Top Ten Things You Should Know about Economics

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  • Scott ButnerScott Butner Senior Member Posts: 3,918 Senior Member
    except much of this is completely at odds with observed reality, or perhaps less hyperbolically, surrounded by a LOT of caveats and exceptions. People are demonstrably NOT rational actors, they often make decisions -- even as organizations, much less as individuals -- on the basis of custom, habit, biases, emotions, etc.

    Classical economists like to ignore this, but the world is a lot messier than "When you subsidize something, you get more of it"

    The author also conveniently ignores an important (IMO, anyway) concept in economics when it applies to the policy sphere, i.e, the notion of external costs. Oil is cheap in part because we choose as a society to heavily subsidize it's stability of supply through foreign policy and military interventions, and to ignore the health and environmental costs or at least make an implicit decision to let them accrue not to the oil producers, but to society as a whole.

    One can argue that without a means of putting those costs on the shoulders of the oil producers, the market is distorted because they're able to ignore many of the costs that are associated with their product, because they are not the ones who have to pay it. That might not matter much from a business standpoint, but it sure as hell is a legitimate issue for public policy.
    .
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    Well considering your economic predictions have been wrong so often, I am inclined to agree with Pio on just how scientific this science is.
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • creekguycreekguy Senior Member Posts: 3,905 Senior Member
    except much of this is completely at odds with observed reality, or perhaps less hyperbolically, surrounded by a LOT of caveats and exceptions. People are demonstrably NOT rational actors, they often make decisions -- even as organizations, much less as individuals -- on the basis of custom, habit, biases, emotions, etc.

    Classical economists like to ignore this, but the world is a lot messier than "When you subsidize something, you get more of it"

    The author also conveniently ignores an important (IMO, anyway) concept in economics when it applies to the policy sphere, i.e, the notion of external costs. Oil is cheap in part because we choose as a society to heavily subsidize it's stability of supply through foreign policy and military interventions, and to ignore the health and environmental costs or at least make an implicit decision to let them accrue not to the oil producers, but to society as a whole.

    One can argue that without a means of putting those costs on the shoulders of the oil producers, the market is distorted because they're able to ignore many of the costs that are associated with their product, because they are not the ones who have to pay it. That might not matter much from a business standpoint, but it sure as hell is a legitimate issue for public policy.
    .

    Yes and coal is also "cheap" because the costs of using it for energy are externalized in the unseen costs of air pollution, acid rain, mine accidents, even railroad accidents. But companies can argue that it is cheaper because the public doesn't get that.
  • except much of this is completely at odds with observed reality, or perhaps less hyperbolically, surrounded by a LOT of caveats and exceptions. People are demonstrably NOT rational actors, they often make decisions -- even as organizations, much less as individuals -- on the basis of custom, habit, biases, emotions, etc.

    Classical economists like to ignore this, but the world is a lot messier than "When you subsidize something, you get more of it"

    The author also conveniently ignores an important (IMO, anyway) concept in economics when it applies to the policy sphere, i.e, the notion of external costs. Oil is cheap in part because we choose as a society to heavily subsidize it's stability of supply through foreign policy and military interventions, and to ignore the health and environmental costs or at least make an implicit decision to let them accrue not to the oil producers, but to society as a whole.

    One can argue that without a means of putting those costs on the shoulders of the oil producers, the market is distorted because they're able to ignore many of the costs that are associated with their product, because they are not the ones who have to pay it. That might not matter much from a business standpoint, but it sure as hell is a legitimate issue for public policy.
    .

    If you can name something that is subsidized where supply would be the same if it weren't, have at it. The examples where this is true are incredibly numerous and obvious.

    Externalities are implicitly covered in his discussion of the tragedy of the commons under Prisoner's Dilemma: Because the benefits of using the land are concentrated on the person who uses it, while the costs (from overuse, degradation, etc.) are spread over everyone. So people keep on using the land more, even when the costs are greater than the benefits. This is pretty much the text book definition of an externality.
  • NZ IndicatorNZ Indicator Senior Member Posts: 10,176 Senior Member
    except much of this is completely at odds with observed reality

    All of it is reality. After reading through that list it has applied everywhere I have been employed.
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    In Japan, pornography laws prohibit photos that show pubic hair. Although the intent of the laws was to ban hard-core photographs of human genitalia, the result was that pornographers started producing more pornography with shaved pubic areas.

    I have seen Japanese ****, this is a lie.

    Also there are many studies that show that women on welfare actually have fewer children.

    Not to mention market dynamics take away the incentive for Pharmaceutical companies to find cures. It is better for them if they can make diseases chronic.

    In fact we have gotten to the point where they are creating diseases.

    http://www.ispot.tv/ad/79jG/movantik-opioid-baggage
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • I have seen Japanese ****, this is a lie.

    You into hentai or bukakke?

    Anyway, the rules changed mid-90s. Prior to that, no pubes. By the way, this was also the rule for strippers and the same substitution effect occured (I can vouch for this personally).
    Not to mention market dynamics take away the incentive for Pharmaceutical companies to find cures. It is better for them if they can make diseases chronic.

    Somebody forgot to tell Gilead.
  • Here is something you should know. Keynes is not dead.

    Hayek stuck him with a knife.
    Milton Friedman stepped on his throat.
    Maggie Thatcher pulled up her skirt and pissed on his grave.
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    Blah blah blah

    Tell me how many economic predictions have conservatives been correct about? Tax cuts equal jobs? QE would lead to runaway inflation? Markets regulate themselves? What? How has that austerity worked in Europe?
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    Joe K. wrote: »

    Tell me, what conservatives are proposing cutting taxes for the bottom income earners?
    In particular, the paper tracks the impact of various tax changes over time, and finds that tax cuts aimed at the wealthy–which some economists argue can boost employment because the rich tend to own businesses and are in a better position to hire large numbers of workers–don’t spur growth in output and jobs.

    Instead, the wealthy show a greater propensity to save, thereby minimizing the short-run impact on the economy’s performance.

    This is counter to what people like Steven have been telling us.
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • magallowaymagalloway Senior Member Posts: 1,030 Senior Member
    I would observe that most of the world's business is controlled by, at best, oligopolies and price is not necessarily an indicator of scarcity. Examples: price of drugs under patent in the US versus their price elsewhere or the fact that Americans have paid roughly three times the price of sugar that the rest of the world has since the Cuban Sugar Embargo of 1961 (I believe that was the date), and you can't convince me that American sugar producers didn't have input to the policy decision. Call this speculation if you wish.

    Jim
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    Interesting point here. Jimmy Carter had a better record on job growth than Reagan. Things that make you go hmmmm.

    http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • Blah blah blah

    Tell me how many economic predictions have conservatives been correct about? Tax cuts equal jobs? QE would lead to runaway inflation? Markets regulate themselves? What? How has that austerity worked in Europe?

    About as many as liberals. You're confusing macro with micro and even Keynes would argue that tax cuts = jobs (he thought government spending would add more though for the same dollar).
    Austerity in Europe has worked pretty **** well actually. For example, the Irish unemployment rate is now 9.5%; the high was over 15%. The Spanish unemployment rate is down over 4 points as well (although it is still ridiculously high).
  • Interesting point here. Jimmy Carter had a better record on job growth than Reagan. Things that make you go hmmmm.

    http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/

    hmmmm.....

    https://en.wikipedia.org/wiki/Misery_index_(economics)

    Let's try and remember that Volcker had to kill the economy to save it.
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    I know you believe that.
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    Steven wrote: »
    About as many as liberals. You're confusing macro with micro and even Keynes would argue that tax cuts = jobs (he thought government spending would add more though for the same dollar).
    Austerity in Europe has worked pretty **** well actually. For example, the Irish unemployment rate is now 9.5%; the high was over 15%. The Spanish unemployment rate is down over 4 points as well (although it is still ridiculously high).

    Oh so because things are better than complete ****, all is well.
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • Lol. It wasn't austerity that got them into the sh-t.
  • I know you believe that.

    Everybody with a brain believes it. The facts are tough to ignore.

    Inflation went from 12% in 1980 to 3.8% in 1982.
    The fed funds rate was 20% when Reagan took office. It was 8.9% in 1982. That didn't happen on its own or without some serious pain.
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    Steven wrote: »
    Lol. It wasn't austerity that got them into the sh-t.

    No it was Bush's belief that markets regulate themselves.
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • No it was Bush's belief that markets regulate themselves.

    So, Bush was to blame for Ireland, Spain, Greece, and Italy going into or nearly into bankruptcy? There's a new one.
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    Not so new. Blaming Europe's market problems on our crisis goes back to 2009.
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • HextallHextall Senior Member Posts: 9,520 Senior Member
    The lodge has turned to clickbait. Maybe those gotcers were right to leave.
  • Not so new. Blaming Europe's market problems on our crisis goes back to 2009.

    Greek structural deficit - Bush's fault
    Property bubble in Ireland - Bush's fault
    Portuguese government mismanagement - Bush's fault
    Spanish property bubble - Bush's fault
    Cypriot bank lending to Greece - Bush's fault

    Got it.
  • NZ IndicatorNZ Indicator Senior Member Posts: 10,176 Senior Member
    Thanks Obama for making everything Bush's fault!!

    Bush_Fault.gif
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    So I guess in your opinion the collapse of our economy that occurred during Bush's presidency is not his fault. To be clear, that although I believe there were many things he could have done to mitigate that collapse, I am actually inclined to agree with you to a point. The collapse was the fault of those bankers that took unwarranted risks and refused to see the writing on the walls. However I doubt you would be so generous were there a Democrat in that office at that time.
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan
  • WetdogWetdog Senior Member Posts: 5,149 Senior Member
    btw I know a number of Spanish, Irish and Greeks. They'll all tell you the forced EU austerity caused the problems to just bottom out. Some non EU countries actually spent more and recovered unlike most on Steven's list. No time for links, I am just about to pass out. No GWB didn't force them, but the U.S. collapse did. I know, I know it's everyone elses fault.
    I find the assault on free thought disturbing,
    I find the willingness to give it up frightening.
  • fishingcomicfishingcomic Senior Member Posts: 24,260 Senior Member
    http://www.vox.com/2015/6/29/8862583/greek-financial-crisis-explained
    When Greece joined the euro in 2001, confidence in the Greek economy grew and a big economic boom followed. But after the 2008 financial crisis, everything changed. Every country in Europe entered a recession, but because Greece was one of the poorest and most indebted countries, it suffered the most.
    'I've spoken of the Shining City all my political life. …In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.'" Ronald Reagan

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