It’s a truism of pop Keynesian economics that consumer spending drives the economy; if spending slows in a recession; government must make up the difference. In reality, consumer spending merely signals what consumers want; producers may be unable or unwilling to deliver. Government spending may compensate—or make matters worse—depending on the type of spending and whether it’s financed by progressive taxes or by borrowing. . . . → Read More: The Keynesian Stimulus Spending Fallacy
Did Mussolini’s 1935 invasion of Abyssinia help Italy escape the Depression? . . . → Read More: Can Invading a Small Third-World Country Stimulate the Economy?
Deficit hawks are justifiably concerned about ballooning national debt. But their solution–cutting social spending–would make matters worse. . . . → Read More: Deficit Hawk, Progressive Style, Part I
As Kevin Phillips recorded in Wealth and Democracy (2002), war has created the opportunity for many great fortunes. Thus the frenzied looting–and disregard for the lives of both US soldiers and corporate employees–displayed in Robert Greenwald’s new film Iraq for Sale: The War Profiteers. One small example: drivers shuttle empty mail trucks up and down . . . → Read More: Benefits of Military Spending
From the day the war in Iraq became imaginable, my husband and I have not missed a peace march. Nonetheless, as the slaughter continues, I have worried about how the US can extricate itself. Ambassador Peter Galbraith’s book is reassuring, if that’s the right word, that a prompt withdrawal really can’t make matters worse.
Galbraith . . . → Read More: The End of Iraq: How American Incompetence Created a War without End, by Peter Galbraith
Introductory Economics Lesson One: Price controls can backfire. Exhibit A: New York City rent control. Landlords neglect repairs, and harass poor tenants into leaving. Meanwhile, well-to-do renters pay thousands of dollars in “key money” to owners or supers to obtain choice apartments.
Exhibit B: Iraqi oil price control. Remember when the Provisional Authority took over . . . → Read More: The Mother of All Bungles in Iraq