Yearly Archives: 2014

The Obola virus

Posted on by
Reply

obama ebola response team

The notion of an Obola virus just popped into my head as I was walking home just now but I thought that before I tried to claim originality I would just google it to see if anyone else had thought of it. Well, not only is it across the net and all over the place, it has apparently already been branded as racist. Well, that’s the end of that. I therefore think I should let the people at Quadrant know since they have already posted an article, President Obola’s Panic Attack. It’s by a former citizen of the Soviet Union, so what else can you expect. But at least he is aware of his own peculiarities and is already prepared to self-ostracise himself and so he should. As he writes:

I have given up on myself. Since everyone I know accepts that my views are to the right of Gengis Khan, I no longer have to make the pretense of drinking soy milk or eating tofu and pretending to enjoy it. I am what I am and happy to be that way, even if my children’s faces go red when I open my mouth in polite company. They look pleadingly at others present, trying telepathically, I think, to transmit the thought that every family has its own dotty uncle who, in their case, happens to be their own, beloved and sometimes moderately useful, but very barmy, two-cans-short-of-a six-pack dad.

I know that look of theirs very well indeed. It says, ‘What do you expect? Dad remembers those weird days when steam engines were used to pull trains, people were paid only for working, kids ran around playgrounds largely unsupervised, and men could grow older, and little more portly, without attracting universal ostracism.

Well, being portly and dotty has its compensations, let me tell you. Nobody is surprised when you ask stupid questions or say things that are sooo politically incorrect they would be beyond the pale for everyone except yours truly. This is fun – looking at the same pictures on the TV screen as everyone else and seeing things differently.

He thinks of the panic as just one more way to get other scandals off the front page, but oddly, if this is actually a non-scandal in reality, it is the one that may finally bite. People win Nobel Prizes in economics for pointing out that remote possibilities are seen as far more probable than they really are while the more likely dangers are ignored as just part of life.

But since Obola/Ebama did nothing in the face of this danger of unknown consequence, and he would be the absolute last person to know one way or the other, his uselessness as a chief executive is being recognised by people who prefer not to die a horrible death even if he gives them free phones. So at least there is this, whatever else may happen next.

UPDATE: A similar kind of outrage from Andy McCarthy, Incompetence Meets Mendacity in Obama Administration’s Ebola Response. From the article:

You can only abide politics as soap opera for so long because politics is actually about real life and real stakes. Reality cannot be scripted. Therefore, politics cannot forever be stage-managed as a “narrative” with “optics,” a daily show focused on how the lead character is affected by the latest crisis.

At a certain point, the reality of the crises hits us, and hits close to home. Am I threatened? Am I going to get sick? If I do get sick, am I going to have health coverage and the doctor I trust? Is the government doing its best to make sure I am not infected? Or shot? Or bombed? Or beheaded?

Where do we get the answers to these questions? From the government we’ve grown to depend on. And now the answers are so purposely, patently, and pervasively false, it suddenly seems as if nothing can be trusted — as if, even as our perils intensify, our government erects another house in its Potemkin village.

And then he lists the lies that are more than lies but a form of deceit that in each instance makes people worse off for no compensating advantage other than to those who are lying:

Of course you can keep your health coverage, and your doctor. And we’ll cover everyone while your premiums plummet. Meanwhile, al-Qaeda is “decimated” and these Islamic State guys are just the jayvee team. In fact (fact?), they’re not even Islamic — although they may not be quite as “secular” as the Muslim Brotherhood. Just extremists. (Extreme about what? Don’t ask.) Jihad is just a “purification of the self” . . . or, at most, “workplace violence.” Benghazi? A spontaneous “protest” incited by a video. The president was not told it was a terrorist attack . . . except by the secretary of defense right after it started — long before he responded by . . . going to Vegas, where he promptly announced al-Qaeda was “on the path to defeat.” Still, rest assured that the State Department’s top priority is the safety of American personnel . . . although we did reduce security in Benghazi after our facility was bombed. And rest assured that the Justice Department would never ever let guns walk . . . except for the thousands its Fast and Furious program transferred to violent gangs — who’ve used them in who knows how many crimes, including the murder of a Border Patrol agent. Still, at least there’s “not a smidgen of corruption” at the IRS, where citizens are harassed, evidence keeps disappearing, and the official at the center of it all takes the Fifth to avoid giving incriminating testimony. No matter. Just take heart that Ebola is not coming to the United States . . . um, well, if it does come there will be no outbreak . . . but, er, if there is an outbreak, we have careful protocols and health-care professionals fully trained to deal with it . . . and even if the protocols don’t work and the professionals don’t have adequate training, we’ll have a rigorous monitoring program for anyone who is exposed . . . or maybe a self-monitoring program for people who will isolate themselves . . . unless, of course, we tell them to go ahead and hop on a plane. Well, look, at least we can promise there won’t be a “serious” outbreak.

It’s Obama, of course, but it’s also the American media. No one can trust either as the world goes from one disaster to the next.

The economics of John Stuart Mill

Posted on by
Reply

I have just sent this note off to a publisher about a book I would like to edit. I recently wrote a rejection for an article on John Stuart Mill that was sent back to me three times after which they asked me to write a reply since they were going to publish it anyway. I was coincidentally also refereeing another article at the time for a different journal which has come back for a second time since I think the other referee must have liked it and they will publish notwithstanding anything I might say which is also about Mill. It was then with the two of them together that I finally worked out that no one knows what Mill wrote or what he means. I very strangely fell into Mill’s economics as just part of my reading things that seemed interesting and was immediately captured by his logic and good sense. I didn’t read it the way most academics do, as a kind of deciphering exercise with modern economics as the standard of excellence. I instead read it with an open mind just for interest. My Free Market text is almost literally an amalgam of Mill, Henry Clay and a smattering of more modern gadgetry. So this is the note I wrote:

I copied you in on an earlier email in which I mentioned an idea I had proposed to you quite some time ago. As I noted, John Stuart Mill’s Principles of Political Economy is the least accessible economics text from amongst the whole of the economics literature. It is not just that it is long-winded, but it contains so much that is completely foreign to a modern economist that it is straightforwardly impenetrable. It also delves into vast oceans of explanation that exhaust even the most patient reader. And there are chapters one after another that deal with issues that might have been current in 1848-1871 but which are of no relevance today. My wish is to put together a more compact Mill that is directed at people who would like to understand what Mill was saying that is relevant today but do not have any idea where to start. And to tell the truth, I think there is hardly anyone else alive who could do it. I will attach an article of mine on Mill’s “Fourth Proposition on Capital” which I have described as economic theory’s version of Fermat’s Last Theorem. No one has been able to make sense of it since 1876 although many have tried, including Marshall, Pigou, Taussig, Keynes and Hayek, not to mention modern commentators such as Harry Johnson and Sam Hollander. No one can even make it make sense, whereas I just included it in my Free Market Economics and teach it to my students who find it perfectly straightforward. They wouldn’t even know there’s a controversy or why it’s controversial since really, it makes perfect sense. Therefore in editing Mill, each of the chapters that I would want to include would also require some kind of introduction so that someone could get past the 150-word sentences and see the point. It is, of course, hard for me to judge whether this would be a commercial proposition for you but for me it would represent an important contribution to the economics literature and for that reason may also sell.

What has made this seem more urgent than before was a paper I recently refereed which I rejected three times before being told that based on the other referee they had decided to publish but invited me to write a response which I have now done. You will see the kinds of things in the article that are found in Mill but which are incomprehensible today. Even scholars who write on these issues are unable to comprehend what classical authors believed and why it might be relevant today. But the thing is, Mill is the comprehensive answer to so much of what is wrong with economic theory today. I just find myself surprised to discover that I am one of the few people around who can explain what Mill wrote. I read others who write on Mill and almost no one seems to read Mill directly but only in second-hand form, much the same as with Adam Smith. Anyway, this would interest me to put together and I would like to think of this as my next major project.

What gets me is that if you merely apply Mill to current economic events and policies, the outcomes are perfectly obvious.

The way of the future?

Posted on by
Reply

This is from Sultan Knish. Is he wrong about the future, our future? There is only one way to find out and that is by acting as if he is obviously wrong and thus do nothing at all. Or we could do something and never know for sure what would have happened if we had done nothing. Anyway, it looks like we will do nothing much at all, so we are going to find out sooner or later whether he was right. And this is what he might yet prove to be right about.

The Grand Mufti of Saudi Arabia ruled that ten year old girls can be married off, because in his words, “Good upbringing makes a girl ready to perform all marital duties at that age.”

The Mufti, who also called for destroying churches in the Arabian Peninsula, is descended from Mohammed Wahhab who gave birth to Wahhabism and whose descendants have controlled the Saudi religious establishment, and through it Islam around the world.

However for all his power and influence, the Mufti is blind and hasn’t seen a thing in the last half century years; an apt metaphor for his entire religion.

Saudi Arabia, the heartland of Islam, still tries and executes witches. What sort of religion can come out of a place that marries off ten year old girls and murders old women on charges of witchcraft? The sort that flies planes into skyscrapers, murders teenage girls for using Facebook and bases its entire society on a ladder with Muslim men at the top, Muslim women a few rungs below and everyone else somewhere at the bottom.

The Saudis are not an aberration, they are Islam in its purest and truest form. That is why Al Qaeda was founded by a Saudi and why Saudis, the wealthy citizens of a wealthy kingdom, are its best recruits. It is not poverty or oppression that moves them to kill, but wealth and privilege. . . .

The endgame of the Arab Spring and the immigration Hegira is to reduce the entire world to the level of Saudi Arabia. And that means eliminating outside influences in a long march to purification. Islamists know that they cannot enjoy complete cultural dominance over their own people until their rivals in the West are obliterated. To turn Egypt and Malaysia into Saudi Arabia, and to purify Saudi Arabia, the infidels must be brought down, their religions subjugated and their nations replaced with proper Islamic states.

Islamic leaders are under no illusion that religion is a spiritual matter, they know that it is a numbers game. Wage enough wars, terrorize enough nations, marry enough barely post-pubescent girls and use them to crank out an endless supply of babies, intimidate or trick enough infidels into joining up and you win. That was how Islam took over so much territory and spread around the world, that is how it is doing it again now. . . .

Islam is savage, intolerant, cruel and expansionistic, not due to a misunderstanding, but an understanding of the worst aspects of human nature. It is what it is and no amount of wishing will make it otherwise. We have opened the door to the desert and a hot wind blows through into the northern climes. Either we shut the door or get used to living in the Saudi desert.

And while you’re thinking about these things, and after you have read the whole article, you can then watch the video above.

Classical economics rediscovered

Posted on by
Reply

I have come across a summary of David Simpson’s The Rediscovery of Classical Economics written by David Simpson himself and published by the Royal Economic Society. Before I quote more extensively, I will note where he wrote:

I refer to an intellectual tradition that began with Adam Smith, was continued by Marx, Menger and Marshall, Schumpeter and Hayek and in the present day is represented by theorists of complexity.

It never surprises me to see the name of John Stuart Mill missing from such lists since Mill is the most difficult of all of the classical economists to access for any one schooled in modern theory. Yet it was Mill who set the standard for the second half of the nineteenth century and was explicitly followed by Marshall and even Hayek even as they turned economics into the more familiar form we find today. I might also mention that what makes Marx interesting even now is found in Mill only with much more common sense as well as a far deeper economic understanding. Mill is the high point of classical thought, and in many ways the high point of economic thought. But who amongst any of you would be able to contradict me, you followers of Keynes and marginal analysis, who barely know Mill’s name never mind have any idea of what he wrote? This is Simpson’s description of the economics that has all but disappeared.

The hallmarks of this classical tradition are principally three. The first is the belief that the growth of the economy, rather than relative prices, should be the principal object of analysis. Coupled with that belief is an understanding of the market economy as a collection of processes of continuing change
rather than as a structure, and that the nature of this change is self-organising and evolutionary. Finally there is a conviction that economic activity is rooted in human nature and the interaction of individual human beings.

The differences between classical theory and equilibrium theory can be summarised in the following terms. Classical theory focuses on change and growth within open, dynamic nonlinear systems that are normally far from equilibrium. Equilibrium theory, on the other hand, analyses the theory of value within closed, static linear systems that are always in equilibrium. As to the essential nature of economic activity, classical economics makes no distinction between micro- and macroeconomics. Patterns of activity at the macro level emerge from interactions at the micro level. Evolutionary processes provide the economy with novelty, and are responsible for its growth in complexity. In equilibrium theory micro-and macroeconomics remain separate disciplines, and there is no endogenous mechanism for the creation of novelty or growth.

The behaviour of human beings in classical theory is analysed individually. People typically have incomplete information that is subject to errors and biases, and they use inductive rules of thumb to make decisions and to adapt over time. Their interactions also change over time as they learn from experience. In equilibrium theory, individual behaviour is assumed to be homogeneous and can be modelled collectively. It is assumed that humans are able to make decisions using difficult deductive calculations, that they have complete information about the present and the future, that they make no mistakes and have no biases, and therefore have no need for adaptation or learning.

Simpson finishes by discussing where economics now needs to go under the heading, “The Implications for Economic Theory”. I think this is both very limited in what is sought but also almost impossible to imagine being taken up within the profession. I’m not so sure about the need for non-linear algebra, but at least with this we have the commencement of a program for change:

First of all, courses in economic history and in the history of economic thought should be a required part of the curriculum for every student of economics. The study of economic history, like the study of complex systems, reveals the importance of context in understanding economic behaviour. The study of the development of economic thought helps us to appreciate the weaknesses as well as the strengths of a theory. Macroeconomics should be downgraded, and give way to the study of business cycles.

Secondly, more space should be found for the analysis of dynamic processes at the expense of static theory. The study of the processes of economic growth should be restored to centre stage. This probably means a greater emphasis on nonlinear algebra.

At the same time, the limitations inherent in applying mathematics to economics need to be acknowledged. The importance of the human factor and of human institutions in economic activity means that more attention needs to be given to non-quantitative methods of analysis.

With the scale of disaster that has befallen us since the GFC, there is something radical that needs to be done. And if you are interested in seeing a twenty-first century update on Mill and classical theory, you can always try this.

Everyone is so panicky for no reason – just ask Obama how well everything is going

Posted on by
Reply

No one would go to West Africa anyway, but would you go to the US? Matt Ridley is expert in people worrying about trifles that never amount to much but even he is worried about where this could go. No government tells the truth if it will harm their prospects, but Obama has taken lying beyond anything seen before in large part because he has a media that lets him. Who would you really trust to tell you the truth? Today’s Drudge round-up on Ebola:

NYT THURSDAY: EBOLA ANXIETY GROWS…
WASH POST: Threat of virus might interfere with commerce, daily routines…
BOEHNER URGES TRAVEL BAN…
NIGHTMARE: NEW PATIENT FLEW DAY BEFORE…
Knowingly Traveled With ‘Low-Grade Fever’…
Called CDC before boarding flight…
PLANE MADE 5 FLIGHTS BEFORE TAKEN OUT OF SERVICE…
Airline Stocks Nosedive…
Passenger Wears HAZMAT To Dulles Airport…
Panic Hits TV News Divisions…
CDC says missed opportunities to contain…
Nurses outraged: ‘There was no protocol, there was no system’…
Obama cancels fundraising trip…
‘Confident we can prevent serious outbreak’…
COULTER: We’ll Tell You How Dangerous Ebola Is — After Election!
SAVAGE: ‘If you like your Ebola, you can keep your Ebola’…
LEVIN: CDC ‘trying to cover its ass’…
LIMBAUGH: Obama’s Deadly Failure…

Saving and investment as understood in 1886

Posted on by
Reply

This is from a note I have just written discussing the 2nd ed of my Free Market Economics. What is most interesting perhaps is the question that was found at the back of a chapter in an economics text published in 1886. Note the assumption that higher saving leads to higher growth, and more mysteriously, that money placed in a bank is not what savings really consist of. All very routine in 1886, now near incomprehensible.

The book being so far from the standard, even people who are potentially sympathetic to what it is trying to explain will be puzzled because of the way in which economic theory is currently taught. I have had the experience now for the past ten semesters in seeing students who don’t get it at the start, specially if they have done economics before, suddenly catching on. What now establishes the course material is that everyone is perfectly aware that neither the stimulus nor the low interest rate regime have brought recovery with it but cannot understand why. So I point out that if you were a classical economist, the economics you would have been taught would have explained all that already, and then I explain what every good classical economist would have known. The question below is one of my favourite questions for this part of the course.

What did Simon Newcomb mean when he asked this question in his 1886 Principles of Political Economy text:

“Trace the economic effect of the frugal New England population putting their money into savings banks. What do such savings really consist of?”

a) for a community the amount of money in banks is not what is meant by saving
b) the economic effect is that a larger proportion of its resources are made available for investment
c) high saving would mean high unemployment
d) money facilitates exchange but resources are what matters
e) the New England economy would be expected to grow only very slowly

It’s useful to me since I try to emphasise that I didn’t make this up but that there is a long pedigree to what I teach. It’s only that since 1936 there has been such a discontinuity in economics that the kind of question found at the end of an introductory text in 1886 would be virtually unanswerable using modern theory. “What do such savings really consist of?” is near on incomprehensible to anyone who has only learned modern macro.

We’re the richest people in the world!

Posted on by
Reply

Picked it up on Drudge but it’s from The Sydney Morning Herald:

Thanks to their houses, Australians are the richest people in the world, according to the investment bank Credit Suisse.

The fifth annual study by the Swiss bank of global wealth trends found the median Australian adult was worth more than $US225,000 ($258,000) in June, well ahead of the second wealthiest population on this measure, the ­Belgians, at $US173,000.

They were followed by the Italians, French and British, all at around $US110,000.

Only 6 per cent of Australians have wealth below $US10,000, compared with 29 per cent in the United States and 70 per cent for the world as a whole.

Of course, if our wealth is tied up in our over-priced houses – all thanks to the foreign money pouring into the housing market – it’s not exactly letting us live high on hog. But on paper we are really doing well. Just one more way amongst many in which how we collect statistics provides one misleading indicator after another.

What me worry? – the Ebola edition

Posted on by
Reply

I somehow seem to miss a sense of urgency, probably because any suggestion that Ebola is a potential catastrophe would emphasise that Obama has been tragically incompetent. So what are we to make of Matt Ridley’s article yesterday, Beat Ebola or face a pandemic as bad as the Black Death. He begins:

IT is not often I find myself agreeing with apocalyptic warnings, but the west African Ebola epidemic deserves hyperbole right now.

Anthony Banbury, head of the UN Ebola emergency response mission, says: “Time is our enemy. The virus is far ahead of us.”

David Nabarro, special envoy of the UN secretary-general, says of Ebola: “I have never encountered a public health crisis like this in my life.”

Then there’s this today, Is Ebola the Same Virus as the Black Death? This one begins:

Most people assume that the fourteenth-century Black Death that quickly ravaged the western world was a bacterial bubonic plague epidemic caused by flea bites and spread by rats. But the Black Death killed a high proportion of Scandinavians where it was too cold for fleas to survive. “Biology of Plagues. Evidence from Historical Populations” published by Cambridge University Press, analyzed 2,500 years of plagues and concluded that the Black Death was caused by a viral hemorrhagic fever pandemic similar to Ebola. If this is correct, the future medical and economic impacts from Ebola have been vastly underestimated.

And finally, the comforting list of headlines at Drudge:

Hospital Cafeteria Abandoned…
WHO predicts 10,000 new cases — per week…
Death rate reaches 70%…
UN WARNS: 60 DAYS TO BEAT…
Researchers say more in USA based on flight patterns…
LA bus driver quarantined after passenger yells: ‘I have Ebola!’
TX College ‘Not Accepting International Students From Countries With Confirmed Cases’…

My father-in-law never knew his own father because his father died in the same month in which he was born, November 1918, during the first influenza epidemic that killed twenty million at the end of World War I. Funny times we live in where the possibility of a worldwide pandemic is news that comes below the fold.

“The Obamas have taken lies, dishonesty, deceit, mendacity, subterfuge, and obfuscation to new depths”

Posted on by
Reply

I have just been sent a copy of a column originally written in February 2012 and then reprinted in January 2013 but which could be reprinted every day before or since and would not grow stale in the retelling. Between the allowing of Ebola to cross so easily into the US while blatantly only pretending to fight a war against the Islamic State, Obama is everything that this column says and more. The one aspect that makes this particular column so untouchable is that the author is a black American and therefore cannot be accused of racism as is the norm for critics of the President. The article was titled, Why I Do Not Like the Obamas but it goes well beyond not liking into the kinds of disgust I feel for him (and his wife) and everything they have done. He also takes note of the singular role the media has played in protecting Obama from any serious oversight. Not surprisingly, this is not an issue often raised in the media, but what is more surprising is now seldom it is mentioned on blogs and in other writings by conservatives.

The author is Mychal Massie and he blogs at The Daily Rant. This is what he wrote:

The other evening on my twitter, a person asked me why I didn’t like the Obamas? Specifically I was asked: “I have to ask, why do you hate the Obamas. It seems personal not policy related. You even dissed their Christmas family pic.” The truth is I do not like the Obamas, what they represent, their ideology, and I certainly do not like his policies and legislation.

I’ve made no secret of my contempt for the Obamas. As I responded to the person who asked me the aforementioned question, I don’t like them because they are committed to the fundamental change of my/our country into what can only be regarded as a Communist state.

I don’t hate them per definition, but I condemn them because they are the worst kind of racialists, they are elitist Leninists with contempt for traditional America. They display disrespect for the sanctity of the office he holds, and for those who are willing to admit same, Michelle Obama’s raw contempt for white America is transpicuous.

I don’t like them because they comport themselves as emperor and empress. I expect, no, I demand respect for the Office of President and a love of our country and her citizenry from the leader entrusted with the governance of same. President and Mrs. Reagan displayed an unparalleled love for the country and her people. The Reagans made Americans feel good about themselves and about what we could accomplish. Could you envision President Reagan instructing his Justice Department to act like jack-booted thugs?

Presidents are politicians, and all politicians are known and pretty much expected to manipulate the truth, if not outright lie; but, even using that low standard, the Obamas have taken lies, dishonesty, deceit, mendacity, subterfuge, and obfuscation to new depths. They are verbally abusive to the citizenry, and they display an animus for civility.

I do not like them because they both display bigotry overtly: as in the case of Harvard Professor Louis Gates when Obama accused the Cambridge Police of acting stupidly, and as in her code speak pursuant to now being able to be proud of America. I view that statement and that mindset as an insult to those who died to provide a country where a Kenyan, his illegal alien relatives, and his alleged progeny, could come and not only live freely; but he could rise to the highest, most powerful position in the world. Michelle Obama is free to hate and disparage whites because Americans of every description paid with their blood to ensure her right to do same.

I have a saying, that “the only reason a person hides things is because they have something to hide.” No president in history has spent over a million dollars to keep his records and his past sealed. And what the two of them have shared has been proved to be lies. He lied about when and how they met; he lied about his mother’s death and problems with insurance; Michelle lied to a crowd pursuant to nearly $500,000 in bank stocks they inherited from his family. He has lied about his father’s military service, about the civil rights movement, ad nauseum.

He lied to the world about the Supreme Court in a State of the Union address. He berated and publicly insulted a sitting Congressman. He has surrounded himself with the most rabidly radical, socialist academicians today. He has fought for abortion procedures and opposed rulings that protected women and children — that even Planned Parenthood did not seek to support. He is openly hostile to business and aggressively hostile to Israel.
His wife treats being the First Lady as her personal American Express Black Card (arguably the most prestigious credit card in the world). I condemn them because as people are suffering, losing their homes, their jobs, their retirements – he and his family are arrogantly showing off their life of entitlement as he goes about creating and fomenting class warfare.

I don’t like them, and I neither apologize nor retreat from my public condemnation of them and of his policies. We should condemn them for the disrespect they show our people, for his willful and unconstitutional actions pursuant to obeying the Constitutional parameters he is bound by, and his willful disregard for Congressional authority.

Dislike for them has nothing to do with the color of their skin; it has everything to do with their behavior, attitudes, and policies. And I have open scorn for their playing the race card.

It is my intention to do all within my ability to ensure their reign is one term. I could go on, but let me conclude with this. I condemn, in the strongest possible terms, the media for refusing to investigate them as they did President Bush and President Clinton and for refusing to label the Obamas for what they truly are. There is no scenario known to man whereby a white president and his wife could ignore laws, flaunt their position, and lord over the people as these two are permitted out of fear for their color.

As I wrote in a syndicated column titled “Nero In The White House” –

“Never in my life, inside or outside of politics, have I witnessed such dishonesty in a political leader. He is the most mendacious political figure I have ever witnessed. Even by the low standards of his presidential predecessors, his narcissistic, contumacious arrogance is unequalled. Using Obama as the bar, Nero would have to be elevated to sainthood…Many in America wanted to be proud when the first person of color was elected president, but instead, they have been witness to a congenital liar, a woman who has been ashamed of America her entire life, failed policies, intimidation, and a commonality hitherto not witnessed in political leaders. He and his wife view their life at our expense as an entitlement – while America’s people go homeless, hungry and unemployed.” (WND.com; 8/8/11)

Oh, and as for it being personal, you tell me how you would feel if a senator from Illinois sent you a personally signed card, intended to intimidate you and your family because you had written a syndicated column titled “Darth Democrat” that was critical of him.

Economics a wasteland

Posted on by
Reply

The front page story in The Australian today comes with the title, Economics course is ‘beyond redraft’. The story begins:

THE national economics curriculum is unsalvageable, with ­errors in key definitions and omissions of fundamental concepts that make it “misleading, unbalanced, too imprecise to be useful and … beyond redrafting”, experts have concluded.

Griffith University economics professor Tony Makin and lecturer Alex Robson, in their advice to the federal government’s ­curriculum review, say the cur­riculum incorrectly defines some fundamental concepts including gross domestic product, ­effici­ency and productivity.

They argue that the curriculum omits key concepts, such as the difference between micro­economics and macroeconomics or between recessions and booms.

It also fails to include the great economic thinkers, including the father of economics Adam Smith and his coinage of the term “invisible hand” to describe the forces of the free market.

What can I say, and if you ask me, they may be a little light in their criticism. It is for this reason that I built my own economics course and wrote my own text to go with it, Free Market Economics, now in its second edition. You may think of this as an ad for my book (and my course), but really I am only about to point out the ways in which my own text exactly matches what Makin and Robson are looking for. There is more in the book than just this:

Definitions: The opening is a chapter with the very title “Definitions”. And rather than being at the end of the book as most glossaries are, it is the first thing you come to. Moreover, it is not alphabetic but thematic. If you go through the definitions in order, you are provided with an overview of everything the rest of the book will say but in a condensed form (and not all that condensed since it goes on for 24 pages).

Micro­economics and macroeconomics: I am surprised to find that other texts leave out the micro/macro division, but whatever others may do, I do not. It lays the foundation of the macro side by starting from the most micro of micro concepts, the role of the entrepreneur, a category, I might add, found in virtually no text on economics I am aware of other than perhaps for a sentence or two. If you want a reason to disqualify most courses on economics, leaving out the role of the entrepreneur would be high on my list.

Recessions and booms: My text is the only text anywhere in the world that discusses the classical theory of the cycle. And by being about the cycle, it’s not like that junk Keynesian rubbish which only discusses recessions and what causes them, it discusses why the cycle is actually cyclical. Downturns reach a trough and then economies turn up. Everyone once knew that, but it has been more than three quarters of a century since these have been discussed at any level, never mind within an economics text.

The great economic thinkers: There are two entire chapters on the history of economics which take you from the earliest times through until the Keynesian Revolution. I have written an entire book on how essential studying the history of economic thought is for an economist. It is, but virtually no one does it any more which makes economists less able to think through economic issues. Without a grasp of history, economics has no anchor in anything that truly matters.

The Invisible Hand: In studying Adam Smith, there is, of course, a discussion on the invisible hand. But the book is itself a discussion on the very essence of what a free market is based around the notions of an invisible hand. No economics book that I know of teaches the way a market economy works. The most you get is a bit on supply and demand and from that moment on it is all about how market failures of one kind or another are there at every turn. It is the nature of the way economic theory is presented. To take just one example, I go on myself about how inane calling the one form of market that by definition cannot exist “perfect” competition and how everything after that is described as “imperfect” competition. Not really all that subtle, but the basic point is there is much work for governments and economists to fix.

I am therefore pleased that Tony and Alex have taken on this monster. The failures of the Keynesian stimulus might, you would have thought, started some kind of soul searching within the profession about how badly served we are with the economic theory we now teach. But a billion dollars or more now tied up in textbooks which carry received economic theory into every classroom, wrong though they may be, misleading page after page, they will nevertheless continue onwards. I will merely mention the first of the quotes on the back of my book:

Free Market Economics is virtually a must read for serious economists. . . . Highly recommended.

The book is a synthesis of the economics that existed prior to the Keynesian Revolution. It is where economic theory must go if we are to salvage the study of economics.