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Archive For: Economics

Efficiency Is Not a Dirty Word

Angry Businessman 10922381_sThe company’s Chief Accounting Officer (CAO) was livid. The young engineer had the gall to question the need for a weekly accounting report to the home office when he didn’t know anything about accounting processes! So the CAO spat some choice words and told the young engineer to leave and never return.

The engineer sheepishly returned to his department and reported the incident to me, his supervising engineer.… Read More


Pope Francis on Poverty

Pope FrancisWhen Sarah Palin said the Pope’s views on poverty were “kind of liberal” and Rush Limbaugh called them “pure Marxism,” the media were aghast. In a rare moment of unity, scoffers joined now-and-then Catholics, former Catholics, and practicing Catholics in protest. Palin and Limbaugh quickly, and prudently, said they had meant no disrespect.

Ironically, their criticisms of Francis’ views on poverty were perfectly valid (though Rush’s categorization was greatly overstated).… Read More


Progressivism’s Fundamental Flaw

Francis Galton (Bing)Progressivism is the dominant political and social philosophy of our time. Even people who know little about it tend to regard it favorably. They believe that since progress suggests moving forward, developing, and improving, Progressivism must be positive and good. But Progressivism doesn’t deserve this favorable image because it is rooted in a profound falsehood—that the vast majority of human beings are mentally deficient and nothing can be done to alter their condition.Read More


Whatever Happened to Logic?

(123RF Purchase)14194886_sOnce upon a time, logic was held in high regard. Most educated people were acquainted with its basic principles and had at least modest skill in separating sound arguments from unsound ones. For example, they would see the validity of “All human beings are mortal; Americans are human beings; therefore Americans are mortal.” They would likewise recognize the fallacy in “Even geniuses make errors; I make errors; therefore I am a genius.”

They were also familiar with common pitfalls in thinking, including oversimplification, overgeneralization, unwarranted assumption,contradiction, and hasty conclusion.… Read More


Enjoying Your Obamelet?

White House KitchenObamelet is an apt metaphor for the President’s transformation of the economy. It recalls Vladimir Lenin’s statement, made 75 years ago in reference to the Great Famine in Ukraine:  “If you want to make an omelet, you must be willing to break a few eggs.” Let’s be clear: I am not labeling the President a murderer or a communist like Lenin. Nor am I implying that he is intentionally hurting people.… Read More


Don’t Raise The Debt Ceiling- LOWER It!

FranklinDoes the debt ceiling debate seem familiar? It should. From the Carter administration to the Obama administration the debt ceiling has been raised 39 times. Each time the increase was opposed but then passed by the opposition party.

It’s like a political variation on the silent movie drama in which the poor damsel says, “I can’t pay the rent,” the villainous landlord demands, “You must pay the rent,” and the young hero declares, “I’ll pay the rent.” In the political version, the parties take turns playing the villain.… Read More


Diagnosis: Omniscience Delusion

Nobel Prize 2008 recipient in economicsI have spent most of the last 50 years writing books that examine reflective, creative, and critical thinking and offer guidance in their use. Along the way I have encountered some of the best and the worst examples of human thought, so it takes a lot to surprise me.

Nevertheless, I was recently surprised and disappointed by a statement made by New York Times columnist Paul Krugman in an column titled “Republican Health Care Panic.” His thesis was that Republicans are upset because Obama’s health care program is probably going to work, and he concluded with these words:

Republicans may be willing to risk economic and financial crisis solely to deny essential health care and financial security to millions of their fellow Americans.Read More


Wages, Capitalism, And Morality: Part II

Leoxiii(Note: Part I documented that the minimum wage harms the very people it is designed to help and the popular alternative—letting capitalism work, unencumbered by regulations—encourages practices that cry out for reform. It concluded by suggesting that a new approach is needed, one based on a discipline that economists seldom consult—ethics.)

The division of knowledge into particular fields of study and the tendency to narrow specialization within each field have led many scholars to assume that nothing outside their disciplines is relevant to those disciplines.… Read More


Wages, Capitalism, And Morality: Part I

Economist Milton FriedmanIt is commonly believed that fairness demands a certain level of wage be guaranteed to all workers. That is the idea behind the minimum wage that has long existed in the U.S. and other countries. But does that wage benefit workers? Some economists say it does, but others argue that it actually hurts those it is designed to help. People on latter side of the argument include Thomas Sowell, Walter Williams (who calls the minimum wage “maximum folly”), and Nobel Prize winner Milton Friedman.… Read More


Ending Legislative Gobbledygook

chestertonI recently commented on the absurdity of having members of Congress vote on bills they have not had time to read. This essay addresses a closely related problem—the fact that most bills are difficult, if not impossible, to understand even when there is ample time to read them. Here are two typical passages:

Excerpt from the Final Version of the Affordable Health Care Act, Sec. 107.… Read More