Tag Archives: Federal Reserve

Videos

Walter Williams explains why capitalism is moral in 5 minutes

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Who is Walter Williams?

Dr. Walter E. Williams holds a B.A. in economics from California State University, Los Angeles, and M.A. and Ph.D. degrees in economics from UCLA. He has served on the faculty of George Mason University in Fairfax, Virginia, as John M. Olin Distinguished Professor of Economics, since 1980.

Williams was born into an African-American family. His family during childhood consisted of himself, his mother, and his sister. His father played no role in raising either child. He grew up in Philadelphia. The family initially lived in West Philadelphia, moving to North Philadelphia and the Richard Allen housing projects when Williams was ten. In 1959 he was drafted into the military, and served as a Private in the United States Army. Following his military service, he re-entered college as a far more motivated student.

While at UCLA, Thomas Sowell arrived on campus in 1969 as a visiting professor. Though he never took a class from Dr. Sowell, the two met and began a friendship that has lasted to this day.

Watch this 5-minute video where he explains why capitalism is more moral than socialism:

And here’s another 5-minute video where he explains the profit motive:

Now let’s consider another economist, Thomas Sowell:

Thomas Sowell (born June 30, 1930) is an American economist, social theorist, political philosopher, and author. A National Humanities Medal winner, he advocates laissez-faire economics and writes from a conservative and libertarian perspective. He is currently the Rose and Milton Friedman Senior Fellow on Public Policy at the Hoover Institution, Stanford University. He is considered a leading representative of the Chicago school of economics.

Sowell was born in North Carolina, but grew up in Harlem, New York. He dropped out of high school, and served in the United States Marine Corps during the Korean War. He received a bachelor’s degree from Harvard University in 1958 and a master’s degree from Columbia University in 1959. In 1968, he earned his doctorate degree in Economics from the University of Chicago.

Sowell has served on the faculties of several universities, including Cornell University and University of California, Los Angeles, and worked for think tanks such as the Urban Institute. Since 1980 he has worked at the Hoover Institution. He is the author of more than 30 books.

Here is a 33-minute interview with Thomas Sowell on basic economics:

Lately, I have been thinking a lot about Christians who focus on only one issue during elections, typically abortion. I consider this to be a weak and short-sighted approach. Even if the main goal you desire is to stop the murder of unborn babies, you would do well to consider your opponent and use every tool available to defeat them in elections. Our opponent on the abortion issue is the Democrat voter. A Democrat is a person who is liberal on social policy – who supports abortion and gay marriage. If you want to defeat the Democrat candidate in an election, then you need to appeal to as many voters as possible on as many issues as possible – not just on social policy. You need to defeat Democrat fiscal policy with arguments and evidence. You need to defeat Democrat foreign policy with arguments and evidence. If you engage every target using every argument and every piece of evidence, you will get more success and win the battle for public opinion.

Let’s face it. We are not going to win elections if we turn only to people who call themselves Christians and try to get them to vote pro-life. There are not enough Christians – and not every person who calls himself a Christians is one. Focusing only on Christians is not going to get the pro-life majority we are looking for. It may be easier to avoid confronting people outside of our church, but it won’t work. A much better idea is to use every argument against every person – Christian or not. And to be able to address objections on every issue – not just one social issue. If the voters don’t care about one issue, then you can argue on another issue. You must be all things to all people so that you can win some by knowing what to say when they ask you for reasons and evidence. Now where have I heard that before?

Here is a full audio course on economics from famous Christian philosopher Ron Nash which I recommend to those who have not yet learned to integrate their Christian faith with economics. His two favorite economists are Walter Williams and Thomas Sowell – he says so in the lectures. In fact, he actually quotes a lot of Walter Williams material from his public lectures on economics, and Thomas Sowell material from his books on economics.

Note: for those who want MP3s of the Thomas Sowell lecture I posted above, here they are:

These are low-quality so they could be smaller for downloading.

News

Egan Jones cuts U.S. credit rating again, this time from AA to AA-

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Story from CNBC.

Excerpt:

Ratings firm Egan-Jones cut its credit rating on the U.S. government to “AA-” from “AA,” citing its opinion that quantitative easing from the Federal Reserve would hurt the U.S. economy and the country’s credit quality.

The Fed on Thursday said it would pump $40 billion into the U.S. economy each month until it saw a sustained upturn in the weak jobs market.

In its downgrade, the firm said that issuing more currency and depressing interest rates through purchasing mortgage-backed securities does little to raise the U.S.’s real gross domestic product, but reduces the value of the dollar.

In turn, this increases the cost of commodities, which will pressure the profitability of businesses and increase the costs of consumers thereby reducing consumer purchasing power, the firm said.

In April, Egan-Jones cuts the U.S. credit rating to “AA” from “AA+” with a negative watch, citing a lack of progress in cutting the mounting federal debt.

Moody’s Investors Service currently rates the United States Aaa, Fitch rates the country AAA, and Standard & Poor’s rates the country AA-plus. All three of those ratings have a negative outlook.

Could this have anything to do with the decision to print $40 billion a month to “stimulate” the economy? Once you’ve given up on letting businesses create jobs by lowering their taxes and removing burdensome regulations, then printing money is all you have left. But no one mistakes that for economic growth, least of all credit rating agencies.

News

QE3: Obama ushers in hyperinflation with more “quantitative easing”

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Investors Business Daily explains Obama’s latest desperate ploy to cover up his economic failures.

Excerpt:

The Federal Reserve announced a third round of quantitative easing Thursday afternoon, and it is big: A net $40 billion a month in additional purchases of mortgage-backed securities. And policymakers said additional accommodation will continue “for a considerable time after the economic recovery strengthens.”

[…]Ordinary Americans can expect to see higher gasoline prices. Quantitative easing also pushes up commodity prices — both by boosting demand for financial assets and by weakening the dollar.

Crude oil prices have been trending higher, and were up $1 to nearly $98 a barrel in mid-afternoon trade.

That will quickly filter down to gasoline prices at the pump. Gas prices moved back to $3.847 a gallon last week, the highest since April. They’ve risen for 10 straight weeks in part on anticipation that QE3 was coming. Gas prices could once again threaten the $4 level — it’s already well over that mark in California. And that’s with no major supply issues or feared disruptions around the world.

Higher oil and gas prices also could push food prices higher, by encouraging more corn burning to produce ethanol, as IBD’s Jed Graham recently noted. Corn prices are near record highs due to this summer’s historic drought.

The producer price index shot up 1.7% in August — the biggest jump in three years — on higher food and energy costs. Gasoline prices at the wholesale level exploded 13.6%. Food costs rose 0.9%, the most in nine months.

With job growth and wage gains so weak, higher food and gas prices will cut into consumers’ buying power on everything else. That will offset much of the modest QE3 benefits.

First and second round of quantitative easing:

Third round of quantitative easing:

It means they are going to print the money. There really is no difference between Barack Obama and Robert Mugabe when it comes to economic policy. The only thing stopping him is the Republican House and the conservative alternative media.