Friday, December 23, 2011

Alex Merced discusses Ron Pauls CNN Interview with Gloria Borger

Alex Merced discusses Ron Pauls CNN Interview with Gloria Borger

Complete Gloria Borger Interview:

Ron Paul Interview with Wolf Blitzer 2008:

Ron Paul Google Interview from 2007 (very good):

Why Ron Paul is good for Minorities and the Poor:

Ron Paul is not Racist:

Ron Paul’s “Liberty Defined”:

Ron Paul in 1988:

Saturday, December 10, 2011

Libertarian for Congress: Richard C. Ehrbar III

For Immediate Release: 12/9/11

 OSU Undergrad Files Congressional Petition in 3rd District as Libertarian
Student believes liberty message, diverse district, and current political environment are recipe for libertarian victory

COLUMBUS, Ohio - Ohio State University undergraduate Richard C. Ehrbar III filed petitions to the Franklin County Board of Elections on Wednesday as a Libertarian Party candidate for congress in Ohio’s new 3
rd District.

Ehrbar filed his petitions after spending the previous months reaching out to numerous areas in and around Ohio’s capitol city.

Located mostly within the Interstate 270 boundary surrounding Columbus, the new 3rd District is a diverse blend of college campuses, businesses, and a large inner city population.

Ehrbar believes the community’s cultural diversity parlayed with the current political environment make the Franklin County district fertile ground for his inaugural campaign for office.

“Our campaign is predicated upon three cornerstones: peace, liberty, and sound money”, Ehrbar said. “Students in the district are concerned with ending the wars and finding jobs; inner city residents are desperate for prosperity and respect for their personal liberties; and small business owners need significant tax relief and freedom from over-burdensome regulatory constraints. Our campaign addresses each of these issues with a constitutional solution.”

With HB 318 still lurking in the Ohio Legislature, the possibility exists that Congressional candidates will have to file petitions once more in order to qualify for the June 2012 primary. Wednesday’s filing deadline may end up being extended until March 2012.

When asked if the uncertainty would impact campaign strategy, Ehrbar replied: “We are already going to be out campaigning for peace, so this just adds a few signatures to the agenda. Our team is ready to put things in high gear. With democrats focusing on primary battles we may get a chance to get a leg up in the race because we can campaign for the general election while they beat each other up preparing for the primary.”

Ehrbar for Congress was launched in late August 2011 in attempts to restore Peace, Liberty, and Sound Money to the American people through constitutional governance. RIchard C. Ehrbar III is seeking to become the first candidate from the Libertarian Party to be elected to the U.S. House of Representatives.


Contact information:

Media inquiries and interviews (for immediate response):
419 806 6120
On the web:   

Ehrbar for Congress   *   1490 Indianola Avenue   *   Columbus, Ohio 43201

Sunday, November 13, 2011

Monday, November 7, 2011

Freedom Rising - Libertarian Transformational Seminars

To Learn More about Freedom Rising go to

Buy Alex Merceds books at

Thursday, June 16, 2011

Recessions and Depressions in American History

Recessions and Depressions in American History
by Alex Merced

                A common narrative of depressions during the period on which the United States was on the classical gold standard (1873-1933)[1] is typically mischaracterized to be the fault of the gold standard itself. When given closer examination it’s easy to see that these downturns had less to do with the lack of an elastic money supply or central bank but more to do with structural changes in the economy and market corrections to speculative bubbles usually due to credit expansion. So what we’ll take a look reoccurring themes of economic downturns during and after the gold standard to see that no matter what is the monetary system the same factors play into recessions and depressions.

Abrupt Changes to the Monetary System

                In the history of the United States the monetary system has changed fairly regularly every 40-50 years. First major change is the ending of the First US bank in 1811 at the hands of Thomas Jefferson then only a few years later another major change with the Second US Bank which was then later also put to an end at the hands of Andrew Jackson. From 1936 to 1973 the United States was on a pseudo free banking system (still heavily regulated on the state level). From 1973-1933 the United State adopted a gold standard which was briefly abandoned in the 1933 – 1944 with a FIAT (paper) monetary system. In the 1944 the Bretton Wood Accord resulted in the Bretton Woods system which was a highly specialized gold standard. The Bretton Woods system eventually fell apart in 1971 and since we’ve been on a FIAT monetary system which has been able to sustain itself due to the reality that after the fall of Bretton Woods most nations found themselves which large reserves of US Dollars giving them a stake in the value of the US dollar despite US Domestic policy.

                This is all important since the years preceding many of the changes in the monetary system result in economic downturns which is to be expected. When the monetary system changes abruptly it’s reasonable to think that this may alarm the banking sector and they may withdraw from taking too much risk until comfort is developed in the monetary environment, this period of discomfort results in credit contraction. So downturns in the early 1870’s (transition to gold standard) and the double dip recession in the mid 1930s (transition off the gold standard) can be explained by this uncertainty in the environment.

Structural Changes from a Peace/War Economy

                If you follow the beginnings and ends of most wars, they are usually also marked by economic downturns which can be easily understood. When an economy must make the transition into a war economy the entire structure of production will have to retool itself to produce the goods needed for the war. This creates a massive demand for credit as factories shift from producing consumer goods to military goods. At the same time as people are sent off to fight in the war, this results in a huge drop of business for many consumer oriented businesses which are also suffering from increases in costs since so much of the productive capacity of the economy is being used military goods meaning the remaining capacity is more expensive to use. So with the reduction in consumer business many people end up decreasing their savings to compensate for higher prices and scarce production which means the available savings to be lent out drops while the demand for it is increasing (factories retooling). When the war is over, the opposite must happen causing another disruption in the economy.

                Taking this into consideration we see that World War I is perfectly bookended by recessions in 1913/14 and 1919/20 (note 1913 was also major change to the monetary system with the creation of the Federal Reserve).  World War II began at the end of the double dip recession in 1938, yet despite economic numbers this transition and the war period was not a period of great prosperity.[2] During this period of time there was rationing of consumer goods such as meats and fuels was rampant because government had got into the habit of price fixing to keep the inflation numbers from reflecting the economic reality of having less productive capacity to use on the goods people needed domestically. Wartime is not a good time for the economy and economist Robert Higgs has done great work explaining the problems with traditional economic statistics during a wartime economy. In the end, when World War II ended, sure enough a recession occurred in 1945.

                So whether it was during World War I which happened during the classical gold standard or World War II which occurred under a fiat paper system except in its last few years when the Bretton Woods System was put in place (1944), we see that economic downturns had no definitive tie to the gold standard as many mainstream economists try to make.

Other Trends

                If we take a look at other downturns during the classical gold standard we see that they are very similar to downturns in today’s world. For example the 1929 stock market bubble is quite similar to the dot com bubble in 2000 where expansion of credit from the central bank resulted in a bubble in stock prices.

                The panic of 1893 is quite similar to the housing crisis that began in 2008. The panic 1893 occurred due government favor when it came to railroad investment (similar to government with housing in modern times), thus many investors invested heavily in the production of railroads (similar to investment in housing over the last few decades). When the Reading Railroad failed it caused a stock market crash and a collapse of the financial system again very similar to the fallout of 2008.


                Economic Downturns as with any other economic event are the aggregated results of individual motivation and decisions. Modern day economist may spend much of their time claiming “when number x goes down economic consequence y occurs”, but what is it about individual motivation and decisions in the economy that cause variable x and y. luckily, economist that spend time looking at these human elements are becoming more influential everyday whether it be a Robert Murphy of the Mises Institute or a Dan Ariely of Duke University, economics is slowly but surely returning to where it began, studying how decision and choice create the world we see around us.


Friday, March 4, 2011

Lesser of Two Evils?: Taxes versus Deficits

Lesser of Two Evils?: Taxes versus Deficits
by Alex Merced

Hello everyone, in this months article what I wanted to talk about was the effects of higher taxes versus deficit spending. While from a political view, deficit spending does less political damage; the more important paradigm is economics and liberty as these are the factors that determine the quality of life of you and those to come. First off let's understand how both function.

Increased Taxation

If government is to increase taxation, this means more of a persons earnings must be taken whether through a direct tax like an income tax which is virtually unavoidable, or an indirect tax such a sales tax which to some extent you can control your payment of. Although one must understand what happens when someone is taxes, they are not only being stolen of their money, but since their time was spent to labor for that money or was earned from money you invested that originally came from you or someone elses labor. If more of your wages are taken, it means more of your labor is needed to maintain the same amount of purchasing power. If they decide not to labor more than then you won't have the same purchasing power meaning you have a choice, save less for rainy day, or cut back on your consumption.

The Bottom Line, taxes take away the fruits of your labor and time which you can't get back. Although, the effect taxation is to reduce CURRENT savings/consumption in the time period the tax takes place. (of course there are larger changes in institutional structures, but that's beyond the scope of this article)

Deficit Spending

If government does not want to raise taxes then it has to borrow the money to make up the deficit in it's budget. This money that is borrowed is received generally from bank lenders who are lending out the savings from a previous period, that would otherwise be lent out to other parties usually to invest in growing or starting new enterprises. If the money is not borrowed out the local or global stock of savings, then a financial intermediary like a central bank can be used to increase the money supply and offer to buy this debt from the banks to encourage the banks to make the loan. This increase in the money supply has the same effect of robbing the savings stock by devaluing the currency the stock of savings is denominated in, and also has the effect of encouraging speculation with that savings stock because of the drops in interest rates that is caused by this increase. Even worse, these loans must still be paid off from future tax increases generally on people who had nothing to do with the need to borrow initially.

Bottom Line, Deficit spending pillages savings from the past to be repaid from robbing/taxing the wages of the future.


Whether you find one of these tactics to fund intrusive monopolies of force (government) preferable really depends on WHEN you want to steal from: The Past, The Present, or the Future. No matter what the result is the change in peoples available resources from this financing does change the outcome of economic and social calculation of individuals in any of these periods of time causing material changes to how institutions in society are created, developed, or even destroyed.

Wednesday, February 2, 2011

Permanent vs Temporary Tax Cuts

Permanent vs Temporary Tax Cuts
by Alex Merced

  Let's take a moment and put taxes into perspective, at the end of the day taxes are a price like any price and thus it should have similar effects on behavior like other prices do. A temporary tax cut is like a sale at your favorite store, to create temporary spur of demand to move stagnant inventory. Sales can be a very useful tool for liquidating inventory that otherwise was not selling at full price, although you generally don't put goods that turnover regularly on sale since there is no benefit to doing so. A permanent tax cut would be similar to when a good is reduced in cost to supply, so the savings then gets passed along to the end consumer which just reflects increased productivity in producing that good.

 One may say wouldn't a store have permanent price reductions if demand drops for a particular good, which is entirely possible but once the current inventory is liquidated it's suspect that they may replace the inventory.

 Returning to taxes, taxes are just the price one pays for government and similarly tax incentives can be used for governments to compete (especially between states). Although the effects of Temporary over Permanent is most important when it comes to special tax programs to incentivize purchases of goods. For example a tax credit for investment in capital equipment.

 A temporary credit would cause businesses to make future purchases of capital goods now instead of later, so at the end of the day your moving purchases that would of already occurred to an earlier date in time, which just results in a slump in that industry in the future from which those sales were taken.

A permanent tax credit would reduce the cost regularly scheduled capital expenditures freeing up resources for other expenses which can be used for more investment although since the credit is permanent there is no incentive to move future purchases to the present allowing purchases to remain more evenly distributed inter-temporally (over time).

So when discussing different types of tax incentives it's important to realize that whether it's permanent or temporary has an effect on human behavior and outcome of such policies.

Friday, January 7, 2011

Interest Rates and Risk

Interest Rates and Risk
by Alex Merced

In plenty of articles I've written or videos I've created I've discussed how interest raes can cause mal-investment and alter the structure of the economy. The increasing of the money supply and lower of interest rates as described by Mises, Hayek, and Rothbard although how money supply increases occur and how does the mal-investment manifest itself can be different from econom to economy. In this article I want to discuss how central banks control over he money supply and involvement in overnight lending transforms into mal-investment.

What is Mal-Investment?

A mal-investment occurs when actors in the economys behavior is altered by distortion of economic signals such as prices, interest rates, and the visible supply and demand of goods. These signals may be distorted by a variety of methods, sometimes by private actors through corruption or fraud although private actors are limited in resources so their is an actual abosolute limit to their fraud and corruption on top of legal ramifications if caught. More important these signals can be distorted by government regulations, laws, and taxes imposed by this institution which has potentiall limitless resources and little fear of legal ramifications which magnifies it's ability to distort economic signals beyond any private actors.

What is the Role of Risk?

If your familiar with my opinion of economics, you'll be aware of how big a role I think risk plays in a sound economy being one of he most important if not most important signals an economy produces. People always complain of corporate and individual greed which is really just a function of an economic actors perceived risk of entering cerain actions. Government more than an other actor distorts the risk signal through guaranteed loans, insurance schemes like FDIC and Unemployent, and tax and monetary subsidies which distort risk signals which magnify what many may perceive as greed.

So what about interest rates?

Interest rates which are often seen as the cost of capital, or the cost to have someone defer consumption so you can consume now can also be seen as the cost of taking financial risk. For example, if you labor for a wage and take risk with those wages and those wages are losts you may have to borrow money with interest in order to buy food or make rent. This same phenomenon occurs with banks in which rates such as the discount rate and fed funds represent the cost of making riskier investments, so if these rates are low then the banks will be willing to make risker loans as the cost to borrow capital if the risks don't pay off is low. Does this mean inerest rates should always be high so economic actors don't take excessive risks? Not at all.

Taking risks can be very rewarding, although having some cushion to limit the effects of a risk taking is also important which is an importat function of savings. Savings serves as a safe landing pad for individuals and for the financial system as a hole so they can take larger risks to grow the economy, so when the savings landing pad is plentiful the economy and banks are signaled to take larger risks via lower interest rates. When the individuals havn't saved for a rainy day, the economy signals for less risk taking via higher rates.

Central Banks via open market operations will purchase government securities (treasury bonds) and increase the money supply. This increase in the supply which enter via bank reserves appears like savings, although individuals don't truly have rainy day fund but the banks are flush with cash which distorts interest rates and the risk signal it gives out. On top of it, if the central bank can keep rates such as the fed funds rate and the discount rate low, banks will feel the risks of taking risk with these artificial reserves to be low yet the economy hasn't ceated the savings landing pad for such risk taking which ends in the boom and bust cycle.

This one way the austrian business cycle can manifest itself, money supply can increase in particular industry via government guarantees for loans for a particular industry increasing money readil lendable to tha industry creating price bubbles. Local towns may grant tax subsidies for people film a movie in their town creating an influx of cash to temporarily enter the town having a similar effect of the local economy. Although at the end of the day this whole process is a function of Interest Rates and Risk.


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