You may have heard the joke 'If you laid all the economists in the world end to end, they still wouldn't reach a conclusion."
Reading this article, it becomes a little clearer why nobody conclusively understands why the economy works as it does, let alone, where to bang it when it gets out of whack. These folks can't even agree why stores stock more of one brand of waffles than another. I'm not mocking them. My practical applications of economic knowledge, these days, start and end with Don't let Giant Food Stores know that you like something; they'll stop carrying it.
3 comments:
I am a great believer in Adam Smith, m'self. His contention is that if you get two guys sitting in a field selling rocks to each other, they both end up as millionaires.
When a government spends money, they get it all back within three weeks due to various taxes. This has the added benefit that it puts the breaks on growth, inflation, and housing prices. Raising taxes just allows the money to come back faster. Of course if you raise it too high, the underground economy kicks in, which lengthens the payback time. High taxes always result in criminal activity as an inevitable consequence.
I can never tell if you're serious about stuff like that.
My uninformed hunch is that Smith is relevant to modern day economics the way that the US founders are relevant to modern constitutional interpretation.
They should rename econometrics into economagic.
Well, thats the problem with the "dismal science". It resembles magic. Not the necromancy-pseudo-religious magik you see at your local occult shop and "Learning Channel", but rather the slight of hand of the stage magician. Now you see it, now you don't.
It "looks" like magic, but it actually follows solid natural laws same as physics. When Smith wrote the "Wealth of Nations", he even stated that it was just a primer, not the be all and end all. His first priciples are still valid. He was the first to admit that economy can be used and abused, that supply and demand for currency was crucial, and that there are concepts which are hard to wrap your head around. Like the concept of cheap or expensive money.
Adam had a whole chapter on external economic influence, and he considered crimminal activities (such as smuggling and arms running) as important influences.
If they would only listen to the Bills of the world....
And for that matter, the US founders whose ideas seemed to work just fine for almost two hundred years....
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