By Monty Pelerin, on December 20th, 2009 A recent post suggesting that President Obama could play most of the roles in the drama Glengarry Glen Ross brought several comments from readers about David Mamet, the extremely talented author. While I was familiar with a small portion of his work, I knew little to nothing about the man. One reader referenced Mamet’s article in The Village Voice entitled David Mamet: Why I Am No Longer a ‘Brain-Dead Liberal.’ Mamet’s categorization of society into two main groups, his role as a member of one of these groups and how he “switched teams,” so to speak, was very interesting reading. While it was not a rapid “road to Damascus conversion,” the change was just as complete as evidenced by the following quote:
“‘Aha,’ you will say, and you are right. I began reading not only the economics of Thomas Sowell (our greatest contemporary philosopher) but Milton Friedman, Paul Johnson, and Shelby Steele, and a host of conservative writers, and found that I agreed with them: a free-market understanding of the world meshes more perfectly with my experience than that idealistic vision I called liberalism.”
Share/Save
By Monty Pelerin, on December 8th, 2009 Jobs or Snow Jobs?
Thomas Sowell
Tuesday, December 08, 2009
President Obama keeps talking about the jobs his administration is “creating” but there are more people unemployed now than before he took office. How can there be more unemployment after so many jobs have been “created”?
Let’s go back to square one. What does it take to create a job? It takes wealth to pay someone who is hired, not to mention additional wealth to buy the material that person will use.
But government creates no wealth. Ignoring that plain and simple fact enables politicians to claim to be able to do all sorts of miraculous things that they cannot do in fact. Without creating wealth, how can they create jobs? By taking wealth from others, whether by taxation, selling bonds or imposing mandates.
However it is done, transferring wealth is not creating wealth. When government uses transferred wealth to hire people, it is essentially transferring jobs from the private sector, not adding to the net number of jobs in the economy.
If that was all that was involved, it would be a simple verbal fraud, with no gain of jobs and no net loss. In reality, many other things that politicians do reduce the number of jobs.
Politicians who mandate various benefits that employers must provide for workers gain politically by seeming to give people something for nothing. But making workers more expensive means that fewer are likely to be hired.
During an economic recovery, employers can respond to an
Continue reading Thomas Sowell on Snow Jobs
By Monty Pelerin, on November 12th, 2009
Image by Toban Black via Flickr
Most people cannot conceive of a world without regulations. I can’t either. But I can conceive of a world that most would think ridiculously defunct of oversight.
We tend to view the world in terms of what exists now, instead of what could or should exist. A good economist never ignores the institutional framework, because it provides the incentives to which economic actors respond. A great economist, however, goes beyond the existing. He examines the institutional framework from a normative perspective. Why did the existing framework evolve? What political and business interests produced it? Can patches to the system improve it? Do we need a completely different approach to regulation?
A particularly incisive post on this comes from Cafe Hayek:
Thomas Sowell has said that economics helps you understand that there are no solutions, only tradeoffs. In that spirit, I want to recommend Arnold Kling’s study of the financial crisis, Not What They Had in Mind. My favorite quote from the essay is a variant on Sowell’s:
The lesson is that financial regulation is not like a math problem, where once you solve it the problem stays solved. Instead, a regulatory regime elicits responses from firms in the private sector. As financial institutions adapt to regulations, they seek to maximize returns within the regulatory constraints. This takes the institutions in the direction
Continue reading Why Regulation Fails Regularly
By Monty Pelerin, on November 7th, 2009
Cover via Amazon
Misconceptions That Mar Medical Care
Posted 11/06/2009 06:19 PM ET
This is the last installment in a nine-part series excerpting the chapter on medical care from the latest version of economist Thomas Sowell’s “Applied Economics.” The entire series can be read at IBDeditorials.com.
IBD Exclusive Series:
Thomas Sowell on The Economics of Medical Care
A number of confusions plague discussions of the economics of medical care.
A confusion between prices and costs has allowed politicians in various countries to be able to claim to be able to bring down the cost of health care, when in fact they only bring down the individual patient’s out-of-pocket costs paid to doctors, hospitals, and pharmacies.
The costs themselves are not reduced in the slightest when additional money to pay for these costs is collected in taxes or insurance premiums and routed through either government or private bureaucracies. Since these bureaucracies and the people who work in them are not free, they add to the cost of providing medical treatment.
Most proposals to bring down the cost of medical care pay little or no attention to the actual cost of creating
Continue reading Tom Sowell on Medical Care
By Monty Pelerin, on November 6th, 2009
Image via Wikipedia
Image via Wikipedia
“Economics and politics confront the same fundamental problem: What everyone wants adds up to more than there is. Market economies deal with this problem by confronting individuals with the costs of producing what they want, and letting those individuals make their own trade-offs when presented with prices that convey those costs. That leads to self-rationing, in the light of each individual’s own circumstances and preferences.
Politics deals with the same problem by making promises that cannot be kept, or which can be kept only by creating other problems that cannot be acknowledged when the promises are made.” Dr. Thomas Sowell
Share/Save
|
Friedrich von Hayek
Friedrich von Hayek founded the Mont Pelerin Society.
“Monty Pelerin” is a pseudonym chosen by this blogger to convey general agreement with the philosophy, goals and spirit of the Mont Pelerin Society. No other connection exists between the blogger and the Society.
|
