If we each have a boxed lunch with the same sandwich, chips, a pickle, and a cookie, why would we consider trading items? Perhaps I prefer chips and you prefer cookies. Maybe I’ll give you my cookie for your chips. Now both of us are happier with our lunches. This is one example of how exchange can make people better off even without increasing the total amount of wealth. Exchange helps correct mistakes in allocation and it makes everyone involved happier. Professor Michael C. Munger offers a few examples of how exchange can make people happier whether people have the same preferences or different preferences, the same stuff to start with or different stuff. The ability to make people better off by simple exchange may seem like magic, Munger says, but it’s just markets.
John Allison is the President and CEO of the Cato Institute. Prior to joining Cato, Allison was Chairman and CEO of BB&T Corporation, the 10th largest financial services holding company headquartered in the United States. During his tenure as CEO from 1989 to 2008, BB&T grew from $4.5 billion to $152 billion in assets. He was recognized by the Harvard Business Review as one of the top 100 most successful CEOs in the world over the last decade.
Allison has received the Corning Award for Distinguished Leadership, been inducted into the North Carolina Business Hall of Fame, and received the Lifetime Achievement Award from the American Banker. He is a former Distinguished Professor of Practice at Wake Forest University School of Business, and serves on the Board of Visitors at the business schools at Wake Forest, Duke, and UNC-Chapel Hill.
Allison is a Phi Beta Kappa graduate of the University of North Carolina at Chapel Hill. He received his master’s degree in management from Duke University, and is also a graduate of the Stonier Graduate School of Banking.
Bill Whittle thinks that President Obama is trying to deliberately hurt America through the questionable sequester budget cuts. Why would the President of the United States try to punish the nation he has sworn to protect?
TANSTAAFL h/t Robert A. Heinlein in The Moon is a Harsh Mistress “There ain’t no such thing as a free lunch.”
Milton Friedman, recipient of the 1976 Nobel Prize for Economic Science, was one of the most recognizable and influential proponents of liberty and markets in the 20th century, and the leader of the Chicago School of economics.In this video from the grand opening of the Cato Institutess headquarters in Washington, D.C. in 1993, Milton Friedman gives a talk about popular political aphorisms, one of his favorites being the one he helped popularize in the title of his 1975 book, “Theres no such thing as a free lunch.”
The common explanation for rising gas prices makes an exciting news story: Villainous oil companies are taking advantage of helpless consumers. Prof. Art Carden explains that this popular story is inaccurate. Gas prices go up and down based on the laws of supply and demand. Political problems, such as barriers to the development of new sources and new energy sources, also contribute to rising prices. Gas prices would be lower if we didn’t have such barriers. Prices would also be lower if demand were not artificially increased through war and other wasteful expenditures.
You have to wonder when SNL takes on Obama’s nonsense.
Saturday Night Live opened the March 2, 2013 episode taking on the big sequestration fight in Congress, with Jay Pharaoh as President Obama admitting to the American people that “I really have no idea how money works or how budgets work,” but did his best to explain to the American people the real-world effects of the budget cuts.
Across the Atlantic, Americans see European economies faltering under enormous debt, overburdened welfare states, governments controlling close to fifty percent of the economy, high taxation, heavily regulated labor markets, aging populations, and large numbers of public sector workers. They also see a European political class that is unable — and, in many cases, unwilling — to implement economic reform. This timely and sobering video explains why Americans cannot ignore the “canary in the coalmine” across the pond in determining our future. We must ask the question: “Is America becoming Europe?”To learn more read Dr. Samuel Greggs Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future: http://www.amazon.com/dp/1594036373/
I have been trying to come up with a very short easily remembered summation of the differences between the major schools of economic thought. If you like it pass it along.
There are two major schools of economic thought, the London and the Austrian. The London School is hundreds of theories addressing how political power can manage an economy. The Austrian School explains how the actual human interaction that comprises an economy works.
The crooks in DC have created a system that allows them to claim they’re cutting the budget when the burden of government spending actually is rising.
This sleazy system is designed in part to deceive the American people, and the current squabbling over the fiscal cliff is a good example. The President claims he has a “balanced approach” that involves budget cuts, but look at the second chart at this link and you will see that he’s really proposing bigger government.
This dishonest approach also was used by the President’s Fiscal Commission and last year’s crummy debt limit deal was based on this form of fiscal prevarication.
Here are some key excerpts from a Wall Street Journal editorial exposing this scam.
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President Obama and John Boehner are playing by the dysfunctional Beltway rules. The rules work if you like bigger government, but Republicans need a new strategy, which starts by exposing the rigged game of “baseline budgeting.” …numbers have no real meaning because they are conjured in the wilderness of mirrors that is the federal budget process. Since 1974, Capitol Hill’s “baseline” has automatically increased spending every year according to Congressional Budget Office projections, which means before anyone has submitted a budget or cast a single vote. Tax and spending changes are then measured off that inflated baseline, not in absolute terms. …Democrats designed this system to make it easier to defend annual spending increases and to portray any reduction in the baseline as a spending “cut.” Chris Wallace called Timothy Geithner on this “gimmick” on “Fox News Sunday” this week, only to have the Treasury Secretary insist it’s real. …in the current debate the GOP is putting itself at a major disadvantage by negotiating off the phony baseline. …If Republicans really want to slow the growth in spending, they need to stop playing by Beltway rules and start explaining to America why Mr. Obama keeps saying he’s cutting spending even as spending and deficits keep going up and up and up.
You probably won’t be surprised to learn that other nations rely on this crooked system, most notably the United Kingdom, which supposedly is imposing “savage” cuts even though government spending keeps rising (and they fooled Paul Krugman, though he seems to make a habit of misreading foreign fiscal and economic data).
