Category Economics

Not So Sanguine About The Dow’s Wednesday Spike

The Dow soared past the 12,000 mark Wednesday on news that the Fed would ease Europe’s liquidity crisis. Here’s the Times account: Wednesday’s rally was among the biggest yet, with the three main indexes on Wall Street rising 4 percent or more, and the Dow Jones industrial average rising 490.05 points, its largest gain since […]

The Austrian Business Cycle

Thoughts after reading Paul F. Cwik’s piece Austrian Business Cycle Theory: A Corporate Finance Point of View” and looking over his Ph.D. dissertation ” An Investigation Of Inverted Yield Curves And Economic Downturns.” Econtalk podcasts with Pete Boettke and Don Boudreaux also influenced this piece. The Austrian Business Cycle Theory (ABCT) explains the boom and […]

Keynes’ Error

Thoughts after reading Steven Kates’: “Why Your Grandfather’s Economics Was Better Than Yours: On The Catastrophic Disappearance of  Say’s Law” Keynesianism has dominated economic thought and shaped public policy since the 1930s. John Maynard Keynes’ General Theory revolutionized economics and made the demand side of the equation paramount. Recessions, in his mind, were caused by […]

Income Inequality Is Not America’s Primary Problem

Occupy Wall Street has focused the nation’s attention on income inequality. Here’s their critique of “the system:” The rich are getting richer off the labor of the poor and middle class. The middle class, once the engine of America’s economy, is dying. Poverty is rising. Something must be done to change an unjust economic system. […]

Europe’s Problem And Our Own

On the front page of today’s New York Times , readers encounter this headline: Greece and Italy Seek A Solution From Technocrats. The article chronicles the political transitions taking place in these two debt ridden countries. A sample: Greece named Lucas Papademos, a former vice president of the European Central Bank, interim prime minister of a […]

Italian Debt Scares Global Markets

The European debt crisis has sent uncertainty and fear throughout global markets during 2011. Last week the international community watched Greece; this week, all eyes are onItaly. On Tuesday night (US time) yields on 10 year Italian treasury bonds crossed the 7% barrier, which is seen as the threshold in which a government must seek […]

The Fight Of The Century

With the economy anemically plodding along, political gridlock has hit Washington. President Obama insists that the key to job creation and economic growth is another round of stimulus. That’s a political non-starter for the House Republicans who believe that lowering taxes and reducing federal spending is necessary for the private sector to pick up again. […]