As long as current monetary policies are kept in place, Cantillon effects will continue to redistribute wealth from peripheral economies to the ultimate centers of world finance, and the ever decreasing interest rates will make it more and more difficult to bridge the income wealth gap. Otherwise put, all possible options for these economies to enjoy a healthy growth—through saving and capital accumulation, import of technology, and foreign direct investments—are throttled by expansionary monetary policies and a host of additional government policies stifling private enterprise. To be sure, it is important to point out that individuals in developing countries can in fact escape poverty even with rising inequalities, so it is important to put these growing inequalities in context. At the same time, it is also important to highlight that the levels of poverty reduction and inequality can also be due to different causes: while technological development, trade, and globalization help reduce poverty, this improvement could have counterfactually been much larger had it not been for monetary policies redistributing wealth to the detriment of the poorest strata of the society.
This being said, there are three main tendencies going on in today’s global economy, whose interaction maintains and prolongs what Mises called “the plight” of peripheral economies.
First and foremost, monetary expansion in developed countries leads to the waste and consumption of the capital stock through malinvestment, capital which could be invested in less developed countries. In the longer run, this also means that capital and technological development become scarcer and more expensive for developing countries, making it more difficult to absorb technology. At the same time, capital inflows from developed countries have a “bubble-thy-neighbor” effect on these countries, and chances are that part of the foreign investments peripheral economies do receive are malinvestments. The changes in the pattern of trade, artificial and unsustainable, also affect developing countries to an even larger extent, as these countries tend to rely overwhelmingly on a limited number of exported commodities.
Second, developing countries waste their own capital stock with similar inflationary policies leading to misallocation of resources and capital consumption. The reduction in the national as well as global capital stock is the most important impediment to the development of these countries. Developing countries also adopt trade policies that promote export-led growth and discourage foreign investments, which further interfere with their comparative advantage. They are also quick to adopt expansionary monetary policies and financialization, and developing country governments are happy to engage in heavier redistributive schemes.
Third and finally, sound capital and wealth accumulation are possible only with sound money. A sound international monetary system, then, is crucial to economic progress in general, and especially to the development of peripheral economies. But there is also another important element that makes these conditions above possible, and that is the mentality of economic freedom and private enterprise. Unfortunately, as Mises explained, in both the developed and developing world, economists and statesmen are “pacemakers of inflation, deficit spending and confiscatory taxation” ( Mises 1990 [1952], 171 ). As a result, Mises continued, “the problem of rendering the underdeveloped nations more prosperous cannot be solved by material aid. Prosperity is not simply a matter of capital investment. It is an ideological issue”
in short; it is revealed to be the only known document both written in Vulgar Latin, or proto- Romance, and using proto-Italic symbols. The original title for the manuscript, given by its female author, is: What one needs to be sure to acquire for the evils set in one’s fate. It is a book offering homeopathic advice and instruction to women of court on matters of the heart, of sexual congress, of reproduction, of motherhood and of the physical and emotional complications that can arise along the way through life.
It is quite obvious what "triggered" Trump's tweet. It was the North Korean pullback from the liaison office. But Bloomberg, like other U.S. outlets, ignores that quite obvious explanation. This constant ignorance of the action of the other side is one of the systemic problems U.S. media have.
New sanctions were announced to which North Korea reacted negatively. Trump, who wants to keep the door open for future negotiations, took note and pulled back on the sanctions. But John Bolton intervened. The sanctions were kept. A well sounding but implausible explanation was found. North Korea accepted that and came back to the table.
There was never real gray area here. Either Trump is a compromised foreign agent, or he isn’t. If he isn’t, news outlets once again swallowed a massive disinformation campaign, only this error is many orders of magnitude more stupid than any in the recent past, WMD included. Honest reporters like ABC’s Terry Moran understand: Mueller coming back empty-handed on collusion means a “reckoning for the media.”Like then, you indeed can take it to the bank that the media will never be held to account, other than their ratings souring worse than they already have.
Of course, there won’t be such a reckoning. (There never is). But there should be. We broke every written and unwritten rule in pursuit of this story, starting with the prohibition on reporting things we can’t confirm.
