Fed Chairman Ben Bernanke is puzzled by the pace of the economic wreckovery:
The economy’s continuing struggles aren’t just confounding ordinary Americans. They’ve also stumped the head of the Federal Reserve.
Fed Chairman Ben Bernanke told reporters Wednesday that the central bank had been caught off guard by recent signs of deterioration in the economy. And he said the troubles could continue into next year.
“We don’t have a precise read on why this slower pace of growth is persisting,” Bernanke said. He said the weak housing market and problems in the banking system might be “more persistent than we thought.”
The is the folly of central planning. They believe they can create an economy and make it do what they want it to do or “stimulate” it when it struggles. The shocking revelation, at least to The Ben Bernank, that central planners may have not been able to revive a struggling economy, despite bailouts to rent-seeking businesses deemed “too big to fail,” including financial institutions and automakers, massive spending; I’m reminded of truism from F.A. Hayek, a Nobel Prize winning economist, from his book, The Fatal Conceit:
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
We often hearing about how successful people want to give back to society in some way, usually by giving up the wealth they earn. It’s something that they tend to preach constantly, though mostly through charity; but also through higher taxes.
The Atlas Network has put out a great video on the morality of profit, nothing that those “giving back” have nothing to give back at all. The money they made was because they got rich through voluntary exchanges of commerce with consumers that wanted to by the products they were selling:
In this new video from Reason TV, Nick Gillespie talks with Kevin Williamson, deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, about the economic system that the left seems to constantly push:
I picked up this book a couple months ago. I haven’t finished read it yet, but what I have read is very good.
I don’t remember who posted this on Facebook, but as someone who’s pretty critical of modern education, I eagerly clicked on the article. It’s a blog post from Psychology Today dated from September 9, 2009 (what can I say? I’m not up on my psychology reading). In it, the author talks about the “sins” of our current educational model.
I don’t agree with everything he says, since a fair amount of it is of the “cooperation all good/competition all bad” type of claptrap that is often used to support collectivism in our modern world, often without any real basis for it. However, not all of it falls into this category. Some of it actually brings up some pretty good points. For example:
4. Interference with the development of personal responsibility and self-direction.
The health care bill, like any massive, comprehensive “reform” effort, has always been marked by the contradictions inherent in any such attempt. Anyone with common sense realizes you can’t demand both more coverage, while keeping costs down as well. The fact that there are unintended consequences is not only predictable, but inevitable.
Reason reports on the attempts to “fix” what has been one of many casualties of the PPACA, child-only insurance policies. These policies are designed to fill a relatively small gap in the insurance market - children who cannot obtain coverage from parents but are also above the qualifications for Medicaid. As a consequence of the legislation requiring coverage for all “pre-existing conditions” these policies are now not being written.
Of course, instead of realizing that bad law creates entirely new problems, legislators in several states are now rushing to address this new hole. Not by fixing the poorly-designed law, of course; but by introducing entirely new law that will carry with it its own side effects. In Texas, one legislator has filed a bill that would require insurers to issue policies to anyone under 19. While he’s at it, why not throw in a free puppy as well?
Some Keynesians, such as Larry Summers, are claiming that the recent earthquake in Japan - truly a devastating and saddening event that has claimed the lives of thousands - could help that country’s economy:
It may lead to some temporary increments ironically to GDP as a process of rebuilding takes place. In the wake of the earlier Kobe earthquake Japan actually gained some economic strength.
After expressing sorrow for the people of Japan, former White House economics adviser Larry Summers said, “it may lead to some temporary increments in GDP as a process of rebuilding takes place. In the wake of the earlier Kobe earthquake, Japan actually gained some economic strength.” Any economist is dead wrong to claim that there is a silver lining in a natural or man-made disaster. As it turns out, earthquakes and tsunamis are not stimuli. Destruction will not create prosperity.
As economics Professor Steven Horwitz notes, “If one really believes such disasters are good for the economy, even in the short run, then one should positively recommend burning down neighborhoods and destroying farm machinery. After all, think of the demand for construction workers and equipment, as well as the demand for manual labor on farms that would generate. Why we’d be rich as kings in no time, right?”
Yesterday, Rep. Ron Paul (R-TX) joined Morning Joe to discuss spending and economics, foreign policy, Donald Trump and his straw poll victory at CPAC:
If you enjoyed the video for “Fear the Boom and Bust,” which explains the decades old battle between ideas of F.A. Hayek and John Maynard Keynes, the guys at EconStories - Russ Roberts and John Papola - are looking for donations for their follow-up video.
In case you haven’t seen it, here is “Fear the Boom and Bust”:
It would be comic if it wasn’t so pathetically tragic. On Tuesday, President Barack Obama stood at the White House to give a press briefing to reporters concerning a compromise deal cobbled together between the president and the Republicans. Just over two years ago this man soaked in the adulation of tens of thousands as he stood before the cheering, weeping, fainting throngs who saw him as a modern-day messiah. Indeed, he seemed to think of himself as such, proclaiming his nomination would be remembered by history as the “moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on earth.”
Alas, he made a fatal mistake. He believed his own hype. Now, with our illustrious Community-Organizer-in-Chief still reeling from the fact that his personal charm and charisma has not ended the war our nation is engaged in (or even closed Guantanamo), his economic policy has been disastrous and has actually increased unemployment, and the planet still has a long way to go to be healed, To top it off he has been handed the worst electoral defeat in more than half a century, losing more than 60 seats in the House to give Republicans control. The sobering reality that he is a mere mortal must be stunning to him.
Yesterday, I noted that Friedrich Hayek is getting some much due attention and respect in as Keynesian economics has again turned out to be a bust. And I also posted the video of “Fear the Boom and Bust,” which was put together by Russ Roberts and John Papola of EconStories, that outlines the decades old battle between ideas of Hayek and John Maynard Keynes.
About a month ago, Roberts and Papola gave a sneak preview of their next video at the Economist’s Buttonwood Gathering. Here it is: