Ludwig von Mises, Frederich Hayek and other Austrians believed in the foolishness and errors inherent in attempting to macromanage an economy. None, however, expressed their objections quite as colorfully as Seth Klarman: QOTD: "Modern economies are too complex to be reliably modeled; their connections and correlations are loose and imprecise, the second- and third-order effects largely immeasurable, the fickle vagaries [...]
Econ 101
standard The Broken Window Fallacy
The “Broken Window” fallacy was exposed by Frederic Bastiat over 150 years ago. It never fails to reappear every time there is a natural disaster. The fallacy is a marker of intellectual IQ. Those who commit the fallacy should not have any credibility, especially with regard to economics. Bastiat explained how those who saw a broken window as a good [...]
standard Common Sense Video — Friedman on Redistribution
Milton Friedman responds to the redistribution issue:
standard All Trade Is Good
Outsourcing is a good thing, despite our two presidential opponents excoriating each other over it. Harry Binswanger provides a defense for outsourcing in a recent Forbes article. Here is an excerpt from the article: Americanism means individualism, but “Hire American” is collectivist, urging businesses to pay more just to patronize “our guys.” This is not rational patriotism, it is not [...]
standard Economics for Idiots
A clever presentation that includes Reagan educating Obama with some famous students participating:
standard It’s From Government’s Stash!
The following piece from Nicholas Snow puts into perspective the game of government. By that, I mean government is unable to do something for you that they have not done first against someone else. Government has no money and produces nothing. Anything it has it has taken via coercion from some productive member of society. THE MAGICAL DELUSION By Nicholas Snow [...]
standard President Quixote’s Legacy: Confused, Ill-Educated and Not Too Bright
The number of Obama supporters seems inversely related to his time in office. Many wonder what happened to “The One We Are Waiting For.” Obama assumed office in difficult economic times. After a couple of years of excuses, which included “the problems were worse than we knew” and the generic, all-purpose “it’s Bush’s fault,” Obama now owns the original problems [...]
standard Chicago vs. Austrian Economics
For free-market layman economists, the differences between the Chicago School and the Austrian School are often blurred. Both often come to the same policy conclusions, but from very different perspectives. Robert Murphy, an Austrian, describes the differences here.
standard Updating “Free To Choose”
Milton Friedman’s TV series “Free to Choose” aired on PBS circa 1980. It probably did more good than any book or video before or since bringing free market principles to the masses. Apparently there is a remake of sorts coming to PBS. As I understand it, it retraces Friedman’s steps and visits around the world updating the thirty-year old series. [...]
standard How Friedrich Hayek Viewed John Maynard Keynes
This interpretation of Keynes through Hayek’s eyes was produced by Taking Hayek Seriously: Hayek was a close student of the economic of John Maynard Keynes — he was, after all, the one who made the “General Theory” necessary after his seismic detonation of Keynes’ earlier “Treatise”. So what did this master economist — one of the all time leading students [...]
standard Keynes or Bastiat
The Broken Window Fallacy, debunked by Frederic Bastiat over 150 years ago, still reigns supreme in Keynesian economics. Some might call it the keystone of this brand of political-economic chicanery. It is the height of economic nonsense, yet supposedly intelligent and educated people In a modern day twist, Jason Kaspar channels his inner Bastiat and provides Keynesian “solutions” to our [...]
standard QE is the End of America as We Know It
Quantitative Easing is confusing for many people. That, of course, is for the Federal Reserve, the Federal Government and major financial interests. If people knew what was happening and what must result, there would likely be a revolt. Elsewhere, I have written that QE is nothing more than a euphemism for “money printing.” It is a policy of inflation dressed [...]