Archive for the ‘Economics’ Category

Freedom and Economics

Wednesday, February 7th, 2007

Walter E. Williams has yet another brilliant column. Money quote:

The economic development lesson is clear: Have a system of economic freedom and grow rich. Extensive government control, weak property rights and government corruption almost guarantee poverty. A country’s institutional infrastructure is critical to its economic growth and the well-being of its citizens. The most critical are protection of private property, enforcement of contracts and rule of law.

Read it all; it’s well worth your time. And share it with any socialists you know!

Tackling the Trade Deficit

Wednesday, January 17th, 2007

Both Walter Williams and John Stossel explain the follies of trade deficit doomsayers.

Minimum Wage Hike

Wednesday, January 10th, 2007

Congress has voted to increase the federal minimum wage:

The Democratic-controlled House voted Wednesday to increase the federal minimum wage to $7.25 an hour, bringing America’s lowest-paid workers a crucial step closer to their first raise in a decade.

The vote was 315-116, with more than 80 Republicans joining Democrats to pass it.

Bush, of course, has vowed to sign the bill. This is a shame, since even a cursory understanding of economics will show that a higher minimum wage means higher prices and greater unemployment. By raising wages, low paying jobs suddenly become more attractive to higher skilled workers. If a company can choose between a high skilled worker or an unskilled worker, who do you think they’ll choose? The minimum wage hurts unskilled workers. But who cares; it makes people feel good to know that our “compassionate” government raised it.

A Letter to Lou Dobbs

Thursday, January 4th, 2007

Donald J. Boudreaux, chairman of George Mason University’s Department of Economics, has an interesting letter to Lou Dobbs.

Via Instapundit

Bush Talks Flat Tax

Tuesday, November 28th, 2006

Bush is praising a flat tax:

President Bush says the United States should have a simpler tax system. Apparently he has found one he likes – Estonia’s.

In a brief stop in the Baltic nation on Tuesday, Bush managed to tout Estonia’s flat income tax three times.

“They’ve got a tax system here that is transparent, open and simple,” Bush said in Tallinn after getting a look at how Estonian citizens can file their taxes online.

In a toast about an hour later to Estonian President Toomas Hendrik Ilves, Bush said, “I am amazed to be in a country that has been able to effect a flat tax in such a positive way.”

And before fielding reporters’ questions with Ilves, Bush again praised Estonia’s approach to taxation.

“I appreciate the fact that you got a flat tax, you got a tax system that’s transparent and simple,” he said.

A flat tax is a great idea, and I hope we’ll see an ambitious push for it. It’s a shame Bush didn’t push it when he had more political capital.

Milton Friedman, 1912-2006

Thursday, November 16th, 2006

Milton Friedman, quite possibly the greatest economist who ever lived, has died. May he rest in peace.

Economic Hypochondria

Thursday, October 19th, 2006

George Will had a great column yesterday on how perception differs from reality. Read it all, but the highlight is definitely this:

Economic hypochondria, a derangement associated with affluence, is a byproduct of the welfare state: An entitlement mentality gives Americans a low pain threshold — witness their recurring hysterias about nominal rather than real gasoline prices — and a sense of being entitled to economic dynamism without the frictions and “creative destruction” that must accompany dynamism. Economic hypochondria is also bred by news media that consider the phrase “good news” an oxymoron, even as the U.S. economy, which has performed better than any other major industrial economy since 2001, drives the Dow to record highs.

Socialism’s Decline

Monday, September 18th, 2006

Is socialism on the decline in Europe? The Cap’n thinks it just might be.

Orwellian in Africa

Thursday, August 31st, 2006

Barack Obama visited Kenya, where he rightfully criticized corruption in the Kenyan government, Zimbabwe President Robert Mugabe, and encouraged AIDS testing. All was going well until a reporter asked Obama about his support for protectionist policies in Washington:

Obama’s response? He talked about the soybean farmers in Illinois, and said, “It’s important to me to be sure I’m looking out for their interests. It’s part of my job.” Absolutely incredible.

For, in July, the European Union and five nations, including the United States and Japan, met in Geneva, Switzerland, to discuss the elimination of farm subsidies and agricultural tariffs. After all, in 2002, the World Bank estimated that African exports would increase by almost $2.5 billion if the U.S., Europe, Japan and Canada eliminated their agricultural tariffs. This is especially true as to peanuts and tobacco. African farmers run up against farmers in wealthy nations whose laws ensure their success at the expense of Third World farmers.

What should Obama have said? “You’re right. America is a rich nation. You are a poor one. Poor nations generally turn into rich ones by starting out with agriculture. So when I get back to Washington, I’m going to tell my colleagues about the devastating real-world effect American protectionism has on poor nations.”

Indeed.

Foreign Aid Fallacies

Tuesday, June 27th, 2006

Dr. Walter Williams contrasts the situation in Botswana with that of Zimbabwe, and tackles foreign aid:

Botswana shares a heritage with Zimbabwe, for it, too, was a British colony. What it doesn’t share with Zimbabwe explains its success: the rule of law, minimal corruption and, most of all, respect for private property rights. No amount of western foreign aid can bring about the political and socioeconomic climate necessary for economic growth. Instead, foreign aid allows vicious dictators to remain in power. It enables them to buy the allegiance of cronies and the military equipment to oppress their own people, not to mention being able to set up “retirement” accounts in Swiss banks. The best thing westerners can do for Africa is to keep their money and their economic development “experts.”

There are some circumstances where foreign aid works, but only when a ruler has at least some concern for his people. Zimbabwe’s Mugabe lacks such concern, as do virtually all dictators and some democratically elected officials.

The same holds true of embargoes and economic sanctions. I am not aware of any instance where such measures have worked. Instead, they simply give dictators anti-American ammunition to instill in the people (who ultimately are punished by the sanctions far more than their authoritarian leaders).