Posted by Bob Murphy on 07/24/10

I wanted to let everyone know that in September, my online Principles of Economics class will begin through the "Mises Academy." It will be a 10-week class giving a solid foundation in free market thinking.

The class is specifically geared towards students in the range of about 6th grade through 10th grade, but I think even many adults would get a lot out of the class. (I already know of a few who have signed up.)

This isn't a class in narrow "Austrian" economics but is a much broader introduction to free market education. If you know of any conservative, homeschooling parents for example, they might be very interested in this class.

The full details of my class are here. Also note that if you are more into history, then Tom Woods is starting up his own online class on the New Deal through Mises Academy at about the same time; details here.

Posted by Bob Murphy on 06/16/10

At the Des Moines C4L event, I urged the attendees to read further on the nature of our current financial system. I argued that it wasn't merely the Fed per se, but the fractional reserve banking system itself that was the problem. (Of course, the Fed props up the whole thing.)

Along these lines, C4L readers may be interested in my recent article at Mises.org. I walk through a numerical example of fractional reserve banking. In some respects it is the same old thing you probably learned in Intro to Macro, but I added some observations that (I hope) cast fractional reserve banking in a new (and disturbing) light. Specifically, there is a very real sense in which the commercial banks--not the Fed--create "money out of thin air" when they advance new loans. I myself didn't really get this point until fairly recently.

Finally, let me also bring to your attention a conference I am co-hosting in Nashville, TN in July. It will feature talks from Tom Woods, Richard Ebeling, myself, and several others. The theme is that the fractional reserve banking system causes the boom-bust cycle, and households need to secede from that system. We offer a practical solution for moving your banking operations outside the direct control of the Fed.

We hope to see you there!

Posted 06/16/10 BigJohn Oak Park, CA

Yeah, fractional reserve banking has to go. It was clear to me as soon as I realized that they were basically lending fake money. I see it as nothing short of fraud. Double fraud. First, a person deposits money with the bank. He is being led to believe that his money is being kept safe by the bank, but it is in fact being lent to others. Fraud. Second, money is being lent to borrowers. They take the loan assuming they're getting real money, and pay interest according. But instead, they're getting "fake money" that's on good faith of the bank's good name. Another fraud. I don't see why banks are allowed to lend the money that's deposited there. If they want to do so, that's what a CD account is for. You let the person know that their money will be lent, and is therefore locked for the duration of that loan. In exchange, that person will receive interest on it.

Posted 06/17/10 C00kieM0nster Oxnard, CA

How do we get you guys to Southern California?

Posted 06/19/10 brandonwbarrios new york, NY

@ Big John. Fake money in this conversation is relative. Central Bank fiat money is fake relative to commodity money. Commercial Bank money is fake relative to the FRB fiat money. Considering the operations of the FRB as a settlement institution between commercial banks, if anything the FRB money passed in any given transaction is that which is transferred from one commercial bank to another commercial bank. In your example you should like to say the bank (loan) customer is receiving the FRB money of the bank (deposit) customer (since its much more likely the loan funds will be deposited with another commercial bank). Though it should be obvious commercial banks don't specifically designate funds in this per transaction manner. The overall $ figure in deposits determines their maximum extension of loan amounts. Up to 90% or X 9 of the bank deposit customer's FRB money (while sitting idle within one commercial bank's books) essentially becomes commercial bank money as the bank's lending operations lend out the FRB money and the commercial bank money is only converted back into FRB money as the deposit customer executes transactions that require FRB money ie a transaction with a person or store that has a deposit account with a different commercial bank. Although I personally enjoyed reading Rothbard's Case Against the Fed and it served as my initial study on the subject of fractional reserve banking I think he left out some very important terms/concepts or didn't explain them very well.

Posted by Bob Murphy on 06/01/09
Last updated 06/01/09

In a recent Forbes.com piece, Bruce Bartlett criticized libertarians for focusing too much on tax cuts and not enough on other areas of government overreach. But before you C4L folk nod your heads in agreement, get this... Of all the self-described libertarians who ignore "Big Government" in the guise of the Drug War or foreign adventures, Bartlett singled out you folks as a great example of the hypocrisy he was talking about!

After linking to this C4L "talking points" memo [.pdf] for people calling in to talk radio, Bartlett says:

An example of this type of libertarian thinking can be found on the Web site of a group called the Campaign for Liberty. It pays lip service to the libertarian philosophy on foreign and social policy, but says little about them. The discussion of economic policy, however, is much greater. But its only major proposal is abolition of the income tax. No ideas on how government spending would be cut to make this possible are put forward except to eliminate the congressional pay raise. Perhaps this group really believes that will be enough to abolish the income tax, but I suspect not. Whoever wrote these talking points is simply pandering to the stupid, the ignorant and the unsophisticated.

Needless to say, if you go and read the "talking points" [.pdf], you'll see that they are incredibly principled as far as these things go, and that the writer(s) spent a large fraction of the 3 pages to issues other than mere tax cuts. Moreover, they listed plenty of ways to save money besides congressional pay.

I am still stunned that Bartlett chose to single out the C4L as the poster child of libertarian hypocrisy when it comes to ranting about Big Government. Now the C4L is accused of simultaneously (a) being too "extreme" and "idealistic" when it comes to its recommendations for the Drug War or the War on Terror, and (b) being too wimpy on ways to cut government spending outside of congressional pay hikes.

For those interested, my initial reaction to Bartlett's hit piece is here.

Posted 06/01/09 rightsman Las Vegas,, NV

Bob Murphy, Mr. Bartlett has the unalienable right to be ignorant and to prove his ignorance by his drivel. And I will fight to the extend of one bruised knuckle to protect his divine right to continue to be an ignoramus. Thank you, Robert Walker

Posted 06/01/09 Andrew Sica Woodbury, CT

Mr. Bartlett's piece is an example of what passes for journalism and opinion now from major media sources: Just do zero investigation, have all the facts wrong and Forbes, Time, etc. will publish the crap you write! Yet another reason why the printed media is going the way of the dinosaur! Not only does he not understand the Campaign for Liberty, but he clearly doesn't understand libertarianism. You wanna know why this country is really messed up now???? Here is another line from the end of the article: "Bruce Bartlett is a former Treasury Department economist"

Posted 06/01/09 JFeldman Kearney, NE

Bruce Bartlett said that? Wait, who is Bruce Bartlett and why do I care? At least we are doing something, instead of sitting around criticizing others while doing nothing. Sounds like the first of a series of hit pieces that we will see coming from the "right" as we grow in influence. If Bruce Bartlett is so concerned about it, he is welcome to join and help lead us those other areas to help sastisfy his own vision of what should be done, but my guess is that he isn't intrested in DOING anything, just whining.

Posted 06/01/09 Sproge Gilbert, AZ

Hahaha this is funny!!! Gonna need pounds of salt for this one!!!

Posted 06/01/09 ConservativeSouthern Nokesville, VA

The guy doesn't even know the difference between "Libertarians" and "Constitutionalist".

Posted 06/01/09 MichaelBarry Sebring, FL

Who is Bruce Bartlett? It would be better for him to remain silent and be thought a fool than to speak and remove all doubt.

Posted 06/01/09 VictimOfFeds San Clemente, CA

Ron Paul has made it quite clear on how we could save $1 trillion per year by ending our interventionist foreign policy. Going down the line of Departments and ending each one of those would save plenty as well. How does Bruce Bartlett not understand this?

Posted 06/01/09 soule hoboken, NJ

Brucelette who? Bob, you did a great job debuking this hit piece on C4L. This is just one of the many signs that tells us, the C4L is going in the right direction, teaching and informing people around the country regarding the US constitution, the monetary policy, the US foreign policy, Freedom and liberty. They will keep attacking this movement with lies and facts spinning, they are good at that, actually, that's all those "MSM Jornalists" are good at. Keep them in check and exposed for what they are, a fraud and disgrace for journalism.

Posted 06/01/09 soule hoboken, NJ

Brucelette who? Bob, you did a great job debuking this hit piece on C4L. This is just one of the many signs that tells us, the C4L is going in the right direction, teaching and informing people around the country regarding the US constitution, the monetary policy, the US foreign policy, Freedom and liberty. They will keep attacking this movement with lies and facts spinning, they are good at that, actually, that's all those "MSM Jornalists" are good at. Keep them in check and exposed for what they are, a fraud and disgrace for journalism.

Posted 06/01/09 HazBalls4RP Champaign, IL

"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi Phase two has begun, comrades.

Posted by Bob Murphy on 05/14/09

Amongst the other things brewing in DC (such as health care and financial sector "reforms"), there is going to be a big push for legislation to combat climate change. For those interested in this topic, here is a very detailed post by climate scientist Chip Knappenberger explaining that the standard policy model shows the Waxman-Markey cap & trade bill--even if flawlessly implemented in its original draft--would avert 9/100ths of a degree (F) in global warming by the year 2050.

Also, here is a 6-minute YouTube clip where I give the big picture explanation of why a "green recovery" is absurd: you can argue that "green" subsidies and mandates are necessary to save the planet, but don't argue that they will simultaneously pull us out of recession. That's just crazy.

Posted 05/15/09 Sproge Gilbert, AZ

There's a GREAT documentary about the hoax of man-made global warming, I reccomend to anyone who hasn't seen it yet: http://video.google.com/videoplay?docid=288952680655100870

Posted 05/15/09 in omnibus libertas PITTSBURGH, PA

Also note that the RealClimate folks wrote a response to Chip Knappenberger's article, to which Chip responded: http://www.realclimate.org/index.php/archives/2009/05/the-tragedy- of-climate-commons/ And, in fairness, I think the RealClimate folks have a point: even if the effect of Waxman-Markey bill is negligible, if the United States is unwilling to sacrifice, we cannot realistically expect the rest of the world (including developing countries that are emitting the lion's share of CO2) to do so. The idea of "green recovery", though, is propounded only by those who are clueless about economics. It will take a long time to reach the point where green energy (in which I include carbon sequestration and nuclear fission) is as cost-effective as using fossil fuels outright. Subsidies only disguise the loss of wealth that obtaining energy in less efficient ways must entail; they do not mitigate it.

Posted 05/15/09 Nagelbett New Bedford, MA

This is a fantastic speech given at the Utah Valley University http://wattsupwiththat.com/2009/05/14/now-thats-a-commencement-spe ech/

Posted 05/15/09 redshirt Philadelphia, PA

FYI, generation of electricity via combustion of biomass with cogeneration of syngas and marketable byproducts is as cost effective as natural gas, right now. I've read as low as 4 cents per kWh for production. With retail prices at near 10 cents it could easily be a few cents more at production and still be worth the investment. I believe that recent reports show solar plants will be competitive with coal in the next couple of years as well. So, I'd be careful about assuming green technology will be stymied for so long that it won't contribute meaningfully to an economic turn around. Technology refinements can make something suddenly economically feasible. Meanwhile, large manufacturers of energy may be so laden with their existing infrastructure and relationships that they may not be able to shift gears. Producing more of our energy here would ultimately reduce trade imbalances. Assuming in the long run, a greater demand for energy, and reduced dependence on foreign sources, this should mean net job creation. But, given good margins, there would be no good reason for government to be involved. As pointed out in the video, if the money is there, there is simply no point in the government being involved. If on the other hand, the technology is in fact less efficient, all the government can do is raise costs, which destroys jobs elsewhere. And since it is government money with the added inefficiencies, it would destroy more jobs than it creates.

Posted 05/18/09 jtfische w, MO

Most people are completely clueless about climate change. Including scientists. The truth is no one really knows exactly whats going on.

Posted by Bob Murphy on 04/20/09

Please forgive the self-promotion, but today is the official launch of my new book.  I tried to boil down all the essentials for (a) what caused the Depression, (b) why Hoover and FDR made it worse, and (c) why World War II was no "cure."  I have a longer infomercial at LRC if you want to take a look.

In all seriousness, the Treasury and Federal Reserve are doing the exact same things today that they did back in the 1930s.  So it's no wonder that the "credit markets are frozen" and unemployment rates are rising.

Oh, one last plug:  On the front cover Ron Paul says, "Read this book and understand why massively increasing government is not change we can believe in."

Posted 04/20/09 BruceKoerber Cedar Rapids, IA

This will be a good book since Robert Murphy is a meticulous writer and a scholar. I am also excited about the upcoming book by Ron Paul titled "END THE FED."

Posted 04/20/09 Nebelwerfer Overland Park, KS

I plan on picking this up as soon as possible and reading it after I finish "The Creature from Jekyll Island." Robert Murphy is great. Should be an excellent read.

Posted 04/20/09 jlick Taipei, Taiwan

I hope you will publish this as an eBook as it looks very interesting.

Posted 04/21/09 vshagoyan glendale , CA

I will be buying this book tomorrow. I wish you great success with it Dr Murphy. Robert Wenzel of economicpolicyjournal.com had a great intro to it. I've read Rothbard's "America's Great Depression," so I know what to expect, but it's been sometime, so why not polish up my knowledge of it once more.