Bank Failures: Runs and Funds

2023-03-16

People are arguing over whether artificial intelligence (AI) and robotics will eliminate human employment. People seem to have an all-or-nothing belief that either the use of technology in the workplace will destroy human employment and purpose or it won’t affect it at all. The replacement of human jobs with robotics and AI is known as “technological unemployment.”
Although robotics can turn materials into economic goods in a fraction of the time it would take a human, in some cases using minimal human energy, some claim that AI and robotics will actually bring about increasing human employment. According to a 2020 Forbes projection, AI and robotics will be a strong creator of jobs and work for people across the globe in the near future. However, also in 2020, Daron Acemoglu and Pascual

2023-03-13

Silicon Valley Bank (SVB) failed on Friday and was shut down by regulators. It was the second-largest failure in US history and the first since the global financial crisis. Almost immediately, the calls for bailouts started to come in. (Since Friday, First Republic Bank has failed, and many other banks are facing collapse.)
In fact, on March 9, even before SVB failed, billionaire investor Bill Ackman took to Twitter to insist a federal “bailout should be considered” if the private sector could not save the bank. Hours after SVB officially failed, Ackman was still at it, and in a 646-word panicky screed, he demanded that the federal government “guarantee SVB deposits” and essentially backstop the entire banking industry to keep failing, inefficient, and poorly managed banks afloat.
Now,

2023-03-11

The Bureau of Labor Statistic (BLS) released new jobs data on Friday. According to the report, seasonally adjusted total nonfarm jobs rose 311,000 jobs (seasonally adjusted) in February, which was nearly 100,000 jobs above expectations. The unemployment rate rose slightly from 3.4 percent to 3.6 percent (month over month) but this partly reflected a rising labor participation rate which rose to 62.5 percent, the highest estimate since March 2020. 
These numbers point to continued resilience in the job market, even if the employment numbers are not nearly as good as the Biden Administration has attempted to claim. The total number of employed persons, for example, is up less than one percent over two years. Nonetheless, this report suggests we have yet to see widespread layoffs extend

2023-03-10

Economics in ActionBy Brian BalfourThales Press, 2022; 306 pp.
“Public” high schools are for the most part rotten to the core, and it is widely recognized, if not quite “a truth universally acknowledged,” that they need to be replaced. But what should students in private schools or homeschooling programs be taught? If we wish to rescue our young people from the socialist and “woke” propaganda inflicted on them in government institutions, it is essential that they have sound textbooks and other programs of learning. In the effort to provide these, no one has done as much as the renowned entrepreneur and friend of the Mises Institute Robert Luddy, who has established the Thales Academies, which are based on a classical curriculum.
One of the key subjects high school students ought to learn

2022-12-29

A relatively new area of study in economics, behavioral economics, has started to gain popularity. The behavioral economics framework emerged because of dissatisfaction with the neoclassical theory regarding consumer choice. A major problem with the neoclassical theory is that human beings are presented as if hardwired with a scale of preferences. Regardless of circumstances, this scale is considered to remain the same at all times.
Mainstream economics argues that, if preferences are constant, it is possible to compress preferences into a mathematical formulation called a utility function. Similarly, the assumption of constancy is considered an important characteristic of rationality.
According to behavioral economics, however, human beings are not considered rational actors. behavioral

2022-12-26

We think of thieves as conducting their work when no one is looking, such as breaking into a house while the owners are away. But the most successful thieves have done their stealing in plain sight, on a grand scale, while the owners were home and often with their tacit approval, though with sleights of hand that few are able to detect. Such a theft occurred when Woodrow Wilson signed the Federal Reserve Act into law on December 23, 1913.
A central bank such as the Fed has a remarkable character. According to establishment boilerplate, its purpose is to stabilize the economy and ensure prosperity and “full employment.” The decision makers at the Fed are of necessity selected for their superhuman brilliance and neutrality of judgment, thus qualifying them to adjust the amount of money

2022-12-24

While Christians the world over look to the celebration as a way to remember the incarnation of Christ, some dismiss it as a Christianized version of the ancient Rome’s Saturnalia. Whatever one’s view happens to be, I humbly suggest that it ought to be used by Christians and non-Christians alike as a reflection upon a collision of two kingdoms and two forms of rule. One that makes the way for life, and the other for misery, suffering, and death.
If the celebration of Christmas is an acknowledgement of the Almighty’s offering of peace and goodwill to people everywhere, then it behooves all people to remember who it is that offers universal war and ill-will. No other earthly institution has so consistently offered the latter than the state. The advent story itself reminds us in the second

2022-10-13

The Wall Street Journal reported on September 22 that Turkey’s central bank cut that country’s benchmark interest rate to 12 percent from 13 percent, pushing the Turkish lira lower as much as 0.4 percent against the dollar to a new record low after the decision. One US dollar recently bought 18.3866 lira.