Month: December 2012
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The Keynesian Stimulus Spending Fallacy
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…
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Capturing the Multinational Dragons’ Gold
As medieval dragons do, the dragon in the Beowulf epic sleeps on a pile of gold. With magic sword and shield, Beowulf kills the dragon and, mortally wounded, distributes the gold to his grateful people. Today’s multinational dragons sleep not on gold, but on hoards of cash. Meanwhile little firms—the true “job creators”—perish for want…