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Spending Does Not Drive the Economy, Part 2

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I posted a few weeks ago some thoughts on how spending does not drive the economy. My point is not that spending is unimportant to the economy, but rather that lack of spending is not the core problem. For before you can spend, you need to have something to spend. Therefore, attempts to re-start the […]

Patrick Lencioni on the Two Core Problems with Socialism

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Patrick Lencioni is an excellent business thinker. He is known for simple yet powerful management wisdom through books like The Five Dysfunctions of a Team and The Three Signs of a Miserable Job. Recently, he has started The Simple Wisdom Project, which is intended to be “a source of perspective and common sense about topics […]

151 Taxes in a Loaf of Bread

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In honor of tax day, here’s Ronald Reagan’s great quote on how there are 151 taxes in a mere loaf of bread. It’s from 1975, and I can’t say for sure if the same is true today. But if anything, my guess would be that that number has gone up, rather than down. The quote […]

False Solutions and Real Problems

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Thomas Sowell has a great column from the other day on the housing crisis. Here are the first two paragraphs: Someone once said that Senator Hubert Humphrey, liberal icon of an earlier generation, had more solutions than there were problems. Senator Humphrey was not unique in that respect. In fact, our present economic crisis has […]

Spending Does Not Drive the Economy, Part 1

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The belief that spending drives the economy is pervasive. It manifests itself in two sub-categories: First, the belief that consumer spending drives the economy and, second, the belief that government stimulus spending assists the economy. We’ll look at each of these in turn, and then show how this relates to the topic of productivity.

UCLA Economists: FDR's Policies Prolonged Great Depression by 7 Years

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A study by two UCLA economists argues that FDR’s policies prolonged the Great Depression by 7 years. This should come as no surprise to those who understand some of the basic principles of economics, as articulated in books like Basic Economics: A Common Sense Guide to the Economy by Thomas Sowell or Free to Choose […]

Upside Down Economics

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Good article the other day by Thomas Sowell on the financial crisis. He begins: From television specials to newspaper editorials, the media are pushing the idea that current economic problems were caused by the market and that only the government can rescue us. What was lacking in the housing market, they say, was government regulation […]

Reaganomics vs. Obamanomics

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Peter Ferrara had an excellent article in yesterday’s Wall Street Journal contrasting Reagan’s and Obama’s economic policies. Here are the key points of the article. In his inaugural address, President Barack Obama said, “The question we ask today is not whether our government is too big or too small, but whether it works — whether […]

Is Government Spending the Answer to an Economic Downturn?

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Keynesian economics — which dominated economic thought for a decent chunk of last century — said yes. Other schools of economic thought — which I find more plausible — do not think so. Gregory Mankiw had a good, brief discussion in the NY Times last month of how there is ample reason to doubt that […]