Category: Economic Theory
The analysis published under this category are as follows.
Wednesday, March 05, 2014
Bastiat's Paradox, Broken Windows, Deficit Spending And War / Economics / Economic Theory
By: Andrew_McKillop
Frederic Bastiat's early 19th century paradox is easy to recycle today. If the West, we mean a certain small number of gung-ho steroid-fed European politicians and their lookalikes in the USA, decided to borrow and spend what it takes to “call a war” with Putin's Russia to defend the Crimea against the violation of Ukraine's territorial integrity, would the net economic result be win-win or lose-lose?
Monday, March 03, 2014
Anti-Logic and the Keynesian Economic “Stimulus” / Economics / Economic Theory
By: William_Anderson
American political culture always seems to be “celebrating” the anniversary of something, be it JFK’s assassination (we just passed the 50th anniversary of that sad event) or the signing of some (mostly bad) legislation. The latest political activity to be enshrined with an anniversary is the so-called stimulus, the $800 billion monstrosity passed five years ago ostensibly to “put America back to work.”
Monday, February 17, 2014
The Economic Singularity - Stuck in a Liquidity Trap / Economics / Economic Theory
By: John_Mauldin
I fully intended to write today about a recently released academic paper that illustrates nearly every bad idea currently being bandied about in the field of economics. The insidious part is that the paper is considered mainstream and noncontroversial. Simply reading it required me to up my blood pressure medicine dosage. It is going to take me a little longer to finish that letter, and I realized that it needs a certain setup – one that coauthor Jonathan Tepper and I conveniently wrote a few months ago and included in the book Code Red.
Tuesday, February 11, 2014
Lowlife Keynesian Morons in Power / Politics / Economic Theory
By: Richard_Daughty
As the scene opens, lights swirl in the eerie black background, crazily careening in a whirling kaleidoscope of disjointed light and dark. In the distance, sirens dimly wail. My face half-hidden in the gloom, I am mindlessly wiping the gleaming barrel of what appears to be a machinegun when I dully look up into the camera lens.
Staring directly into the camera, my narrowed, bloodshot eyes darting from side to side like the frightened little rat that I am, I feverishly say in a hoarse whisper “The Federal Reserve is monetizing the debt! We’re Freaking Doomed (WFD)!”
Tuesday, February 11, 2014
The Broken Limb and Burst Pipe Economic Fallacies / Economics / Economic Theory
By: James_Quinn
Economics is haunted by more fallacies than any other study known to man. This is no accident. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.
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Monday, February 03, 2014
The Keynesian Multiplier – Does it Exist? / Economics / Economic Theory
By: Submissions
Dan Lieberman writes: Can someone clarify a significant economic and well accepted proposition that bothers me?
The notion that the Keynesian multiplier means that “an exogenous increase in spending, such as an increase in government outlays, increases total spending by a multiple of that increase,” is troublesome. Is it possible to add one dollar to the money supply and magically turn it into more dollars? I don’t think this is possible. I believe economists have misinterpreted the multiplier. To me, it is not a multiplier. It is a divider.
Thursday, January 30, 2014
Minimum Wage Laws Kill Jobs / Economics / Economic Theory
By: Steve_H_Hanke
President Obama set the chattering classes abuzz after his unilateral announcement to raise the minimum wage. During his State of the Union address, he sang the praises for his action, saying that “It’s good for the economy; it’s good for America.”[1] Yet this conclusion doesn’t pass the economic smell test; just look at the data from Europe.
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Monday, January 27, 2014
Economic Growths False Paradigm / Economics / Economic Theory
By: Submissions
Raymond Matison writes: With pressing economic, banking, and systemic financial problems the world over, leaders of advanced nations both in Europe and in America are calling for programs to resume growth. President Obama in a recent State of the Union message proposed to reinvigorate growth in the US by doubling exports over the next several years. Prime minister Abe of Japan was a keynote speaker at the World Economic Forum in Davos his January outlining the need to rejuvenate growth. Japan has been vigorously increasing its money supply and depressing interest rates in order to promote the growth of its exports and GDP. Government leaders seek growth as the universal answer for maintaining government solvency as well as citizen prosperity, and it seems that no government leader anywhere in the world seeks less growth. Yet few have really considered recently whether growth is the promised panacea of nations and its citizens. This article raises reasonable questions regarding such policy and its desirability.
Thursday, January 23, 2014
More of the Same From the Keynesians in 2014 / Economics / Economic Theory
By: MISES
Harry Goslin writes: The first rule I teach my economics students is that when the economy fails, it’s usually safe to blame the government. To paraphrase Winston Smith in 1984: If we accept that the state is the source of economic misery, “all else follows.”
As a science, economics is really not that difficult because it encompasses decisions we make every day that impact our well-being and the well-being of those around us.
Thursday, January 09, 2014
Knowledge and Power - The Need for a New Economics / Economics / Economic Theory
By: John_Mauldin
In last week’s Thoughts from the Frontline I talked about the Age of Transformation, attempting to refute Robert’s Gordon rather stark and gloomy view of the future growth potential of the economy. That letter generated a rather significant amount of reader response, both pro and con, as not everyone agrees with my decidedly optimistic long-term view of the future. It might be fun and thought-provoking, in fact, to do a letter that deals with some of the issues you raised. I really do have some of the smartest readers of any economics and investing letter out there.
Sunday, January 05, 2014
The Minimum Wage Forces Low-Skill Workers to Compete with Higher-Skill Workers / Economics / Economic Theory
By: George_Reisman
The efforts underway by the Service Employees International Union, and its political and media allies, to raise the minimum wage from $7.25 to $15 per hour would, if successful, cause major unemployment among low-skilled workers, who are the supposed beneficiaries of those efforts.
Tuesday, December 24, 2013
Economic Illiterate Proposal: Inflation Creates Jobs / Economics / Economic Theory
By: Mike_Shedlock
Those looking economically illiterate proposals can have a field day reading Ezra Klein's "Wonkblog" on the Washington Post.
In Full Employment Gives People Jobs Klein states (citing two others) "The Federal Reserve Bank's focus on keeping inflation below 2 percent effectively sacrifices the other half of its dual mandate: full employment."
It's difficult to know where to start debating such economic lunacy, but let's briefly discuss the notion of a "dual mandate".
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Tuesday, December 17, 2013
Economic Lessons from Nazi Germany - Starvation and Military Keynesianism / Economics / Economic Theory
By: MISES
Julian Adorney writes: Many Americans, from the Glenview State Bank of Chicago to author Ellen Brown assume that the Nazi economic regime was successful, but closer examination tells a tale of rationing, shortages, and starvation. Learning why their economy failed can teach us how to avoid the same fate.
Friday, November 29, 2013
Ron Paul vs Paul Krugman: True Prophet vs False Prophet / Economics / Economic Theory
By: GoldSilverWorlds
Isn’t it strange? We are living in the 21st century, a period of time in which people buy land on the moon, humanity has dozens of satellites providing GPS services and real time traffic information, internet brings people and information as close as one click, science and technology are making historic break throughs … but economists cannot agree on the real cause of the latest financial crash (2008).
Sunday, November 17, 2013
New York's Skyscraper Curse Signaling Economic Crisis / Economics / Economic Theory
By: Mark_Thornton
It is now official! New York City has won the title of having the nation’s tallest structure. The heated controversy between New York and Chicago was settled recently when the Council of Tall Buildings and Urban Habitat (based in Chicago) decided that the 408-foot spire sitting atop the One World Trade Center could be included in the total height of the building.
Tuesday, October 29, 2013
Expendable People as a Result of Murderous Academic Economics / Politics / Economic Theory
By: John_Kozy
The English who settled America brought English culture with them. The colonies were nothing but little Englands. When the colonists revolted, they were merely trying to get free of the tyrannical English monarchy, not trying to change the culture. They were perfectly happy with the English way of life. They carried on its practices and adopted the English system of common law.
Monday, October 28, 2013
Economies are Not Destroyed in a Day / Economics / Economic Theory
By: MISES
Nicolás Cachanosky writes: Earlier this month, Argentina's leading conservative paper, La Nación published an unsigned editorial comparing the economies of Argentina and Venezuela. The editorial concluded that as economic freedom declines in Argentina, and as Argentina adopts more of what Chavez called “twenty-first century socialism,” it is becoming increasingly similar to Venezuela. Is this true? Will Argentina suffer the same fate as Venezuela where poverty is increasing and toilet paper can be a luxury?
Saturday, October 19, 2013
To Save Europe, Free the Markets / Economics / Economic Theory
By: MISES
Frank Hollenbeck writes: The current European economic strategy is to kick the can down the road. Debt levels in almost all European countries continue to rise and growth seems to be a long forgotten memory. The day of reckoning is around the corner, as Rudi Dornbush once warned, “[t]he crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought, and that’s sort of exactly the Mexican story. It took forever and then it took a night.”
Tuesday, October 15, 2013
Robert Shiller’s Egalitarian, Regulated, and Subsidized “Good Society” / Politics / Economic Theory
By: David_Howden
What defines a “good society” and how can we use finance to achieve it? Robert Shiller takes the former question as settled, and dedicates his 2012 book Finance and the Good Society to the latter: what is wrong with modern finance, and how should it be restructured to reach this ideal?
Monday, September 30, 2013
Free Immigrants, Free Capital, Free Markets / Economics / Economic Theory
By: David_Howden
Early this year, the Saudi Arabian government decided to crack down on foreign workers. Writing for The Globe and Mail, Martin Dokoupil and Marwa Rashad argue that this will lead to a “stronger, more diverse economy.” In particular, they focus on the plethora of businesses open at the moment — more than they think is necessary — and the resultant reduction in both “unnecessary” labor and businesses that would be possible if these foreign workers were forced to leave.