The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The east coast and parts of the southern U.S. were to varying degrees paralyzed by blizzards a few weeks ago. The snow as expected rendered the roads treacherous, and in anticipation of slick streets, shoppers flocked to the grocery stores in advance.The rush into grocery stores, and its aftermath, offers worthwhile lessons in economics.First up, […]
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.I’m going to […]
Last year was quite the year for Bitcoin. We’ve seen exponential growth in Bitcoin’s exchange rate and extensive coverage in the media. Another phenomenon we have witnessed is the proliferation of alternative cryptocurrencies, five of which we’ve provided below.What all of these cryptocurrencies have in common is that they rely on a decentralized network to […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Recent difficulties with implementing the Affordable Care Act have increased opposition to the program. A majority of Americans now oppose it. Problems with the HealthCare.gov website are in all likelihood temporary. However, there are serious long-term problems, particularly considering long-term finance and labor supply issues. Given the mounting difficulties with and growing concerns about the […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”As the inequality gap grows, there is an ideological battle unfolding in the West.On the one hand, there are those who think government can fix things. It must do more, tax more, […]
On Feb. 7 the United States will once again reach its statutory debt limit, meaning it cannot legally borrow any more money. Since the obvious option of cutting spending to match the amount of revenue that the government collects is off the table for some inexplicable reason, Congress will have to pass a new, higher […]
The New York Times published an interminable article on health care recently. Plenty of facts — how scrupulous are these journalists! — but the article displayed absolutely no comprehension of the basics of cause and effect. I was left wondering about the whole point.The article details how the health care system rewards specialists to an […]
The Largest Company in History:“The United States Corporation of Government (USCOG)”I follow global social and commercial networks, looking for entrepreneurial opportunities.Innovation surges when industry and government models change. Buggy whips. Landline phones. Railroads. The Soviet Union. Apartheid South Africa. All marked social and commercial innovation, both bad and good.We are witnessing a new form of […]
We’d like to give the banks in Australia some credit. They’ve finally gone and done it. They have caught up with 1960s technology. They’ve figured out how to use PIN numbers.How to only use PIN numbers, that is. They’re considering scrapping signatures on credit cards to cut down on fraud. Apparently, having to verify your […]
We put in a good-citizen call to the SEC the other day.“There’s a massive scheme to manipulate stock prices,” we told the friendly agent.“I have to tell you that your call is being monitored so that we can better serve the public,” he replied.“Oh, don’t worry about that. The NSA is tapping our call anyway.”“Are […]
Dr. William C. Padgett is a retired optometrist who has been trying to bring an elderly care facility to Beaufort County, North Carolina, for over a decade.“Our senior citizens,” he laments, “are finding that it is difficult and in many cases impossible to find an appropriate long-term care facility locally.” Though he has received several […]
If you don’t have the angst out of your system concerning Wall Street banksters, Government Sachs, and the Affordable Care Act, settle in with Matt Taibbi’s Griftopia to make your blood boil one more time.Investors should be reminded of 2008 as they shrug their shoulders and put their money back in the stock market. The […]
What do 8 of the 10 wealthiest people in the U.S. have in common?Aside from being able to fly in private jets, the common thread is that each of them has made their fortune thanks to a start-up.Let me explain…From tech titans like Bill Gates and Larry Ellison (founders of Microsoft and Oracle, respectively), to […]
“Inequality is the defining challenge of our time,” according to President Obama. It’s certainly the topic of the day for Paul Krugman, Joe Stiglitz and a whole raft of liberal pundits.But have you noticed that hardly anyone else is talking about it? When is the last time you heard a shoeshine person or a taxi […]
In December of last year, I left my career to travel the world for one year.My plan was to visit as many countries as possible on my Star Alliance Around-the-World ticket in the first nine months, then, for the remaining three months, return back to the country that most caught my eye and my curiosity.Nine […]
Economic history is primed to repeat in the nastiest of ways unless the government stops distorting the price of something we use every day.Every product, good, or service has a price, which is essential to rational decision-making. We use prices every day as vital data that guide us. Without true prices, prices not distorted by […]
A new survey from Harvard University found a large majority of young Americans do not believe the law will save them money, do not believe it will improve their health, and do not intend to sign up for insurance through the new exchanges.
Uh-oh!The new pope, Francis from the Pampas, has just warned us to beware the “tyranny” of capitalism.Each man worships his own gods. Some worship at the altar of Jesus of Nazareth. Some at the altar of the Almighty Dollar. The capitalists don’t bad-mouth Francis’ god. You’d think he would cut them the same slack.Bad-mouthing Catholicism […]
The market has selected different things as money throughout history. Some of these items have served as money in isolated places for specific periods of time — for instance, cigarettes in prisoner-of-war camps. Cigarettes continue to be a currency in prisons if allowed, but if not, according to Wikipedia, “postage stamps have become a more […]
A president stands disgraced. Congress is scattering. Bureaucrats are baffled. Pundits are reaching. Industry is scared. Politicians are scrambling to do something, anything, to make it better. One political party is in meltdown and the other loving every minute of it, hoping to ride the calamity to electoral gains.The so-called Patient Protection and Affordable Care […]
Imagine you have a friend who is completely unfamiliar with economics. Imagine further that he says he is going to read exactly 99 pages of economics and no more. What would you suggest that he read? I submit that Faustino Ballve’s Essentials of Economics: A Brief Survey of Principles and Policies would be an excellent candidate.
The book offers an admirable combination of breadth and brevity, and it delivers on everything promised in the title. The reader will come away with a brief survey of the essential principles of our beloved dismal science, a bit of familiarity with the intellectual genealogy of some of the ideas, and a handful of applications. At 99 pages, Essentials of Economics is a masterpiece of efficient communication of economic ideas.
It is an ideal introduction to economic thinking for people who haven’t the time or the inclination to conquer such massive tomes as Human Action, The Wealth of Nations, or Man, Economy, and State — though I suspect that the uninitiated reader with Essentials of Economics on his nightstand or e-reader for a few days will be much more likely to read further.
By the end of the book, the reader should be convinced that, in the words of Gustavo R. Velasco’s preface to the Spanish edition, “It is not possible to escape from economics.” Ballve’s method follows in the tradition of the economists working then (and now) in the tradition of Carl Menger and Ludwig von Mises.
He begins from a set of very simple postulates — scarcity and action — and deduces from these a body of propositions that help us make sense of the world around us. Ballve writes with a passion and verve that makes sometimes dry concepts come to life. In the course of 10 short chapters, he explains to the reader what economics studies, how markets work, what entrepreneurs do, how income flows to factors of production, the origins of money and credit, the origins of business cycles, and the fallacies of protectionism, nationalism, socialism, and interventionism.
While reading, I was continually impressed with the problems we face as teachers, scholars, economic communicators, and citizens. Research on public opinion and public policy — like Bryan Caplan’s 2007 The Myth of the Rational Voter, for example — suggests that the fundamental problem with economic knowledge is not that many voters don’t understand the fine points, nuances, and subtleties of sophisticated macroeconomic models.
Rather, from all appearances, it looks like voters take issue with the most basic ideas in economics: People respond to incentives, resources are scarce, and trade creates wealth. Without getting bombastic or unnecessarily strident, Ballve reminds us how important these principles are in a translation that absolutely sparkles.
Much of what Ballve wrote will seem obvious today, and some readers might find his criticism of econometrics somewhat dated. It is important to remember the context in which Ballve was writing. The book first appeared in Mexico in the 1950s and in English in the early 1960s. The consensus at the time, even among professional economists, was that Mises and Hayek had lost the socialist-calculation debate. Keynesian macroeconomics ruled the roost.
Ballve stepped into this environment and produced a very short, power-packed volume that offers an unapologetic defense of markets and liberty that relies not on a stubborn refusal to remove ideological blinders, but on a nuanced understanding of the sciences of human action. Speaking of which, readers familiar with Mises’ Human Action and Adam Smith’s The Wealth of Nations will find much in this book that they recognize; indeed, there were times I felt like I was actually reading Mises or Smith.
For the uninitiated reader, it is a fantastic introduction. For the expert, it is a valuable refresher. For everyone, it is a valuable addition to any reading list. I expect to return to my notes on it quite frequently.
In short, Essentials of Economics is a book that any economist would be proud to have written. It offers a valuable corrective to the errors that inform too many policies. If we take Ballve’s lessons to heart, we can perhaps fix some of the damage done by policies made by those who either do not understand economics or reject it outright. At the very least, we can avoid making bad situations worse.
That Essentials of Economics has not received more attention than it has is curious, if not scandalous. I hope that this new Laissez Faire Books edition will remedy that. The world will certainly be better for it.