Do Bad Forecasts Mean Bad Economics?
Proper methodology is often debated in economics. Inevitably, one side points out that the other side has made some very embarrassing predictions. Pro-market folks love to reference WWII era Keynesians who thought that the United States would go back into depression after the government stopped spending vast amounts of money on war goods. As it turns out, […]
The Adam Smith Illusion
“The problem is not simply that Smith was not the founder of economics.The problem is that he originated nothing that was true, and that whatever he originated was wrong.” -Murray Rothbard Adam Smith (1723-1790), author of the iconic Wealth of Nations, is widely regarded as the “founder of modern economics”. His name is revered by self-described […]
Keynesianism is Against the Law, Say’s Law
As the recession continues, economists like Laura D’Andrea Tyson, the Chair of the Council of Economic Advisors under President Clinton, advocates spending as the pathway out of our economic banana. In her latest post on the New York Times economics blog, Tyson tells us that in order for the economy to recover we need an […]
Unlearning Economics
The Unlearning Economics blog offers a supposed list of inconsistencies inherent in the free market. Unfortunately, the reasons are themselves a convoluted, inconsistent collection of strawmen. Below is a response to each of his twenty four points. 1. Credit expansion does, indeed, cause boom-bust cycles. Many Austrians agree that outlawing fractional reserve banking would eliminate […]
Is Joseph Stiglitz Serious?
In this month’s Vanity Fair renowned economist Joseph Stiglitz discusses important lessons economists should take from the Great Depression. The article is lengthy, but interesting if you have the time. Stiglitz, a Keynesian, gives the expected presentation: manipulating financial markets (monetary policy) is ineffective in combating recessions and we need greater government spending (fiscal policy) […]
Romney is Wrong on Minimum Wage
When asked about the minimum wage over the weekend, leading GOP presidential candidate Mitt Romney gave the following response: “My view has been to allow the minimum wage to rise with the CPI [Consumer Price Index] or with another index so that it adjusts automatically over time. I already indicated that when I was governor […]
Krugman Gets (a Little) Something Right
It’s not uncommon for presidential candidates to tout their business experience, often claiming that they know “how the economy works.” Surprisingly, in a recent post, Krugman correctly shot this idea down, noting, “The idea that what America needs now is an executive type is just foolish.” Unfortunately, Krugman does not arrive at this conclusion through […]
The Only Supporters of a Free Market are Children!
Those of us who are mature, sophisticated, and all grown up know that without government regulation we would all live in slums and be poisoned by the food we eat. Or so Huffington Post writer Carl Gibson would like you to think in his hit piece on Ron Paul’s free market ideas. In this article, […]
Is there such thing as ‘certainty-inducing regulation’?
It’s that time of year! Earlier today, the Heritage Foundation released it’s highly-anticipated 2012 Index of Economic Freedom. As expected, the United States fell even lower on the index, landing between Ireland and Denmark at tenth place. Now I have no quibbles with the way the index is compiled. Indeed, I highly recommend it to anyone […]
Huffington Post takes a shot at Austrians
There seems to be a growing trend in economics news: discredit Austrian economics. Slate did it about a week ago, and The Huffington Post, not to be outdone, did the same thing. The themes are similar, Austrians are kooky and wrong. Unfortunately, the authors fail to comprehend what Austrians are saying. “For them [Austrians], one […]