Artifically low prices resulting from government decree causes an artificial shortage which results in long lines, empty stations, and lack of incentives for more supplies.
The dollar is always losing value. To measure the decline, people turn to the Consumer Price Index (CPI), or various alternative measures such as Shadow Stats or Billion Prices Project. They measure a basket of goods, and we can see how it changes every year. However, companies are constantly cutting costs. If we see nominal—i.e. […]
Creating paper money does not create goods.
The basic ingredients for Hong Kong’s progress were not foreign aid and other handouts from Western nations but instead law and order and a free market.
Ben Bernanke presided over the Federal Reserve for two terms, from 2006 through 2014. A year and half into his first term, he began driving the Federal Funds Rate down. By the end of his frantic interest episode, this key overnight lending benchmark had been crushed. It hit bottom, and it hasn’t sprung back in […]
When our government subsidizes home purchases, recklessness is invited.
Monetary policy is actually putting the hurt on labor. Let’s look at why.
Minimum wage laws reduce employment opportunities for the young and the unskilled of any age.
The real issue is whether Greece’s decades-long experiment with failed debt-financed socialism will be allowed to survive much longer.
One myth driving the irrational policies of central planners is the idea that a depreciating currency is good for a domestic economy.
Central planning creates the kind of inefficiency that brought down the Soviet Union. While Americans shopped in malls full of goods, Russians waited in long lines.
Knowing results alone cannot establish whether there is fairness or justice.
Anyone in the world buys gold when they don’t like the interest rate offered on paper, and especially when they don’t like the rising risks.
“Whether one is a conservative or a radical, a protectionist or a free trader, a cosmopolitan or a nationalist, a churchman or a heathen, it is useful to know the causes and consequences of economic phenomena.”
Falling consumer prices are good for the consumer and the economy, but they are bad for central banks looking to maintain asset bubbles and for governments looking for a graceful way to renege on their debts.
Have you ever been in an argument about whether we should raise taxes and then someone tosses out a real whopper? “The top tax rate for decades after World War II was over 90% and look how the economy boomed!” Or perhaps you read a Paul Krugman column where he said that, “there’s a big […]
The battle over minimum wage is raging. Emotions are running hot. Some cities are setting the bar very high. For example, Seattle is mandating a $15/hour wage. Economically, the issue is very simple. Minimum wage laws do not raise anyone’s wage. This is because it’s not sustainable to overpay. Suppose you run a small tailor […]
There are economists, most notably Nobel Prize-winning economist Paul Krugman, who suggest that the law of demand applies to everything except labor prices (wages) of low-skilled workers.