Russ Roberts | The Future of Keynesianism - Know Your Limits | The European Magazine - The Debate Magazine
This is an interesting critique of Keynesian economics.
EXCERPT:
"Economics isn’t rocket science; it’s a lot harder. We should be wary of governments trying to solve the crisis with sweeping policy proposals."
Thursday, February 28, 2013
Thursday, February 21, 2013
Desperate Postal Service tries to find its cool factor | Reuters
Desperate Postal Service tries to find its cool factor | Reuters
EXCERPTS:
"The federal government's mail transport and delivery agency this week said it will roll out a line of apparel and accessories it plans to sell in department and specialty stores.
"The "Rain Heat & Snow" brand of clothing, named after the Postal Service's motto trumpeting its carriers' determination to overcome whatever Mother Nature can throw at them, would put USPS in the "cutting edge of functional fashion," it said.
"The idea is to blend in with the younger audiences as well as the more educated consumer," said Roy Betts, a spokesman for the Postal Service.
***
"The mail carrier lost about $16 billion last year and expects to run out of money by October if legislation isn't passed soon.
"Because of its dire financial situation, Geddes said, lawmakers need to free the Postal Service to operate more like a commercial business, with the leeway to try out innovative new ways to create revenue and stay relevant.
QUESTIONS:
EXCERPTS:
"The federal government's mail transport and delivery agency this week said it will roll out a line of apparel and accessories it plans to sell in department and specialty stores.
"The "Rain Heat & Snow" brand of clothing, named after the Postal Service's motto trumpeting its carriers' determination to overcome whatever Mother Nature can throw at them, would put USPS in the "cutting edge of functional fashion," it said.
"The idea is to blend in with the younger audiences as well as the more educated consumer," said Roy Betts, a spokesman for the Postal Service.
***
"The mail carrier lost about $16 billion last year and expects to run out of money by October if legislation isn't passed soon.
"Because of its dire financial situation, Geddes said, lawmakers need to free the Postal Service to operate more like a commercial business, with the leeway to try out innovative new ways to create revenue and stay relevant.
QUESTIONS:
- I think it would be a good idea to have the Postal Service operate like a commercial business.What does a commercial business do when it loses money year after year with no end in sight?
- When a private business decides to provide a new product it is because its owners believe this will be profitable. They willingly risk their own money, knowing that if they are wrong the company will lose money and their own wealth will suffer. When the Postal Service, whose area of expertise is in delivering mail, decides to add a new product line (apparel and accessories), whose money are they risking? Who will bear the cost if it turns out that the people who deliver mail don't have any special expertise in designing clothing?
Wednesday, February 20, 2013
Thursday, February 14, 2013
One of a market economy's greatest flaws.... silence
From Donald Boudreaux:
EXCERPTS:
EXCERPTS:
"One of the market economy's greatest flaws is the silence it maintains when it is working relatively flawlessly. When the market stumbles, though — or when it's tripped up by unwise government interventions — a great clamor is heard. Unemployment rises, stock prices and exchange rates plummet, and tales abound of this hardship and that lost dream. Pundits proclaim loudly that the unreliable market must be “corrected” or “tamed” by the wisdom and prudence of politicians.
But when the market works smoothly — as it typically does — hardly anyone notices. We take its successes for granted.
That's the thing about a steady stream of relatively small, almost daily improvements in our standard of living. We acclimate to them.
Recall the first time you saw someone unlock or lock an automobile by using a remote-keyless-entry device. When I first saw someone point a plastic nodule at his car to unlock it from a distance, I marveled. “One day I'll earn enough money to drive a car with that feature!” I told myself.
***
"That was 1994. I do indeed now drive a car with keyless entry. And so do most Americans. Keyless entry is standard on even low-end automobiles today. Seeing someone unlock or lock a car using a keyless-entry device is as remarkable to us now as seeing a pigeon in Central Park. It's just part of our world.
Yet who invented this device? Do you know? Even if you do know the names of the people whose creativity was key (!) to this invention, those people are likely complete strangers to you. And yet those strangers pondered and experimented and spent time on efforts that resulted in affordable and reliable keyless-entry systems that benefit you .
Why did they perform these tasks? What mechanisms and institutions bring together all the workers, materials and financing required for the continual production (and improvement) of these handy little devices?
The answer is “the market.”
The market is a vast and complex pattern of voluntary choices and exchanges — including the taking of financial risks — that emerge when each individual is free to produce, to sell and to buy according to his or her own individual lights. The only constraints upon such exchanges are the rules of private property and of freedom of contract. If I want your pet frog or your productive factory, I can get it only if I agree to give you something that you voluntarily accept in exchange.
Unlike in politics, market participants do not confiscate the property of others. Unlike in politics, where those with the most votes get to take unilaterally from those with the fewest votes, in markets, even those with the most money are prevented from unilaterally taking even from those with the least money.
Tuesday, February 12, 2013
Monday, February 11, 2013
A Simple Rule for a Complex World
From Don Boudreaux:
EXCERPTS:
"Saying “Let the market handle it” is to reject a one-size-fits-all, centralized rule of experts. It is to endorse an unfathomably complex arrangement for dealing with the issue at hand. Recommending the market over government intervention is to recognize that neither he who recommends the market nor anyone else possesses sufficient information and knowledge to determine, or even to foresee, what particular methods are best for dealing with the problem.
"To recommend the market, in fact, is to recommend letting millions of creative people, each with different perspectives and different bits of knowledge and insights, each voluntarily contribute his own ideas and efforts toward dealing with the problem. It is to recommend not a single solution but, instead, a decentralized process that calls forth many competing experiments and, then, discovers the solutions that work best under the circumstances.
***
"This process is flexible and it encourages creativity. It also denies to anyone the power to unilaterally impose his own vision on others.
"In brief, to advise “Let the market handle it” is a shorthand way of saying, “I have no simplistic plan for dealing with this problem; indeed, I reject all simplistic plans. Only a competitive, decentralized institution interlaced with dependable feedback loops — the market — can be relied upon to discover and implement a sufficiently detailed way to handle the problem in question.”
"None of this is to say that getting the government out of the way is sufficient to create peace and prosperity. Markets require a rule of law to ensure that, among other blessings, property rights are secure and exchangeable. At their best, governments can help to protect our rights. Markets also require a culture in which commerce flourishes.
***
"While declaring “Let the government handle it” comes across as a solution, it’s no such thing. Instead, it is merely a sign of a simple and baseless faith — a simple and baseless faith that people invested with power will not abuse that power; that political appointees possess or will find better answers than will millions of people pursuing solutions in their own ways, and staking their own resources and reputations on their efforts; that only those ‘solutions’ that are spelled out in statutes and regulations and that have officials paid to implement them are true solutions.
"So yes, show me a problem and I’ll likely respond “Let the market handle it.” I’ll respond this way because I know that not only is my own meager knowledge and effort never up to the task of solving big problems but that not even the Einsteins or Krugmans or Bushes amongst us can know the best solution to any social problem.
EXCERPTS:
"Saying “Let the market handle it” is to reject a one-size-fits-all, centralized rule of experts. It is to endorse an unfathomably complex arrangement for dealing with the issue at hand. Recommending the market over government intervention is to recognize that neither he who recommends the market nor anyone else possesses sufficient information and knowledge to determine, or even to foresee, what particular methods are best for dealing with the problem.
"To recommend the market, in fact, is to recommend letting millions of creative people, each with different perspectives and different bits of knowledge and insights, each voluntarily contribute his own ideas and efforts toward dealing with the problem. It is to recommend not a single solution but, instead, a decentralized process that calls forth many competing experiments and, then, discovers the solutions that work best under the circumstances.
***
"This process is flexible and it encourages creativity. It also denies to anyone the power to unilaterally impose his own vision on others.
"In brief, to advise “Let the market handle it” is a shorthand way of saying, “I have no simplistic plan for dealing with this problem; indeed, I reject all simplistic plans. Only a competitive, decentralized institution interlaced with dependable feedback loops — the market — can be relied upon to discover and implement a sufficiently detailed way to handle the problem in question.”
"None of this is to say that getting the government out of the way is sufficient to create peace and prosperity. Markets require a rule of law to ensure that, among other blessings, property rights are secure and exchangeable. At their best, governments can help to protect our rights. Markets also require a culture in which commerce flourishes.
***
"While declaring “Let the government handle it” comes across as a solution, it’s no such thing. Instead, it is merely a sign of a simple and baseless faith — a simple and baseless faith that people invested with power will not abuse that power; that political appointees possess or will find better answers than will millions of people pursuing solutions in their own ways, and staking their own resources and reputations on their efforts; that only those ‘solutions’ that are spelled out in statutes and regulations and that have officials paid to implement them are true solutions.
"So yes, show me a problem and I’ll likely respond “Let the market handle it.” I’ll respond this way because I know that not only is my own meager knowledge and effort never up to the task of solving big problems but that not even the Einsteins or Krugmans or Bushes amongst us can know the best solution to any social problem.
Wednesday, February 6, 2013
Increasing the minimum wage in Illinois to $10 an hour - should you move there?
EXCERPTS:
"Gov. Pat Quinn is expected to call on lawmakers to raise the minimum wage, allow online voter registration and switch Illinois to open primary elections when he delivers his State of the State at noon today.
"Quinn wants Illinois' minimum wage to increase from $8.25 to $10 an hour, according to a source familiar with the planned remarks. The federal minimum wage is $7.25 an hour, but Illinois' rate has been higher for years.
"The Democratic governor, who faces re-election next year, also intends to focus on his accomplishments since taking office while delivering a frank assessment of the budget challenges the state still faces.
QUESTIONS:
1. Will increasing the minimum wage to $10/hour ensure that everyone will earn more?
2. Who will be hurt by this increase?
3. Do you think those who are hurt by the increase will realize that the governor's policy was the cause of their being hurt?
Tuesday, February 5, 2013
How Dictators Come to Power in a Democracy | Jim Powell | Cato Institute
EXCERPTS:
"Hitler gave speeches appealing to those he called “starving billionaires” who had billions of paper marks but couldn’t afford a loaf of bread. Altogether, during the inflation, Hitler recruited some 50,000 Nazis and became a political force to reckon with. Economist Constantino Bresciani-Turroni called Hitler “the foster child of the inflation.”
"To be sure, he attempted a coup that failed (November 8, 1923), and he was imprisoned. But he retained his key followers and wrote his venomous memoir Mein Kampf that became the Nazi bible.
Monday, February 4, 2013
Argentina freezes prices to break inflation spiral
BUENOS AIRES, Argentina (AP) — Argentina announced a two-month price freeze on supermarket products Monday in an effort to break spiraling inflation.
The price freeze applies to every product in all of the nation's largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains....
The commerce ministry wants consumers to keep receipts and complain to a hotline about any price hikes they see before April 1.
Polls show Argentines worry most about inflation, which private economists estimate could reach 30 percent this year. The government says it's trying to hold the next union wage hikes to 20 percent, a figure that suggests how little anyone believes the official index that pegs annual inflation at just 10 percent.
Friday, February 1, 2013
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