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Ryan McMaken

Ryan McMaken

Ryan McMaken is the editor of Mises Wire and The Austrian. Send him your article submissions, but read article guidelines first. (Contact: email; twitter.) Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

Articles by Ryan McMaken

The Trillion-Dollar Coin Idea Is Just Another Way to Rip Us Off

15 days ago

Here we go again. Every few years in Congress there is a purely political battle over the debt ceiling. We’re supposed to be horrified and worried that the US might default on some of its debt. Some commentators will insist the US has never defaulted, and that default be a disaster. (That’s wrong, by the way. The US has defaulted before.)
But these debt ceiling debates always end the same way. Congress ends up increasing the debt ceiling and the US’s national debt continues to spiral upward.
During all the theatrics over the debt ceiling, however, many strange ideas are put forward as a supposed means to avoiding a shutdown. One of these is the “trillion-dollar coin” idea. The general premise is that the government can do an end run around the debt ceiling

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Why the Fed Is Bankrupt and Why That Means More Inflation

17 days ago

In 2011, the Federal Reserve invented new accounting methods for itself so that it could never legally go bankrupt. As explained by Robert Murphy, the Federal Reserve redefined its losses so as to ensure its balance sheet never shows insolvency. As Bank of America’s Priya Misra put it at the time:
As a result, any future losses the Fed may incur will now show up as a negative liability (negative interest due to Treasury) as opposed to a reduction in Fed capital, thereby making a negative capital situation technically impossible.
That was twelve years ago, and it was all academic at the time.
But in 2023, the Fed really is insolvent, although its fake post-2011 account doesn’t show this. Nevertheless, the reality is that the Fed’s assets are losing value at the

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The Fed Is a Purely Political Institution, and It’s Definitely Not a Bank.

18 days ago

Those who know Wall Street lore sometimes recall that Fed chairman William Miller—Paul Volcker’s immediate predecessor—joked that most Americans believed the Federal Reserve was either an Indian reservation, a wildlife preserve, or a brand of whiskey. The Fed, of course, is none of those things, but there’s also one other thing the Federal Reserve is not: an actual bank. It is simply a government agency that does bank-like things.
It’s easy to see why many people might think it is a bank. “Bank” is right there in the name of the twelve regional banks that make up the system: for example, the Federal Reserve Bank of Kansas City. The Fed also enjoys many titles that make it sound like a bank. It’s sometimes called the “lender of last resort.” Or it is sometimes

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Real Wages Fall for the Twenty-First Month as Rent and Food Prices Keep Rising

20 days ago

The federal government’s Bureau of Labor Statistics (BLS) released new price inflation data today, and according to the report, price inflation during the month decelerated slightly, coming in at the lowest year-over-year increase in fifteen months. According to the BLS, Consumer Price Index (CPI) inflation rose 6.5 percent year over year during December, before seasonal adjustment. That’s the twenty-second month in a row of inflation above the Fed’s arbitrary 2-percent inflation target, and it’s fifteen months in a row of price inflation above 6.0 percent.
Month-over-month inflation fell for the first time in five months, with the CPI falling 0.1 percent from November to December.
December’s year-over-year growth rate is down from June’s high of 9.1 percent,

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The Constitution Failed. It Secured Neither Peace nor Freedom.

25 days ago

If one cares to look, it’s not difficult to find numerous columns written for mainstream news outlets announcing that the US Constitution has failed. This ought to raise the question of “failed to do what?” The answer depends largely on the one claiming the constitution has failed. On the Left, claims of constitutional failure generally revolve around the idea that the constitution doesn’t empower the federal government enough. For example, Chris Edelson of the American Constitutional Society believes the constitution has failed because the US government hasn’t done enough about global warming and racial injustice. Ryan Cooper at The Week says the constitution is a failure because of gerrymandering and not enough “democracy.” On the other hand, many classical

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Money-Supply Growth Turns Negative for First Time in 33 Years

January 4, 2023

Money supply growth fell again in November, and this time it turned negative for the first time in 33 years. November’s drop continues a steep downward trend from the unprecedented highs experienced during much of the past two years. During the thirteen months between April 2020 and April 2021, money supply growth in the United States often climbed above 35 percent year over year, well above even the “high” levels experienced from 2009 to 2013.
Since then, the money supply growth has slowed quickly, and we’re now seeing the first time the money supply has actually contracted since the 1980s. The last time the year-over-year change in the money supply slipped into negative territory was in February of 1989.
At that time, negative growth continued for 12 months,

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How Christmas Became a Holiday for Children

December 24, 2022

During the 1980s, millions of American children pored over the Toys ‘R’ Us catalog, daydreaming about what toys we hoped to receive in a few weeks on Christmas morning. After all, by the mid twentieth century, Christmas—for countless middle-class households with children— had become more or less synonymous with an enormous number of gifts for children in the form of toys and games. Barbie playsets and a myriad of action figures were routinely advertised during Saturday morning cartoons and in Sunday print ads in the weeks before Christmas. We kids of the 80s were sure to tell our parents what toys we "needed."
We weren’t the first generation with such thoughts, of course. As Jean Shepherd (1921-1999) recounts in the beloved film A Christmas Story—set in

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Since Covid Lockdowns, New York Lost More of Its Population than Any Other State

December 23, 2022

Florida Governor Ron DeSantis has frequently bragged that Florida is in high demand among people looking to relocate. In a new report released this week from the Census Bureau, it seems that he’s been correct. According to the Bureau’s report: 
After decades of rapid population increase, Florida now is the nation’s fastest-growing state for the first time since 1957, according to the U.S. Census Bureau’s Vintage 2022 population estimates released today.
Florida’s population increased by 1.9% to 22,244,823 between 2021 and 2022, surpassing Idaho, the previous year’s fastest-growing state. 
In raw numbers, that amounts to an increase of about 416,000 people, which is the size of a medium-sized American city. This quickly leads to the question of why so many people

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Secession: Why the Regime Tolerates Self-Determination for Foreigners, but Not for Americans

December 21, 2022

Opponents of secession in the United States often choose from several reasons as to why no member state of the United States should be allowed to separate from the rest of the confederation. Some antisecessionists say it’s bad for national security reasons. Others oppose secession for nationalistic reasons, declaring that “we”—whoever that is—shouldn’t “give up on America.”
Antisecessionists Believe Self-Determination Leads to “Bad” Laws
One of the most popular reasons to oppose secession is that people will pass “bad” laws in places allowed to live under their own governments. That is, we’re told that without federal “oversight” over state and local communities, independent states would deny basic “rights” such as getting an abortion, voting without ID, or

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The Fed’s Powell Admits “I Don’t Know What We’ll Do” in 2023

December 18, 2022

The Federal Reserve’s Federal Open Market Committee (FOMC) on Wednesday announced it will raise the target federal funds rate by 50 basis points, bringing the target rate to 4.5 percent. Wednesday’s rate hike followed four hikes in a row of 75 basis points, and is the smallest rate hike since March.
According to the FOMC’s press release, the committee voted unanimously for the half point hike, pointing out that “[price] inflation remains elevated” while also dogmatically (and wrongly) placing the blame for a year of 7-point-plus price inflation on “supply and demand imbalances related to the pandemic” and “Russia’s war against Ukraine.”
The 50 basis-point increase had been predicted by many finance pundits following Tuesday’s print of a 7.1 percent CPI inflation

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Total Employed Workers Fell Again in November as Savings and Incomes Fall

December 5, 2022

Total employed workers fell for the second month in a row in November, dropping nearly 400,000 workers below the pre-pandemic peak in February 2020. According to new employment data released by the Bureau of Labor Statistics on Friday, the current population survey shows employed workers fell to 158,470,000 in November, down 138,000 from October’s total of 158,608,000. This continues a nine-month trend in which the total number of employed persons has moved sideways.
From March 2022 to November, the number of total employed persons has only increased by 12,000 people, rising from about 158.45 million to 158.47 million. With November’s drop, this also puts total employment in November below the peak of 158.8 million in February 2020. In other words, the household

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On Secession and Small States

December 2, 2022

The international system we live in today is a system composed of numerous states. There are, in fact, about two hundred of them, most of which exercise a substantial amount of autonomy and sovereignty. They are functionally independent states. Moreover, the number of sovereign states in the world has nearly tripled since 1945. Because of this, the international order has become much more decentralized over the past eighty years, and this is largely due to the success of many secession movements.
The new states are smaller than the ones that came before them, however, and this all reminds us that there is a basic arithmetic to secession and decentralization in the world. Since the entire surface of the world—outside of Antarctica, of course—is already claimed by

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Money-Supply Growth in October Fell to a 39-Month Low. A Recession Is Now Almost Guaranteed.

November 29, 2022

Money supply growth fell again in October, dropping to a 39-month low. October’s drop continues a steep downward trend from the unprecedented highs experienced during the thirteen months between April 2020 and April 2021. During that period, money supply growth in the United States often climbed above 35 percent year over year, well above even the “high” levels experienced from 2009 to 2013.
During October 2022, year-over-year (YOY) growth in the money supply was at 2.59 percent. That’s down from September’s rate of 3.91 percent, and down from October 2021’s rate of 5.94 percent.
The growth rates during most of 2020, and through April 2021, were much higher than anything we’d seen during previous cycles, with the 1970s being the only period that came close.

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How Easy Money Fueled the FTX Crypto Collapse

November 21, 2022

The collapse of the crypto exchange FTX may prove to be a canary in the coal mine of the easy-money fueled crypto bubbles. FTX’s collapse has exposed just how little due diligence is actually taking place among investors who are apparently willing to put large amounts of cash in whatever place looks like the hottest new thing and promises—without convincing evidence—big-time returns.
Indeed, FTX seems to be a textbook example of how many investors are easily hoodwinked by media narratives about the latest investment genius who has magically discovered some new way of delivering unprecedented returns.
The “genius” in this case is Sam Bankman-Fried, a 30-year old MIT grad who ran FTX into the ground and had placed control of his clients’ money in the hands in the

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The Housing Boom Is Already Over. Get Ready for Even Higher Prices.

November 19, 2022

As mortgage rates have risen this year, the demand for home purchases has fallen. That has spelled trouble for the home construction business. Homebuilder confidence dropped for the 10th straight month in October. The decline in builder sentiment reflects what economist Ian Shepherdson describes as “housing … in free fall. So far, most of the hit is in sales volumes, but prices are now falling too, and they have a long way to go.” The University of Michigan’s index of buying conditions for homes has fallen to the lowest level since 1982.
Meanwhile, as of this week, mortgage demand for home purchases is “down 41% from a year ago and close to a seven-year low.” 
Naturally, this has been a sizable drag on the sale of newly constructed homes. According to the Census

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“Antidemocratic” Just Means “Something the Regime Doesn’t Like.”

November 11, 2022

“Democracy” is the new “revolutionary.”
In the old Marxist regimes, anything that displeased the ruling communist regime was said to be contrary to “the revolution.” For example, in the Soviet Union, national leaders spoke regularly of how the nation was in the process of “a revolutionary transformation” toward a future idealized communist society. Many years after the actual revolution and coup d’etat in Russia in following the collapse of Tsarist Russia, the word “revolution” had “positive connotations and was considered a source of legitimacy in official ideology.”
Revolutionary became a synonym with “a thing we like,” and it’s no surprise that a 1952 soviet legal manual lists “counterrevolutionary” activities as among the “political crimes … deemed generally

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The Number of Employed Workers Fell in October and Price Inflation Continues to Outpace Wages

November 7, 2022

In another sign of weakness for the job market, the total number of employed persons in the United States fell, month over month, in October. That’s the third time in the last seven months this total has fallen, dropping to approximately 158 million.
According to new employment data released by the Bureau of Labor Statistics on Friday, the current population survey shows 328,000 fewer people were employed in October than in September, seasonally adjusted.

This continues a seven-month trend in which the total number of employed persons has moved sideways. From March 2022 to October, total employed persons has only increased by 150,000 people, rising from about 158.45 million to 158.6 million. With October’s drop, this also puts total employment in October

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Without Easy Money from the Fed, Home Prices Will Keep Falling

October 30, 2022

Home price growth of the sort we’ve seen in recent years simply cannot be sustained without a continued commitment to easy money from the central bank, and it shows.
Home prices continued to slide in August as the economy cooled, and as the Fed hit the Pause button on quantitative easing while allowing interest rates to rise. Home prices in August were 13.0 percent higher nationally compared with August 2021, according to newly released data from the S&P CoreLogic Case-Shiller Home Price Index. That is down from a 15.6 percent annual gain in the previous month. This is a big shift downward, and as CNBC reported Tuesday, “The 2.6% difference in those monthly comparisons is the largest in the history of the index, which was launched in 1987, meaning price gains are

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Latest Recession Alarm: Money-Supply Growth Fell in September to a 37-Month Low

October 30, 2022

Money supply growth fell again in September, dropping to a 37-month low. August’s drop continues a steep downward trend from the unprecedented highs experienced during much of the past two years. During the thirteen months between April 2020 and April 2021, money supply growth in the United States often climbed above 35 percent year over year, well above even the “high” levels experienced from 2009 to 2013.
During September 2022, year-over-year (YOY) growth in the money supply was at 3.92 percent. That’s down from August’s rate of 4.54 percent, and down from September 2021’s rate of 7.02 percent.
The growth rates during most of 2020, and through April 2021, were much higher than anything we’d seen during previous cycles, with the 1970s being the only period that

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This Is Why the Yield Curve Just Inverted, Signaling a Coming Recession

October 29, 2022

In recent decades, every instance in which the economy contracted two quarters in a row has coincided with a recession. Nonetheless, the Biden Administration and the leadership at the Federal Reserve insist there is no recession now, nor is one even in the works.
On the other hand, declining GDP growth, rising credit card debt, disappearing savings, and falling disposable income all point to recession. And now one of the most closely watched recession indicators is now flashing red: the yield curve inversion.
As The Wall Street Journal put it Wednesday:
The spread between yields on the three-month U.S. Treasury bill and the benchmark 10-year note has inverted several times since Tuesday’s trading session. Inversions have preceded both the 2008 financial crisis and

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Thanks to the Fed, You’ll Work More this Year to Keep Last Year’s Standard of Living

October 14, 2022

According to the establishment survey of employment, released last week by the Bureau of Labor Statistics, total employment increased, month-over-month by 263,000 jobs. The “job market stays strong” reads one CNBC headline, and the new jobs print was hailed as a great achievement of the Biden Administration by MSNBC pundit Steve Benen.
Yet, the employment data is possibly the only data that looks good right now, and that’s not much comfort since employment is a lagging indicator of the economy’s direction. In fact, if we look beyond the employment survey, what we find is an economy where real earnings are falling, savings are falling, and more people are taking on second jobs to make ends meet.
The first indicator of this is the fact that while total jobs have

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The Fed Is Finally Seeing the Magnitude of the Mess It Created

September 24, 2022

When asked about price inflation in his Sunday interview with 60 Minutes, President Biden claimed that inflation “was up just an inch…hardly at all.” Biden continued the dishonest tactic of focuses on month-to-month price inflation growth as a means of obscuring the 40-year highs in year-over-year inflation. This strategy may yet work to placate the most ignorant voters, but people who are paying attention know that price inflation continues to soar.
Thus, while Biden may be pretending that it’s all no big deal, the Federal Reserve knows it better do something about price inflation which even the Fed now admits shows no signs of even moderating.

Another 75 Basis Points
On Wednesday, the Fed’s Federal Open Market Committee announced that it will again raise the

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Central Bankers Are Gaslighting Us about the “Strong Dollar”

September 22, 2022

On February 8, the Japanese yen fell to a 24-year low against the dollar, dropping to 143 yen per dollar. Not much has changed since then with the yen hovering between 142 and 144 per dollar. In September of 2021, one only needed 109 yen to buy a dollar.
Overall, the yen has dropped 21 percent against the dollar over the past year, yet Japan’s central bank apparently has no plans to change course. Nor should we expect it to do so.  Japan’s debt load has become so immense that any attempt to raise interest rates or otherwise tighten monetary conditions would prove extraordinarily painful.  So, it’s no surprise the BOJ is now positioned to become the world’s last central bank clinging to negative interest rates.
It’s Not Just Japan
The yen is sliding the most among

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Why the Fed Usually Ignores its Mandate for “Stable Prices”

September 21, 2022

In recent years, Congress has attempted to add various new mandates to the Federal Reserve’s mission. In 2020, Democrats introduced the “Federal Reserve Racial and Economic Equity Act.”  Then, in 2021, pundits and politicians were telling us that it’s the Fed’s job to “combat climate change.” These are just the latest efforts to use the enormously powerful central bank to achieve political ends to the liking of elected officials.
This is a helpful reminder, of course, that the Fed is not independent from politics. The Federal Reserve has never been politically independent, and it certainly isn’t so now. Fed independence is a fairy tale academic economists like to tell their students. The debate over new mandates has also highlighted the fact the Fed already has no

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Molinari Explains the Difference between Monarchy and Popular Government

September 18, 2022

With the impending burial of the United Kingdom’s Queen Elizabeth II, republicans from London to Sydney have ramped up their efforts to end the British monarchy. The resulting war of words between monarchists and their opponents has highlighted the sheer diversity of opinions over the desirability of monarchy. Indeed, it would be impossible to enumerate all the different criteria on which different groups and individuals judge monarchy as an institution. However, for those of us who favor the ideology known as laissez-faire liberalism—also known as “classical” liberalism or libertarianism—a fundamental question we must ask ourselves in judging monarchies is whether or not they are useful in limiting state power.
This is not a new question, and fortunately the

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August’s Price Inflation Soared, and That Means Earnings Fell Yet Again

September 16, 2022

The federal government’s Bureau of Labor Statistics released new price inflation data today, and the news wasn’t good. According to the BLS, Consumer Price Index (CPI) inflation rose 8.3 percent year over year during August, before seasonal adjustment. That’s the seventeenth month in a row of inflation above the Fed’s arbitrary 2 percent inflation target, and it’s six months in a row of price inflation above 8 percent.
Month-over-month inflation rose as well, with the seasonally adjusted CPI rising 0.1 percent from July to August. With the exception of July’s month-over-month figure, which was zero, monthly CPI inflation has risen twenty-seven months in a row.
August’s increase keeps price inflation near forty-year highs. June’s year-over-year increase of 9.1

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GDP Shrinks Again as Biden Quibbles over the Definition of “Recession”

July 31, 2022

The U.S. economy contracted for the second straight quarter during the second quarter this year, the Bureau of Economic Analysis reported Thursday. With that, economic growth has hit a widely accepted benchmark for defining an economy as being in recession: two consecutive quarters of negative economic growth.
According to the BEA, the US economy contracted 0.9 percent during the second quarter in the first estimate of real GDP as a compounded annual rate. This follows the first quarter’s decline of 1.6 percent. MSNBC reports:
The decline came from a broad swath of factors, including decreases in inventories, residential and nonresidential investment, and government spending at the federal, state and local levels.
Gross private domestic investment tumbled 13.5%

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How the World Embraced Nationalism, and Why It’s Not Going Away Soon

July 19, 2022

Perhaps one of the more astute observers of Russian foreign policy in recent decades has been John Mearsheimer at the University of Chicago. He has spent years warning against US-led NATO enlargement as a tactic that would provoke conflict with the Russian regime. Moreover, Mearsheimer has sought to explain why this conflict exists at all. Why, for example, doesn’t the Russian regime just accept US-led expansionism in the region? Or perhaps, more precisely, why have so many Russians continued to support Vladimir Putin in his efforts to counter US influence in the region? After all, many countries—Poland and Estonia, for instance—have benefited materially from embracing “the West.” For Mearsheimer the answer to this question is related to the question of why the

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Inflation Hits 9.1 Percent after Months of Empty Talk at the Fed

July 17, 2022

The US Bureau of Labor statistics released new Consumer Price Index inflation estimates this morning, and the official numbers for June 2022 show that price inflation has risen to 9.1 percent year over year. That’s the biggest number since November 1981, when the price growth measure hit 9.6 percent year over year. The month-over-month measure surged as well, with the CPI measure hitting 1.4 percent. That’s the highest month-over-month growth since March 1980, when the measure hit 1.5 percent.
June marks the fifteenth month in a row during which CPI inflation has been more than double the Fed’s 2 percent target inflation rate. CPI inflation has been more than triple the 2 percent target for the past nine months, and year-over-year growth in CPI inflation has

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To Avoid Civil War, Learn to Tolerate Different Laws in Different States

July 4, 2022

Most commentary on the Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization—which overturns Roe v. Wade—has focused on the decision’s effect on the legality of abortion in various states. That’s an important issue. It may be, however, that the Dobbs decision’s effect on political decentralization in the United States is a far bigger deal.
After all, the ruling isn’t so much about abortion as it is about the federal government’s role in abortion. State governments are free to make abortion 100 percent legal within their own borders. Some states have already done so. The court’s ruling limits only the federal government’s prerogatives over abortion law, and this has the potential to lead to many other limitations on federal power as well. In this

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