Macro Economics

Just in time for Christmas:

Classics in Economics

Rethinking Bastiat and Broken Windows - Amity Shlaes

His old ideas actually resemble candles, shining so brightly they help us sort out murky proposals made today.

In the summer of 1850, just before going to Paris, Bastiat laid out the now-famous parable. Disaster happens. A thief breaks a man's window, or a storm does. The man has to pay the glazier to fix it. The glazier spends his money at the store. When enough windows are smashed, voila: a visible benefit, new jobs for the glass industry.

True enough, noted Bastiat. The window replacement is what is seen. What about that which is not seen? "Since our citizen has spent six francs for one thing, he will not be able to spend them for another. It is not seen that if he had not had a windowpane to replace, he would have replaced, for example, his worn-out shoes or added another book to his library."

The same holds for a government: when it repairs windows -- cleans up hurricane damage -- it is not using the same money for other causes that might be more worthy, such as reducing government debt or taxes.

The Use of Knowledge in Society - Friedrich A. Hayek

The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources—if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.

Keynes vs. Hayek Video

Fight of the Century from Econ Stories:

The Economy - January 2010

America's New Year's Unemployment Hangover - by Rep. John Carter



Bernanke and the Beast - N. Gregory Mankiw

IS galloping inflation around the corner? Without doubt, the United States is exhibiting some of the classic precursors to out-of-control inflation. But a deeper look suggests that the story is not so simple.

"Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem


ObamaNomics: An Endless Downward Spiral - BoomerJeff



A REALITY CHECK FOR A LAME WASHINGTON ESTABLISHMENT TALKING POINT - Glenn Reynolds

Note that the following table is of actual and estimated annual federal budget deficits, not the cumulative national debt.