Archive for February, 2010

The unsung heroes of the Indian private sector

Posted in Uncategorized on February 9th, 2010 by Abhi – Be the first to comment

A friend of mine sent me the following link the other day.

Shaffi Mather: A new way to fight corruption

I have quite honestly, found it to be the most inspiring thing I have seen on the internet for quite some time. Shaffi Mather, a former employee of Reliance industries, has gone on to found 1298 for Ambulance (the same service that  heroicallyreached and provided ambulance services for the victims of the Mumbai attacks before any government services were anywhere near the locations), a for profit ambulance service that is succeeding in providing this emergency healthcare, an area the government has failed in so badly there its presence is not even felt, as well as an education initiative creating schools and providing elearning services throughout India.

However, his most impressive feat by far is his latest initiative to provide a private service that will fight on behalf for victims of corruption utilising legal mechanisms to do so. A wonderful example of the divison of labour at work!

I urge readers to spread this clip, truly revolutionary. All we need now is to start issuing private currencies, while the rupee still holds only de facto legal tender status. That should give the Manmophan Singh the Keyesian something to worry about!

So, “market failure” anyone?

Quote of the Day

Posted in Uncategorized on February 8th, 2010 by admin – Be the first to comment

Far from adding cozily to the private sector, the public sector can only feed off the private sector; it necessarily lives parasitically upon the private economy.

- Murray N. Rothbard, The Fallacy of the “Public Sector”

Hit the link to read the full essay here

A major sovereign debt crisis brewing?

Posted in Uncategorized on February 7th, 2010 by admin – Be the first to comment

The drama of the PIIGS’ debt crisis continues to unfold, as some say it foreshadows what will happen to the US eventually. History is replete with countries that experienced economic crises which turned into fiscal crises. It appears that we may be in the beginning stages of this cycle.

Check out the great post from bearishnews.com on this subject.

If the all of the fiscal stimulus and massive deficits has spawned its own crisis (which could be even worse than the financial crisis), does this render all of the stimulus worthless (assuming you even thought it was a good idea to begin with)? Have we simply turned a financial crisis into an even greater fiscal crisis? Share your thoughts in the comments.

The Fed as counterfeiter & Jefferson on Banks

Posted in Uncategorized on February 1st, 2010 by admin – Be the first to comment

Consider this fantastic summary of “The Fed as Giant Counterfeiter” by Robert Murphy:

Ah, but we’re not done yet. Not only does the Fed’s accumulation of Treasury debt artificially push down the interest rate, but the Fed gives the interest payments right back to the Treasury! After all, interest is how the Fed “makes money.” It writes checks on itself (created out of thin air) and accumulates assets, and then earns the interest and (in some cases) capital gains on the assets. But after the Fed pays its employees, pays its electric bill, and throws the staff Christmas party, it remits the excess earnings back to the Treasury….

…Sorry, but our own monetary system has the same feature. When the Treasury securities held by the Fed mature — so that the Treasury has to pay back the face value in principal — the Fed rolls over the debt. Over time, the nominal market value of the Fed’s holdings of Treasury debt continually grows. Barring a sudden reversal in this policy, the Treasury knows that it will never have to pay off this debt. For all practical purposes, any Treasury debt ultimately finding its way onto the Fed’s balance sheet is economically equivalent to our monarch running the printing press to pay his bills.

Related to this, consider Thomas Jefferson’s warning to America concerning private issuance:

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Why Friedman Misunderstood Physics and Mises Was Right about Economics

Posted in Uncategorized on February 1st, 2010 by Abhi – Be the first to comment

Milton Friedman published in 1966 an essay, which arguably, combined with Keynes’ General Theory were the two pieces of literature most responsible for shunting economics on to the wrong track, to use the same expression William Stanley Jevons used to describe the influence of David Ricardo on the science’s development. FA Hayek once said he regretted later not writing responses to both these works.

I hope I have done my own small part in providing a response to Milton Friedman’s “The Methodology of Positive Economics” in the following essay I am providing a link to. I have also decided to dedicate it to the memory of a friend and not so long ago fellow classmate of Mises University, hosted by the venerable Ludwig Von Mises Institute.

http://www.yourfilehost.com/media.php?cat=other&file=1665Why_Friedman_misunderstood_Physics_and_Mises_was_right_about_Economics.doc

A succinct version of this essay shall soon be published at mises.org.