empty tables

The Empty Corona Chairs and the Spare Capacity Fallacy

– September 12, 2020

“Business responses to corona have shown us that unused items – from chairs and tables to urinals – still have value; they are still in use, even when nobody seems to be occupying them. Most importantly, government spending has little ability to raise that utilization. For this age-old economic fallacy, free lunches remain elusive.” ~ Joakim Book

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Citibank’s $900 Million Mistake and the Finality of Payments

– September 11, 2020

“Cases like Citbank’s $900 million mispayment and $846,000 bank drafts stuck in financial limbo make for interesting stories. But keep in mind that the participants in these transactions are the accidental victims of a payments system that provides hard finality. What is unseen is the huge amount of trade that the certainty of hard finality facilitates.” ~ J.P. Koning

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The Myth of Voting One’s Pocketbook

– September 11, 2020

“‘People vote their pocketbooks’ is a misleading and potentially insidious approximation of voter behavior. A better approximation for modern times is ‘People vote for the candidate or party that provides a better story about themselves.’ That can be problematic itself, but when we bring economic performance along for the ride the problems only multiply. Putting our economic fortunes in the hands of politicians is a recipe for division and stagnation, every time.” ~ Max Gulker

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The Sturgis Bike Rally, Sensationalist Reporting, and Broken Disease Models

– September 11, 2020

“By reevaluating the methodology used to report on the Sturgis rally, Black Lives Matter protests, anti-lockdown protests, Trump rallies, and so on, we can reach some more productive conclusions. There are certain things that are so significant and the tradeoffs favorable enough that they are worth braving a pandemic, such as Woodstock.” ~ Ethan Yang

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The Great LARP

– September 11, 2020

“Even more distressingly, 2020 is getting even deadlier. Violence, even murder, has increased of late, portending a potential shift from civil war games to actual civil war. And of course our civil liberties and what little fiscal and monetary discipline the federal government had left also died in 2020.” ~ Robert E. Wright

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closed

Coase and Covid

– September 10, 2020

“An implicit assumption undergirding the mandated NPIs is that ordering people to be confined at home and ‘socially distant’ from each other, despite the resulting massive disruption of economic and social activities, is the lowest cost means of protecting individuals from covid. But even if we grant here that mandated NPIs are an effective means of reducing the physiological harm caused by covid, they are not the only means of achieving this worthwhile outcome.” ~ Donald J. Boudreaux & Lyle D. Albaugh

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The Resilience and Brilliance of the World’s Poorest: The Case of Pagpag

– September 10, 2020

“The problem isn’t that the world’s poorest don’t work hard. The problem is that they work hard in societies where restrictions on economic freedom throttle growth.” ~ Art Carden

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America’s Fiscal Follies are Dangerously in the Red

– September 8, 2020

“History is filled with many examples of financial and economic disaster that has followed government fiscal recklessness. It can happen even here, in America.” ~ Richard M. Ebeling

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passing

Assar Lindbeck – Sweden’s Greatest Economist Died 90 Years Old

– September 8, 2020

“Lindbeck was a great economist and public voice of economic sanity. He will be sorely missed.” ~ Joakim Book

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Celebrate Entrepreneurs, Don’t Guillotine Them

– September 7, 2020

“The key to getting wealthy in a capitalistic society is to produce something so valuable that millions of people want to trade for it.” ~ Raymond C. Niles

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money

Where Does Money Come From?

– September 7, 2020

“Money makes possible an incredible amount of interpersonal coordination in the market. Rules of private property and contract, of various kinds, predate money. But widespread market integration and economic growth only result when there is a critical mass of people in a single commercial network linked by money.” ~ Alexander W. Salter

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tesla

What Raised the S&P 500 Price-Earnings Ratio?

– September 7, 2020

“For those who find stock price gains inexplicable and therefore terrifying, the Yardeni-Reynolds Model offers a purely empirical explanation of a seemingly high trailing P/E ratio – extremely low global inflation and bond yields combined with an artificially low P/E denominator of past earnings that includes the terrible second quarter of 2020.” ~ Alan Reynolds

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