Category: Economic Theory

Discussion of various points of free markets. See Government Economic Policy for US Government’s significant role.

An Empire of Wealth. John Steele Gordon

I didn’t start with a specific intent to find fault with the economic narrative. On the whole there’s much to admire about the book; nonetheless, the antagonism to the Glass-Steagall Act was striking in revealing Gordon’s short-sightedness. Totally oblivious to the coming financial crisis, with banks taking massive risks with depositors money that the government, not banks, had to guarantee.

Soft Sciences, Hard Sciences

Soft sciences deal with human behavior and have value judgments in them. Hard sciences strive to understand the physical world and its phenomena.

German 10 Yr rate 1.5% lower than US 10 Yr rate

How can German 10 Yr rate be more than 1.5% less than the US 10 Yr rate? The German rate is 0.23%, while US Treasury rate is 1.92%! The most likely answer is that investors think that the difference in local currency valuation will disappear as the euro falls against the dollar. The euro exchange…

Inflation Measurement

The sticker shock you get in the grocery store is apparent inflation. Real inflation occurs when your income can’t buy the same daily goods with your salary or when you have to work longer to earn enough to purchase that market basket.

Russia and Oil Prices

The Russian currency has a tendency to weaken so that the dollars earned by oil export are converted to more nearly equivalent number of rubles.

Law of Selfish Action

It looks fine to move forward on the plank of a seesaw

A selfish action by one person may be good for that person, but if all people make the same decision – it can be bad for everyone.

Gas Price Inflation

Decline of US dollar purchasing power from continued inflation

In the Twilight Zone episode (1960), ‘The Hitchhiker’ a sign shows gas at 32.9 cents/gal. Now it’s about 10 times higher. What’s that inflation rate?

Thoughts that I Want to Draw More Meaning From

Thoughts come and go during the day.  Some I’d like to know more about. Income Inequality.  Vision statement.  Society is for people, not markets.  Markets are a means, not an end.  Yes, equality of opportunity, not equality of outcome; but free markets don’t guarantee equality of opportunity – proof: firms only want equality of opportunity…