Category: Economic Theory
The analysis published under this category are as follows.
Sunday, October 16, 2016
End of Economic Growth Sparks Wide Discontent / Economics / Economic Theory
By: Raul_I_Meijer
Former British diplomat and MI6 ‘ranking figure’ Alastair Crooke quotes my September 26 article “Why There is Trump” so extensively in this article for Consortium News that I thought I might as well post the whole thing here at the Automatic Earth too. The other sources he also quotes -John Gray, Stephen Hadley among them- help to put my points in a solid perspective, which is nice to see. I can only hope that this will open more people’s eyes to the fact that in the end of growth and centralization, we are witnessing the “most important global development in decades.”
Monday, September 19, 2016
Fascist Business Model: Reich Economics / Economics / Economic Theory
By: Jim_Willie_CB
The Fascist Business Model incorporates all the worse elements of Keynesian economics, a broken fallacious school of thought. The model also integrates a vast system of economic heresy, put forth as public address dogma. All their messages are wrong. They are instead aligned with support of the power structure where big banks conduct self-dealing and print money for themselves.
Sunday, September 18, 2016
American Economics / Economics / Economic Theory
By: Andy_Sutton
Over the years, we have written multiple times about the system of Keynesian economics, its dysfunction, and the fact that it is a pure lie. This has all been well-documented from studies, observations, right down to remarks made by Keynes himself regarding the long-term viability of his new faux economics.
However, from Keynesian economics, there has morphed another type of economics. A more ignorant and destructive type of scarce resource allocation – which is what economics really is after all – and this type is no respecter of persons, intellect, position, or influence. We could easily call it the economics of entitlement, but that would be misleading because when most think of entitlements, they think about Social Security, Medicare, and other government programs. No, that’s not where the sense of American (and global) entitlement ends. It ends with the average working stiff who is paying 20% on a $40,000 / 7 -year truck loan with a balloon payment because his buddies told him he wasn’t cool if he didn’t have such a truck. There are zillions of other such examples of financial stupidity, however, nobody is bothering to tell these folks that they’re committing financial suicide. The banks certainly aren’t going to tell them. The government? Talk about the kettle and the pot. Or maybe there is too much legal pot. We certainly can’t legislate common sense, but we sure try to legislate away the consequences of foolish behavior.
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Friday, September 09, 2016
Money and The Rats of NIHM / Economics / Economic Theory
By: Dr_Jeff_Lewis
“When you see that trading is done, not by consent, but by compulsion; when you see that in order to produce, you need to obtain permission from men who produce nothing; when you see money flowing to those who deal, not in goods, but in favors; when you see that men get richer by graft
and pull than by work, and your laws don’t protect you against them, but protect them against you; when you see corruption being rewarded and honesty becoming a self-sacrifice you may know that your society is doomed.”– Ayn Rand
Saturday, September 03, 2016
John Maynard Keynes’ “General Theory” Eighty Years Later / Economics / Economic Theory
By: Antonius_Aquinas
To the economic and political detriment of the Western world and those economies beyond which have adopted its precepts, 2016 marks the eightieth anniversary of the publication of one of, if not, the most influential economics books ever penned, John Maynard Keynes’ The General Theory of Employment, Interest and Money. Sadly, even to this day, despite its thorough refutation by lights such as Henry Hazlitt and other eminent scholars, The General Theory, which spawned “Keynesianism” and its later variants, remains supreme in academics, financial markets, and public policy.
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Wednesday, August 24, 2016
Proof Positive the Economic Recovery Is a Myth / Economics / Economic Theory
By: Graham_Summers
For years, I’ve been warning that all claims of economic “recovery” in the US are complete fiction.
We now have definitive proof in the form of tax receipts.
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Friday, August 19, 2016
Big Policies, Bigger Failures / Economics / Economic Theory
By: Peter_Schiff
Economics is far simpler than most in academics or government would have you believe. To make accurate predictions all you really need is an honest appreciation of the self-interest that is at the heart of free market transactions and an ability to understand how regulations that attempt to "correct" these realities don't work. This is certainly the case with the completely predictable slow-motion train wrecks that are the signature U.S. domestic policy experiments of the last eight years: Obamacare and Federal Reserve stimulus. From the start, I issued countless commentaries on why both would fail spectacularly. The jury has started to come back on Obamacare, and the results are a disaster. And while the verdict on the Fed's policies has yet to arrive in similarly stark terms, I believe that its failure is just as certain.
Friday, August 12, 2016
How the Frankfurt School Changed American Culture / Economics / Economic Theory
By: David_Galland
Dear Parade-Goer,
How many times have you heard someone lament how much the world has changed from the good old days? You know, the simpler pre-PC period when the world operated according to fairly predictable principles.
But then we woke one day in a world with every bastion of what some might called normalcy under attack. Institutions that 100 years ago appeared unassailable—marriage, for example—are increasingly seen as antiquated. Even the idea of a national character is viewed as wrong-minded and, in the successful societies of the West, as exclusionary and even racist.
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Monday, June 13, 2016
Keynesian Economics Versus Austrian Economics - Video / Economics / Economic Theory
By: Mario_Innecco
hi it's monday jun 13 2016
home of alternative economics and contrarian views
this morning I want to talk about the difference between the cannes in school
of economics and the Austrian School of Economics because you might be thinking
what is alternative economics and in my view that's what alternative economics
is today is the Austrian School of Economics Austrian School of Economics
is based on the studies of Austrian scholars from the 19th century and it
was followed through by economist's like ludwig von mises Africa
friedrich hayek Murray Rothbard from the US and yeah that's the are strange
school that the proponents of the Austrian school usually while not
usually the proposer ask our school argue that economics is not a science
economics is based on human action and of course human action is not predictable
Tuesday, May 03, 2016
Just Look to the Middle-Class for Proof of Trickle-Down Economics / Economics / Economic Theory
By: Harry_Dent
Politicians and economists get many things wrong, but right now, the one thing that really gets up my… let’s keep this clean and just say, nose… is how clueless they are about “trickle-down economics.”
Republicans believe it. (They just don’t realize how long it takes and that it isn’t happening yet from the information revolution.)
Wednesday, March 30, 2016
Price Controls May Be On the Way / Economics / Economic Theory
By: MISES
Paul-Martin Foss writes: If you thought negative interest rates were as bad as it could get with central banks, you might be in for a surprise. Central banks have been so spectacularly unsuccessful with their accommodative monetary policies that they are discussing pulling out all the stops to get the results they want. They fail to realize that the reason prices aren’t rising is because they really want and need to fall. Bad debts weren’t liquidated during the last financial crisis, the debtors were merely bailed out. Overpriced assets weren’t allowed to be reduced in price. Central banks pumped trillions of dollars into the economy to attempt to paper over the recession. Market forces want to drive prices down, while central banks attempt to prop them up. So what to do when central banks aren’t getting their way?
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Monday, March 21, 2016
Unemployment vs Inflation - May the Phillips Curve Rest in Peace / Economics / Economic Theory
By: Michael_Pento
In 1958, economist William Phillips claimed there was a historical inverse relationship between the rate of unemployment and the corresponding rate of inflation. His conclusion was that full employment (whatever that means) was inflationary. He illustrated his claim through a chart referred to as the Phillips Curve.
Monday, March 07, 2016
Free Trade Is the Path to Prosperity / Economics / Economic Theory
By: MISES
Georgi Vuldzhev writes: The political circus of the 2016 presidential election has revived and reinvigorated popular belief in age-old protectionist fallacies. Currently both Donald Trump and Bernie Sanders, are both in favor of expanding protectionist trade policy, with both of them arguing that free trade “destroys” jobs and hurts domestic workers and producers by exposing them to foreign competition. Both candidates espouse an utterly misguided zero-sum view of economics, in which one side to an exchange wins only when the other side loses. Both men are, of course, completely wrong.
Thursday, February 04, 2016
TPP is Economic Warfare, Trade Can Make Everyone Worse Off / Governments are Stupid / Economics / Economic Theory
By: Dylan_Waller
Professor Yoram Baumun’s comedic retake of the Principles of Economics appropriately translates “Trade can make everyone better off” to “Trade can make everyone worse off.” Moreover, he translates “Market are usually a good way to organize economic activity” to “Governments are Stupid”.
Monday, December 14, 2015
Why Gold-Backed Money Doesn’t Bring Economic Booms and Busts / Commodities / Economic Theory
By: Frank_Shostak
According to popular thinking, not every increase in the supply of money will have an effect on economic activity. For instance, if an increase in supply is matched by a corresponding increase in the demand for money, we are told, then there won’t be any effect on the economy. The increase in the supply of money is neutralized, so to speak, by an increase in the demand for money, or the willingness to hold a greater amount of money than before.
What do we mean by demand for money? And how does this demand differ from demand for goods and services?
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Friday, November 27, 2015
Economics Is About Scarcity, Property, and Relationships / Economics / Economic Theory
By: MISES
Michael J. McKay writes: The other day I was having coffee with a new friend, a retired businessman who had customized luxury cars in California. I mentioned I had recently retired from owning an investment firm and had studied economics for many years, especially Austrian economics.
Like so many people, he said, “I really don't understand economics and always have been confused by it.”
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Thursday, October 29, 2015
The Financialization of the Economy / Economics / Economic Theory
By: John_Mauldin
Roger Bootle once wrote:
The whole of economic life is a mixture of creative and distributive activities. Some of what we ‘‘earn’’ derives from what is created out of nothing and adds to the total available for all to enjoy. But some of it merely takes what would otherwise be available to others and therefore comes at their expense.
Successful societies maximise the creative and minimise the distributive. Societies where everyone can achieve gains only at the expense of others are by definition impoverished. They are also usually intensely violent….
Much of what goes on in financial markets belongs at the distributive end. The gains to one party reflect the losses to another, and the fees and charges racked up are paid by Joe Public, since even if he is not directly involved in the deals, he is indirectly through costs and charges for goods and services.
The genius of the great speculative investors is to see what others do not, or to see it earlier. This is a skill. But so is the ability to stand on tip toe, balancing on one leg, while holding a pot of tea above your head, without spillage. But I am not convinced of the social worth of such a skill.
This distinction between creative and distributive goes some way to explain why the financial sector has become so big in relation to gross domestic product – and why those working in it get paid so much.
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Wednesday, October 21, 2015
Why Star Trek Is Wrong: There Will Always Be Scarcity / Economics / Economic Theory
By: MISES
Jonathan Newman writes: With the recent successes and announcements of sci-fi movies and TV shows like The Martian, Interstellar, and new incarnations of Star Trek and Star Wars, no one can deny that we crave futurism and stretching our imagination on what advanced technology can accomplish. Many look to the example of these fictional worlds as an indication of what life might be like when technology can provide for all of our basic needs, a condition some call “post-scarcity.”
Thursday, September 10, 2015
Confusions About Interest Rates Part 2 / Interest-Rates / Economic Theory
By: Frank_Hollenbeck
Following the 2001 dot-com crisis, interest rates were lowered to 1% and then slowly raised to 5% over a 4-year period. This timid policy still created a massive bubble in housing that finally bust in 2008. Instead of learning from the past, we doubled down on this same failed policy. Interest rates were then lowered to 0% and have been held there with little political will to raise them one iota.
We are now on the eve of another major financial crisis, yet economists (except Austrians) still don’t really understand the role played by interest rates in a capitalist economy. To avoid repeating economic mistakes of the past, we must understand the faulty logic that led us to these errors.
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Thursday, September 10, 2015
Confusion About Interest Rates Part 1 / Interest-Rates / Economic Theory
By: Frank_Hollenbeck
Since 2008, central banks have rushed to lower interest rates to spur growth. This has induced mal-investments in almost all asset classes. For example, with oil prices below $50 a barrel and trending lower, the shale oil industry is in serious trouble as is the banking industry that lent it over $1 trillion.
Of course, economists and faulty economic theory are 100% responsible for what is to come. The professional economist today is like the doctor of the past whose prescription to bleed the patient was considered state-of-the-art medicine; the cure, of course, being much worse than the disease.
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