Newspapers this morning were full of the story of how physicists at CERN in Geneva have demonstrated that a particle (sub-atomic one) could go faster than the speed of light. I'm no physicist, (although I do make extensive use of the principles of gravity and inertia), but this appears to be a rather startling result … Continue reading The Difference Between Physics and Mainstream Economics
Month: September 2011
The Fed’s New “Twist” – Not Likely To Help
Late Wednesday The Federal Reserve announced a new program to try to stimulate the economy so that maybe somebody, somewhere could get a new job, or maybe it's so that critics would shut-up about employment. It's always hard to tell what The Fed's real objectives are. I don't have time to explain now why it's … Continue reading The Fed’s New “Twist” – Not Likely To Help
John Stossel Fails an Education Test and Demonstrates That He’s Economically Illiterate
John Stossel is a Fox Business News reporter. Stossel is an unabashed "libertarian" with a strong Austrian orientation on economics who focuses on economic issues. He's made a living out of being indignant and disgusted by "liberals" and "big government" which he sees as the root of all economic problems. He's been quite successful over … Continue reading John Stossel Fails an Education Test and Demonstrates That He’s Economically Illiterate
Obama’s So-Called Keynesian Stimulus Efforts Aren’t Very
The simple version of Keynesian economics suggests that if the economy is suffering from too little economic activity and high unemployment there are some policy options. Specifically Keynes suggests there are three general kinds of policy options: The central bank (The Fed in the case of the U.S.) could lower interest rates and create money … Continue reading Obama’s So-Called Keynesian Stimulus Efforts Aren’t Very
What a Liquidity Trap Looks Like in Pictures
I want to follow up a little on my discussion of the liquidity trap that we are have been in. Brad Delong has an excellent post today called "Four Years After the Wakeup Call". In it he shows some graphs which illustrate very well our the liquidity trap. Delong first serves us two graphs on … Continue reading What a Liquidity Trap Looks Like in Pictures
Yep, This Is What A Liquidity Trap Looks Like
People, businesses, and banks simply aren't investing in the sense of putting financial wealth to work in productive purposes with the intent to produce goods and thereby produce profits. Instead, folks, the ones who have financial wealth that is, are just sitting on cash. They're putting it in the bank at record low interest rates. … Continue reading Yep, This Is What A Liquidity Trap Looks Like
Stimulus Requires More Than Taking Your Foot Off the Brakes
Last week I discussed how I think the President's jobs proposal, the American Jobs Act, will be less than stimulating. I updated it here. I based my analysis on what economists call "back of the envelope" calculations - quick simple estimates of the key variables using rounded numbers. Now the folks at Goldman Sachs research … Continue reading Stimulus Requires More Than Taking Your Foot Off the Brakes
Note on Comments
There's been an upsurge in recent weeks in readership on this blog and I'm very gratified by it. Thanks to all of you for reading and, in many cases, passing links along to others or using my stuff in discussions in other sites. Along with that, I'm starting to get more frequent comments, which is … Continue reading Note on Comments
Where Are or Were The Jobs?
With the all the alleged concern in Washington now from both parties about job creation, there's something that's missing in much of the debate: facts. So let's take a look at some. I really like graphics like the one below. They're complex and take quite some time to read and fully absorb what's there, but … Continue reading Where Are or Were The Jobs?
Businesses (and Micro) Refute the Logic of Jobs Tax Credits
I wrote a few days ago about how I found the President's American Jobs Act proposal to be less than stimulating and I updated my assessment yesterday. Much of the proposal involves a lot of complex tax credit ideas that are supposed to provide the incentives for businesses to hire. The idea is that if a … Continue reading Businesses (and Micro) Refute the Logic of Jobs Tax Credits
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