DeLong’s ‘Circular Flow’ Falls Flat
Economist Brad DeLong wrote on his blog yesterday about Paul Krugman’s “A Note on the Ricardian Equivalence Argument Against Stimulus.” While the post was quite complex and requires a previous knowledge of Krugman’s argument, he makes one claim I would like to point out. “He gets it completely wrong because Krugman knows very well who […]
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 […]
Mission Impossible: War and the Economy
Arms Dealer: “Why should I help you?” Hunt: “If you don’t help me, we will be facing war.” Arms Dealer: “But war is good for business.” Hunt: “Nuclear war?” Arms Dealer: “…let’s talk.” I certainly did not expect to be writing about economics in response to seeing Mission: Impossible – Ghost Protocol last night (a great movie, by the way). But as you […]
Did The Economist Present Austrian Theory Accurately?
As krlatham pointed out yesterday, it is wonderful to see the Austrian school get a shout out in such a noted publication as The Economist. While it is true, in a sense, that all publicity is good publicity, there were some shortcomings in The Economist’s representation of Austrian theory. The author writes that “Austrians see […]
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 in court […]
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 […]
Incomplete Logic Strikes Again!
Pat Garofalo of Think Progress bemoans the worsening housing crisis as housing prices fall ever lower despite marginal gains in employment. To be clear, Pat is just expanding on a recent Wall Street Journal piece. What both articles highlight is the fact housing prices have failed to rebound. Low home values have made it much harder […]
The Economist Speaks!
http://www.economist.com/node/21542174 Is fiscal stimulus not working? Then do more of it, say the neo-chartalists. Are monopolies and price controls a problem? Then get rid of the central bank’s monopoly in setting the price of credit and the supply of government money, say the Austrians The Economist, beloved and respected throughout the profession, ridiculed by outsiders […]
Did World War II End the Great Depression?
Below is a quote from Paul Krugman’s blog yesterday: “All around, right now, there are people declaring that our best days are behind us, that the economy has suffered a general loss of dynamism, that it’s unrealistic to expect a quick return to anything like full employment. There were people saying the same thing in the 1930s! […]
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 […]