Economics

Earthquakes, stimulus and the Broken Window

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.

Over at The Daily Caller, Matt Kibbe, president of FreedomWorks, debunks the notion floated just days after this disaster:

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?”

Ron Paul chats with Morning Joe

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:

EconStories needs your help!

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.

They discussed the plans a couple of months ago at The Economist’s Buttonwood Gathering, So, if you want to see this happen, send them a few bucks.

In case you haven’t seen it, here is “Fear the Boom and Bust”:

Economics, Class Warfare and the Washington Blame Game

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.

A preview of “Fear the Boom and Bust” Part 2

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:

Chart of the Day: Wasn’t the “stimulus” supposed to keep unemployment down?

Via Dan Mitchell comes this chart that shows monthly unemployment numbers since the passage of the “stimulus” in February of last year. During the debate over passage of the Keynesian-style spending package, the Obama Administration told us that the “stimulus” bill would keep unemployment under 8%.

Of course, unemployment hit as high as 10.1% in October of last year, and high been above 9.5% consecutive months, the longest streak since the Great Depression.

Unemployment Chart

How do you create a job, Mr. Blumenthal?

His name may be Dick Blumenthal (D-CT), but I’m gonna call him Miss Teen South Carolina. During a recent debate, Linda McMahon (R-CT) asked Blumenthal, “How do you create a job?”

Here is his answer:

The answer was woefully inadequate, espousing much of the same in the way of economic policies that we’ve seen from President Barack Obama and Democrats, such restrictionist trade policies (Buy American) and government spending to drive demand for jobs (Keynesian economics).

Unfortunately, McMahon is trailing by an average of 9.2 points, according to Real Clear Politics.

It’s the spending, stupid

In a new video from the Center for Freedom and Prosperity, Dan Mitchell explains that deficits aren’t the problem with the budget, it’s runaway spending that causes the red ink:

Bill Clinton embraces F.A. Hayek

Has Bill Clinton been reading F.A. Hayek? You would think so after reading remarks he made at a recent speaking engagement:

Friedrich Hayek, 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.”

Bill Clinton, 9/21: “Do you know how many political and economic decisions are made in this world by people who don’t know what in the living daylights they are talking about?”

Next thing you know, Clinton will be jamming to “Fear the Boom and Bust”:

H/T: Greg Mankiw

Blue Dogs are no friends to free trade

A day after they launched a new website aimed at Blue Dog Democrats, the Club for Growth is continuing to expose these fiscal frauds by shining sunlight on their record on free trade:

Blue Dog Democrats claim to be fiscal conservatives, but to them, that means holding the line on just taxes and spending. Nowhere in their agenda do they profess to be supporters of free trade, which is something you would expect from a true fiscal conservative.

There’s a reason for that. The Blue Dogs, by and large, are huge protectionists.

96% of them (52 of 54) voted to slap tariffs on China last week. Before that, 86% of them (38 of 44) voted to block the free trade agreement with Colombia.

Worse still, twenty-three of them have sponsored the TRADE Act, which is the ultimate protectionist bill to sign up for. It would reopen all of our previous free trade agreements and essentially gut them. It’s no wonder that the labor unions love it.

Supporting free trade is good for the middle class, despite the outright lies from populists like Lou Dobbs and President Barack Obama. Even Rep. Gene Taylor (D-MS), who often goes against party on fiscal matters, has fallen into trap of blaming free trade for the many of nation’s problems.

 


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