All posts by Jeff Haymond

Predicting socialist policies lead to disaster is like shooting fish in a barrel

In a response to a recent post on the need for us to pray for the poor people of Venezuela, one poster suggested the problems weren’t socialism, but over-dependence on one export–oil.  And since the price of oil has dropped so dramatically, that has caused the problems.  While that is a superficial reason, one has to look at deeper reasons as to why they were overly dependent upon oil, and we also must examine why the oil industry in Venezuela was… Continue Reading ››

Venezuela is starving, please pray

From today’s WSJ, Venezuela is starving (gated).  No political economy discussion really needed here.  The socialist experiment is turning Venezuela into North Korea, with all the attendant misery. This is potentially going to be worse than Syria. This is an unmitigated, albeit predictable, disaster.   No need to discuss the issue as to why, just pray for these poor people.  May God have mercy on them.

Puerto Rico Bankruptcy–is bankruptcy ever a good thing?

Puerto Rico is trying to use a bankruptcy provision approved last year to ameliorate its $123B debt.   Now this is important for many reasons but I just want to focus on one.  This bankruptcy, and the potential of stiffing the bondholders, will be beneficial in the long run.  Why?  I mean, we all think people should pay their debts, don’t we?  So why shouldn’t Puerto Rico? I think the concept of Odious Debt applies here.  Politicians will often promise… Continue Reading ››

Trumpian Tax Triumph?

Mr. Trump unveiled his tax plan earlier this week, and there was something for almost every conservative to like.  Our current obscene corporate tax rate of 39% is the highest among industrial nations (only exceeded by Chad and the UAE), but doesn’t yield all that much revenue, so Mr. Trump proposes drastically reducing it to 15%.   As shown in the figure above, that would put the U.S. slightly more competitive than the average country, instead of being the most… Continue Reading ››

Does capital capture all the productivity gains of our modern economy, with labor getting nothing? A short case study in how to deal with competing claims

Thanks to our frequent critic Mr. Adams, we have the opportunity to think about how we deal with “facts” that go against everything we know to be true.  When the latest scientific study comes out claiming that global warming is happening (despite no warming in the last 20 years), or that the minimum wage actually doesn’t cause any negative effects, or almost any other competing claim (especially in the social sciences), how do we assess it?  We don’t want to… Continue Reading ››

Paul Krugman is right (to a degree), and some readers never thought I’d say that!

Paul Krugman, the Nobel Laureate economist who writes op-ed’s for the NYT’s, delights in ideological conflict with conservatives.  And there are whole hosts of blog sites that routinely spar back with him, such as this Austrian post.  So I generally disagree with him.  Yet his post earlier this week has a lot of merit to it.  Krugman takes Mr. Trump to task for highlighting the importance of manufacturing jobs, and asks the great question as to why aren’t other jobs lauded?… Continue Reading ››

Amazing how honest politicians are when they are no longer in office!

Earlier this week we heard with great candor from former Democratic presidential candidate and U.S. Senator Bob Kerrey, expressing dismay at the Trump budget.  Why?  Cuts in the EPA?  Cuts for Big Bird and PBS?  No.  Senator Kerrey is concerned about Mr. Trump’s unwillingness to do something about our biggest budget challenge–the runaway growth of entitlements, specifically Medicare and Social Security.  Sen Kerry laments that we’re on track to increase those two programs by $80B next year.  As Kerry says,… Continue Reading ››

The Saudis are learning the economics of perfect competition–Price equals Marginal Cost.

Oil took a dive south again this week, going below $50/barrel yesterday.  As we’ve discussed before, the American “fracker” is now the marginal supplier–ready to turn on the spigots at the first sign of a higher price.  In an introductory Econ course, we’ll review what is often called “perfect competition,” or more appropriately, a price-taker market.   One of the central tenets of this model is that it will be characterized by price equaling the marginal cost.  So if the marginal… Continue Reading ››

Some people just like to be outraged–makes ’em feel good

So I said something to this effect to a fellow Berean a few months back. As I had watched some of the craziness on the far left, especially running up to and after the election, it seemed to me that many of them felt almost a moral buzz as they could get angry at those that think like I do.  For just one example, there is considerable righteous indignation that we have any immigration restrictions, because those advocating are not-so-in-the-closet… Continue Reading ››

Quick ? for Mr. Trump based on his speech

Mr. Trump rightly noted that any healthcare reform, to be effective: it must be the plan they want, not the plan forced on them by the Government. I like this principle.  But this leads to a natural follow-on question.  If it is good for Americans to be able to buy the health care plan they want, not what the government wants for them (and their cronies), why not allow Americans to buy whatever goods and services they want from whomever… Continue Reading ››