The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. – F.A. Hayek
Posted in Economic Illiteracy, Economics Problems, Market Failures, You Can't Have it Both Ways on Feb 2nd, 2012
I cannot even begin to tell you how many times I am told, “yeah, supply and demand and prices work and all that, but if we allow them to run wild, the environment will inevitably be destroyed.” These arguments are often levied far more vehemently in the presence of classical liberals than in more mainstream [...]
Posted in Economics Problems on Jan 19th, 2012
Via Greg Mankiw, this video is spot on: Disclaimer: I went to Cornell. No difference. OK, little difference.
Posted in Economic Illiteracy, Economics Problems, You Can't Have it Both Ways on Jan 19th, 2012
About twice a year I end up writing a post screaming at people for not understanding what the term adverse selection means as it pertains to the health insurance market. I can almost understand if the popular press gets it wrong (not really, it is the job of real reporters to understand what they are [...]
Posted in Economics Problems on Jan 16th, 2012
Paul Krugman is NOT a raving Marxist. If you were to follow the back-and-forth in the blogosphere about the importance of the Keynesian paradigm, whether the stimulus was big enough, whether we are in a liquidity trap, whether the FED has any power to reflate the economy right now, whether this is an appropriate time [...]
Posted in Economics Problems, You Can't Have it Both Ways on Jan 4th, 2012
One justification for progressive income taxation is that a dollar of additional income to someone earning $600,000 per year in income is not valued nearly as much as a dollar of additional income to someone earning $18,000 per year. I’d like to point out three implications/observations based on this justification. If you use this as [...]
Posted in Economic Illiteracy, Economics Problems, Environment on Dec 29th, 2011
In the year 2000 there were 8,354 oil and petroleum based product spills in US navigable waters. 5 years later? 4,073. In 2008? 3,633. In 2009? 3,492. How much oil has been spilled? 2000: 1.43 million gallons 2005: 2.36 million gallons 2008: 777,000 gallons 2009: 196,000 gallons While 10x less oil spilled in waters since [...]
Posted in Classical Liberalism, Corporatism, Economic Illiteracy, Economics Problems on Dec 8th, 2011
Diligent readers will know that I frequently bang on the idea that we ought to be humble regarding the state of our knowledge and our ability to act on it. But that does not mean, as Hayek correctly pointed out, that economists cannot say anything, about the world. We are well positioned to make what [...]
Posted in Economic Illiteracy, Economics Problems, Politics on Nov 2nd, 2011
In an OpEd in tomorrow’s WSJ, Democratic Senate Candidate Jeff Greene tells us we should listen to the message of OWS folks. I may agree with him, but not when he pulls out the boilerplate arguments: … These policies, and deregulation, created the environment for widespread defaults as well as predatory lending, exotic mortgage derivatives, [...]
Posted in Economic Illiteracy, Economics Problems, Government Gone Wild on Aug 2nd, 2011
Here was Krugman on the pending Fiscal Train Wreck, it is sure to be a crowd pleaser: Now it projects a 10-year deficit of $1.8 trillion. And that’s way too optimistic. The Congressional Budget Office operates under ground rules that force it to wear rose-colored lenses. If you take into account — as the C.B.O. cannot [...]
Posted in Economics Problems, Property Rights on Jul 29th, 2011
I really try to do my best to read Progressive blogs and to stay away from getting near anything resembling an ad-hominem. With that in mind, I reprint in full today’s post from Scott Sumner, who is always well worth reading (of course, after reading him you will realize how utterly bad your macro education [...]
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