A gold standard will not limit economic growth
Last week, Dr. Jeffrey Herbener (a professor of mine at Grove City College) testified before Congress on the issue of the Federal Reserve and sound money. Among many things, here is one particular statement he made in his written testimony that often proves quite contentious: “The primary step in monetary reform, then, is to turn […]
Bubble Ahoy!
Is the economy in for another bubble? We’ve seen the housing bubble pop, and before that we had a tech bubble. These events divide the profession, as every economist has their own pet theory describing bubbles. Economics news hunters seek these bubbles much like Ahab sought Moby Dick; the first to spot the bubble (or […]
The Government “Safety Net” is a Fleeting Fantasy
Writing about the record number of Americans purportedly living in poverty, Think Progress blogger Travis Waldron makes a huge economic error when considering the effects of government “safety net programs”. See his quote below: “The number of workers in poverty would be even higher were it not for government safety net programs that have reduced […]
Money, Exchange, and Robinson Crusoe
Money can be defined as the general medium of exchange, or the most widely traded good. However, it is neither a consumer nor a producer good. Suppose Robinson Crusoe, Friday, and Jackson are all on their island. Crusoe wants a rabbit from Friday’s collection, but he knows that Friday will not accept the fedora that […]
To Aid or Not to Aid: The Harms of Federal Disaster Relief
It is easy to deride recent claims by certain economists that the federal government has no business offering aid to the victims of last month’s Midwestern tornado outbreak. As pictures of destroyed homes and devastated families flood the media, it is hard to imagine a person who is unwilling to offer whatever government aid is available. But while […]
The Irrefutable Logic of South Park Economics
A recent episode of South Park got me thinking that Matt Stone and Trey Parker just may know basic economics. The episode attempts to explain the jewelry business. It depicts old people buying jewelry at ridiculous prices from a home shopping channel and then giving it as gifts to their children. The children immediately take […]
‘Tax cuts have never extinguished a fire’ and other such nonsense
Sometimes anti-government rhetoric can go too far, as Katrina vanden Huevel points out at The Nation. While it may be endearing and folksy to accuse the government of getting in the way of business and job creation, Huevel thinks it is dead wrong. And common sense seems to be on her side. Look at all […]
Would a 3rd Round of Quantitative Easing be a Charm?
Would a 3rd Round of Fed Quantitative Easing be a charm? Matthew O’Brien, writing last week for The Atlantic, certainly feels it would be. Those who share his sentiments were disappointed when Fed Chairman Ben Bernanke in his hearing before Congress stated “monetary policy is not a panacea”, which many have interpreted as a sign […]
Minimum Wage Distorts Reality
A price control is a legal price established by the government that forbids the selling of a good or service above some maximum or below some minimum price. It is an example of triangular intervention—the state coerces two parties to exchange at a certain price. The direct consequence of the effective maximum price control is […]
Some Things Never Change
I have really enjoyed studying economics. One aspect in particular which has drawn me to the science of economics is its permanence as a result of its causal-realist nature. Sound economic theory establishes truths that hold from generation to generation. It provides one with a timeless framework to evaluate market exchange between individuals as well […]