Author Archive | libertas



It seems hardly a day goes by when the financial press fails to warn us about the looming dangers of deflation, despite the fact that the last period of price deflation in the United States was during the mid-1800’s. In fact, the threat of deflation is extremely slight given Bernanke’s well-documented deflationphobia. This USA Today…
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Follow-up on Slate

Krlatham’s piece on this Slate article is excellent, and exposes most of the strawmen and mischaracterizations in Yglesias’ article.  However, the article was so badly misinformed it deserves a few follow-up comments. “He was referring to so-called “Austrian economics,” an idiosyncratic passion of his and a set of beliefs that put him at odds with…
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Romer Takes the Economy's Temperature

Romer Takes the Economy’s Temperature

On the eve of the new year, this NYT article asked 6 well-known economists—Greg Mankiw, Christina Romer, Tyler Cowen, Robert Frank, Robert Shiller, and Richard Thaler—their views on the economy.  The article is too long to examine all their responses, but this post examines some of the problems with Romer’s views.  Like a doctor, Romer…
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Monopoly Revisited

Monopoly Revisited

We’ve been having some profitable discussion on the threat of monopoly in a recent post.  In this post, I want to clarify a few things, and perhaps add some additional thoughts. We have established that is impossible to distinguish “competitive prices” from “monopoly prices” because we only observe the market price.  The “competitive price” is…
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Debt Mythology

Debt Mythology

Paul Krugman implies that deficit spending is necessary to jumpstart a floundering economy, and in the process repeats the well-known “we owe it to ourselves” fallacy about public debt in his latest piece. The implication of the “we owe the debt to ourselves” fallacy is that debt isn’t all that harmful or distortionary because, after…
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The Monopoly Bogeyman

As this late 2010 article predicted, 2011 was indeed a year for mergers. The most noteworthy was AT&T’s attempt to buy T-Mobile. The attempted move by AT&T would have given them an estimated 43% of the market share for cellular phone providers. This number drew the ire of United States regulators which eventually landed AT&T…
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Bridge to Nowhere

Bridge to Nowhere

Krugman makes his latest argument with nothing but a few words and a lonely chart which shows the recent drop-off in government infrastructure “investment.” Contrary to Krugman’s worldview in which “full employment” is the only feasible economic ideal, employment is only “good” when it occurs voluntarily under market processes.  Why?  Because working for working’s sake…
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Crystal Ball

Do Economists Have a Crystal Ball?

It’s not uncommon to see a host of economists offer their predictions concerning economic conditions for the new year. This recent MSNBC article is a case in point. Unfortunately for those who rely on these forecasts, it turns out that they are less reliable than the weatherman. These faulty forecasts are a result of a…
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Minimum Wage 2

Minimum Wage: $100/hr!

San Francisco is not the only area on the precipice of a minimum wage increase. This NYT article states that 8 states will see an increase in minimum wage on the new year. While most economists do, indeed, agree that the inevitable result of minimum wage is increased unemployment, the article, nonetheless, trots out several…
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St. Louis Monetary Base

Kontra Krugman

To piggyback on nfreiling’s post, Krugman’s article makes several oversights which only muddy his analysis. First, he relies on the mainstream definition of inflation—a rise in prices. However, a more accurate definition for inflation would be “an increase in the supply of money”—something that has happened at a historically unprecedented rate if the following chart…
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