The Gov’t Just Announced The U.S. Economy Has Set A New Record- And It’s Awful News

Stocks fell Friday following lower-than-expected labor statistics for the month of September.

Though the official unemployment rate remained unchanged at just north of five percent, many critics of the Bureau of Labor Statistics say that figure does not take into account the millions of Americans who have dropped out of the workforce altogether.

One telling number included in the report addresses that growing segment of the population. While August set a record with roughly 94 million individuals older than 16 out of the labor force, that number grew to more than 94.6 million last month.

The nation’s workforce participation rate hit similarly distressing levels in September, marking the lowest percentage — 62.2 — of engaged Americans in nearly four decades. While the news is not good for the nearly 14 million Americans either unemployed or looking for work, it did not come as a surprise to many critics of the Obama administration.

Are you surprised so many Americans have dropped out of the workforce in the Obama economy? Share your thoughts in the comments section below.

Congress And The Fed Refuse To Learn From Their Mistakes

This month marks the seventh anniversary of the bursting of the housing bubble and the subsequent economic meltdown. The mood in Congress following the meltdown resembled the panicked atmosphere that followed the September 11th attacks. As was the case after September 11th, Congress rushed to pass hastily written legislation that, instead of dealing with the real causes of the crisis, simply gave the government more power.

Just as few understood the role our interventionist foreign policy played in the September 11th attacks, few in Congress understood that the 2008 meltdown was caused by the Federal Reserve and Congress, not by unregulated capitalism. Not surprising to anyone familiar with economic history, the story of the 2008 meltdown starts with the bursting of the Fed-created tech bubble.

Following the collapse of the tech bubble, the Fed began aggressively pumping money into the economy. This money flooded into the housing market, creating the housing bubble. The Bush Administration and the Republican Congress also added fuel to the housing bubble. These so-called “free-market” conservatives expanded federal housing programs in hopes of creating an “ownership society.”

If Congress understood the Austrian theory of the business cycle, it would have allowed the recession that followed the housing bubble’s inevitable collapse to run its course. Recessions are the economy’s way of eliminating the distortions caused by the Federal Reserve. Attempts by Congress and the Fed to end a recession via inflation and government spending will only lead to future, and more severe, economic downturns.

The corporate bailouts, government spending, and money creation via quantitative easing that Congress and the Fed have engaged in since the fall of 2008 have failed to produce even the illusion of prosperity. The daily experience of most Americans shows that the government’s doctored statistics drastically understate both unemployment and inflation.

This is not to say that no Americans have benefited from Federal Reserve policies. Even Donald Trump has called quantitative easing “a great deal for guys like me.” Much of the growth of government over the past seven years, from the bailouts to the increases in military and domestic spending to Obamacare, has also benefited politically-connected crony capitalists.

The Federal Reserve’s continued delay of an interest rate increase suggests that, contrary to its public statements, the Fed understands that the economy has not recovered from the meltdown and is on the brink of another major recession. Fear that the Fed is not being fully forthcoming with its view of the economy is one reason the stock market declined following the Fed’s recent decision to once again postpone increasing interest rates.

Learning the full truth about how the Fed evaluates the economy and its plans to respond to another downturn are two reasons why it is important to pass the Audit the Fed bill.

A vote on Audit the Fed would probably be the only good thing to occur in Congress this year. A Congress that cannot defund Planned Parenthood is unlikely to make any serious cuts in spending. Instead of waiting for politicians to do the right thing, those who know the truth must spread the ideas of liberty as far and wide as possible. Only when the teachings of the Austrian school are embraced by a critical mass of Americans will Congress cut warfare spending, cut welfare spending, and audit, and then end, the Fed.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

Envy, Economic Destruction, And Moral Decay: Pope Francis And Bernie Sanders

Both Pope Francis and Bernie Sanders seem to be down on capitalism, and they support the imposition of more economic regulations, and higher taxes on “the rich,” in the name of reversing “income inequality.” Which means taking more wealth and income away from the producers, the innovators, the entrepreneurs, the providers of jobs. Which ultimately causes slowed productivity, factory shut-downs and higher unemployment. And then these socialists and fascists call for more interventions, more bureaucratic intrusiveness into private industry, and ultimately, government seizures of whole industries (like health care).

Yes, they are both fascists as well as socialists. But “fascist” sounds bad, unlike “socialist.” That has “social” in it. “We love people!” So Bernie calls himself a “socialist.” And while I don’t think Pope Francis calls himself a “socialist,” I’m sure he probably doesn’t object to that description.

As opposed to “fascist,” which sounds like “Hitler” and all that. But both words have economic meanings, and that’s important.

In my simplistic view of things, I see socialism as “public ownership of the means of production” which really means government ownership, which means bureaucrats usurping ownership away from the people. It is theft, in actuality. And fascism supposedly allows for private ownership, but the controls over the industries, property, contracts and labor are seized by those covetous and power-grabbing government bureaucrats. Both socialism and fascism are enslavement of the people.

As I have stated in the past, the minimum wage is an example of economic fascism. Bureaucrats order employers to pay workers not less than a certain amount. The choice is: pay the worker less than demanded by ignoramus bureaucrats and go to jail, or cut those jobs if the employer can’t afford it. Most employers choose the latter rather than going to jail. So that’s a fascist control usurped by bureaucrats over the wage part of the private contract between employer and employee.

Interesting how “liberals” are concerned when private businesses engage in “price gouging,” even though the free market’s raising prices at certain times actually benefits those most in need (as opposed to anti-price-gouging laws which backfire and cause shortages). But when the “liberals” artificially raise the price of labor (minimum wage), they really are “price-gouging” by legal force, and thus causing people to lose their jobs! (Some “liberals”!)

Now, Pope Francis and Bernie Sanders’s complaints are supposedly of the greed of “capitalism” and the “1%“. They want to crack down on Wall Street. In my view, Wall Street is just a de facto branch of the federal government, and is rigged to enrich the insiders at the expense of small investors. Wall Street is also a beneficiary of socialism. Example: The Wall Street Bailout at involuntary taxpayer expense. So Wall Street is not an example of actual free market capitalism.

Actually, there has been very little capitalism–that is, free market capitalism–in America, certainly not in Europe or any of the other areas of the world. There is crony capitalism, in which the established firms get in bed with the bureaucracy’s major power wielders, who write special legislation to pay off the insider established firms’ bigwigs, who have all the legal forces at their fingertips to get around whatever legislation is written that the smaller firms can’t afford to do. This is a main component of fascism, by the way.

Besides the minimum wage, one textbook example of crony capitalism and fascism (that some people have been mistakenly referring to as “socialism”) has been the ObamaCare law, or the Affordable Care Act. This law was largely written by the lobbyists of the pharmaceutical and insurance industries. They have benefited a great deal from this new health insurance racket.

In contrast, real capitalism is this: Free markets, i.e. freedom, in which everyone is free to do with one’s own person, labor, property, capital and wealth whatever one wants, as long as you don’t steal or use fraud, coercion or aggression against others. And that’s it. No governmental intrusions or guilty-until-proven-innocent controls, mandates, licensing, or reporting anything to the government. For those are all trespasses, in my view; and thus, they are criminal intrusions, which is what socialism and fascism are all about.

In contrast, free market capitalism is the way of life which, during the 19th Century, led to the greatest expansion in human prosperity and raised the standard of living of most of the people in society. It raised the standard of living of those at the bottom, as well as the middle.

And then in the 20th Century, the socialists and fascists came in and wrecked all that. Besides the Europeans and their socialist and fascist centrally planned economic policies and wars, in America there were Woodrow Wilson and Franklin Roosevelt, the two major players whose socialism and fascism gave us the income tax, the Federal Reserve System, and FDR’s many, many fascist bureaus and programs, ordering people to do this and do that, or else.

The socialist redistribution-of-wealth schemes and takeovers of whole industries and/or fascist controls that Pope Francis and Bernie Sanders want to impose on America are an expansion of those which began over the last century. The policies they support are not those of promoting freedom, of liberating the people from the shackles of the State, but just the opposite.

Socialism and fascism are government enslavement of the people. Of course, they would never admit to that, just as the “tax” theft advocates don’t want to call their policies “stealing.” As I wrote in this earlier post, there are some people who mistakenly view the relationship between a capitalist employer and employee as like an “enslavement.” I’m sure you’ve heard the phrase, “wage slavery.” But in free market capitalism, everything is voluntary. The worker is not being forced to work at that place of employment. In a free society, all relationships and contracts are voluntary. In socialism and fascism, they are not voluntary — they are coerced, forced, compelled, ordered, mandatory, or prohibited by government bureaucrats who just like to order people around. And that’s one of the biggest differences between free markets and the socialist/fascist utopia envisioned by Bernie Sanders and Pope Francis.

Besides the personal enslavements, the results of economic policies that Bernie Sanders wants to impose on America, and Pope Francis wants to see globally, would be like the terrible conditions in Venezuela. Government’s socialist takeovers of industries and fascist price controls cause shortages and empty store shelves and long lines.

In America, just look at all the free market-directed grocery stores and food distributors we have, with minimal or non-existent bureaucratic intrusions. Prices are set by wholesalers and retailers, not government bureaucrats. No long lines and empty store shelves. That’s capitalism, freedom, and prosperity.

The motivations of Pope Francis and Bernie Sanders, and most of the people on the left, should be viewed as dubious when they continually support policies of government theft of private wealth and government regulations which have mainly succeeded in causing higher unemployment, inflation and economic distress. The Left’s most recent anti-capitalist hero, French economist Thomas Piketty, wrote in his book, Capitalism in the Twenty-First Century, that a progressive, global tax on capital and individual wealth “would not bring the government much in the way of revenue, because it would quickly fulfill its objective: to drastically reduce remuneration…” As quoted in this Mises Institute article, Piketty writes his main point, which in my view mirrors most on the left: “The primary purpose of the capital tax is not to finance the social state but to regulate capitalism.” I.e., it is not as important to help the poor as it is to make the rich less rich. Which ultimately takes more opportunities away from the middle class and the poor, and makes the poor poorer as well — that’s how things work with these government interventions. We know that from actual historical and empirical evidence.

So really, Pope Francis and Bernie Sanders reflect the Left’s general sentiment of envy toward the successful, the entrepreneurs, and producers and creators of wealth. They promote the policies of wealth destruction and economic and moral decay. After all, promoting the stealing from others’ honestly acquired wealth and property is just that: stealing. And that’s immoral. They can rationalize the institutionalized theft all they want, but that’s what it is. This is also what motivates their obsession with higher taxes on producers to cure “global warming/climate change,” as well. In my view, they are not as concerned with cleaning the environment and preventing “melting polar ice caps and rising sea levels” as they are obsessed with taking more wealth away from the producers of society (and thus taking jobs away from the workers!).

This article originally appeared at Scott’s blog

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

Vote With Your Feet: Free States Are Happier And Richer

The greater the economic freedom, the wealthier and happier the people.

From minimum-wage laws to higher progressive taxation to greater unionization to larger welfare programs to more regulation, left liberals demand a stronger and more economically active central government. Advocates of laissez-faire, on the other hand, favor smaller government, less regulation, lower taxes, and greater individual opportunity and property rights.

But which economic policy approach actually yields the best results?

We’ve already clearly demonstrated — via international and US state migration rates — that people the world over are naturally drawn toward greater economic freedom. Across countries, and even across states, millions of people every year migrate away from greater taxation and more regulation and toward lower taxation and less regulation. But are they better off?


Let’s take a look at the fifty US states, ranked by their level of economic freedom. The most highly-ranked states have lower tax burdens, deference to property rights, less government spending, and labor market freedom:

Economics Freedom Ranking in US

Taking into account cost-of-living differences, the top ten most economically free states have an average $52,334 median household income, which is considerably higher than the $43,090 median income for the ten least free. That’s a 21 percent raise for workers by switching state government policies to a smaller government approach. How much more could it be increased if the same were done at the national level?

Table 1

The observed results are not a question of race or country of origin: African-Americans, Hispanics, Asians, and immigrants also earn substantially more in the more economically free states. While left liberals should be lauded for their apparent concern for the welfare of minorities, the truth is that their policies yield the worst results for them, a standard of living pay cut just for living in a more regulated and heavily taxed state.

One may think that this could be driven by urban vs. rural states more than policies, but the top ten free states are 71 percent urban vs. 72 percent for the bottom ten — a negligible difference. Moreover, the states in between the two are even more urban, at 75 percent, which effectively rules out correlation.

Another objection may be that “the rich” or “the 1 percent” are skewing the numbers — that income inequality is running rampant with less government to level the playing field, as many persistently believe. The exact opposite is the case.

Using median incomes as the measure (instead of average incomes) effectively eliminates the impact of the very wealthy on the numbers. And the “Poverty Measure” is lower in the most free states (13.3 percent) than in the least free (15.1 percent).

But the real measure of income inequality is the Gini index, and we can put aside for now the fact that median incomes are a far better measure of overall economic well-being than inequality of incomes (i.e., 100 people making $1 a day are perfectly equal but not better off than ninety-nine people making $2 a day and 1 making $5 a day, despite the latter’s higher inequality).

Table 2

If we assume inequality to be an important economic measure instead of a normal byproduct of economic growth, the most free states do better, with a .446 Gini index vs. a higher and less equal .462 Gini for the least free states. Not only that, but the rate of growth of inequality over the past forty years is lower in the most free states compared to the least free: 22 percent vs. 30 percent. In other words, heavier government involvement has led to more income inequality and faster growth of such, while less government has created a more equal growth in incomes.

A final argument might be that while there may be greater income in more free-market states, the increased government regulation and intervention provides greater care and increases the population’s happiness and well-being. But the opposite is the case.

Gallup publishes an annual Well Being Index, which measures and ranks each state’s population across five core measures of well-being:

  1.  Purpose (liking what you do each day and being motivated to achieve your goals)
  2.  Social (having supportive relationships and love in your life)
  3.  Financial (managing your economic life to reduce stress and increase security)
  4.  Community (liking where you live, feeling safe, and having pride in your community)
  5.  Physical (having good health and enough energy to get things done daily)

Averaging each state’s Wellness rank for the past seven years, we find that states with greater economic freedom also bring greater happiness and well-being.

So what happens when you create a more laissez-faire and libertarian environment where people make more money, have less poverty, and find greater happiness in their lives? People want to move there. And indeed, looking at state-to-state migration of Americans between 2006 and 2010, we see a net migration flow of 704,000 from the twenty-five least economically free states to the twenty-five most economically free. That’s hundreds of thousands of Americans choosing to relocate away from more interventionist government to more free market oriented government.

Political Party Just One Factor

On that latter point, it’s important to distinguish small-government ideology from Republican party control in a state. While it’s true that there’s a strong correlation between Republicans and economic freedom — the ten most free states had a Partisan Voter Index (PVI) average of R+10.3 vs. D-6.1 for the ten least free — it’s not a perfect correlation either. Two of the top ten states (Virginia and New Hampshire), for instance, are swing states; and two of the bottom ten economically free states (West Virginia and Mississippi) are solidly Republican.

It’s also worth noting what economic freedom is not: it is not corporatism or crony capitalism, where the government bails out banks and subsidizes politically connected businesses, which both major political parties are heavily guilty of. Rather, it’s smaller, less intrusive government.

The reality on the ground is that states with more libertarian free market policies enjoy better results: greater median incomes, a more equitable distribution, less poverty, greater success for minorities and immigrants, and higher overall levels of happiness and well-being. In the political rhetoric landscape, the battle of ideology is fierce and filled with demagoguery; in the real world, the difference in results between competing economic policies are strikingly clear.

This commentary was originally published on and is reprinted here under a Creative Commons license. 

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

The Failed Moral Argument For A ‘Living Wage’

With Labor Day upon us, newspapers across the US will be printing op-eds calling for a mandated “living wage” and higher wages in general. In many cases, advocates for a living wage argue for outright mandates on wages; that is, a minimum wage set as an arbitrary level determined by policymakers to be at a level that makes housing, food, and health care “affordable.”

Behind this effort is a philosophical claim that employers are morally obligated to pay “a living wage” to employees, so they can afford necessities (however ambiguously defined) on a single wage, working forty hours per week. This moral argument singles out employers as the morally responsible party in the living wage equation, even though the variables that determine a living wage go far beyond the wage earned.

For example, as I discussed here, the living wage is a function not simply of the wage, but of the cost of housing, food, health care, transportation, and a myriad of other factors. Where housing costs are low, for example, the living wage will be lower than it would be in a place where housing costs are high.

So, what matters is not the nominal wage paid by the employer, but the real wage as determined by the cost of everything that a wage is used to purchase.

Why Is Only the Employer Responsible?

So, if it’s the real wage that matters, why is there a fixation on the nominal wage itself? After all, wages, in real terms, could be increased greatly by forcing down food costs and rents. So, why is there not a constant drum beat for grocers to lower their prices to make necessities affordable? Why are activists not picketing outside grocery stores for their high prices? Why are they not outside KB Homes headquarters for KB’s apparently inhumane efforts at selling homes at the highest prices that the market will bear? Why are people not picketing used car dealers for not lowering their prices to make transportation affordable for working families? And why are gas stations strangely exempted from protests over the high cost of gasoline? Certainly, all of these merchants are just as instrumental in determining real wages as any employer. Grocers, landlords, home sellers, and the owner of the corner gas station can put a huge dent in the family budget when they allow their “greed” to impel them to charge the highest prices they can get away with in the market place.

And yes, it’s true that plenty of activists regularly denounce landlords as “slumlords” or greedy capitalists for charging the highest rents the market will bear. And there are still plenty of activists who argue for price controls on rents and food. But they’re in a small minority nowadays. The vast majority of voters and policymakers recognize that government-dictated prices on food and housing lead to shortages. Setting a price ceiling on rents or home prices simply means that fewer housing units will be built, while setting a price ceiling on eggs, or milk or bread will simply mean that fewer of those staples will be brought to market.

Such assertions are barely even debated anymore, as can be seen in the near-extinction of new rent-control efforts in the political sphere. You won’t see many op-eds this Labor Day arguing for price controls on fruit, gasoline, and apartments. You won’t see any articles denouncing homeowners for selling their homes at the highest price they can get, when they really should be slashing prices to make homeownership more affordable for first-time homebuyers.

So, for whatever reason, homeowners, grocers, and others are exempt from the wrath of the activists for not keeping real wages low. The employers, on the other hand — those who pay the nominal wage — remain well within the sights of the activists since, for some arbitrary reason, the full moral obligation of providing a living wage falls on the employer.

Were food prices to go up by 10 percent in the neighborhood of Employer X, who is responsible? “Why, the employer, of course,” the living-wage activists will contend. After all, in their minds, it is only the employer who is morally obligated to bring up real wages to match or exceed an increase in the cost of living.

So while price controls on food, housing, and gasoline are generally recognized as a dead end, price controls on wages remain popular. The problem, of course, as explained here,here, here, and here, is that by setting the wage above the value offered by a low-skill worker, employers will simply elect to not hire low-skill workers.

A Low Wage Is Unacceptable, but a Zero Wage Is Fine

And this leads to the fact that when faced with high wages, employers will seek to replace employees with non-human replacements such as these automated cashiers at McDonalds, or other labor-saving devices.

But this phenomenon is simply ignored by the living-wage advocates. Thus, the argument that employers are morally obligated to not pay low wages becomes strangely silent in the face of workers earning no wage at all.

Indeed, we see few attempts at passing laws mandating that employers hire human beings instead of machines. While it’s no doubt true that some neo-Luddites would love to see this happen, virtually no one argues that employers not be allowed to employ labor-saving devices. Certainly, anyone making such an argument is likely to be laughed out of the room since most everyone immediately recognizes that it would be absurd to pass laws mandating that a road builder, for example, hire people with shovels instead of using bulldozers and paving machines.

Meanwhile, successes by “living wage” advocates in other industries, where automation is not as practical, have only been driving up prices for consumer goods. Yes, living wages in food, energy, and housing sectors will squeeze profits and bring higher wages for those who keep their jobs; but the mandates will also tend to raise prices for consumers, meaning that real wages in the overall economy have actually gone down, thanks to a rising cost of living.

All in all, it’s quite a bizarre strategy the living wage advocates have settled on. It consists of raising the prices of consumer goods via increasing labor costs. Real wages then go down; and, at the same time, many workers lose their jobs to automation as capital is made relatively less expensive by a rising cost of labor. While the goal of raising the standard of living for workers and their families is laudable, it’s apparent that living wage advocates haven’t exactly thought things through.

Note: The views expressed on are not necessarily those of the Mises Institute.

This commentary originally appeared at and is reprinted here with permission under a Creative Commons license

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

This post originally appeared on Western Journalism – Equipping You With The Truth