If someone asked me how to solve our economic problems, I would respond, “Do nothing.” I believe in free markets; therefore, the market participants should act based on their preferences, not mine. But I know of one thing we should stop doing. We should stop all government involvement in schools. We should close all government … Continue reading Get Government Out of Schools

I finally figured out how Bidenomics is supposed to work. He really is having an incredible amount of success in his economic strategy. It’s all based on what’s commonly referred to as “The Broken window theory.” According to the “theory,” destruction leads to economic growth. A most popular example comes from an essay written in … Continue reading Biden’s Broken Window

Impact of the Federal Funds Rate Popular Misconception If you start asking questions about federal funds in the federal funds rate, the response you receive will read something like the following: “The federal funds rate is one of the most important interest rates in the U.S. economy. That's because it impacts monetary and financial conditions, … Continue reading Fed Funds Explained No. 5

The coronavirus has not caused lost jobs, closed businesses, restricted air travel, and many other adverse economic effects. Responses to the coronavirus have caused these effects. Were those responses appropriate? We may never know. Responses due to market intervention have been substantially different than they would have occurred in a free market. Introduction It will … Continue reading The Response to Coronavirus

Does The Fed Provide Liquidity? You may have heard people say that The Federal Reserve provides “liquidity” to the banking system. Does it really? I will give you just a few facts about The Fed and its Open Market Operations in this article. In this limited space, I cannot answer this very complex question definitively, … Continue reading Fed Funds Explained No. 4

In order to perform maintenance on my production system I will not publish any articles until July 19. I hope the changes will help me publish on a more timely basis. See you next week. Jim Berger, Publisher

When President Trump threatened to impose tariffs on steel and aluminum, it triggered a blizzard of articles for and against the proposal. Instead of parroting what others have said — mostly empirical evidence- I want to give you the tools to understand the issue behind the proposed tariffs: “trade deficits.” Definition To discuss the issue … Continue reading Trade Deficits, An Introduction

It never ceases to amaze me how people seem to misinterpret what happens in the process of federal finance. At the head of the list stands this ridiculous economic stimulus program that the government has adopted. The chatter about the federal deficit probably stands second in line. To provide a basis for conversations about these … Continue reading Federal Finance Made Easy

Banks Replace Gold and Introduce Fractional Reserves This post tells a short tale of how banks take ownership of gold (a money commodity) and replace it with notes and checking accounts used as money. Eventually, they create more checking account money than they have gold, creating “fractional reserve banking.” New Account In a time before … Continue reading Fed Funds Explained No. 3

I started writing a piece explaining why the "Founding Fathers" did not want a Democracy. Then I remembered a YouTube video featuring the late Walter Williams. I cannot do better than this: https://youtu.be/6tq_VDp2CKo