Hysteresis

Benyamin Appelbaum:

More grim ruminations on our economic prospects: What if recessions do permanent damage, diminishing a nation’s productive capacity?

As I wrote on Thursday, recessions are commonly understood as disruptive rather than destructive to the economy as a whole. But a paper presented Friday at the Brookings Institution warns that recessions may do . . . → Read More: Hysteresis

Flaws in the Defense of Free Trade

From Art Carden:

But there’s more to this than meets the eye. What we don’t see are the hidden costs of protectionism. The first is the waste from using costly production methods. Protectionism changes manufacturers’ incentives, and they use capital and labor that could have been better-used elsewhere to produce (say) cars. The economic . . . → Read More: Flaws in the Defense of Free Trade

Systemic Uncertainty

Thomas Sowell explains why the recovery is delayed:

That is a big part of the problem. It is not politically possible for either the Federal Reserve or the Obama administration to leave the economy alone and let it recover on its own.

Both are under pressure to “do something.” If one thing doesn’t work, . . . → Read More: Systemic Uncertainty

Keynes vs. Hayek

Freidrich Hayek and the Austrian school of economic policy argue for a laissez faire approach to the economy – emphasizing individual actions and criticizing government intervention. John Maynard Keynes acknowledged that economies could, over time, correct themselves, but argued that government had a responsibility to intervene and stimulate demand when the economy is in . . . → Read More: Keynes vs. Hayek

Is There a Crisis of Capitalist Democracy?

Richard Posner’s recent book, ‘The Crisis of Capitalist Democracy’, is mainly about the global financial crisis, how it came about in the US, the lessons that the author thinks we should have learned from it and what governments should do to prevent similar crises in future. According to this distinguished author the crisis came about . . . → Read More: Is There a Crisis of Capitalist Democracy?

Stossel Does Atlas Shrugged, Asks "Who is Wesley Mouch?"

In tomorrow’s episode of John Stossel’s new show on Fox Business, he will address the question, “Who is Wesley Mouch?” in speaking to the parallels between Atlas Shrugged and contemporary America.  As one might expect, in my view it seems as if almost all businessmen (given their predilection towards using government to destroy markets . . . → Read More: Stossel Does Atlas Shrugged, Asks "Who is Wesley Mouch?"

Colorado Governor: “Reason For Optimism”

An open letter from Colorado Governor Bill Ritter:

Here in Colorado, we’re seeing encouraging signs of success and reason for optimism.

Last week we learned Colorado’s unemployment rate has dipped to 7%, now nearly 3 full points below the national average of 9.8% — and lower than all but a dozen states’ . . . → Read More: Colorado Governor: “Reason For Optimism”

Credit Cards and the Collapsing Country

The policy of credit card companies charging an annual fee for those cardholders with solid credit is a good proxy for the state of the nation, and also a microcosm of both the progressive (read socialist) movement in this country and the unintended consequences of an economic policy destined to fail — or succeed . . . → Read More: Credit Cards and the Collapsing Country

Senate Likely to Extend $8,000 Home-Buyer Tax Credit

Senate Majority Leader Harry Reid has proposed a new version of a popular home-buyer tax-credit extension. Folks close to the matter claim a vote on the proposal is coming shortly.

Another recent Senate alternative would continue the $8,000 credit for four months and then gradually phase it out after that. Current law . . . → Read More: Senate Likely to Extend $8,000 Home-Buyer Tax Credit

How Credible is Rudd’s Spin on the History of Economic Reform?

In his comments in “The Australian” (8 Sept. ’09) on Paul Kelly’s new book, “The March of Patriots”, Kevin Rudd attempts to make a distinction between the economic reforms of the Hawke-Keating Labor governments and those of the Howard conservative government. Rudd describes the Hawke-Keating reforms as “modernising our economy to make it more . . . → Read More: How Credible is Rudd’s Spin on the History of Economic Reform?