“Good corporate citizenship” is a familiar song that has topped the charts for far too long. Every two decades, it comes back with a slight variation, finding wild popularity. The new version arrived in the mid-Eighties with suggestive lines about corporate behavior. The traditional corporate enterprise, it sings, should modify its goals not only
Milton Friedman, interviewed in Barron’s (August 24, 1998), was asked: Q: You were acquainted with the Austrian economist Friedrich Hayek and also are familiar with the work of Ludwig von Mises and his American disciple, Murray Rothbard. When you were talking about bad investments, you were alluding to Austrian business-cycle theory. There is a
The failure of a major hedge fund, in concert with the lingering shrinkage of Asian markets and the further slide of Russians into corruption and chaos, is ripe for the symbolic pickings. The anti-capitalist crowd, the people who never respected the market, has found their whipping boy. After spending the last two decades downtrodden by the
[Presented September 16, 1999, at the Mises Institute conference “Austrian Economics and the Financial Markets,” Toronto, Canada] My topic is How the SEC Subsidizes Stocks, and my subtitle could be: Why and How is the government in the securities industry? I mean “subsidy” in the broadest possible sense here and not direct cash support.
The Free Market 16, no.2 (February 1998) It’s time to start thinking of the stock market as a giant S&L. Money continues to pour in, despite a bounty of evidence that the extraordinary gains of the last few years cannot be enjoyed in the near future. The perception has never been stronger that the stock market is the right place to be for your
The Free Market 16, no. 9 (September 1998) “Good corporate citizenship” is a familiar song that has topped the charts for far too long. Every two decades, it comes back with a slight variation, finding wild popularity. The new version arrived in the mid-eighties with suggestive lines about corporate behavior. The traditional corporate
The Free Market 17, no. 1 (January 1999) The most talked-about financial failure of the year is Long-Term Capital Management, an investment partnership (loosely termed a hedge fund) run by Wall Street darling John Meriwether. The fund is known for its esoteric financial models and complex securities transactions, many involving derivatives. Its
“ It’s the bond market, stupid !” (Economist): “An odd thing is happening in the market for risk and the market of the riskless, also known as the equity and government-bond markets: prices are rising in both. The S&P 500 share index, up by over 20% from its low earlier this year, continues to soar. Meanwhile, rising prices in the bond market have
Japan Today runs a meditation by Charles Olson entitled “Why Isn’t Japan Broke?” It includes this welcome observation, implying an Austrian-like understanding: “many things have delayed the facing of the music and extended the downside. Politicians are the major authors of delaying tactics to resist drastic solutions, preferring schemes to prop
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