My big takeaway from Money (McGraw Hill, 2014) is that Steve Forbes is no James Dean. Forbes is a rebel with a cause. Free-markets and sound money, please. In what follows, I will briefly mention 11 other takeaways from my reading of Money by Steve Forbes and Elizabeth Ames.
Category: Economic Theory
The analysis published under this category are as follows.
Friday, August 15, 2014
Don’t Assume What Is “Unseen” Doesn’t Exist / Economics / Economic Theory
By: MISES
Gary M. Galles writes: The use of the ceteris paribus, or “other things equal” assumption is an essential aspect of economic education. It is an important caveat that helps make sense of a complicated world by clarifying the incentive stories that comprise the core of economics.
Unfortunately, the often unthinking acceptance of that phrase has also provided an opening for misrepresenting economic reality in analyzing government interventions. That is because governments cannot change just one incentive. As a result, assuming certain “other things equal,” when those other things inherently cannot remain equal, provides cover for omitting adverse effects.
Read full article... Read full article...
Wednesday, August 13, 2014
High Frequency Failure Economics / Economics / Economic Theory
By: Andrew_McKillop
High Frequency Failure
Japan's most recent GDP data showing a 6.8% annual rate of contraction was quickly shrugged off by the markets as only a signal for more handouts from the Japanese government and the BOJ. But Shinzo Abe's government has to admit the failures are coming faster all the time. In the global finance industry we can move on from the easy explanation why we have HFT, Dark Pools, Libor rigging, FX rigging, oil and gold market rigging and the rest – that they deliver large easy profits to insiders, fixers and riggers. These fail-sure (rather than fail-safe) processes are also essential to maintaining an appearance of real economies with real markets. They serve this additional basic function.
Wednesday, July 30, 2014
Anne Elk’s Theory On Brontosauruses / Economics / Economic Theory
By: John_Mauldin
By Grant Williams
Though they reunited this past month for a series of concerts at London’s O2 Arena, the cast of Monty Python last assembled onstage together at London’s Drury Lane Theatre a staggering 40 years ago.
As they took to the stage at the O2 in early July, the surviving members of perhaps the most famous comedy troupe in history (sadly, Graham Chapman died in 1989) boasted a combined age of 357.
Read full article... Read full article...
Monday, July 28, 2014
Time to Put a New Economic Tool in the Box / Economics / Economic Theory
By: John_Mauldin
[E]conomists are at this moment called upon to say how to extricate the free world from the serious threat of accelerating inflation which, it must be admitted, has been brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.Read full article... Read full article...
Thursday, July 03, 2014
Remarks on Money: How the Destruction of the Dollar Threatens the Global Economy / Economics / Economic Theory
By: Steve_H_Hanke
— and What We Can Do about It by Steve Forbes and Elizabeth Ames
These remarks were delivered at a Cato Book Forum, June 19, 2014, Washington, D.C.
Thursday, July 03, 2014
Why the Mainstream Fails to Understand Recessions / Economics / Economic Theory
By: MISES
Hal W. Snarr writes: In a 2010 Bloomberg Television interview, Alan Greenspan said, “The general notion the Fed was propagator of the bubble by monetary policy does not hold up to the evidence. ... Everybody missed it — academia, the Federal Reserve, all regulators.”
Sunday, June 15, 2014
The Busted Myth Of War And Economic Growth / Economics / Economic Theory
By: Raul_I_Meijer
A strange point of view is expressed in George Mason University economics professor Tyler Cowen’s NY Times article ‘The Lack of Major Wars May Be Hurting Economic Growth’, strange in more ways than just the obvious ones. Of course we find it counterintuitive to link growth to warfare. And of course we don’t like to make a link like that. But there’s a lot more here than meets the eye. For one thing, the age-old truth that correlation does not imply causality, something Cowen hardly seems to consider at all. Which is curious, and certainly makes his arguments carry a whole lot less weight, and interest. It makes his whole article just about entirely one-dimensional.
Friday, June 13, 2014
The Great Myth of Money Velocity / Economics / Economic Theory
By: Dr_Jeff_Lewis
The missing variable in the great monetary equation is money velocity. We hear it over and over again, "There is no money velocity." And therefore, inflation cannot be a problem and is not.
Yet, there is a great divergence between the conventional financial media and the public who goes to the supermarket. The financial media swallows whole the official artifice that inflation is near-zero while ‘J.Q. Public’ sees his/her grocery costs, health insurance, etc. rising by leaps and bounds.
Read full article... Read full article...
Wednesday, June 11, 2014
Debunking The Velocity Myth Once And For All / Economics / Economic Theory
By: Jeff_Berwick
Ed Bugos writes: - “Things are not what they appear to be: nor are they otherwise”
At TDV we demonstrate this truth almost every day – in our blog, our tweets, and in our newsletters.
Just last week Jeff discussed the fallacy of GDP, comparing our lot to that of Jim Carey’s as Truman Burbank, the unaware mark in the Truman Show. In that blog, Jeff discussed one of the main problems with relying on GDP (Gross Domestic Product) as a measure of economic growth.
Read full article... Read full article...
Tuesday, June 10, 2014
Orbital Teapot Syndrome And Success-Bias Economics / Economics / Economic Theory
By: Andrew_McKillop
Doctor Les Woodcock Says
The former NASA consultant scientist, Dr Les Woodcock of Manchester University UK says he has had enough of Global Warming hysterics. His argument that an unsubstantiated hypothesis cannot rule supreme in climate science also applies to the flagrant and mindless meddling with the economy, for example by 'Super' Mario Draghi of the ECB using his Keynesian spin doctors for the chorus line.
Friday, June 06, 2014
The Slope Of Hope Economy And The Persistence Of History / Economics / Economic Theory
By: Andrew_McKillop
The Faith Based Slope of Hope
Writing on the website The Slope of Hope, June 4, Tim Wright in 'The Persistence of Memory' said that: “....honestly, I don’t have visions of a group of thirty rich men sitting around a gigantic table at the top of a skyscraper, smoking cigars, chortling villainously and plotting humanity’s path. I do, however, firmly believe that the central bankers and political leaders of the largest countries were shocked at what happened late in 2008 and vowed Never Again”.
Wednesday, June 04, 2014
The Federal Reserve versus Hyman Minsky / Economics / Economic Theory
By: Raul_I_Meijer
The Fed itself has stated many times over the past years that it intends to keep interest rates low. And now it starts complaining about low volatility. It looks like Yellen et al want to have their cake and eat it too. Perhaps they should have paid a little more attention to Hyman Minsky. Who long ago wrote – paraphrased – that if and when markets are perceived as being stable, it’s that very perception will make them unstable, because stability, i.e. low volatility, will drive investors into riskier asset purchases. The Fed’s manipulation-induced ultra-low rates have achieved just that, and now they’re surprised?
Read full article... Read full article...
Sunday, June 01, 2014
Decline And The Art Of No Economic Growth / Economics / Economic Theory
By: Andrew_McKillop
The Oxymoron of Permanent Growth
One of the starkest non-surprises is that economic growth declines as well as advances. Why this should be “extraordinary” and a shock to civilization is hard to understand – for normal persons. Taking the case of Japan and the Asian Tigers, their miracle growth epochs or eras lasted about 30 – 40 years and then it was over. Taking the case of China and India, their period of extreme high annual growth lasted less than 20 years. In the case of the US and western European economies, high growth was commonplace for about 25 years.
Friday, May 30, 2014
Crony Capitalism - Crony Economic Growth / Economics / Economic Theory
By: Andrew_McKillop
Tuesday Markets and IMF Forecasts
Almost any Tuesday, financial markets are up. Yes it happens but no, the “Tuesday blip” is pure market manipulation and nothing whatsoever to do with the real economy. Likewise any IMF forecast of economic growth, for any country in the world is always revised down from the previous forecast, but always shows a magnificent recovery “coming soon”.
Thursday, May 29, 2014
Impending Economic Downturns and the New Skyscraper Curse / Economics / Economic Theory
By: Mark_Thornton
From CNN to Barron’s to Le Monde, Mark Thornton has been featured as an authority on how record-setting skyscrapers signal impending economic downturns. Last month, Dr. Thornton spoke with us about the Skyscraper Index and the Skyscraper Curse.
Mises Institute: The Skyscraper Index, which shows a correlation between the construction of the world’s tallest buildings and economic busts, was created by economist Andrew Lawrence in 1999. In 2007, you used the index with Austrian business cycle theory to identify the economic downturn that followed. How does Austrian business cycle theory explain the index?
Read full article... Read full article...
Thursday, May 29, 2014
Piketty's 'Capital in the 21st Century' Book Envy Problem / Economics / Economic Theory
By: Peter_Schiff
There can be little doubt that Thomas Piketty's new book Capital in the 21st Century has struck a nerve globally. In fact, the Piketty phenomenon (the economic equivalent to Beatlemania) has in some ways become a bigger story than the ideas themselves. However, the book's popularity is not at all surprising when you consider that its central premise: how radical wealth redistribution will create a better society, has always had its enthusiastic champions (many of whom instigated revolts and revolutions). What is surprising, however, is that the absurd ideas contained in the book could captivate so many supposedly intelligent people.
Thursday, May 29, 2014
Why Keynesians Should Not be so Careless with Terminology / Economics / Economic Theory
By: Frank_Hollenbeck
Should we print, not print? Stimulate, not stimulate? Is austerity the right or wrong policy? Is government spending or printing effective? If we ask two economists these questions, we will likely get three opinions for each question. Economists seem confused, yet these questions are more important today than ever. Where does this confusion come from? Doesn’t economic theory give us clear cut answers? It does, but poor terminology and a lack of focus have muddied the waters. Many macroeconomic disagreements can be elucidated with a better understanding of the role played by holding cash, or hoarding, in economics.
Tuesday, May 27, 2014
Natural Disasters Don’t Increase Economic Growth / Economics / Economic Theory
By: Frank_Hollenbeck
Hurricane season is nearly upon us, and every time a hurricane strikes, television and radio commentators and would-be economists are quick to proclaim the growth-boosting consequences of the vicissitudes of nature. Of course, if this were true, why wait for the next calamity? Let’s create one by bulldozing New York City and marvel at the growth-boosting activity engendered. Destroying homes, buildings, and capital equipment will undoubtedly help parts of the construction industry and possibly regional economies, but it is a mistake to conclude it will boost overall growth.
Tuesday, May 20, 2014
Banking Buffoonery, Modeling Mysticism and Why Paul Krugman Should Be Sweatin’ Bullets / Politics / Economic Theory
By: F_F_Wiley
We have a few things to say about the recent debunking of established monetary theories.
In case you missed it, the Bank of England issued a report in March explaining that standard textbooks get money and banking all wrong.
The authors point out that banks don’t wait for deposits before making loans, as often claimed by academics. It’s the other way around. Banks create new deposits when loans are made, for this is how loan proceeds are delivered to the ultimate recipients. The fact that deposits then slosh around from bank to bank has no bearing on future loan issuance, which is always matched with newly-created, not old, deposits.
Read full article... Read full article...
Tuesday, May 20, 2014
The General Theory Of Unknowing / Politics / Economic Theory
By: Andrew_McKillop
The Project
I am presently developing and testing the several hypotheses structuring this theory, which at present is only at the descriptive, not predictive stage. I am actively seeking research collaborators and funding to continue the works needed to achieve a defined theory with possible predictive capabilities. The theory concerns a wide range of disciplines, ranging from semantics, information and general systems theory, to economics and finance, political science, geopolitical and military studies, sociology, ethics and philosophy, social anthropology, and the general history of western civilization. Other disciplines are certainly concerned, notably the theory of governance and government.