The popular belief that the U.S. economy has been steadily recovering has endured months of disappointing data without losing much of its appeal. A deep bench of excuses, ranging from the weather to the Chinese economy, has been called on to justify why the economy hasn't built up any noticeable steam, and why the Fed has failed to move rates off zero, where they have been for seven years. But the downright dismal September jobs report that was released last Friday may prove to be the flashing r... (more)
New data show that worker compensation is rising faster in the federal government than in the private sector. After rapid growth in federal pay during the George W. Bush years, growth slowed from 2011 to 2013 after policymakers enacted a partial freeze on federal wages.
That era of restraint is now over. The latest data from the Bureau of Economic Analysis (BEA) show that wages rose 2.9 percent in the federal government in 2014, on average, compared to 1.7 percent in the private s... (more)
The federal government uses very carefully manipulated numbers to cover up the crushing economic depression that is going on in this nation. For the month of September, the federal government told us that 142,000 jobs were added to the economy. If that was actually true, that would barely be enough to keep up with population growth. Sadly, the truth is that the real numbers were actually far worse than that. The unadjusted numbers show that the U.S. economy actually lost 248... (more)
As you probably know if you follow the news, a man named Martin Shkreli in charge of a startup firm called Turing Pharmaceuticals bought the rights to a drug called pyrimethamine (brand name Daraprim), used in the treatment of AIDS and malaria, and announced that he was jacking up its price from $13.60 to $750. Massive outrage resulted, which has echoed through social media for the past week.
Pyrimethamine is long since off patent. It is not difficult to manufacture, and sells che... (more)
One of the fun parts about learning economics is realizing how broadly it can be applied. Once you understand the basic logic of scarcity, opportunity cost, and the rest of the economic way of thinking, all kinds of social phenomena are open to explanation.
The economic way of thinking might explain some recent changes in how people find their way into romantic relationships. These changes affect marriage, divorce, and infidelity.
A group of artists have won a landmark victory over the Happy Birthday song. A California judge ruled that the copyrights to one of the world's most popular melodies is invalid. As a result, Happy Birthday enters the public domain while a multi-million dollar licensing business is destroyed.
Starting today everyone is free use “Happy Birthday” without having to pay a license fee, as a California federal court ruling just entered the popular song into the public domain. ... (more)
In every economic exchange, both sides benefit, each from his own individual, personal perspective. That's because each trader gives up something he values less for something he values more. Thus, at the moment of the trade, each of the traders is better off than he was before the trade. The standard of living of both traders has been improved by the simple act of trade.
Every dictator knows that a continuous state of emergency is the best means to justify tyrannical policies. The trick is to keep the fictitious emergency from breeding so much paranoia that routine activities come to a halt. Many have discovered that its best to make the threat external, intangible and ultimately, unverifiable. In Orwell's 1984 the preferred mantra was "We've always been at war with Eurasia," even though everyone knew it wasn't true. In its rate decision this week the Federal Re... (more)
Once again the Fed’s bite has failed to live up to its bark. Despite months of expectations that it would finally raise rates for the first time since 2006, the Fed continued to sit on its hands while pointing to some unspecified date in the future when all the economic and financial stars will align in a way that makes a 25 basis point increase appropriate. Am I the only one getting bored by the repetition?
Just like it has in prior statements, the Fed’s Open Market Committee pai... (more)
We seem to be panicking about China's economy. Let's pause and look at some of the facts.
First, consider the short-term concerns that sent shock waves across the world. Unlike the United States, where very developed capital markets are connected to the economy at large, in China the linkage is less strong. Even so, what has really happened to the stock market over there? The Shanghai Composite Index has dropped from 5,166 in June of this year to 3,005 as I write this--about 4... (more)
The other day I was having coffee with a new friend, a retired businessman who customized luxury cars in California. I mentioned I had recently retired from owning an investment firm and had many years of study of economics, especially Austrian Economics.
As so many people I have met before him, he said, "I really don’t understand economics and always have been confused by it."
To which I surprised him with, "Of course you understand economics; it is the thought pro... (more)