Keynesian Economics and Liberty are Not Compatible

<p><a href=""><img class="alignleft size-medium wp-image-2522" alt="Liberty" src="" width="300" height="199" /></a>Me with Baked Flounder and Steve Schippert on Radio214 discussing why Keynesian economics and liberty are not compatible. Oh, and a little about Alaska too.</p> <h3><a href="">Click here to listen to the podcast</a></h3> <p><a href=""><strong> Return to home page</strong></a></p>

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Relativity in Behavioral Economics

<h2><strong>Relativity is not just for physics.</strong></h2> Nicolae Naumof posts a very good introduction to the foundational concept of <i>relativity</i> in behavioral economics. <a href="" rel="attachment wp-att-2320"><img class="alignright size-medium wp-image-2320" alt="relativity" src="" width="300" height="168" /></a>Through two examples he describes how we use mental references, environmental factors, and comparisons to make what are sometimes less than purely rational decisions. From Naumof: "<b>The pond effect shows us that people don’t evaluate size of the carp as being 50cm per se, but rather as being a big or a small fish compared with its environment and fellow fish." </b> <a href=""> <h3>Click here to read the entire article on relativity in behavioral economics</h3> </a>                   Image courtesy of Idea go

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The New Economics: Meso and Meta

<h3><a href=""><img class="alignleft size-medium wp-image-2017" title="ID-10074402" src="" alt="economics"width="300" height="211" /></a>From the article by Andrew Sheng and Xiao Geng:</h3> "Indeed, today’s mainstream micro- and macroeconomic models are insufficient for exploring the dynamic and complex interactions among humans, institutions, and nature in our real economy. They fail to answer what Paul Samuelson identified as the key questions for <b>economics</b> – what, how, and for whom are goods and services produced, delivered and sold – and rarely deal with “where” and “when,” either. The division of <i>economics</i> into macroeconomics (the study of economic performance, structure, behavior, and decision-making at the national, regional, or global level) and microeconomics (the study of resource allocation by households and firms) is fundamentally incomplete and misleading. But there are at least two other divisions in <u>economics</u> that have been neglected: meso-economics and meta-economics." <h3><a rel="nofollow" href="">Click here to continue reading</a></h3> <h3><a href="">Return to home page</a></h3>

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Why Self-Interest In Markets Can Benefit Everyone

<h2>What Penguins Know About Business: The Value of Sharing in Markets</h2> <a href=""><img class="alignleft size-medium wp-image-1705" title="penguin" src="" alt="" width="200" height="300" /></a>From Paul J. Zak at Claremont Graduate University: <div></div> "There’s nothing new about being shameless, or ruthless and cynical, when it comes to making a buck. Plenty of people in business seem to think that fakery and exploitation is the name of the game. Which is one reason that trade and commerce have always had something of an image problem. “Behind every fortune is a great crime” is one way of looking at it. “Never give a sucker an even break” is another. Contrary to those sentiments, research in my lab and in numerous field experiments has shown that the marketplace actually makes people more <a title="Psychology Today looks at Morality" href="">moral</a>, not less. Trade not only depends on moral behaviors like trustworthiness; it extends it beyond the small circumference of kinship or

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U.S. Debt Saturation?

<h2><strong>Has the U.S. Reached The Debt Saturation Point?<a href=""><img class="alignright size-medium wp-image-1661" title="ID-10034354" src="" alt="" width="300" height="199" /></a></strong></h2> <p>The linked article below is a couple of years old, but contains an interesting chart about our return on debt. It shows that when the change in U.S. GDP is divided by the change in U. S. debt, we actually reached the point of debt saturation in 2009. In other words we reached the point where our return on debt is actually negative. From the article:</p> <p>"Back in the early 1960s a dollar of new debt added almost a dollar to the nation’s output of goods and services. As more debt enters the system the productivity gained by new debt diminishes. This produced a path that was following a diminishing line targeting ZERO in the year 2015. This meant that we could expect that each new dollar of debt added in the year 2015

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3 Reasons I’ll Never Have Fame

<h2 align="center"><strong>The Economics of Fame</strong><strong> </strong></h2> <a href=""><img class="aligncenter size-full wp-image-1520" title="ID-10045857" src="" alt="fame"width="400" height="282" /></a>I have a good friend who loves to tell me I’m going to be famous someday. He seems to think the tipping point is just around the corner. I simply smile and say, “You’re too kind” because I know better. While <i>fame</i> is not something I’ve studied formally, I do have a few opinions on why most of us are not likely to become famous, at least from an economic perspective. <strong>Supply and Demand</strong> There are a lot more people willing to be famous than there is demand for famous people. In any market when there is a surplus prices are driven down. The bubble for <u>fame</u> <em>AND</em> fortune burst a long time ago. Now people are willing to accept fame without fortune. I’ll never be famous in part because when I do a cost/benefit analysis I find the

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