Politicians proclaim the benefits of small business while on the campaign trail. But when they meet in the seedy halls of Congress, they have no problem doing whatever they can to stifle, regulate, and subdue their progress. Instead of siding with entrepreneurs, these politicians often side with political allies and cronies that helped put them into office.
Just because you’re retired doesn’t mean you have to stop working. Especially now that you have all the time in the world to do what you really want. Entrepreneurs don’t only come out of Silicon Valley. They come from all walks of life, from all different ages. If you’re retired and want to stay active while you relax, then find out the steps you need to take in order to start, manage, and grow your next small business.
Austrian economics does more than tell you what happens when the government disturbs market forces. In the hands of knowledgeable investors and entrepreneurs, it can tell you exactly what to expect from the market. Market behavior depends on how people behave. And how people behave is central to the Austrian perspective.
The U.S. dollar has been the world's reserve currency for almost a century, and already there are signs it may be in decline. But that doesn't mean it's not still valuable. On the contrary... As Chris Mayer explains, there are many reasons the U.S. dollar will remain relevant on the world stage for years to come. Read on...
World War II might have dragged the country out of the Great Depression, but it did so at a great price. Central planning took center stage, and politicans and bureaucrats suddenly knew what was best for America, the economy, and your life. On top of that, they replaced the free market with a new economic system… Creditism.
If you’re good at something should you be penalized so others have a chance at success? Should award winning actors and actresses be barred from future Oscar ceremonies to give other men and women the chance to succeed? Success should always be rewarded and encouraged. But what happens when you have a government that wants to even the playing field and take away the spoils of success. Gregory Bresiger finds out...
Practical people often pooh-pooh fiction reading as a time wasting dalliance, dominated by a Marxist coloring of the world. However, fiction readers were given a scientific reason recently for spending hours absorbing fanciful figments of someone’s imagination.
Argentina is suffering the ravages of government debasement of the currency -- i.e., inflation, the process by which government pays for its ever-increasing debts and bills by simply printing more paper currency. The expanded money supply results in a lower value of everyone’s money, which is reflected in the rising prices of the things that money buys.
When government expansion is allowed to continue unabated or when it casts a heavy regulatory shadow on America’s entrepreneurial spirit, the freedoms that we’ve come to know, and perhaps take for granted, slowly begin to slip away.
Its acceptance is as widespread as its justification is important, for it provides the rationale for the Federal Reserve’s unprecedented monetary expansion since 2008. While critics may dispute the wealth effect’s magnitude, few have challenged its conceptual soundness. Such is the purpose of this article. The wealth effect is but a mantra without merit.
Baron Rothschild, the famous French financier, was once heard to say that he knew of only two men who really understood money -- an obscure clerk in the Bank of France and one of the directors of the Bank of England. “Unfortunately,” he added, “they disagree.”
The new reality of Obamacare’s tax credits has left finance reporters to pen articles warning readers to “take care” when considering a tax credit and providing strategies for how best to “protect yourself.” So what do finance reporters know that the White House doesn’t?
Nihilo ex nihilo fit. Out of nothing, nothing comes. First put forward by ancient Greek philosopher Parmenides in the fifth century B.C., Thomas Aquinas and St. Augustine later used this axiom to prove that the universe needed a “first mover” to get things going. Even if the whole thing began with some kind of “Big Bang” moment, it still needed a banger to bang it. Who? God, of course.
Economic theories don’t lend themselves to laboratory testing, so the work of a national appraisal firm is especially enlightening. A new study lends support to the Austrian business cycle theory, which says that the less government is involved, the faster a market will recover.
What positive steps can we take? The energy that is now expended by well intentioned, freedom-seeking individuals on the destructive course of politics can be turned into powerful steps that will have a positive effect on the future. All are moral, right and just. None require aggressing. Consider the following...
The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The east coast and parts of the southern U.S. were to varying degrees paralyzed by blizzards a few weeks ago. The snow as expected rendered the roads treacherous, and in anticipation of slick streets, shoppers flocked to the grocery stores in advance.The rush into grocery stores, and its aftermath, offers worthwhile lessons in economics.First up, […]
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.I’m going to […]
Last year was quite the year for Bitcoin. We’ve seen exponential growth in Bitcoin’s exchange rate and extensive coverage in the media. Another phenomenon we have witnessed is the proliferation of alternative cryptocurrencies, five of which we’ve provided below.What all of these cryptocurrencies have in common is that they rely on a decentralized network to […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Recent difficulties with implementing the Affordable Care Act have increased opposition to the program. A majority of Americans now oppose it. Problems with the HealthCare.gov website are in all likelihood temporary. However, there are serious long-term problems, particularly considering long-term finance and labor supply issues. Given the mounting difficulties with and growing concerns about the […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”As the inequality gap grows, there is an ideological battle unfolding in the West.On the one hand, there are those who think government can fix things. It must do more, tax more, […]
The enormous tragedy for young people today is that so many are sealed off by law from any involvement in the commercial marketplace… until it is too late. This means that they know not the heartbeat of civilization itself. This terrible condition persists until their young adulthood.
It is their luxury — for the first time in world history! — to sit at desks for a full decade after they are old enough to be working. Instead of skills and experience, they mostly learn little how to be bored for extended periods.
When that time is up, they are thrown out into a world they can’t possibly navigate or even comprehend and told: “Get a job, pay your debts, and be a success.”
Great system? Not so great.
In fact, this isn’t working. This whole trend has turned out precisely the opposite of what the dreamers imagined in the interwar period. People were once thrilled that kids would be liberated from the demands of work so they could be in school and better themselves. The literature and philosophy they would learn!
Their whole presumption got out of hand. In the 1930s, the government banned kids from the workplace to help with the problem of persistent unemployment. Then the government boosted the numbers attending college after World War II. Further, the government created vast numbers of colleges and subsidized others and, finally, gave loans to everyone to partake in this machinery.
It turns out, however, that school might be the worst possible teacher. The workplace is probably better. The old system in which kids worked from an early age alongside adults better prepares them for the practical arts of life itself. It is not the military but commerce that permits us to be all that we can be, engaging reality in ways that draw on our highest ideals and potentials as human beings.
As a result of the bad system governments set up, kids get their first taste of real life at the age of 22 and are then shocked to discover that nobody wants to reward them for having played by the rules all those years. They are expected to actually contribute something to this world, about which they know nothing. When it doesn’t work out as expected, they blame the markets, capitalism, commerce, and the 1% and otherwise languish in a sense of being victimized. More and more, they just drop out.
How to address the problem? Let me suggest a small way that parents and grandparents can help raise the consciousnesses of teens toward commerce and the market economy. Instead of giving a gift for the holidays or giving them money they can spend, a better path is to open an online trading account in their name with you as the overall administrator, populating it with some seed money. Let the young person become his or her own broker. This one action could be a turning point.
You might start with $1,000. The account can go to anyone 12 or older or so. It’s a big attention-getting gift. The rules attached to the gift are simple. If the teen loses the money, there is no obligation to pay it back. This is a gift. But if he or she makes money, it is his or hers to keep and reinvest.
Most likely, the teen won’t have any idea what he or she has been given. That gives you an opportunity to explain how the financial markets work. They will be amazed to discover that they can be part-owners in their favorite companies. You can explain how these institutions developed and what they are for.
This alone will make quite the impression. Crucially, to be an owner of stocks changes a person’s perception of their own interest. Instead of joining the culture of hate, the owner might start to cheer on the success of business and enterprise.
If they own McDonald’s stock, eating a Big Mac takes on all-new significance.
[Editor's Note: A fantastic book that embodies this idea is Justin Ford's Seeds of Wealth. It is beautifully written, accurate, and great for teaching kids how to save, invest and build real wealth. It could be the beginning of a new life or a change that could launch them into a productive career. It's an excellent start.
Click here to get more details on the book and claim a 50% discount.]
They will become curious about what makes a firm succeed or fail. They will be interested to discover just how tricky it is to interpret price signals. They will discover what it means to find bargains and avoid overpriced stocks. They’ll get interested in what the buy and sell signals are.
One teen I know first attempted to buy stock that had a history of going up, but as soon as he bought it, it turned south. Learning his lesson, he started to buy stock that had a history of going down, except that after purchasing that one it went down further. Crucial lesson: The future is unknown, and entrepreneurial judgment is an inescapable fact of life.
This tutorial period alone will open up a whole new world. And unlike knowledge obtained solely from books, the mind is more focused when we are talking about real resources and the opportunity to actually do something with them.
Maybe they will start using their smartphones for market research, rather than just texting and Facebooking.
These days, too, there are so many research materials online. Every chart is a click away. Online accounts provide access to vast data. But what do these charts mean? The teen will find that opinions on particular stocks are all over the place and that no one in this world knows anything for sure. Yet you still have to decide, still need to commit. And the teen will also find that there are times when it is best to sit out and stay in safe places without committing.
There is a low probability that the teen will make money this way, and that’s OK. He or she will learn from this experience just how hard money is to come by. Maybe that doesn’t sound like a revelation, but it truly is for many young people today who have never worked, never experienced that relationship between labor and wages, and never had to make economizing decisions.
It is good, too, not to manage their accounts in every detail. They should be permitted to make some judgments in a real sense. You can suggest that the teen put half in relatively safe places, just to be somewhat protected from the downside. But with the other half, they can take some risks. Penny stocks are a blast. And they can buy into their favorite companies, like Facebook or Nike, or a restaurant chain or two — stocks that tap directly into their experiences as consumers. Maybe gold stocks are a good idea — and here is an opening to talk about the relationship between precious metals and hard economic times.
Instead of just being consumers, they will begin to think of themselves as being on the producers’ side. They will begin to appreciate just what an awesome responsibility it is to be the CEO of a company who’s trying to deal with a huge consumer base on one hand and a massive number of stock owners who can bail or buy at the slightest whim on the other.
To become part of this is a mind-opening experience. One thing a teen will discover quickly: This is not the easy path to riches. In fact, chances are the teen will lose money within the first weeks and then become risk averse, wanting to move entirely into cash. This is not a good path, however, because, as you can explain, you lose all potential for upside. If they hold a stock that has been creamed but then recovers, they will see with their own eyes the advantages that come from outsmarting the mob, being contrarian, and thinking more critically and outside the box.
What if, after a year or two of account management, the teen ends up losing most of the money? Well, there is a lesson there. Maybe as a society we should show a bit more respect for successful investors and capitalists? What if it is a struggle to keep the account in the black and it never really takes off? No problem. But if the account balance goes up, there will be clear reasons for it. Some stocks and funds did well, and those are balanced out against those that did badly. Just discovering the reasons is an education in itself.
Consider the gift of education you have given. Parents spend such amounts all the time on private lessons, trips, tutorials, clothes, etc. This is an expenditure that deals in some measure with the great problem that faces the new generation, their near total isolation from the real world that they will soon have to engage in fierce competition.
This one gift could be a turning point in their lives, lifting them out from the rabble that drifts by year after year without giving them a clue about what is going on in the world. It might be the beginning of a brilliant capitalist career and the foundation for serious success in life. It’s a risk, but so is everything with payoffs. They will learn that lesson too.
To manage real money provides a kind of education you can’t get sitting at a desk and listening to someone else’s view of what you should know. To manage real resources is the beginning of a great process of discovering what makes the world work.