Richard J Grant

Published in The Tennessean , Sunday, May 30, 2010 Worst response to a recession since the Great Depression by Richard J. Grant The 1970s began with the rate of price inflation over five percent. This was unusually high and of great concern to people at that time. Few could foresee that by the end of that decade, when price inflation reached 14 percent, a return to five percent would come as a relief. When problems arise, many are too quick to assign blame. With the prices of consumer goods rising, many consumers automatically blamed businesses for raising their prices. Business owners and managers responded by blaming their increased costs of doing business, particularly the high union wages pushed upon them by the strike-threat system. But union leaders could argue that they needed wage increases to keep up with the rising cost of living. Around the blame went. One side would claim that prices must rise because the prices of supplies and labor were rising, while the other side would ...

Published in The Tennessean , May 23, 2010 Political influence threatens the euro’s foundation by Richard J. Grant The currency that we now call the “euro” came into existence just over 11 years ago through the unification of the currencies of most European Union member states. The move to the single currency reduced the costs of trade and currency exchange, and eliminated exchange-rate risk from many investments and transactions. From this perspective, the creation of the euro was a good idea and the currency is not under any threat from purely economic causes. The problem with any modern currency is its political foundations and the constant threat of political influence on its management and value. The current weakness of the euro, compared to other major currencies, is generally attributed to the credit crisis facing EU member-state, Greece. But the Greek debt problems are not, and cannot be, a direct cause of euro currency weakness. The European Central Bank could easily maintain ...

Published in The Tennessean , May 16, 2010 Greed not the only reason for financial meltdowns by Richard J. Grant Is Greece a derivative? Its government has certainly allowed the value of its debt to become dependent on outside events. Rather than face voters with the full cost of their demands, the Greek government has pushed off the day of reckoning by borrowing to the point of financial failure. Few people take the trouble to learn about financial derivatives, so it is easy for demagogues to distract everyone by making derivatives the scapegoat for our financial crisis. But most derivatives are quite simple, and even the most complex ones still look like child's play when compared to the complexity of the macro-economy. The biggest problems in our financial system have been caused, not by complex financial instruments, but by a repeated failure to observe the most basic rules of civil and commercial conduct. Mere greed is not the problem: greed has always been with us, and we ha...

Published in The Tennessean , May 9, 2010 Beware government 'help' that can actually hurt by Richard J. Grant Just when Tennesseans need it most, the law of supply and demand has been suspended. In the wake of the recent flooding disaster in Middle and West Tennessee, the state attorney general was quick to issue a news release warning Tennesseans “to be aware of potential price gougers.” There is actually a state law that makes it “illegal to set prices that are grossly in excess of the price generally charged immediately prior to the disaster.” This presumes that there is someone in the state government with the omniscience required to make such judgments. There is not, but the law is enforced and companies have been forced to make repayments in the recent past. Governments often display a tremendous disrespect for price and believe that merely by controlling prices they can control costs. But real life doesn't work that way. With one of the water treatment plants shut do...

Published in The Tennessean , May 2, 2010 Government regulations will destroy free market by Richard J. Grant Banks and labor unions have more in common than meets the eye. Both owe their current forms to the plethora of labor, corporate, and banking law that has been imposed over the decades. Both groups have been protected from the moral discipline that would be imposed upon them in truly free interactions with their associates and customers. However sweet the intentions of early labor leaders and their supporters, the main function of labor unions has been to limit the supply of labor in order to raise the incomes of their members at the expense of everyone else. Such an endeavor always requires the use of force, with or without the complicity of government. Only by force can these groups limit the alternatives available to customers and thereby extract higher payments than the value received by those customers. Just as labor law has created an artificial distinction between u...