The great thing about being a libertarian is that there is seemingly little conflict between morality and utilitarianism.  Liberty is the most moral system, and it also produces the greatest prosperity on net.  Of course, non-libertarians would beg to differ.

The moral case for libertarianism is rather easy to make.  This isn’t to say that it is easy to convince others.

If you have a sick neighbor that needs money for medical care, would you personally go to another neighbor’s house and demand money to help the sick neighbor?  If your neighbor refused to give you any money (even if he is wealthy), would you demand the money at the point of a gun?

Most people, fortunately, would answer “no”.  They would not point a gun at anybody unless it was in self-defense.  Even if it was for a seemingly just cause, and even if they thought they could get away with it, most people would not point a gun at another person.

However, most people (i.e. non-libertarians) have no problem delegating this same task to the state.  While they won’t personally point a gun at their neighbor to help someone else, they will allow the state to do it for them.  Sure, the gun usually doesn’t actually come out, but your neighbor knows he has to pay his taxes and abide by the laws or else the guns will eventually come out to drag him to prison, or worse if he refuses to go.

So while advocates of state welfare and other state power like to claim the moral high ground in the name of “helping the poor”, or “doing good”, or “liberating foreigners”, they do not actually hold the moral high ground.  They are relying on the threat of violence in order to achieve their objectives.

Therefore, it is only libertarians, who oppose the initiation of force for political or social change, who can claim the moral high ground.

Fortunately, the libertarian position also yields the greatest peace and prosperity.  A free market will allocate resources in accordance with consumer demand.  It is only a system of property rights and free association that will yield the greatest prosperity.  Any state intervention that goes beyond the protection of property rights and the enforcement of contracts will make our living standards lower than they otherwise would have been.

Of course, in a libertarian society, people are free to be as charitable as they would like.  There is nothing prohibiting the wealthy neighbor from donating money to help the sick neighbor.  There is also nothing wrong with you asking your wealthy neighbor for a donation, as long as you are not threatening force and you are not encroaching on his property without permission.

Most hardcore libertarians who abide by a set of principles (mainly, some form of the non-aggression principle) understand both the utilitarian and the moral arguments for liberty.  They are both important.

It is rare to find a principled libertarian who abides or fully understands only one of these things.

In other words, if you find a self-proclaimed libertarian who does not fully understand or appreciate either one of these two aspects, then you will likely find someone who does not fully subscribe to libertarianism.

Ludwig von Mises was a utilitarian.  He is essentially the face of Austrian school (free market) economics.  He saw economics as value-free.  He did not present a moral case.  He is a rare exception of someone who was a utilitarian only, yet he remained mostly principled in favor of liberty.  This is because he truly understood economics, and he understood that free market economics was by far the best system for human flourishing.  Mises was one of the greatest economist ever in terms of his understanding.  (I would argue there are others who were/ are better at communicating it to the layman.)

Meanwhile, anyone who fully appreciates the fact that libertarians hold the moral high ground because they only rely on persuasion instead of violence for promoting their goals, is apt to remain principled.  It doesn’t matter the possible consequences of certain policies; it is not an excuse to initiate force.

You can explain the moral arguments to non-libertarians, and they may even agree with you initially.  But then you will inevitably hear something to the effect of, “But we still have to help the poor.”  In other words, they still don’t fully buy in.  They don’t fully understand free market economics.  And they are willing to allow the state to initiate violence on their behalf for certain, maybe even limited, things.

Ultimately, both moral and utilitarian arguments are important in convincing non-libertarians to become libertarian (or at least more libertarian).  It is very difficult to win someone over with just one portion.  You might change their positions on particular issues with utilitarian arguments, but they will not have a full libertarian view of everything.  They won’t apply some form of the non-aggression principle to everything they are confronted with.

The moral case is a critical component in explaining libertarianism.  At the same time, it is important to understand economics to reinforce the moral position and to let others know that libertarianism is both moral and pragmatic.

The holiday season (Thanksgiving and Christmas) can be particularly testing for many people, as they find themselves interacting with friends and family whom they don’t normally associate.  You may have Christmas dinner with an uncle who you see only once a year.

In some households, the discussion may turn to politics.  Even non-political discussions can turn into political discussions for the simple fact that politics has become involved in so many facets of our lives.  We can’t even talk about football any longer without politics entering the scene.

For libertarians, that Christmas or Thanksgiving dinner with the uncle may end up turning into a heated discussion.  This can go for anyone, but libertarians are particularly vulnerable because libertarianism is not widely accepted.  It is also not widely understood.

I know that libertarians tend to be very passionate about their positions.  There is a reason that Ron Paul signs were everywhere in 2007/ 2008 and 2011/ 2012.  His supporters were hardcore.  Yet, he didn’t come close to winning the Republican nomination.

Unfortunately, this passion can also turn people off.  If you get into a heated debate with your uncle (or whoever), then you probably aren’t going to convince that person of anything.  If anything, it may turn them off to your message even more.

This is especially problematic with family members because they know your flaws.  They may know that you are stupid when it comes to fixing cars or working on a computer or discussing classical literature.  They assume that just because they know there are a lot of things you don’t know, that you probably are far from being a political expert.

(Incidentally, it is only libertarians who acknowledge their own lack of knowledge.  They understand the importance of decentralization and the division of labor.  They understand that the marketplace is more knowledgeable than a bunch of central planners.  They understand that they are not smart enough to dictate society, but they also understand that nobody else is smart enough either.)

It isn’t easy being a libertarian in a non-libertarian world, but it is important to realize that you are not going to convince others, particularly friends and family, by being argumentative.  You can’t let every discussion lead to a point you have to make about liberty and against government.

On this same note, some libertarians need to learn to relax a little more.  If you are going to a movie, don’t let yourself become consumed with determining whether each scene has a hidden libertarian message or an anti-libertarian theme.  If the movie is not blatantly political, just try to let it go for a while and enjoy yourself.

The inevitable question is whether you should be friends with or associate with others who have vastly different political beliefs.  This is a question not just for libertarians, but for everyone.

For a libertarian, I think it is obvious that you cannot exclude all non-libertarians from your life because you are already in such a small minority already.  While the libertarian community has grown to a large degree in the last decade, the number of actual hardcore libertarians is still a couple of percent at best.

You obviously have to associate with others with different political beliefs.  You aren’t going to ask the cashier at Walmart what his political beliefs are.  You aren’t going to only buy a car from another libertarian.

Even on the family and friendship front, I don’t think it is a good idea to exclude someone from your life solely because of their political beliefs, but with a few exceptions.  I will get to those exceptions shortly.

Michael Malice was asked on the Tom Woods podcast (this was the 1,000th episode celebration) by an audience member about how he talks to his leftist friends about liberty.

Malice essentially said that he doesn’t get into arguments on a personal level.  He said that if he were in a tough situation, he wants somebody he can call and talk to about his bad situation rather than just have somebody say “I agree with you about the Constitution.”  In other words, you want your friend to be there as a friend.

The majority of my friends are not libertarians.  Most, if not all, of my family members are not libertarians.  But in a time of need, I know they will be there for me.

As I stated above, there are some exceptions.  There are some people who you should cut out of your life and not seek a friendship.

Libertarians generally believe that you should not initiate force for political or social change.  The difference between libertarians and most other people is that they apply this principle to the state as well as their own lives.  Most people, particularly in the U.S., live their daily lives as libertarians.  They don’t hurt people unless it is in self-defense.  They don’t steal from others.  They do things that they have agreed to do (contract law).  The only difference is that they don’t apply the same standards to the state.  They don’t see it as immoral for the state to steal or hurt others.

For me, the cutoff is for someone who uses aggression in their own life without going through the state.  If I know someone who intentionally hurts others (not in self-defense) or steals from others, then I do not want to be friends with that person.  I don’t want to associate with that person.

If someone calls himself a Bernie Sanders socialist, I can probably still get along with the person.  However, if that person really doesn’t believe in private property at all, then I will have trouble with any kind of friendship, or even association.  If he thinks it is ok to just rip the clothes off of my back, then I don’t want to be around such a person.

It is also important to acknowledge that part of friendship is having some things in common.  Therefore, if a rural guy in Mississippi who goes to church and the shooting range on weekends doesn’t want to be friends with a guy from New York City who spends his time at the opera, it is understandable.  It isn’t just that one might be a Republican and one might be a Democrat.  They just have different cultures and different values, and their politics may reflect this.

In 2016, there were a lot of relationships that were tested because of Donald Trump.  There were marriages that broke up, and there were friendships that were lost because of a difference in politics.  But you can’t blame Donald Trump.  Sometimes two sides are just at opposite ends and there is no reconciliation.  If both sides are really passionate about their positions, then they will likely either have to agree not to discuss it, or they will have to go their separate ways.

With Trump, some may see him as a bully and a creep, while others may see him as someone who is willing to take a stand against the creeps in Washington DC.  If there is disagreement over his character, then it should be realized that this is somewhat subjective, and it is just a different judge of character.  But if you start to disagree over key issues that could impact your life, then there may be no way to reconcile.

A husband and wife can disagree over whether the rich should pay more taxes or whether minimum wage laws significantly increase unemployment.  The problem comes when they disagree over whether a gun should be in their home or whether their children should be homeschooled.

In conclusion, I don’t think libertarians (or anyone else) should shut people out of their lives who have differing political opinions unless those political opinions extend beyond what the state should or shouldn’t do, or if the political opinions impact the friendship in a personal way.  If a cancer patient uses medical marijuana, it would be understandable for that person not to be friends with a hardcore drug warrior.

When finding a spouse, there are certain key issues where you should probably be in agreement.  The most important is having a similar view on how to raise your children.

Libertarians tend to be pessimistic because we understand the damage that big government does.  We hear all of the bad stories around us that others tend to block out or never hear in the first place.

However, libertarians tend to underestimate the power of the free market (or somewhat free market), which is curious.  It seems easier to overestimate the bad and underestimate the good.  But despite all of the government interventions, our economy still manages to function to a relatively high degree.  Sure, there is some false prosperity based on inflation and debt, but the houses we live in and the smartphones we use are real.  Our living standards, at least in some areas, still get better.

It is also easy for libertarians to get down on the United States.  If there is one negative aspect of a relatively free market, it is that the massive wealth created can eventually be siphoned off and used for bad purposes by the state.  The U.S. government would not be so destructive, especially towards other countries, if there were not so much wealth available in the first place.

Despite the out-of-control U.S. government, the U.S. is still a relatively great place to live in many aspects.  It is a great place for libertarians to live, despite the many problems.  Here is a list of 10 reasons why the United States is a great place to live for libertarians.

1. There is a high regard for free speech.  Despite the leftists shutting down speakers on college campuses, you can still say almost anything in the U.S. and get away with it, as long as you aren’t threatening anyone directly.  Sure, there are always stories out there to the contrary, but the general rule is you can say almost anything.  You can call the president or any politician every name in the book, and you can criticize the government.
2. Gun ownership is greater in the U.S. than anywhere.  Despite some gun regulations, most people can own guns.  The gun control advocates have not made much progress in the last several decades.  If there were ever a foreign invasion in the southern part of the United States, the invaders wouldn’t last long.
3. There is still some degree of federalism, meaning there is a difference between different areas.  If you really want to smoke marijuana legally, you can move to Colorado.  If you care about low taxes, you can move to New Hampshire.  If you want to gamble, you can go to Las Vegas.  While not one area is completely free, at least we can choose certain states and cities that favor the things we care about the most.
4. Property rights are still held in high regard in general, at least compared to most other places in the world.  Sure, taxation is much higher than we would like, but at least there is some predictability in what we can keep.
5. Entrepreneurship is respected in the U.S.  In some cultures, making money is demonized.  This is one of the great advantages of the American culture.  Despite some class warfare, most people will respect the entrepreneur who provides a great product or service to others.  Americans still appreciate the rags to riches story.
6. Homeschooling has become widespread across the United States.  It is easier to do in some states as compared to others.  But it is legal in most states, and it is becoming more popular.  This is not the case in many other parts of the world.
7. The U.S. is still by far the richest country in the world.  If you think some of the wealth in the U.S. is a fraud, take a look at China where the economy is one giant malinvestment.  There are certainly some small countries like Singapore where per capita income is higher than the U.S., but the U.S. is still by far the richest country against all other large countries.
8. Despite being overtaxed, Americans are still very charitable.  Despite the welfare state, most Americans are generous and willing to help out those who are truly in need.  Even when disasters strike in other countries, Americans open their wallets.  If government didn’t try to act as a charity, it would be amazing to see how much more Americans would donate to charity.
9. Most Americans act as libertarians in their daily life.  They work, they buy things, and they enter into contracts.  Most people do what they have agreed to do.  They enter into mutually beneficial exchanges on a daily basis.  They are just inconsistent when they permit the government to do things that they otherwise wouldn’t do (i.e., using force).
10. One of the best things about living in the U.S. for libertarians is that there are many other libertarians living in the U.S.  Sure, the percentages are still low, but the percentage is near zero in most other countries.  A Ron Paul type candidate for president wouldn’t even be possible in most other countries.  We should be thankful that we can interact with so many other libertarians, even if it is through Facebook or reading articles or listening to podcasts.

I hope libertarians living in the United States realize the many positive aspects of living in the United States.  Despite the problems, there are many things to be thankful for.

As tax reform is in the news, there is inevitable debate on the pros and cons of it.  There is even debate amongst libertarians.

There are certain portions of the tax reform that most libertarians will cheer.  For example, most will agree with reducing corporate tax rates and eliminating the estate tax.  But even here, there are people like David Stockman who will criticize the fact that most of the tax cuts go towards the rich.

There are also libertarians who say that tax reform doesn’t do much good if you don’t cut spending.  Some will argue otherwise, saying that these are two separate issues that should be argued separately. When it is time to argue for spending reductions, we can do that then.  For now, we are talking about tax reforms, so we should argue for tax cuts, they say.

I fall into the former camp.  To me, the two things are related, and it is difficult to separate them.  If the federal government is going to continue to spend $4 trillion annually, then they are still consuming these resources whether it is through direct taxation, or borrowing, or inflation.  The one main reason I favor tax cuts even without cuts in government spending is because it is more likely to bring on higher interest rates and price inflation faster, which will put an end to the reckless spending faster.

Within the tax reform debate, there is also a huge debate about whether to expand or reduce tax deductions.  Most libertarians will agree that refundable tax credits should be reduced or eliminated because this is pure welfare.  It means that some people will actually receive money who don’t pay any federal income taxes in the first place.  (They do pay other taxes.)

The big debate is for non-refundable tax credits and deductions.  In the current tax reform, there will be a reduction in the deductions, which will hurt people who itemize.  This will disproportionately hurt those in states that have higher taxes and higher costs of living. In other words, it will hurt taxpayers in blue states more than red states.

Some libertarians favor reducing deductions as long as it is coupled with a reduction in rates or an increase in the standard deduction.  They argue that the tax code is too convoluted (which it is) and that it plays favoritism for some groups at the expense of others.

Other libertarians argue for the expansion of deductions, or so-called loopholes.  They argue: the more, the merrier.  When deductions are expanded, it means more people get to keep more of their money (ignoring the spending issue described above).

When we talk about tax reform in general, some people mistakenly believe that the biggest issue is the complicated tax code.  But while I wish our tax code were simpler, the bigger issue is the amount we pay.

The average American family is paying over $30,000 annually for the cost of the federal government alone.  You have to make this calculation based on government spending, not on government tax collections.

If I spend 10 hours in early Spring doing my taxes, and I pay a total of $30,000 per year, which do you think matters more to me?  I would spend an additional 100 hours per year doing my taxes if it meant I could reduce my total tax burden in half.  I would gladly trade 100 hours for $15,000.  That would be $150 per hour (tax-free).

Again, the main issue isn’t the fact that the tax code is complicated.  The main issue is the amount being confiscated by the government.

I am sympathetic to both sides of the tax deduction issue when dealing with libertarians.  Those who argue for greater loopholes will quote Mises and Rothbard and say that we should keep expanding loopholes until nobody is paying.

At the same time, we know that wouldn’t happen.  It would be easier to reduce the tax rates to near zero.  Plus, the libertarians who argue against tax deductions are correct that there is favoritism.

I take an exception to the libertarian argument that we should favor all expansions of deductions.  I can easily use an absurd example for illustration.  If there were a proposed tax deduction for former presidents of the U.S., I would certainly oppose this.  Even if there were a proposed additional deduction for all federal government employees, I would not support this.

Then you get into all of the other questionable deductions and whether most people in these groups are really deserving of them.  I understand the libertarian argument that it is their own money, so you should support allowing people to keep more of their own money.  But what about people who “earn” their money through the taxpayer in the first place?  And what about people who “earn” their money through other government favoritism?  Plus, if you reduce the tax burden on some groups, they may care less about the burden placed on those who are paying a heavy load.

If there were a proposed additional tax deduction for all employees of military contractors, should libertarians really support this?  If there were an additional tax deduction for all senior citizens, should we support this (even though they get Social Security and Medicare)?  You can see where we can start getting into a lot of gray areas where there isn’t necessarily a clear-cut answer for libertarians.

There are a lot of difficult questions here because we already have a system of massive political power and corruption, which puts different groups up against each other.

There is no easy answer, but I believe libertarians need to judge each scenario, but in context with the big picture.  I know some libertarians will never support a tax reform that institutes a new tax.  But if there were a proposal to eliminate all federal income taxes and payroll taxes and replace it with a 1% national sales tax, it would be hard to oppose this, especially if it means the average American will pay tens of thousands of dollars less each year.

We also must continue to point out what we want.  We should not separate issues completely.  When tax reform is being discussed, we need to point out the reckless $4 trillion per year spending.  When there are crazy tax deductions being discussed, we need to continually advocate lowering rates across the board.

We know the power elite is still holding strong when they can get libertarians arguing over legislation.  We can disagree on individual pieces, but we should be united in calling for reduced government spending and reduced tax rates across the board.

It is no secret that the big cities of California have a politically leftist bent.  They will call themselves progressives, democrats, social democrats, and even sometimes socialists.  But if this is what the progressive consider progress, we should want no part of it.

The big cities of California – Los Angeles in particular – have become a haven for homelessness and poverty.  In some areas of Los Angeles, you can drive for blocks and blocks and see tents lined up along the streets.  These tents are what thousands of people call home.

The political left prides itself on looking out for the poor.  Or perhaps they pride themselves more in going after the rich, at least in words.  But even the rich supposedly go after the rich.  This is especially true in Hollywood.

The Hollywood leftists (mostly a redundant term, unfortunately) will lecture us on how we need to take care of the poor.  Of course, what they mean by taking care of the poor is expanding the size and scope of government.

Do these Hollywood elites really expect the politicians in Washington DC, let alone Sacramento, to solve the problem of poverty.  The Hollywood leftists will lecture middle class America while poverty runs rampant in their own backyard.  If they are so kind and caring, why is Los Angeles one of the top spots for homelessness in the United States?  You would think they could at least eradicate homelessness within a 100 mile radius.  Instead, it is much worse where they are.  They are an example of major inequality.

This is the glaring contradiction that the left ignores.  We don’t know if people pretend not to see the elephant in the room, or if they just can’t apply basic logic.  If they can’t get their statist policies to work in one city, how are they going to work in a country of 325 million people?

If you point out the obvious to them, they will come up with excuses. Some will say that we need more government, but this ignores that California (and Los Angeles on a local level) have a more invasive government than areas that do not have widespread homelessness.

As is typical with government programs, the exact opposite happens as compared to the stated goal.  They say they want less poverty and homelessness, so their policies create more poverty and homelessness.  When you stifle the marketplace through high taxation and regulation, it makes most people poorer on net.  They have made housing so unaffordable in Los Angeles (and San Francisco too) that you inevitably get homelessness.  The middle class can barely afford to live in a decent place.

In a free market society, you don’t end up with tent cities.  It’s not to say that homelessness is impossible because someone could still choose to live that way.  But having a free market environment sets up a situation of prosperity, even lifting the lower class.  And there is so much wealth created that there is plenty of charity for the few who can’t prosper on their own.

This is why you don’t see miles of tents lined along the streets of Singapore or Switzerland.

There are various factors for these poor living conditions, but most of them point back to the state.  Whether it is the war on drugs, zoning laws, taxation, or regulations, you can blame various levels of government for creating this situation.

The only sustainable way to help the poor and homeless in Los Angeles and other areas is to drastically reduce the size and scope of government at all levels.  In other words, the left has to stop “helping” these people with their destructive policies.  And if the Hollywood elites truly want to help, they should volunteer their own money instead of volunteering everyone else’s money.

The Federal Open Market Committee (FOMC) released its latest statement on monetary policy on December 13, 2017.  As expected, the target federal funds rate was hiked by a quarter percent.  The federal funds rate target is now in the range of 1.25% to 1.50%.

This was widely expected, and therefore, the markets did not react negatively.  Stocks were largely flat or up, and gold was up for the day.  The rate hike was already priced in.

When we talk of rate hikes now, it has almost nothing to do with the money supply.  While the Fed is continuing its program of rolling off assets at around $10 billion per month (a very small percentage of the monetary base), this is not directly correlated with the hike in the federal funds rate.  (The roll off rate will increase to $20 billion starting in January.)  Since the commercial banks still have huge amounts of excess reserves, the Fed increases the interest rate it pays to banks on their reserves in order to hike its target rate.

On the same day as the Fed’s statement, the latest CPI numbers were also released.  The CPI was up 0.4% in November, but the CPI less food and energy was only up 0.1%.  The more stable median CPI was up 0.2% and stands at 2.3% year-over-year.  Price inflation may not be as tame as what the Fed makes it out to be, but it isn’t roaring out of control either.

The place where we continue to see high price inflation is in assets.  These prices are largely ignored in the government’s statistics in calculating consumer price inflation.  The problem is that consumers do buy houses, stocks, fine art, and even Bitcoin.  While these are considered assets, they still have prices, and people spend money on these things.

For those who follow Austrian school economics (free market economics), it may be curious why asset prices continue to rise.  The Fed is hiking rates and deflating its balance sheet (albeit slowly).  The Fed stopped QE3 over 3 years ago now, yet the bubbles have yet to pop.

First, it does take time for things to play out.  Just as an inflation in the money supply does not hit instantly, a deflation also doesn’t hit instantly.  It takes time for the previous malinvestment to be exposed.

Even more importantly, I believe that this bubble is taking longer because of the financial crisis nearly a decade ago.  More accurately, I believe it was the Fed’s response to the financial crisis that is holding up this market.  And it is possible that it could make it last longer than what seems possible.

The Fed’s reaction to the crisis in 2008/ 2009 was unprecedented.  It was probably even a surprise to those who advocate massive intervention in the marketplace.  The Fed bailed out major banks and financial institutions, and it nearly quintupled the adjusted monetary base.  This would not have been believable if you had predicted this in 2007.

The Fed acted so aggressively that there is even more of an implicit guarantee than there was before.  At this point, it is even hard to use the word “implicit”.  It is almost a certainty that the Fed would act aggressively again if the bottom fell out.  In other words, the moral hazard has increased.

Stock investors and real estate investors know that if things turn ugly, the Fed will quickly step in and try to revive things.  If the Fed quintupled its balance sheet before, why can’t it do it again?  As long as the Fed is willing to step in with an aggressive easing (i.e. digital money printing), then there is a lot less to fear.

The same goes for bond investors, or even more so.  It is possible that stocks could fall despite more money creation from the Fed, particularly in the short run.  But for bond investors, they know that the Fed will create money by buying assets.  And when those assets are bonds, then there really isn’t much to fear as long as price inflation remains relatively tame.

The Fed isn’t holding down market interest rates and propping up asset prices by its actions.  It is doing these things because of its previous actions and the anticipation that it would do so again.

For that reason, it makes it difficult to short the market right now.  The boom and bubbles are unsustainable, and they will eventually turn to a bust.  But things could go on for a while longer because of the Fed’s willingness to step in right away.

The Fed will ultimately not be able to stop the implosion, but it does have the ability to kick the can down the road.  We just don’t know how much road it has left.

There are arguments for and against homeownership.  For full disclosure, I am a homeowner.  I enjoy the benefits, and I also experience the hassles.

Homeownership is pushed in our society, particularly in the U.S.  It is pushed by public opinion, and it is also pushed through government in the form of many incentives and subsidies, particularly when it comes to handing out mortgages.  The push for homeownership has perhaps slowed a bit since the housing bust a decade ago, but it is still often touted as the smart thing to do.

Here are 10 reasons not to buy a house (or condo or townhouse).

1. If you ever want to move or need to move, you will be thankful for not owning a house.  A house ties you down to one spot.  If you are offered another job, even if it is just on the other side of the city, it becomes a bigger roadblock if you own your house.
2. Buying a house ties up liquid money.  Even with the subsidized mortgage market, most people have to put down at least 3%, plus closing costs, plus the costs of moving, plus furnishings, plus fixes, etc.  This can cause unnecessary stress if you don’t have backup reserves, especially for emergencies.
3. If the toilet is broken, you are responsible for fixing it.  If you are renting, you can just call and wait for the maintenance guy.
4. Home ownership not only takes your liquid money, but you should have money in reserve just to deal with the house for any unexpected repairs.  Actually, they shouldn’t be called “unexpected” because you are guaranteed to have repairs.  If you need a new air conditioning unit, expect to pay many thousands of dollars.  If you decide to buy a house, be sure to factor in all of the things that can go wrong.
5. You also have things that will require somewhat regular maintenance such as your air conditioner and your garage door.
6. If you aren’t in a condo or townhouse, then you are probably responsible for maintaining your lawn.  While some people like doing yard work, it is mostly a hassle.  It can also be an added expense.
7. While this one does not have to be true, there is a tendency for it to be true.  When you own a house, you have a tendency to accumulate more stuff (i.e. junk).  It’s not to say that there aren’t many renters living with a lot of clutter, but there is something about owning a home that encourages the accumulation of even more stuff.
8. If your monthly payments become a burden and you want to lower your expenses, it is difficult when owning a house, especially if you don’t want to sell it.  If you rent, it is easier to move.  You can just wait until the end of the lease and then find a cheaper place to live, even if it means finding something smaller.
9. When you own a house, moving is very expensive.  Unless you are building a real estate empire and renting out your house when you move, then the process of moving is really expensive.  You really should never buy a place if you think you will not be living there for at least 7 years (at a minimum).  If you sell a house for just $100,000, you are looking at close to $10,000 in closing costs if you pay the standard 6% in real estate agent fees.  This does not include the actual cost of moving, nor does it include the holding costs if you move out before you sell.
10. Homeownership is not an investment.  Some people get lucky in a booming market, and some are smart enough to sell near the top. But overall, buying a house is not an investment if you are planning to live there.  It is a consumer good.  It just so happens it is an important consumer good in that it provides shelter for you. But most people are not just buying a roof over their head.  Buying a house can be a good forced savings plan if you live there for a long time and don’t extend your loan.  But if your only goal is to make money, you are better off renting a really cheap place and investing the difference.

Again, there are many reasons to favor homeownership, but you should go into it with your eyes wide open.  You must consider your own situation and whether owning is right for you.

Jerome Powell will likely be the next chair of the Federal Reserve.  He will take over from Janet Yellen at the end of January 2018.  Whether Yellen knows it or not, her exit will be a blessing for her.  She should be quietly thanking Donald Trump.

Ben Bernanke took over as Fed chair in 2006.  He inherited a mess, but it wasn’t known at the time.  Even for those who knew there were underlying problems in the economy, most didn’t expect the drastic nature of the housing bust, financial meltdown, and overall recession.  There is absolutely nothing Bernanke could do to stop the bust from coming.  Perhaps he could have delayed it a little bit through monetary inflation, but it likely wouldn’t have postponed it for long.

Bernanke was a really bad Fed chair, but not because we had a severe recession and financial crisis.  He was a bad Fed chair because of his response to the financial crisis.  To the bankers and others who were bailed out, Bernanke was not a bad Fed chair.

He presided over the greatest monetary expansion in the history of the Federal Reserve.  He approximately quintupled the size of the adjusted monetary base.  But due to the piling up of excess reserves by banks, coupled with continued fear in the markets, consumer price inflation never really took off.  The same can’t be said for asset prices as reflected currently by the big valuation increases in housing and stocks.

While Yellen came into office as an Obama-appointed Keynesian, she has actually be relatively subdued.  She wrapped up QE3 in her first year and has not expanded the balance sheet since then.  While it took her a while, she actually just started the Fed’s program of reducing the balance sheet, even if slowly.

If we are to believe the Austrian Business Cycle Theory, the Fed’s loose monetary policy from 2008 to 2014 caused malinvestments (misallocated resources).  Therefore, resources are not all currently being used in an efficient manner in accordance with consumer demand.  At some point, these malinvestments will be exposed as such, and there will be a correction.  The Fed’s tight monetary policy will put further pressure on the situation.

Much like Bernanke, Jerome Powell is going to inherit a mess.  He will be stuck with the malinvestments that started under Bernanke.  Powell will likely oversee the bust phase.  Unfortunately, he is probably like Bernanke in other ways in that he will likely resort to significant monetary inflation when faced with a crisis.

When Donald Trump was campaigning for president, he mentioned a few times that there were bubbles in the economy.  As soon as he became president, he started taking credit for the boom.  This was stupid, but politicians just can’t help themselves.  Since Trump has been taking credit for the little boom, he will own the bust.

There will be many bubbles that pop.  Stock prices will take a huge hit.  Housing will take a hit in many areas.  Some fads like cryptocurrencies – particularly Bitcoin – will take a hit.  Some commodities will take a hit, although gold is less certain.

Assuming we don’t see a significant pickup in price inflation, government bonds will probably not go bust in the recession.  That bubble will get blown bigger in the short run.  Investors still see U.S. government debt as a safety vehicle.  They will seek to lock in long-term rates.  Therefore, expect interest rates to actually fall in the next recession.

The one bubble we need to pop more than anything is the bubble that is Washington DC.  We need a drastic reduction in the size and scope of the federal government.  Unfortunately, the only way we are likely to see this happen is to have much higher interest rates where the Fed can no longer intervene due to fears of rampant inflation.  As long as the Fed is allowed to step in as a buyer in the bond market, then the government bubble will probably keep going.

While the Fed has not been a net buyer of government debt for over three years now, it still stands there ready to act if needed.  This helps to support the bond market, even when the Fed is not actually buying.

Jerome Powell will be little different from previous Fed chairs.  But the situations may differ, especially in size.  The current system of Fed interference and massive deficits will come to an end eventually.  We know this because it isn’t sustainable over the long run.  When the next recession hits, the annual deficit will quickly balloon over a trillion dollars.  At some point, the debt will become unmanageable.

There is a tendency for us to let our guard down, partially due to the fact that we can’t constantly be on high alert.  When times are good, or at least decent, then we think they will just keep humming along.  But one day, something will happen and the dominoes will start to fall.  We don’t know when that will be, but we should at least not be surprised when the day comes.  Neither should Jerome Powell.

For anyone living under a rock, there has been a huge wave of women coming out accusing many famous men of sexual misconduct, or worse in some cases.

The first major person to fall was Harvey Weinstein, or at least this seems to be the case that triggered the wave to follow.  Morning hosts Charlie Rose (CBS and PBS) and Matt Lauer (NBC) have both lost their jobs.  Senator Al Franken and Congressman John Conyers (among other politicians) have also been accused, but they have not resigned from Congress.  In Franken’s case, there is a picture that proves at least part of the accusations.

As a libertarian – and I’m sure the same goes for many conservatives – it has been a somewhat enjoyable spectacle.  The scandals have focused around Hollywood and Washington DC.  When I say Hollywood, I am really including New York and the entertainment industry in general.

It is the politicians and those in the entertainment industry who tend to be the greatest advocates of statism.  They are generally opposed to liberty, except in cases where it benefits them personally.

They are also a bunch of hypocrites.  These are some of the same people who were blasting Donald Trump for making lewd or rude comments about women.

Of course, these people were already hypocrites because they gave Bill Clinton – the rapist – a pass for decades.  They also gave a pass to his so-called wife who tried to smear the women who accused him.  Bill Clinton was charming enough that they could overlook his misdeeds.  If there is one really good thing about this whole thing, it is likely the end of the Clintons, at least in terms of political office.  With the uproar now, it gets much harder to defend Bill Clinton, even though the previous credible accusations against him have not changed.

To be sure, many of the women in politics and entertainment are just as hypocritical.  It would be hard to believe that none of these women knew what was happening behind the scenes.  And I’m not saying it would have been an easy decision for them to go public, as it probably would have ended their careers at that time.  Still, they had no problem sitting there with a straight face telling us about how we can’t elect the womanizer that is Donald Trump.

Despite the entertainment value of these people falling, it is also unsettling to a certain degree.  Most of the cases are not accusations of rape, and some are not even accusations of sexual assault.  Some of it is “misconduct”, which leaves open a big area for interpretation. If a man makes it known to a woman that he finds her attractive, does that become misconduct, even if it is done in a non-threatening way?

Harvey Weinstein is probably a criminal in that he used force or the threat of force against women.  In many of the cases, it is more a case of being immoral or being indecent.  Still, in a relative free market, there are consequences for these actions without having broken any laws.  If anyone wonders how a libertarian society can punish immorality, then here is a good example.

The unsettling thing about all of these cases is not knowing where it will end.  You start to get into a lot of gray areas that are not clear-cut.  It is also a problem that it could be setting us up for false allegations down the road.  My guess is that most of the allegations up to this point have been true, but even here I don’t really know.

It is not hard to think of a scenario where a few people get together and decide to make false accusations against someone who they detest for other reasons.  This is easy to envision with future political campaigns.  At some point, we are going to have to give the benefit of the doubt to those being accused, or at least apply a similar principle of innocent until proven guilty, even if there are multiple accusations.  Just because a couple of women say something about some celebrity doesn’t automatically make it true.

There is one other unsettling thing about this whole thing for me as a libertarian, which I alluded to in the title of this post.

There is this widespread outrage about men making inappropriate advances on women.  Meanwhile, innocent people overseas continue to die due to U.S. drone bombings, U.S. sanctions, and outright war.  There are victims in Iraq, Afghanistan, Libya, Syria, Yemen, other places in the Middle East, and many countries in Africa.

While Matt Lauer gets humiliated and is fired from his job, Barack Obama still walks around as a hero in the eyes of the establishment media.  It doesn’t matter that Obama helped starve people in Yemen, or that he caused massive death and destruction in Libya and Syria.

Maybe Harvey Weinstein will end up at trial. Maybe he will go to jail, as he probably should.  But meanwhile, George W. Bush, Dick Cheney, Colin Powell, and all of the other liars are walking free.  They can lie us into war and slaughter hundreds of thousands of people and destroy entire countries, yet they do not seem to be condemned in the same way that some of these celebrities are now.

Of course, this isn’t to defend the celebrities in any way.  It is an issue of proportionality though.  I wish society would have the same outrage at the killing of innocent foreigners as they do at men committing sexual misconduct.  Of course, there should be far more outrage at the killing of innocent foreigners, but at this point, I would be happy if it got the same attention.

This is the world we live in.  Still, there is an optimistic side to take.  You never know what is building up in society that will all of a sudden come loose.  Because of allegations against Weinstein, it caused a great wave of people to come forward out of the woodwork.

Maybe something similar will happen in foreign policy.  Maybe there will be a whistleblower that triggers a bunch more to come forward. Maybe some particular incident of foreigners being killed overseas will spark outrage about all of the killings.  Sometimes it just takes one thing to light a spark, and you never know where it might come from.

Let’s hope that one day we will see headlines plastered all over the place about the innocent people in the past who have died at the hands of the U.S. government with its interventionist foreign policy.  These are victims who can’t speak out, but there are others who can speak out for them.