general also entered into agreements with GE Funding requiring the payment of penalties, disgorgement of profits from the illegal conduct and payment of restitution to the victims harmed by the bid manipulation by GE Funding employees, as well as other remedial measures.

 

 As a result of GE Funding’s admission of conduct; its cooperation with the Department of Justice and other enforcement and regulatory agencies; its monetary and non-monetary commitments to the SEC, IRS and state attorneys general; and its remedial efforts to address the anticompetitive conduct, the department agreed not to prosecute GE Funding for the manipulation of bidding for municipal investment and related contracts, provided that GE Funding satisfies its ongoing obligations under the agreement.

 

 JPMorgan Chase & Co., UBS AG and Wachovia Bank N.A. also reached agreements with the Department of Justice and other federal and state agencies to resolve anticompetitive conduct in the municipal bond derivatives market.  On May 4, 2011, UBS AG agreed to pay a total of $160 million in restitution, penalties and disgorgement to federal and state agencies for its participation in the anticompetitive conduct.  On July 7, 2011, JPMorgan agreed to pay a total of $228 million in restitution, penalties and disgorgement to federal and state agencies for its role in the conduct.  On Dec. 8, 2011, Wachovia Bank agreed to pay a total of $148 million in restitution, penalties and disgorgement to federal and state agencies for its participation in the anticompetitive conduct.

 

 The department’s ongoing investigation into the municipal bonds industry is being conducted by the Antitrust Division, the FBI and the IRS-Criminal Investigation.  The department is coordinating its investigation with the SEC, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.  The department thanks the SEC, IRS and state attorneys general for their cooperation and assistance in this matter.

 

The Antitrust Division, SEC, IRS, FBI and state attorneys general are members of the Financial Fraud Enforcement Task Force.  President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  For more information about the task force, visit Stopfraud.gov.

How Mises Rebuilt Economics

By Hans-Hermann Hoppe

 

What is the logical status of typical economic propositions such as the law of marginal utility (that whenever the supply of a good whose units are regarded as of equal serviceability by a person increases by one additional unit, the value attached to this unit must decrease as it can only be employed as a means for the attainment of a goal that is considered less valuable than the least valuable goal previously satisfied by a unit of this good) or of the quantity theory of money (that whenever the quantity of money is increased while the demand for money to be held in cash reserve on hand is unchanged, the purchasing power of money will fall)?

 

In formulating his answer to this question, Ludwig von Mises faced a double challenge. On the one hand, there was the answer offered by modern empiricism. The Vienna Ludwig von Mises knew was in fact one of the early centers of the empiricist movement: a movement which was then on the verge of establishing itself as the dominant academic philosophy of the Western world for several decades, and which to this very day shapes the image that an overwhelming majority of economists have of their own discipline.

 

Empiricism considers nature and the natural sciences as its model. According to empiricism, the aforementioned examples of economic propositions have the same logical status as laws of nature: Like laws of nature they state hypothetical relationships between two or more events, essentially in the form of if-then statements. And like hypotheses of the natural sciences, the propositions of economics require continual testing vis-à-vis experience. A proposition regarding the relationship between economic events can never be validated once and for all with certainty. Instead, it is forever subject to the outcome of contingent, future experiences. Such experience might confirm the hypothesis. But this would not prove… (Read more)

 

Source: Mises.org

Two Former Leaders of the United Auto Workers Sentenced to Prison for Extorting General Motors

Donny Douglas, 70, of Holly, Michigan, a former United Auto Workers (“UAW”) International Servicing Representative, and Jay Campbell, 70, of Davisburg, Michigan, a former UAW Local 594 Chairman, were both sentenced today to terms of imprisonment United States Attorney Barbara L. McQuade announced. Douglas was sentenced to 18 months in prison, and Campbell was sentenced to 12 months and one day in prison based on their June 2006 convictions following a jury trial.

 

McQuade was joined in the announcement by James Vandenberg, the Special Agent in Charge of the Department of Labor, Office of Investigations–Office of Labor Racketeering and Fraud Investigations and FBI Special Agent in Charge Andrew Arena.

 

Douglas and Campbell stand convicted of conspiring to commit extortion and conspiring to violate the Labor-Management Relations Act. The jury found that Douglas and Campbell had conspired to commit extortion by threatening to extend the 1997 strike at the Pontiac Truck Plant by UAW Local 594 unless General Motors hired two unqualified, non-UAW members who were family members or friends of the defendants as skilled tradesmen. Based on the demands of the defendants and in order to avoid continued significant losses from the strike, General Motors hired Campbell’s son and a former UAW Local 594 President’s son-in-law as journeymen even though neither man was a member of the UAW, worked for General Motors, or was qualified for the position.

 

Previously, in May 2007, the district court had sentenced Douglas and Campbell to terms of probation. These sentences were overturned on appeal before the Court of Appeals for the Sixth Circuit. Today, the district court conducted another sentencing hearing based on the decision of the Sixth Circuit.

 

The case was investigated by agents of the Department of Labor, Office of Inspector General–Office of Labor Racketeering and Fraud Investigations and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys David A. Gardey and Kathleen Moro Nesi.

The Market for Literary Products

By Ludwig von Mises
 
Capitalism provides many with the opportunity to display initiative. While the rigidity of a status society enjoins on everybody the unvarying performance of routine and does not tolerate any deviation from traditional patterns of conduct, capitalism encourages the innovator. Profit is the prize of successful deviation from customary types of procedure; loss is the penalty of those who sluggishly cling to obsolete methods. The individual is free to show what he can do in a better way than other people.
 
However, this freedom of the individual is limited. It is an outcome of the democracy of the market and therefore depends on the appreciation of the individual's achievements on the part of the sovereign consumers. What pays on the market is not the good performance as such, but the performance recognized as good by a sufficient number of customers. If the buying public is too dull to appreciate duly the worth of a product, however excellent, all the trouble and expense were spent in vain.
 
Capitalism is essentially a system of mass production for the satisfaction of the needs of the masses. It pours a horn of plenty upon the common man. It has raised the average standard of living to a height never dreamed of in earlier ages. It has made accessible to millions of people enjoyments which a few generations ago were only within the reach of a small elite.
 
The outstanding example is provided by the evolution of a broad market for all kinds of literature. Literature — in the widest sense of the term — is today a commodity asked for by millions. They read newspapers, magazines, and books, they listen to the broadcasts and they fill the theaters. Authors, producers and actors who gratify the public's wishes earn considerable revenues. Within the frame of the social division of labor a new subdivision evolved, the species of the literati, i.e., people making a living from writing. These authors sell their services or the product of their effort on the market just as all other specialists are selling their services or their products. They are in their very capacity as writers firmly integrated into the cooperative body of the market society.
 
In the precapitalistic ages writing was an unremunerative art. Blacksmiths and shoemakers could make a living, but authors could not. Writing was a liberal art, a hobby, but not a profession. It was a noble pursuit of wealthy people, of kings… (Read more)
 
Source: Mises.org

Overland Park Man Charged with Scheme to Sell Phony Investments in Facebook

WICHITA, KS—A Kansas man has been charged with devising a scheme to sell phony investments in Facebook, U.S. Attorney Barry Grissom said today.

 

Ronald D. Catrell, 45, Overland Park, Kan., is charged with three counts of bank fraud, one count of money laundering, one count of wire fraud and one count of aggravated identity theft. Federal criminal charges were filed Friday in U.S. District Court in Kansas City, Kan.

 

The charges allege Catrell fraudulently obtained business loans from three banks including Valley View Bank, Bank of the West and M&I Bank. In order to obtain the loan from Valley View Bank, for instance, he gave the bank a personal account statement claiming his account balance was more than $297,000 when the actual balance was less than $179.

 

As part of the investment fraud scheme, Catrell created a business called Blue Valley Capital Management, LP, which he claimed had an office at 244 Fifth Avenue, Suite 1882, New York, N.Y. In fact, the building at that address did not have an 18th floor and the business located there, Aerobeep & Voicemail, offered postal mail boxes to persons or businesses desiring a mailing address on Fifth Avenue in New York.

 

Catrell offered investors the opportunity to purchase Facebook stock through him. He falsely told investors he could purchase stock in Facebook through Goldman Sachs. In fact, Facebook was a privately held company that was not publicly traded. One victim, identified as William L., gave Catrell $35,000 to invest in BCVM and $50,000 to invest in Facebook stock.

 

Upon conviction, the crimes carry the following penalties:

 

■Bank fraud: A maximum penalty of 20 years and a fine up to $1 million.

■Aggravated identity theft: A mandatory two years and a fine up to $250,000.

■Money laundering: A maximum penalty of 10 years and a fine up to $250,000.

■Wire fraud: A maximum penalty of 20 years and a fine up to $250,000.

The FBI investigated. Assistant U.S. Attorney Chris Oakley is prosecuting.

 

In all cases, defendants are presumed innocent until and unless proven guilty. The charges merely contain allegations of criminal conduct.

Treasury International Capital Data for October

WASHINGTON – The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for October 2011.  The next release, which will report on data for November 2011, is scheduled for January 18, 2012.

 

Foreign residents increased their holdings of long-term U.S. securities in October — net purchases were $2.6 billion.  Net purchases by private foreign investors were $10.1 billion, and net sales by foreign official institutions were $7.5 billion.

 

At the same time, U.S. residents decreased their holdings of long-term foreign securities, with net sales of $2.2 billion.

 

Taking into account transactions in both foreign and U.S. securities, the net foreign purchases of long-term securities were $4.8 billion.  After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, the overall net foreign acquisition of long-term securities is estimated to have been negative $13.4 billion in October.

 

Foreigners decreased their holdings of U.S. Treasury bills by $11.5 billion.  Foreign holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $41.0 billion.

 

Banks’ own net dollar-denominated liabilities to foreign residents increased by $0.7 billion of $48.8 billion.  Of this, net foreign private outflows were $7.0 billion, and net foreign official outflows were $41.9 billion.

 

Complete data are available here.

Will Nickels and Pennies Soon Disappear?

By James E. Miller

 

Back in December 2006, the US Mint, in yet another power grab over economic life, made it illegal to melt pennies and nickels in addition to exporting large quantities of either. Though the Mint admitted there was no evidence coin melting was occurring, this was the government's attempt at being proactive to prevent the destruction of its legally imposed currency.

 

So why the concern over people melting down coinage that supposedly belongs to them?

 

Back when the ban was implemented, the high price of copper was responsible for driving up the price of individual nickels and pennies in terms of metal content. Due to their copper content (nickels minted between 1946 and 2011 are composed of 75 percent copper and pennies minted between 1909 and 1982 are composed of 95 percent copper), both coins have a higher value as metal than as legal tender.

 

The irony in the government banning the melting of its own issued currency lies in the fact that its own actions contribute to the higher price of copper. Whenever the Federal Reserve engages in dollar easing (read: money printing), this newly printed "wealth" often translates into higher stock and commodity prices. Even the very announcement of… (Read more)

 

Source: Mises.org

The Origins of the Fed

By Ron Paul

 

The Federal Reserve cartelizes the banking industry, allowing individual banks to inflate together, earning them and the government enormous profits, while making sure that they are never held accountable for their fraudulent practices.

 

The Federal Reserve Cartelizes the Banking Industry

Here's how we got saddled with this monstrosity: In the early 1900s — during the so-called Progressive Era — the US government began a radical program of intervention into the economy. Pundits hailed this as fostering a new "spirit of cooperation" between business and government. In fact, the new system was a precursor of socialism and fascism.

 

Government-business cooperation took several forms, all of which conferred special privileges on favored firms, insulating them from the competition of the free market. Individual businesses and whole industries lobbied and bribed government officials for laws that benefited them at the expense of the consumer, and the whole operation was sold to the public as antimonopoly measures. This illegitimate and unconstitutional process happened time and time again, and government intervention became a permanent part of manufacturing, railroads, agriculture, and many other industries in the United States.

 

This was the era when the US free market received a beating, and, for lovers of liberty, its effect was much worse than the New Deal's.

 

In the free market, opportunity is granted to all and privilege to none. Laws affect… (Read more)

 

Source: Mises.org

Iraq: Cost of Embassy and Consulate Operations

Office of the Spokesperson

Washington, DC

 

Question Taken at the December 12, 2011 Daily Press Briefing

 

Question: What will be the annual operating costs for running our Embassy and consulates in Iraq?

 

Answer: The Department requested $3.8 billion for operations in Iraq during FY 2012. This figure includes mission operations, such as security, logistics, and life support, as well as construction, educational and cultural exchanges, contributions to international organizations, and other general management expenses.

Entrepreneurs: Don’t Just Try

By Christopher Westley

 

He stood in front of my desk, fidgeting, and avoiding eye contact. This was a necessary but not pleasant conversation.

 

"Look," I said, "to get a B in the class, you will need to do just a little better on the final than you have so far on your previous tests. But just a little. Remember: Students usually raise their averages on the final exam. You have seen most of this material before. You understand it better now. And since the final is weighted more heavily than the other tests, I'd say you are in a pretty good position to pull out a B. Can you do it?"

 

He looked up from the floor. "Well, I'll try."

 

It's a conversation I have multiple times toward the end of every semester. A student wants to clarify where he stands in the class and what he needs to earn on the final to both maintain his current grade and to perhaps even raise it.

 

It's a short, one-act play in which we both know our parts. I pull out my calculator and show the student the necessary score. Often, I'll add that I am not saying that he has to ace the final but only improve his previous performance by a small, marginal amount.

 

And then the student says, "Well, I'll try."

 

It wasn't until the most recent semester that this retort began to… (Read more)

 

Source: Mises.org

The Risk of Sovereign Debt

By David Howden

 

With a 50 percent haircut recently given on the Greek sovereign-debt question, investors are increasingly asking what the real risk of sovereign debt is. It would appear that investors underpriced the risk inherent in sovereign debt, especially that of Europe's periphery. One might even go so far as to say that investors made foolish choices in the past and are now getting their just deserts.

 

Such statements require an assessment of what the specific risk is of holding sovereign debt, and how specific European institutions affected these risk factors.

 

Debt is in almost all cases collateralized by some asset. A mortgage is backed by the value of the house that it is borrowed against. Student loans are backed against the future earnings ability of the student (or their parents' income and assets if cosigned). In almost all cases debt is collateralized by the asset that it is used to purchase.

 

Sovereign debt is slightly different, as no clear asset stands ready to serve as collateral. Instead, borrowing is backed by the future taxing capacity of the state. When investors purchase sovereign debt, they do so knowing that if their plans turn out wrong they will not be receiving some portion of that state's assets as the consolation prize. They purchase the bond knowing that the ability to repay is conditioned by the future economic health of the country, and also by its future taxing power. As there is a general negative relationship between tax rates and economic health there is an upper bound on how much tax revenue can be raised in the future to pay off debts incurred today.

 

When we say that sovereign debt is "risk free," we mean that there… (Read more)

 

Source: Mises.org

Is There Room For Compromise With Socialism?

By Ludwig Von Mises

 

Private ownership of the means of production (market economy or capitalism) and public ownership of the means of production (socialism or communism or "planning") can be neatly distinguished. Each of these two systems of society's economic organization is open to a precise and unambiguous description and definition. They can never be confounded with one another; they cannot be mixed or combined; no gradual transition leads from one of them to the other; their obversion is contradictory. With regard to the same factors of production, there can only exist private control or public control.

 

If in the frame of a system of social cooperation only some means of production are subject to public ownership while the rest are controlled by private individuals, this does not make for a mixed system combining socialism and private ownership. The system remains a market society, provided the socialized sector does not become entirely separated from the nonsocialized sector and lead a strictly autarkic existence. (In this latter case there are two systems independently coexisting side by side — a capitalist and a socialist.)

 

Publicly owned enterprises, operating within a system in which there are privately owned enterprises and a market, and socialized countries, exchanging goods and services with nonsocialist countries, are integrated into a system of market economy. They are subject to the law of the market and have the opportunity of resorting to economic calculation.

 

If one considers the idea of placing by the side of these two systems…

 

(Read more)

 

Source: Mises.org

U.S., European Union Closer to Trade Mutual Recognition Decision

Washington – U.S. Customs and Border Protection and the European Union Taxation and Customs Union Directorate agreed to language for the U.S.-EU Mutual Recognition Decision today which will lead to its signing in the Spring of 2012. Once signed, the Mutual Recognition Decision will recognize the respective trade partnership programs of the U.S. and the EU—CBP’s Customs-Trade Partnership Against Terrorism and the EU’s Authorized Economic Operator—with reciprocal benefits.

 

“The U.S. and the European Union are one step closer to a mutual recognition decision that will facilitate trade while increasing security of the global supply chain,” said CBP Assistant Commissioner Thomas Winkowski.

 

In 2007, CBP and TAXUD initiated efforts to implement Mutual Recognition between C-TPAT and AEO. Mutual Recognition is an industry partnership program that creates a unified and sustainable security posture that can assist in securing and facilitating global cargo trade. Upon achieving mutual recognition with a foreign partner, one program may recognize the validation findings of the other program.

 

C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. C-TPAT recognizes that U.S. Customs and Border Protection can provide the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers. CBP currently has mutual recognition with: New Zealand, Canada, Japan, Korea and Jordan.

 

U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of our nation's borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.

Ten Years Later: The Enron Case

Boxes of evidence and data

It was 10 years ago this month that the collapse of Enron precipitated what would become the most complex white-collar crime investigation in the FBI’s history.

 

Top officials at the Houston-based company cheated investors and enriched themselves through complex accounting gimmicks like overvaluing assets to boost cash flow and earnings statements, which made the company even more appealing to investors. When the company declared bankruptcy in December 2001, investors lost millions, prompting the FBI and other federal agencies to investigate.

 

The sheer magnitude of the case prompted creation of the multi-agency Enron Task Force, a unique blend of investigators and analysts from the FBI, the Internal Revenue Service-Criminal Investigation Division, the Securities and Exchange Commission, and prosecutors from the Department of Justice.

 

Agents conducted more than 1,800 interviews and collected more than 3,000 boxes of evidence and more than four terabytes of digitized data. More than $164 million was seized; to date about $90 million has been forfeited to help compensate victims. Twenty-two people have been convicted for their actions related to the fraud, including Enron’s chief executive officer, the president/chief operating officer, the chief financial officer, the chief accounting officer, and others.

 

“The Enron Task Force’s efforts resulted in the convictions of nearly all of Enron’s executive management team,” said Michael E. Anderson, assistant special agent in charge of the FBI’s Houston Division, who led the FBI’s Enron Task Force in Houston. “The task force represented a model task force—the participating agencies selflessly and effectively worked together in accomplishing significant results. The case demonstrated to Wall Street and the business community that they will be held accountable.”

Ron Paul Comments on Fed Actions in Europe

“…another reason why Congress needs enhanced power to oversee and audit the Fed.”

 

LAKE JACKSON, Texas – 2012 Republican Presidential candidate Ron Paul, who serves as Chairman of the Monetary Policy Subcommittee on the House Financial Services Committee, released a statement today regarding the Federal Reserve’s latest actions coordinating with other central banks in an effort to intervene in Europe’s debt crisis. See below for statement.

 

“The Fed’s latest actions in cooperating with foreign central banks to undertake liquidity swaps of dollars for foreign currencies is another reason why Congress needs enhanced power to oversee and audit the Fed.  Under current law Congress cannot examine these types of agreements.  Those who would argue that auditing the Fed or these agreements with central banks harms the Fed’s independence should reevaluate the Fed’s supposed independence when the Fed bails out Europe so soon after President Obama promised US assistance in resolving the Euro crisis.

 

“Rather than calming markets, these arrangements should indicate just how frightened governments around the world are about the European financial crisis.  Central banks are grasping at straws, hoping that flooding the world with money created out of thin air will somehow resolve a crisis caused by uncontrolled government spending and irresponsible debt issuance.  Congress should not permit this type of open-ended commitment on the part of the Fed, a commitment which could easily run into the trillions of dollars.  These dollar swaps are purely inflationary and will harm American consumers as much as any form of quantitative easing.

 

“The Fed is behaving much as it did during the 2008 financial crisis, only this time instead of bailing out politically well-connected too-big-to-fail firms it is bailing out profligate government spending. Citizens the world over deserve better than this. They deserve sound money that cannot be manipulated and created out of thin air by central planners who promise printed prosperity. Fiat money caused this European crisis and the financial crisis before it.  More fiat money is not the cure. The global fiat currency system has proven itself a failure, we need real monetary reform. We need sound money. ”

The Market and the Distribution of Wealth

By Ludwig M. Lachmann

Everywhere today in the free world we find the opponents of the market economy at a loss for plausible arguments. Of late the "case for central planning" has shed much of its erstwhile luster. We have had too much experience of it. The facts of the last 40 years are too eloquent.

 

Who can now doubt that, as Professor Mises pointed out 30 years ago, every intervention by a political authority entails a further intervention to prevent the inevitable economic repercussions of the first step from taking place? Who will deny that a command economy requires an atmosphere of inflation to operate at all, and who today does not know the baneful effects of "controlled inflation?" Even though some economists have now invented the eulogistic term "secular inflation" in order to describe the permanent inflation we all know so well, it is unlikely that anyone is deceived. It did not really require the recent German example to demonstrate to us that a market economy will create order out of "administratively controlled" chaos even in the most unfavorable circumstances. A form of economic organization based on voluntary cooperation and the universal exchange of knowledge is necessarily superior to any hierarchical structure, even if in the latter a rational test for the qualifications of those who give the word of command could exist. Those who are able to learn from reason and experience knew it before, and those who are not are unlikely to learn it even now.

 

Confronted with this situation the opponents of the market economy have shifted their ground; they now oppose it on "social" rather than economic grounds. They accuse it of being unjust rather than… (Read more)

 

Source: Mises.org

Department of Justice and Federal Trade Commission Meet with Chinese Ministry of Commerce on Merger Enforcement Matters

WASHINGTON – Acting Assistant Attorney General Sharis Pozen of the Department of Justice’s Antitrust Division and Federal Trade Commission (FTC) Chairman Jon Leibowitz today met with a delegation from China’s Ministry of Commerce (MOFCOM) to discuss antitrust merger enforcement.  The delegation was led by China International Trade Representative and MOFCOM Vice Minister Gao Hucheng.  MOFCOM is responsible for handling reviews of mergers and acquisitions under China’s Antimonopoly Law.

 

 This is the first high-level MOFCOM visit to the U.S. antitrust agencies since the department and the FTC signed an antitrust memorandum of understanding (MOU) with China’s three antimonopoly agencies in July 2011, to promote communication and cooperation among the antitrust enforcement agencies in both countries.

 

 The discussion topics in today’s meeting included recent antitrust enforcement and policy developments, the role of antitrust enforcement in times of economic downturn and cooperation among the three agencies on merger enforcement issues.  The three agencies developed further guidance for cooperation on investigations when one of the U.S. antitrust agencies and MOFCOM are reviewing the same merger.

 

Department and FTC officials said that the discussions with the delegation from MOFCOM were productive, and that they look forward to continuing their cooperative relationship.

Thomas Jefferson's Free-Market Economics

By Murray N. Rothbard

 

Thomas Jefferson (1743–1826) had been a friend and admirer of the philosophes and ideologues since the 1780s when he served as minister to France. When the ideologues achieved some political power in the consular years of Napoleon, Jefferson was made a member of the "brain trust" Institut National in 1801. The ideologues — Cabanis, DuPont, Volney, Say, and de Tracy — all sent Jefferson their manuscripts and received encouragement in return. After he finished the Commentary on Montesquieu, de Tracy sent the manuscript to Jefferson and asked him to have it translated into English. Jefferson enthusiastically translated some of it himself, and then had the translation finished and published by the Philadelphia newspaper publisher William Duane. In this way, the Commentary appeared in English (1811), eight years before it could be published in France. When Jefferson sent the published translation to de Tracy, the delighted philosopher was inspired to finish his Traité de la volonté and sent it quickly to Jefferson, urging him to translate that volume.

 

Jefferson was highly enthusiastic about the Traité. Even though he himself had done much to prepare the way for war with Great Britain in 1812, Jefferson was disillusioned by the public debt, high taxation, government spending, flood of paper money, and burgeoning of privileged bank monopolies that accompanied the war. He had concluded that his beloved Democratic-Republican Party had actually adopted the economic policies of the despised Hamiltonian federalists, and de Tracy's bitter attack on these policies prodded Jefferson to try to get the Traité translated into English. Jefferson gave the new manuscript to Duane again, but the latter went bankrupt, and Jefferson then revised the faulty English translation Duane had commissioned. Finally, the translation was published as the Treatise on Political Economy, in 1818.

 

Former President John Adams, whose ultra-hard-money and 100 percent-specie-banking views were close to Jefferson's, hailed the de Tracy Treatise as the best book on economics yet published. He particularly… (Read more) ​

 

Source: Mises.org

Treasury Department Announces Public Offering of Warrants to Purchase Common Stock of Associated Banc-Corp

WASHINGTON – The U.S. Department of the Treasury announced today that it has commenced a secondary public offering of 3,983,308 warrants to purchase the common stock of Associated Banc-Corp (the “Company”). The proceeds of this sale will provide an additional return to the American taxpayer from Treasury’s investment in the Company beyond the dividend payments it received on the related preferred stock. The offering is expected to price through a modified Dutch auction. Deutsche Bank Securities Inc. is the sole book-running manager for this offering.

 

Deutsche Bank Securities Inc., in its capacity as auction agent, has specified that the auction will commence at 8:00 a.m., Eastern Time, on November 30, 2011, and will close at 6:30 p.m., Eastern Time, on that same day (the “submission deadline”). During the auction period, potential bidders for the warrants will be able to place bids at any price (in increments of $0.05) at or above the minimum bid price of $0.50 per warrant.

 

The auction procedure, and the exercise price, expiration, and other terms of the warrants are described in the preliminary prospectus supplement referenced below.

 

The warrants are being offered pursuant to an effective shelf registration statement that has been filed by the Company with the Securities and Exchange Commission (the “SEC”). A preliminary prospectus supplement related to the offering will be filed by the Company with the SEC and will be available on the SEC’s website at http://www.sec.gov. Copies of the final prospectus supplement relating to these securities may be obtained, when available, from Deutsche Bank Securities Inc., Prospectus Department, Harborside Financial Center, 100 Plaza One, Jersey City, New Jersey 07311-3988, telephone: 1-800-503-4611, or by emailing prospectus.cpdg@db.com. Before you invest, you should read the prospectus and prospectus supplement in the registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the warrants.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

A Case for Free-Market Bank Regulation

By Anthony W. Hager

 

Bank of America (BAC) has rescinded its plan to charge customers a $5 monthly debit-card fee. Shall we praise bank regulators for their swift action in preventing the exorbitant charge? Well, no. Then we'll credit politicians for legislating against greedy, big-bank profiteering, right? Wrong again. The free market drove BAC to drop the debit-card fee.

 

Several banks have floated similar debit-card fees — some already assess the monthly charge — and each met the same fate as BAC. Customers informed their financial institutions that they would rather pull their assets than pay the fee. Banks responded in predictable fashion. Banks need customers in order to remain solvent; therefore they heed their customers' complaints and outrage, whether or not they are reasonable. That's the free market in action. Unpopular fees and programs are abandoned just as surely as profits are taken. Everything depends on what the market will bear.

 

The $5 debit-card charge was never a product of free-market capitalism. It was the result of political machinations, most notably on the part of Senator Dick Durbin. Durbin's amendment to the Dodd-Frank bank reform legislation placed an arbitrary cap on debit-card interchange fees, which banks impose on retailers for each swipe of a customer's card.

 

Banks collect this fee to maintain their electronic networks, retailers distribute the fee among their customers, and customers enjoy the convenience of cashless transactions… (Read more)

 

Source: Mises.org

2011 America the Beautiful Five Ounce Silver Uncirculated Coin™ – Olympic National Park Available November 29

WASHINGTON - Collectors may begin ordering the 2011 America the Beautiful Five Ounce Silver Uncirculated Coin - Olympic National Park (Washington) on November 29 at noon Eastern Time (ET).  The current price of the coin is $229.95; however, as with all United States Mint products containing precious metals, pricing is subject to change.

 

A maximum mintage limit of 35,000 units has been set for each of the 2011 America the Beautiful Five Ounce Silver Uncirculated Coins.  Orders will be limited to five coins per household for the first week of sales.  At the end of one week, the United States Mint will re-evaluate this limit and either extend, adjust or remove it. 

 

The America the Beautiful Five Ounce Silver Uncirculated Coins are collector versions of those issued through the America the Beautiful Silver Bullion CoinTM Program.  The three-inch uncirculated coins feature the same designs that appear on the bullion coins and the corresponding circulating quarters issued through the America the Beautiful Quarters® Program.

 

The America the Beautiful Five Ounce Silver Uncirculated Coins are struck in .999 fine silver and display the "P" mint mark indicating production at the United States Mint at Philadelphia.  To protect the uncirculated finish, each coin is enclosed in a capsule and an attractive presentation case.  A Certificate of Authenticity is included with each coin. 

 

The United States Mint will accept orders at http://www.usmint.gov/catalog and at 1-800-USA-MINT (872-6468).  Hearing- and speech-impaired customers with TTY equipment may order at 1-888-321-MINT (6468).  A shipping and handling fee of $4.95 will be added to all domestic orders. 

 

The United States Mint, created by Congress in 1792, is the Nation's sole manufacturer of legal tender coinage and is responsible for producing circulating coinage for the Nation to conduct its trade and commerce.  The United States Mint also produces proof, uncirculated and commemorative coins; Congressional Gold Medals; and silver, gold and platinum bullion coins.

 

Note:  To ensure that all members of the public have fair and equal access to United States Mint products, orders placed prior to the official on-sale date and time of November 29, 2011, noon ET shall not be deemed accepted by the United States Mint and will not be honored.  For more information, please review the United States Mint's Frequently Asked Questions, Answer ID #175.