Archive for Economics
How To Be Poor
Posted by: | CommentsExtreme poverty is not a difficult condition to reach. All you have to do is remove yourself to a desolate wilderness area, and exert the minimum effort necessary to feed and shelter yourself. Any increase in activity, or human interaction, will make you less poor.
It’s more difficult to become poor if you start off with the advantages of modern technology, surrounded by the incredible human resources of a capitalist republic. Here are some techniques that both individuals, and nations, find equally reliable for impoverishing themselves:
Book Review – Economics in One Lesson by Henry Hazlitt
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“Economics is haunted by more fallacies than any other study known to man.” is the opening sentence Henry Hazlitt’s classic primer on economics, Economics in One Lesson. In this classic first published in 1946 takes the reader through basic economic reasoning and applies it to a variety of policy issues. While some of the issues are dated many are not just the names and particulars have changed.The first chapter entitled simply “The Lesson” explains the pitfalls that lead to faulty economic reasoning. The first flaw is self interest which can prevent sound reasoning. The second is the inability to look beyond the initial effects which are often good to see all the secondary effects. In modern speak this is often called the “unintended consequences” Hazlitt explains this fallacy in the following passage which is also on the first page: This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences. ”
GM Paid Back Bailout Loan With Bailout Money
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You are probably hearing radio ads or seeing television ads from GM trumpeting their complete payback of their bailout loan plus interest five years early. On the surface, this would seem to be exciting news.
However, according to Forbes magazine, the ads are very misleading and border on downright lies.
The Dreadful Equation
Posted by: | CommentsWhat is money? It’s a medium of exchange – you use it to make purchases. To the average individual, money is also a means of cooperation. It transforms the value of your labor into a very efficient form of communication.
Suppose you’re a skilled chef who knows very little about carpentry. You could spend many hours struggling to make a bookshelf, producing a rickety and unlovely piece of furniture. It would be better to find a skilled carpenter and offer to trade your gourmet cooking for a well-constructed bookshelf.
Money makes this transaction vastly more efficient – you can choose from many different carpenters and compare their prices. Great companies have formed to produce mass quantities of bookshelves, which is much more effective than hiring out individual carpenters to construct shelves on demand, resulting in much lower prices to the consumer. You don’t have to spend time finding a carpenter you can trust, then waste more time haggling over the relative value of stuffed pheasant versus six feet of shelving. The value of your cooking skill is converted into money, and so is the value of the bookshelf. This is much better than bartering. Money is a swift, versatile, and precise vehicle for cooperative effort.
The Obama Stimulus: Prediction vs. Reality
Posted by: | CommentsIt’s about jobs. Really. Seriously. I promise.
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