Far from an example of a market failure, Enron's saga shows that firms that invest too much in politics can easily become complacent in the face of changing market conditions. In economics, this is called government failure, and we can blame the growing requirement for firms to divert resources to grease palms in Washington as a necessary business investment for its occurrence.
In its original meaning, "crisis" signifies a turning point that can either lead to improvement and recovery or to more severe deterioration. In the case of Argentina, with the future of the Argentinean people in mind, one must hope for the abandonment of its interventionist economic system, with its reliance on a bureaucratic apparatus and its self-chosen dependency on foreign credits.
The publication of David DeRosa's latest book is all the more timely given the financial crises and stock market crises that littered the 1990s. The problem with DeRosa’s book, however, is that his solution offers no hope for stabilizing the system. Nicolas Bouzou reviews In Defense of Free Capital Markets.
Government is far from the economy's savior. Rather, it is a parasite, a cancer, that eats away at the wealth of its citizens with its fiat currency, its many billions of dollars of expropriated wealth, and its multitudinous directives.
When we talk about demand for money, what we really mean is the demand for money's purchasing power. After all, people don't want a greater amount of money in their pockets; they want greater purchasing power in their possession.
Even though research commenced in the 1970s, behavioral finance has only now gained wider currency with its terminology and ideas more widely disseminated and accepted.
Recently, Paul Krugman published his own critique of the Bush tax cut in a short, popular book entitled Fuzzy Math.
It is the inevitable consequence of Fed interest-rate manipulations to disturb, disrupt, and disarrange economic activity, writes Hans Sennholz.
Tax cuts are always a joy. But let's dispense with the fiction that they constitute an economic stimulus. For that, we need an increase of savings and dramatic spending cuts.
The Fed, the media, and most economists agree: Spending is what drives an economy forward. Frank Shostak shows why this view is wholly incorrect.
