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u/LWRellim · 0 pointsr/Economics

>> but the houses of the 1950's were actually UNUSUALLY SMALL.

>In comparison to what exactly? They were larger than the majority of homes people lived in in europe which typically averaged 600~700 sq feet and especially to intercity homes in America, which were roughly the same size.

You are now switching and choosing to compare Apples to Oranges. Doesn't matter what the "typical" size of home was in Europe (and what exactly constitutes "typical" -- average? mean? what about the "Manor Houses" in England? Or are we to ignore those [despite the fact that many of the help lived there as well] and instead are we to use the size of the "worker's shed" in the village?)

>Most historians would say that a 3 bedroom house was unusually large for the era... right until 900+ square feet became the norm. Now most families live in 1500+ square foot homes.

Well, then most "historians" would be wrong. Typical farm homes featured distinct kitchens, several bedrooms, a dining room, sitting room, music room, etc -- and these were quite common, not merely the "wealthy" (who in fact had much larger "mansions").

And as I stated, yes, many immigrants lived in small "workers housing" that was built/owned by the local factory, etc. But equating those to a normal "house" erected by a person on his own is no more relevant than it would be to compare it to the square footage of a college student's dorm room.

>> but we'll never again see the exponential gains that we did by the initial adoption of computers.

>This is likely a false statement. "We will never again see the exponential gains that we did by the adoption of the wheel! the printing press! The steam engine! The internal-combustion engine!, etc"

So sorry that I wasn't pedantic enough for you. What I meant (by context which you didn't comprehend) was that:

"The exponential gains from adoption of computers will NOT happen again by the adoption of additional, faster computers. IOW, the 'economic gains' from computerization are now essentially complete (in the same way that the gains from the advent of steam power are long past, and the gains from IC engines completely integrated into the economy -- gains from further refinements in steam or IC engines are unlikely to me more than minor in influence, and likewise with further advances in computer hardware."

Is that explanatory enough for you?

>Technology has been continously doubling for a while now and there is no reason to see it stopping.

And where (other than Moore's law with circuitry) do you see this phenomenal "doubling" going on? My turn to demand evidence.

>I can guarantee you that once we adopt quantum computing there will be a paradigmn shift.

How? Because accounting transactions will be able to be done 100x faster? Modern computing already happens so fast that for 99% of applications, processor chips are actually sitting "idle" and waiting for input the vast majority of the time. Increasing the speed of the processor itself (much like increasing the storage capacity of hard drives) will no longer gain us much of anything for a further advantage.

>>And my argument wasn't that Moore's law that technology should thank economic process, it was that technology is part of the economic process and cannot be excluded.

And I have sufficiently demonstrated that I not only understand it, but have a much more thorough understanding of it than you do... you simply seem to believe in a Pollyanna fashion that "technology will save us"?

I have no doubt that we will in general continue to innovate technology wise, but we most certainly cannot predict nor "count on" any more "exponential" innovations to save our bacon. (Many of the most important innovations DID indeed come "out of left field" -- in that they were not "centrally planned" and in a few cases, entirely unexpected.) And it will be good that such does continue -- but I would expect most such things to have incremental, evolutionary value, rather than exponential, revolutionary value; indeed I think that the ACTUAL productivity increase from computerization is LESS than commonly believed, if only because it has also become a great time-waster, and a tool for "busywork".

>Making goods cheaper over time is a normal process though? Everything becomes cheaper over time unless it is held up through artifical means; especially like gold which is subject to governments and individuals attempting to horde it for no reason other than it being a shiny metal.

Yes and no. It is commonly TRUE that manufacturers (and farmers) HAVE been continually increasing their productivity and efficiency -- but it is NOT something that happens "automatically" -- it requires significant thought, creativity, effort, and investment, in short it is a LOT of work.

And there are many things (from natural disasters, to epidemic diseases, to wars, to tyranny) that can deflate, disrupt or even "reverse" those innovations.

>You haven't shown this though any sort of data though.

There are plenty of collections of data that DO show this though. (Reinhart & Rogoff have recently assembled 800 years worth of data -- which is doubtless too large to fit into a reddit post, and took them years to assemble.) As far as your demand, I assert you should go and assemble the data to back up your position, assemble it and present it here in full, and THEN I'll consider doing the same on my side. (IOW your "demand" for data is absurd).

>>You see, since the major economic impact of Moore is now over

>This isn't true in any sense. Computing power is still doubling, as is nearly all other forms of technology.
>You're like a modern day John Adams at this point. "Men will likely never take the sky! We have reached our limits!"

It's completely true. You've provided zero evidence of this imaginary "doubling" of "nearly all other forms of technology" -- such an expansion of capability exists only in your mind.

And the MAJOR gains from computing are now fully integrated. There is no "magic bullet" from computer chips that is going to "save us all" -- just not there... sorry (and I'm not a technophobe, but rather I am and always have been a technophile, just not a self-delusional one.)

u/rangerkozak · 1 pointr/Economics

> Yet the bankers just keep doing it again and again. They do it with and without central banks.

Fractional reserve should be prosecutable as fraud. Having said that, banks would be much more responsible if they faced a risk of going out of business. The occasional bankruns of the late 19th century, did not significantly impede the surging prosperity of the gilded age. They were a good thing -- just like when a crappy restaurant goes out of business.

> > but your own devotion to Keynesianism fails to live up to the standards by which you judge the Austrian School.

> I fail to see how. Keynesianism doesn't pretend to be deductive logic.

It seems to me that Keynesians are able to put numbers around little things. Unemployment, inflations (both of which are heavily manipulated). They have graphs and charts and look very much like their distant colleagues in the hard sciences. The play empiricism, but all the big things and important decisions are made by pure deduction, just like the Austrians. For example:

We need a central bank.
We need to bailout company/industry X
The economy can be centrally steared by manipulating the reserve rate in a positive way.
We need to force people to use their state's currency.
The liquidity trap occurs when there's a shortage of money circulating.
The free market is inherently unstable.
Crashes are caused by animal spirits / the bursting of asset bubbles.

> > it just restructures production for long-term projects.

> That directly contradicts the concept of "flight to liquidity".

Not a contradiction. A flight to liquidity can mean a flight to savings and checking accounts. That's money ready for lending.

> If savers were making long term investments, we wouldn't have a problem.

Ugh. Right now, you Keynesians think we need long-term investment, and your policies are creating an illusion of savings by lowering the interest rate to zero. In actuality, there are almost no savings. People need to work, busy consumer goods, and save (or not -- it's up to them). Keynesian policies have pushed a lot of land labor and capital into long-term projects at a time when people are thinking about the short term.

Your statement presumes a "correct" way for savers to be investing. The only correct way is one which is in harmony with the level of savings, and the market signal which creates that harmony -- the interest rate -- is centrally controlled and, for the moment, pushed to near-zero, creating an illusion of savings which don't really exist.

> How do you know? [regarding consciousness] . . . There is no evidence that the human brain consists of anything but physical processes

Because physics cannot even entertain (much less provide answers for) simple questions like what do you want to do? When there's meaningful progress on the Turing test, I'll reconsider.

> if you really believe it is such a great thing and will work well in the real world, go find a small country and convince them to adopt pure Austrianism. . . . Honestly, I'd write a letter … to advocate giving you guys an island in the Pacific ocean to test your system.

Liberty is a threat to the gov't. Allowing it would mean exposure of their fraud.

I'd love to, and I think about it often. Small states have many advantages over large ones. There's a theoretical project by Friedman's grandson which involves a nation consisting of floating barges.

> Even the anarcho-capitalist advocates say that there must be private militaries that are hired by insurance companies (which is really all a state is) to protect their customers. Overall, the idea that violence is magically going to disappear is very naive.

No one says violence is going to go away. A state is not a hired insurance company, because the client does not the right to walk away. The service of security is not subject to market pressure. The state unilaterally decides both the nature of security (invading Afghanistan, Iraq, Libya, bombing Somalia and Yemen, TSA, full body scanners), and the cost of security. This is the difference.

> for placing the extreme long term conservation of value for mattress stuffers

It is not just mattress stuffers. Huge quantities of wealth are transferred from people in general to whomever is closest to the place where new money enters the economy. Even Keynes admits this:

"By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens."

And I think you're full of shit for trying to muddy the waters on the ethic argument I raised. The dollar is backed by force. Voilence will be used against Americans who attempt to work around the dollar system. Yes, violence has been used before in history. No, this doesn't justify today's.

> gold

You were comparing the dollar's 97% loss in value to the instability of gold. That dog don't hunt.

> As I said, the 1921 recession ended when the fed cut rates.

I'm going to look more deeply into this. It seemed that the 29 crash happened when they stopped their easy money policies. Do you think we can get out of today's easy money without a catastrophe?


> Please stop calling an increase in the money supply inflation... just say "an increase in the money supply".


> voluntarily decided it likes fractional reserve banking. In 400 years or so of modern banking, full reserve banking simply hasn't emerged.

Not true. It's contradicted by the video you posted. Government enshrined and protected the fractional reserve system.

> That era was a miserable failure.

Not true at all. Yes, lots of banks went out of business. (It is good when bad companies go out of business). But it was a time of sky-rocketting prosperity.

Your baromoter is laughable. When banks go out of business this is bad. When today's commercial banks survive for a long time, this is good. Dark world. How much wealth has to be taken to give irresponsible banks a long life?

> So which is it? Do you support free banking or gold? A gold standard (at least in the form that the US and most other countries had in its past) is mandated from a central government, by the way.

Free banking gets my vote, though either one would be huge, mind-blowing progress. I'll mention again that fractional reserve banking should be prosecutable as fraud instead of enshrined by law.

> Except it has been done successfully that way for long periods of time. You shouldn't get your ethics confused with your evidence. You might not like central banking, but to say that it can't work is absurd given how successful the US economy was under the periods with central banks.

Typical of your positivist and keynesian approach, whenever you connect two data points you jump for joy. Can we likewise conclude that the Soviet system worked because it brought electrification, had zero unemployment and a growing GDP?

You know, Keynesian economist and Nobel Prize winner Paul Samuelson predicted into the late 1980's that the soviet union, the fucking soviet union!!!!! would outpace the US economically. He asked whether their surging economy didn't make the political oppression (43-62 million killed) worth while. But it's the Austrians who are cruel. Right?

Also, not all the evidence supports you. The biggest depression in American history. The only time there has been wide-spread malnutrition in the US. A 97% drop in purchasing power.

> I believe the burden of proof is on you if you want to make claims about government failure. You haven't done that with the CRA or with any other program.

The long history of bailouts are facts. What proving do they need?


FACT: In 2008, CRA loans accounted for just 7% of Bank of America's total mortgage lending, but 29% of its losses on home loans. Also, banks with the highest CRA ratings tend to have the lowest safety and soundness ratings.

FICTION: Only 6% of subprime loans were originated by banks subject to the CRA, so the vast majority of risky lending was not tied to the law.

FACT: Among other things, the figure does not count the trillions of dollars in CRA "commitments" that WaMu, BofA, JPMorgan Chase, Citibank, Wells Fargo and other large banks pledged to radical inner-city groups like Acorn, Greenlining and Neighborhood Assistance Corp. of America (NACA) after they used the public comment process to protest bank merger applications on CRA grounds.

[Earlier this week I noted that I had changed my mind on the Community Reinvestment Act. Contrary to my initial conclusion, the evidence is overwhelming that the CRA played a significant role in creating lax lending standards that fueled the housing bubble. Once I realized this, I had to abandon my suspicion that the anti-CRA case was a figment of the rhetoric of Republicans attempting to distract attention from their own role in the mortgage mess.]

Prior to 1995, such subprime home loans constituted less than 2% of new home loans, but by 2000 they were over 9% of new home loans, and by 2008 they were 20% of new home loans. To make matters worse, Freddie Mac and Fannie Mae began to buy and/or guarantee more and more of these risky subprime loans.

If you want more opinions supporting my view, look here,
here, here.

u/Mad_Bad_n_Dangerous · 2 pointsr/Economics

I'm curious what utility theory you've read?

Certainly based off what I'd say is the premier graduate text on microeconomic theory, it's quite standard to take preferences as being transitive. That transitivity does then carry over into utility function mapping from there.

I don't mean to be patronizing, but I can't see your argument and to make sure we're not talking past each other, let's rehash the definitions.

Let a person gets utility value from good x equal to U(x).

Transitivity requires that if for a person, U(a) > U(b) and U(b) > U(c), then U(a) > U(c).

So if the guy prefers scotch to gin and gin to wine, then he prefers scotch to wine. Is this always true in every possible collection of choice problems? Eh, maybe not. We can find behaviorists pointing to weird marketing and price packaging phenomena that break this. But does it not seem reasonable for you to believe it's true to most economic situations at large for most people? At the very least it seem to work well for our models and really is required to get utility functions that are even remotely usable. Without it, it'd be pretty much entirely impossible to do any economic modeling. And at the very least, we can probably assume it's true in quantities of money. All other things being equal (that's important here), surely 99.9% of the population would prefer more to less consistently. Therefore, in utility over strictly monetary values, we have transitivity.

While you're right in that we need transitivity to really talk about utility functions (particularly for them to be continuous and monotone), after that it's use really goes away. Transitive preferences certainly don't imply DMU. A counter example would be a utility function where say U($10) = 100, U($20) = 400, U($100) = 10000, i.e U(x) = x^2. That's transitive and has strictly increasing marginal utility. It's just that economists don't generally believe that's how people work. You don't seem to agree with that though - why? Would you really value $100 the same if you were broke on the street vs a billionaire? On one hand it keeps you alive, on the other hand you might be spending more than that for your drinks.

Regardless of your personal assumptions, I'm going to go ahead and say I'm not sure you understand utility theory that well. Or we disagree on what you think utility theory is, in which case you're going to need to explain it for me (or really any traditionally trained economist) to know what you're talking about.

> I do have trouble having economic discussions with people who think utility functions are transitive... "Who do you think gets more utility from a $100 bill, a millionaire or a homeless person?!" In their minds, DMU means the homeless person must get greater utility from that money, but that's a nonsensical application of utility theory.

... where are you getting this claim. I'm willing to talk about to what degree people have transitive preferences, but to say it's nonsensical is absurd. It's the standard economic model and use of utility theory. Do you have a source or an argument that goes deeper?

> The study isn't telling you that you should care about it.

Well then why do they want us to read it? I think you're looking at this wrong. They are trying to speak to an audience by telling them something that interests them. If not, it's just background blither on the internet, a supply of which is as nearly infinite phenomena as they get. We're the consumers, they're the producers. It's getting posted because people want economists and people interested in economics to discuss it. Why else?

And I'm not trying to make it a policy prescription, I'm just wanting to see data that would better inform me about the world. I really don't understand your criticisms with my comment. I'd get it if you find the absolute numbers more interesting, but I don't get how you can't see people thinking other measures might be more interesting. If that doesn't make sense then I don't know if I can help you.

u/jwilke · 8 pointsr/Economics

insomniac84, your response is lengthy and it is obvious this is something you care about. I would first like to direct you to Henry Hazlitt's Economics in One Lesson. It is inexpensive, short, and concise.

Next, I would like to ask you how single-payer government healthcare would be any different from having insurance companies? Our problem right now is high insurance premiums. If federal healthcare was passed, wouldn't we be in the same situation with higher taxes (or deficit spending equaling inflation) replacing the insurance premiums, except without the option of not having insurance because we will be taxed for not having the government plan?

Think of Social Security. What was set up to make retirement an option to everyone by requiring lifelong payment has become a moneypit. The Social Security fund is spent annually by congress on other failing programs. Instead of people having the option of choosing different IRA plans through private banks, that money was pulled into the government, and never accounted for. I think everyone will agree Social Security has failed to do what it was intended and our seniors are not receiving enough if anything compared to what they paid in. What would make single-option healthcare any different?

Do you expect cell phone service to be "free?" Your 10 cents a kilobyte pays for the initial risk that company took when starting, the set-up of the network, the maintenance of the network, and the improvement of your network and cell phone service. Because there is profit in it for the cell phone company, there is motivation for them to continue service, hire smarter labor, and improve their service. Because there is profit in the cell phone industry, other companies are drawn to it, seeking to provide a better service, and lower cost to improve profits, resulting in the consumer having better, cheaper service.

I hope my response to your cell phone question also illustrates what Paul is trying to say about healthcare. Simply replace maintaining the network with medical school and drug research.

The monopolies you say run our nation are only allowed to do so by our legislators. A natural monopoly cannot exist unless it continues to provide the best product at the lowest cost. Utility, telephone, and other monopolistic industries are allowed to do so because laws have been passed by our politicians permitting it.

I know this is long, but I hope it has answered some of your concerns. Also, I have a close friend who took the PCAT today and would hope you don't want a shitty pharmacist. She is entering that field because it is profitable and she can make a good living while working with chemistry. She isn't paying for Pharm School to have her salary capped and do it "at cost" :)

Please read Hazlitt's book, he can explain this much better than I.

u/zorno · 0 pointsr/Economics

> They would also be pretty unhappy if you told them that they had to walk to the grocery store instead of taking a bus or driving a car.

Actaully they would be unhappy, but only because they would see rich people driving by them.

If the entire country suddenly had to walk to the store, people would be fine with it. It would suck at first, but as I said, the issue is the income GAP, not GDP.

>Quick.. start informing people in China that economic growth isn't that important. Millions of people are being pulled out of poverty every day.

Standard /r/econ talking point. "Its ok, some people over there got out of poverty". No one who pushed free trade agreements ever gave a shit about poor people in china.

The thing is... China might have done just as well withotu those agreements. And mexico had better per capita income growth before NAFTA. The overall GDP has risen since then, but per capita income has stagnated... the reason for that is that mexico now has rich billionaires, so while GDP has gone up, NAFTA didn't really help the average worker. NAFTA increased the income gap. Interesting that free trade makes things worse.

>The article you cited looks nice, but it doesn't give us the entire picture. But it's good for cherry picking feel good stories to justify welfare.

Come on, /r/econ shouts 'lots of chinese are less poor now!' and that's not cherry picking?

Here is another article that explains why free trade and neoliberalism is a sham.

This book also talks about it.

Im not sure if youre the guy I already said this stuff to, if so, sorry. I just lose interest in these discussions, people are not open minded here much at all.

Lets get rid of copyright and patent laws, if you are so eager to remove global poverty. S Korea gained it's success by pirating the software and books to educate its people. If it had had to pay more for books and software, it would have been able to educate many less people. Instead decades ago they stole books and software and many people there were able to get educations.

So... we're all about eliminating poverty around the globe right? Lets remove patents and copyright laws, and allow our knowledge and IP to flow freely into these poor nations!

Suddenly, freedom isn't so appealing, is it? Now all the business and tech people suddenly get all protectionist. Funny how that is.

u/ElectricRebel · 1 pointr/Economics

>The whole attempt at steering (centrally planning) the economy by playing with interest rates is pure Keynsianism. It explicitly contradicts what Friedman said.

Friedman believed in using the central bank to steer the economy as well. He wanted to maintain small constant inflation. If you read the book I cited at the beginning of this discussion, you will see that he calls the early 30s the "Great Contraction" because the Federal Reserve ran too tight and allowed deflation to happen. If you look at the inflation table in the other post I just made on stagflation, the 30s showed major deflation in the CPI. So nothing about using the central bank really contradicts Friedman.

If anything is "pure Keynesianism", it is the idea that governments should use explicit fiscal policy during recessions. McCulley's point was that this part of Keynes was dead in the water after Reagan was elected.

>Mattress stuff would lower prices for all the people who aren't stuffing their mattresses. Fluctuating prices can absorb changes in spending habits if you let them.

And in the meantime, debtors would be destroyed. Do you think that businesses and workers with some debt but were otherwise well behaved should be destroyed in a recession? This is the primary reason that made the Great Depression so horrible.

>As far as how much more savings savers need before they choose to start investing again? That's up to each individual.

You completely dodged the question. You basically admit that liquidity trap conditions can exist, but you offer absolutely no solution. This is a failure of Austrian economics.

>This is further evidenced by the fact that crashes come, first and hardest, in capital goods instead of in consumer goods.

A much simpler explanation of a drop in capital goods investment is what I gave. Those with savings flight to safety.

>It had nothing to do with letting irresponsible banks fail.

Keep telling yourself that. This is yet another example of you putting your head into the sand and dodging questions for ideological reasons. Bank runs can destroy well managed banks as well as bad banks and made the Great Depression far worse than it should have been.

>Money is just the medium of exchange. It is not the wealth.

This is just more Austrian doublethink. Money is used to acquire wealth.

>If you were right, if crashes were caused by savings, then the crash would begin in consumer goods, right?

You are getting confused. I was talking about a liquidity trap, which happens after a crash (by which I mean the end of a speculative bubble). If you are interested in why crashes happen, read some Hyman Minsky and Robert Shiller, but that is a separate issue. The point is that in a liquidity trap, everyone trying to save makes a recovery difficult.

>They attempt to understand human society in all its complexity but their only tool is a tape measure.

That is simply not true. That is like saying science in general only relies on the tape measure while discounting everything else that is done. Mises's problem is that he did not understand how the scientific method works. Science is a process of making predictions about the world based on models and then using evidence to identify which models work and which do not. Whether Mises wants to admit this or not, this is how all non-trivial knowledge is acquired. And his solution is pure snake oil. If the tools of science can't manage the complexity of human economics (which I already agreed that they cannot fully), then deductive logic certainly cannot.

For example, the claim that "human action is purposeful action" is useable as an axiom is laughable and demonstrates the Mises also does not understand logic. Here is an example of an axiom: A and B implies A. Axioms are incredibly simple. Before we can use Mises's action-axiom, we have to define what it means to be human, what an action is, and what it means for an action to be purposeful. Hence, this is not really an axiom at all, but merely the basis of a pseudo-logic. And yes, I know that Mises defines action as "will put into operation and transformed into an agency". But then you have to start talking about what "will" is, and that gets into deep questions of how the human brain works. None of this is as simple as anything traditionally called an axiom. It makes a bunch of simplifying assumptions and defines things in such a way that a certain conclusion always arises. It is not logic in the way that something like first-order predicate calculus is a logic.

>Show me the empirical evidence of the need for a central bank, of free market fallibility, of the need for public education, bank bailouts, stimulus packages.

Those are enormous questions. I recommend you read books and study history outside of the writings of Mises, Rothbard, and their ideological ilk if you want the answers to those questions. The only short answer I can give is that every first world country goes by these rules and they generally work well, while no first world country has relied on strict Austrian economics because it is merely a non-practical pipe dream just as much as something like pure communism. Austrians believe in spontaneous order, right? Well, the successful countries have all spontaneously ordered themselves in such a way.

>I'm not arguing against data. You need data. But the numbers tell you nothing without a meaningful, deductively sound theory.

This is exactly the basis of empiricism and the scientific method. As I said, I believe you have fallen for doublethink.

>I think we'll live to see a collapse of the dollar. It lost 97% of it's value since the Fed was created a hundred years ago. I think it might lose the next 97% much more quickly.

Losing 97% over 100 years is not that important. The dollar does not need to be a store of value over 100 years. Even gold cannot provide such long term guarantees (especially in the next few hundred years as things like deep ocean mining and asteroid mining possibly become within our technological reach). If someone refuses to spend a dollar in that time rather than doing something useful with it over such a long period of time, I'm really not concerned if they lose the value. As time goes on, past earnings should depreciate in value. If they want to keep the value, there are easy ways to do so (TIPS, real estate, stocks). Most economists agree that given the tradeoffs, small positive inflation is the best option. The world is vastly wealthier now than 100 years ago by any measure even in the face of a declining dollar. In the short and medium term, as long as inflation is kept in check, the dollar is a practical store of value, unit of account, and medium of exchange.

As for hyperinflation specifically (by the definitions we gave above), you are dodging my question. If the federal reserve's actions in the last 3 years really are Armageddon, then we should see something happen soon. Otherwise, you and Peter Schiff should apologize to the world for fearmongering.

>Where in the essay does Rothbard talk about a debt deflation scenario which ended quickly?

You are confused again. He doesn't give an example and that is my point. He says this: "this expectation hastens the fall in wages and other factor prices, hastening the recovery, and permitting normal prosperity to return that much faster." Clearly he believes that if deflation is allowed to happen, the recovery will happen sooner. I'm asking for such a scenario.

>I don't think I can answer your question, because you're asking for something non-Austrian.

You just said that you don't dislike data. You can cite international examples if you want. You can cite pre-Fed examples if you want. I just want Austrians to support their claims with actual evidence.

>The Austrians point to 1921 or 2001 and say, no, the problem is here.

Quick question: how did the Fed go from 1929 to 2001 without having a major speculative bubble pop in the United States? My answer is because we had Fed chairman like William McChesney Martin Jr., who was quoted as saying his job at the Fed is "to take away the punch bowl just as the party gets going". The point is that other than the early days of the Fed and Greenspan, we've had a pretty damned good run at preventing major bubbles, especially compared to the panics of the 1800s that I cited before. So my argument is that lowering rates during a recession is not the problem because the Fed did that for decades without creating bubbles. The problem is that during the good times, the fed needs to be willing to "take away the punch bowl". As I mentioned before, McCulley criticized Greenspan for not using the tools available to him to do so and for being Mr. Magoo on the upswing of the market. And further, given that we've had speculative bubbles even without central banking, it is clear that the cause is more complex. If you have not read it, I encourage you to read this book. It gives a very detailed explanation from a Keynesian point of view of exactly how bubbles can take off. The fed certainly has an influence (especially by raising rates when a bubble is forming), but in the end, it is the private market that actually goes through with all of the malinvestment.

u/usuallyskeptical · 0 pointsr/Economics

I see what you did there ;)

In hindsight that appears to be correct, but I'm not sure if it was that straightforward in 2011. There are many differences between the US now and Japan in the 1990s. I see a lot of people declaring victory over others who predicted higher interest rates and inflation as a result of QE, but the main thing I've learned in paying attention to markets and the economy is that hardly anything is as it seems. The people downplaying a threat of future inflation could be like the people calling for Dow 36,000 in 2000 or the people saying stock prices in 2007 were perfectly rational. Now, the people who went on record predicting inflation were certainly like the 2000 and 2007 folks, but the people predicting muted inflation over the next 5 years could be doing the same thing. The determinants for future prices and interest rates are just way too complicated for the human brain to comprehend. Krugman did end up being right, but I'd be very surprised if anyone truly grasps the complex interactions that led to interest rates and inflation doing roughly what he thought they would do.

u/geezerman · 1 pointr/Economics

Also, as to...

>I'm very interested in monetary policy

... the best Intro book on this is, hands down, Money Mischief: Episodes in Monetary History, by Milton Friedman, the Nobelist and greatest monetary economist of the 20th Century. Only $8.61 at Amazon.

It's written for the average person and covers everything, from the creation of the gold standard in Britain after the Napoleonic wars (and how it was an accident, if they'd done what they'd intended they'd have created a silver standard) and everything on until 1994.

It's a real easy read, no math necessary, fun and fascinating, and will really get you into the subject.

From there you'll learn what else to look for.

BTW, for "monetary policy" the best of the links I gave above is, by far,

It's cutting edge, has been very influential, yet is a very easy read for laypersons who are interested enough to learn about the subject.

Go through the archives for interesting topics.

u/Wicked_Truth · -12 pointsr/Economics

...said the pot to the kettle.

Look again. Hey, here's some more evidence (note the timing of major income/wealth inequality changes). If that's still not enough economic data to satisfy your interest, I hear Thomas Pikkety's book, "Capital in the 21st Century" is full of data. Too soon?

If you want details, I'm sure a competent economist, like yourself, will have no problem locating the data to substantiate the economic elements pointed out.

Political history is notoriously data deficient. Special interest groups and politicians like it that way, but there's another data trail that's quite revealing if you'd like to go there's called political contributions. The Academic community has it's own data trail that can be quite enlightening as well (i.e., endowments, research grants and speaking engagements). Much to the chagrin of some ideologues, money leaves a data trail in life as it does in economics.

Feel free to provide data which refutes what has been pointed out. I would love to see it.

u/bamdastard · -1 pointsr/Economics

Nobel Prize winning economist Milton Friedman's 10 part PBS series on his book Free To Choose.

wiki link

tldr; volume 1:

America's freedom and prosperity derive from the combination of the idea of human liberty in America's Declaration of Independence with the idea of economic freedom in Adam Smith's Wealth of Nations. Friedman explains how markets and voluntary exchange organize activity and enable people to improve their lives. He also explains the price system. Friedman visits Hong Kong, U.S. and Scotland.

u/eaturbrainz · 3 pointsr/Economics

LegioXIV has covered the government dynamic. Let me say something about market dynamics.

The median salary in the United States is about $26k/year. The median household income is about $48k/year (nowadays often with 2 adults working).

Now let me direct you to this book, which provides much of the detail for my point. The greater the inequality, the more you will see "bubbles" (with a long-term tidal trend) driving up the prices of productive capital assets, or indeed of simply living near productive assets.

Because remember, sellers of capital assets aren't going to sell "Wal-Mart-grade" cheaper versions of stocks or bonds or index funds. We already had a housing bubble driven by the Wal-Martization of housing and the migration away from productive cities into cheap but unproductive hinterlands (see link). And even with the new crowd-funding law, you still need a lot of money and financial knowledge to do equity investment in early-stage start-up companies.

So the purchasing power of "the rich" (really: any given wealthy individual) on capital-asset markets rises with inequality (the degree to which this individual can outbid everyone else). With increased relative purchasing power will come increased prices and increased catering by the market towards that segment of buyers, as dictated by normal laws of supply and demand.

Thus, increasing inequality allows the rich to price everyone else out of access to productive capital. In layman's terms, increasing inequality means that starting an entry-level job at $80k/year in the Boston area only allows you to live in a one-bedroom apartment or with roommates, because housing prices have gotten so high that you need a six-figure (let's call that top-20%) income to afford your own house. This happened to me. Meanwhile, the folks across the state in Greenfield can't get jobs, and dream of how they would own the entire town if they made $80k/year.

Really, I should have used Manhattan as the example par excellence, but I didn't work or live in Manhattan.

u/fifteencat · -2 pointsr/Economics

Haiti, Africa, Latin America. These are capitalist countries. And more free market than most (not that true free markets actually exist anywhere).

Many of the countries that have moved from poverty to prosperity did it with capitalism, but they did it with a highly regulated capitalism with large amounts of government regulation. S Korea, Japan, Great Britain, the United States. What then happens is when a country becomes rich with government intervention they then find it is advantageous to deny government intervention to others. They reach the pinnacle. They then kick away the ladder for potential competitors.

Ha Joon Chang's "Bad Samaritans" is a good primer on this.

u/rightc0ast · 1 pointr/Economics

Agreed. After EIOL, I highly recommend Callahan's Economics for Real People. Dr. Block used it for his intro course. It's pretty much the best "intro" book to begin to think like an economist ... and the best part, written for beginners and laymen.

Free online as well, if the Amazon link is not to the OP's liking. PDF WARNING

u/howdytest · 1 pointr/Economics

Life got busy again and i lost track of what was happening in terms of books. You said you read Ron Paul's book, so i thought i might throw out some of the books i enjoyed.

Henry Dent

George Soros

Tom Wood & Ron Paul

They're outdated, but provided some good economic thought behind what has happened and their forecasts. Tom Wood's and Ron Paul's book was interesting, but i'm not sure how relevant it ever was. At best, it served as a warning. Don't get me wrong, i'm a fan of Ron Paul, but the system will never remove the Federal Reserve. Also looks like there's some updated editions out too.

I'm looking at new books as we speak.

u/oldsillybear · 2 pointsr/Economics

I agree, I'd like to see more about disposable income.

Interested readers may want to check out, among other things, a book called The Two Income Trap

When both parents work and have kids to raise, you have additional costs, such as a second reliable car and day care / after school care. These can add up to put a big dent in that second income. Of course, there are variables, if both parents have really good jobs it makes it easier, or if you have a nearby relative to provide day care; but if one goes to work "to help pay the bills" and it is offset by $1,000 a month for day care it doesn't help as much.

u/limbicslush · 2 pointsr/Economics

How could you forget the granddaddy of Micro texts: Mas-Colell. This book is the standard in many first year grad courses, and it covers everything pretty well -- the game theory is a little obtuse, though. It won't help much with economic intuition, but for people like the OP who want to learn the mathematical models, it's encyclopedic and definitive.

Otherwise, you have some very good links.

Edit: Apologies, I just noticed that the OP only wanted online links. I'll still recommend Mas-Colell in the case that the OP wants a good Micro text.

u/snakedoc76 · 1 pointr/Economics

Have you read this book:

It's a pretty good read, but shows some interesting data. I'm far from an economist, and I don't think that it prescribes a total loss of work in the near future, but I do think it makes a pretty good argument for things being a touch different this time around. It also show's that jobs have been steadily decreasing for some time now (more than even most people who peg it around '08).

While I don't know that the Dystopian outlook is the correct one, I'm not sure that I think things are going to be rosy unless we start having conversations (thankfully, much like this one).

Honestly it's a good quick read, and the one that got me to see things in a different light.

u/honeyboots · 1 pointr/Economics

Yes. Building the "bottom up theory of the economy" is the work of generations of theorists in economics.

You mention you have a math background. If you can do math at the level of a first course undergraduate course in real analysis then you can go directly to Microeconomic Theory by Mas-Collell, Whinston, and Green. This has been the standard grad text in North America for over 10 years and for very good reason. It is a masterpiece. Beyond the content, the references and suggestions for further reading are fantastic. While this book is not the last word on micro theory, it certainly the first.

There are also a number of important lessons for macro theorists in the text. Chapter 4 has important lessons for those who want to do any kind of aggregation, and chapters 15-20 build a general equilibrium model from first principles and point out all the holes that macro theorists paper over.

u/Phokus · 1 pointr/Economics

LOL, do you even know the economic history of the US? We had some of the highest tariffs in the history of the world. GB became rich with tariffs as well (of course they became 'freer trade' when they became a colonizing empire, stealing from poor nations).

Read up on the American school of economics:

HAHAHAHAHAHAHAHAHA are you serious about bringing up SINGAPORE?

The same singapore whose government owns all the land, has socialized industries, where the government owns a significant portion of the GDP, and who practices neo-mercantilism?

"Neomercantilism is a term used to describe a policy regime which encourages exports, discourages imports, controls capital movement and centralizes currency decisions in the hands of a central government. The objective of neo-mercantilist policies is to increase the level of foreign reserves held by the government, allowing more effective monetary policy and fiscal policy.

This is generally believed to come at the cost of lower standards of living than an open economy would bring at the same time, but offers the advantages to the government in question of having greater autonomy and control. China, Japan and Singapore are described as neo-mercantilist. It is called "neo-" because of the change in emphasis from classical mercantilism on military development, to economic development, and its acceptance of a greater level of market determination of prices internally than was true of classical mercantilism."

Sorry i didn't list EVERY SINGLE FUCKING COUNTRY, but Australia, Canada, New Zealand, and Hong Kong (lol are you serious? they depended on the british government to get where they were) aren't examples either.


Read this book, and maybe you'll learn something:

u/krokodilgena · 4 pointsr/Economics

Animal Spirits by George Ackerloff and Robert Shiller is a really good one. It sort of expands on Keynes' ideas about human psychology and subsequent unpredictability of the macroeconomy. Pretty interesting read. Pretty easy and non-technical read.

u/burntsushi · 1 pointr/Economics

> Actually, I think the trade deficit coupled with an environment of loose credit, which was brought about by deregulation, is what brought down the economy. Nevertheless, fraud in the banking sector played a pivotal role.

Well that's certainly a far cry from what you originally said:

> considering deregulation in that sector led to a plethora of fraudulent lending practices that wrecked the entire economy.

Which implies that the leading cause was fraud. Which is absurd.

> Nevertheless, fraud in the banking sector played a pivotal role. After all, you don't need to take my word for it; this is the conclusion drawn from the FCIC's crisis report.

See pages 40-41. I'm sure there's a lot more.

Also see Meltdown that gives a more macroscopic view of things, and bubbles in general.

> Huh? I'm not following what you're saying at all. My point is that zero regulations will force firms to take more risks to earn higher profits, which will inevitably harm some consumers. Read what I wrote once more if you're confused.

It won't force them to do anything. Some firms could absolutely start selling more risky medications: "Here's something that could work, but has really bad side effects." or "Here's something that could work, but it hasn't been thoroughly tested." That's a benefit.

Your example seemed to imply that consumers would somehow become less safe. You haven't convinced me of that at all. If anything, they'll get more options. Some of them will be more risky, but it's risk that the customer takes on.

> Haha, that's pretty cute. Actually, I never said that some markets don't self regulate. So why on Earth would I rebutt something you wrote that I agree with?

I didn't say you said that. My point was that I've cited several examples that you ignored. And that you're now arguing against free markets because a 10 year study might not detect cancer---which is true whether we have regulations or not.

> OK, here's where I think the fundamental disagreement is coming from. You keep saying that the goal of firms (for-profit firms, hot shot) is to appease consumers. But that's not right. The goal is to earn a profit. Appeasing consumers is a means to earning a profit, but it's not the end. With that in mind, it's easy to see how firms will make decisions that hurt some consumers, especially when the future is uncertain, as is the case in the drug example I've mentioned.

Of course some consumers get hurt. But nothing will ever stop that---not even regulatory bodies. I didn't claim free markets are perfect and everyone is always happy. The point is that they are simply better then some supposed benevolent dictator calling the shots. It is therefore completely dishonest to criticize zero regulations for not making everyone happy.

Different products have different ramifications if they aren't safe. Necessities for life like food, water and medications have high impact if mistakes were made or weren't made as safe as they reasonably could be. If people start dying from a particular firm's goods, all of the other firms immediately reap a competitive advantage and therefore more profits. This is an extremely simple concept, and I don't know why it's beyond you.

u/Maurizio_Colucci · 2 pointsr/Economics

Just read this:

This is the famous "Economics in One Lesson" by Henry Hazlitt. It is still the best introduction to economics that exists, and it's easy to understand.

If you're interested in more, you can try this:

which is also easy to understand. Or this:

which is a more systematic treatise.

u/tunedradio · 1 pointr/Economics

Hi callum_cglp-

Economics, at its heart, is based on calculus. Linear algebra is important mostly for econometrics, although matrix calculus does come up a fair bit. Generally, MA programs are not as rigorous as PhD programs.

I'd suggest having a look at the first 6 chapters of Mas-Colell et al. "Microeconomic Theory" and seeing if you're comfortable with the level of rigor. It's the standard text for microeconomics at almost every PhD program:

u/[deleted] · 2 pointsr/Economics

>when I refer to something being better or more efficient, I mean it towards society as a whole and not the individual.

This troubles me. All value is subjective; the best we can do is observe an individual choice and know the individual preferred (ex ante) the one over the others. It's not clear to me what calculus you would use to determine, ex ante, whether "society" was better off.

>Also, I assume the human is not a completely rational organism...

I just want to note that "rational" means multiple things. Colloquially, it's a rather muddled term, generally meaning a choice the speaker might make for themselves. Economists have a more precise meaning. More on this distinction here.

>... there has yet to exist a truly universal economic system that would benefit everyone in the same way.

And I would go further and say such a system is impossible. Individual subjective preferences are too varied from one another, and too inconsistent. I would argue that emergent systems such as the price/market process do a better job of approaching that ideal than imposed systems.

>My problem with Capitalism...

I understand your concerns, but I dislike using the term "capitalism." For more on this, see here.

As to the concerns themselves, I would urge you to pick up this book. It's not exhaustive, but it will at least expose you to the "free-market" positions in a well-argued way. I'm sure someone else can recommend a primer for the opposing views.

u/xxrealmsxx · 2 pointsr/Economics

I'll be buying that since you hold it in such high esteem.

Although I must say my favorite econ book is:

Yeah go ahead and laugh.

u/cgeorgan · 0 pointsr/Economics

Great story. You can find stuff just like this in "This Time It's Different." Not the most interesting read, but it lays out pretty bare the consequences of unchecked leverage.

u/testeemctest · 5 pointsr/Economics

If you frame this as a "our free market" vs "their central planning" debate, I have some recommended reading.

Economic planning, done right, can be incredibly beneficial.

u/Cutlasss · 5 pointsr/Economics

There's a book called The Worldly Philosophers which has been through many editions and is a favorite among students of economics. Chapter 2 in the book gives a good, although brief, overview of Smith's background and his basic economic philosophies. The whole book is worth a read, if only to get a foundation of where modern economic thought began.

u/toxicafunk · 2 pointsr/Economics

Thanks for sharing! Its interesting that this alternative view draws to similar conclusions:

> Standard thinking naturally assumes that big effects are due to big causes and, thus, merit major intervention. If the poor are deeply hurt
by their failure to have a bank account, then there must be compelling reasons for that failure. Behavioral research, on the other hand, has shown that highly consequential behaviors often are triggered by what are deemed to be minor causes.

The good news might be that simple and inexpensive policies have substantial impact. The cautionary news is that policymakers may need to attend to nuances they often are not trained to attend to.

I was actually expecting Shafir et favor stronger intervention and an anti-market bias similar to Dan Ariely's Predictably Irrational: The Hidden Forces That Shape Our Decisions

u/iconoclashism · 2 pointsr/Economics

The Mystery of Capitalism does a good job explaining how the shadow economy in Latin America has hindered growth. The gist is that the lack of property rights in the shadow economy limits the ability of people to enter into entrepreneurial activities because they can't pledge their homes as collateral for a loan, essentially making their real property dead capital. The author's wiki page explains in some more depth if you are interested.

Note though that bitcoins don't share the same property right concern as above except with respect to limiting government taxation.

u/peeonyou · 0 pointsr/Economics

It has long been implied by certain groups that Kennedy was assassinated for his executive order 11110 among other things. With the scary quotes from previous presidents it doesn't take a large leap of imagination to accept the possibility.

I'd say the film is basically factual but tries to shock the viewer into questioning what they know of money by providing those conspiratorial overtones. Whether or not that's the most effective way to reach people is debatable for all but those who are prone to diving into conspiracies head first.

edit: I would also like to note that The Creature from Jekyll Island explains the circumstances of the birth of the Federal Reserve and a brief history of the subsequent major events since.

u/batkarma · 1 pointr/Economics

Econometrickk and Integralds' lists are great. A few additions:

Wealth of Nations

Money Mischief



The top two present a one sided view of economics, but are incredibly useful for providing a framework for thinking about it. Nudge gives some behavioral. You're mostly missing Keynesian which is available on the other lists. These are non-technical books.

u/Flaming-Sheep · 2 pointsr/Economics

Check out The Worldly Philosophers by Heilbroner:

An accessible but really good read, it formed the basis of a History of Economic Thought class during my undergraduate degree.

u/besttrousers · 3 pointsr/Economics

Productivity and population are also closely linked. I can't remember the exact #'s, but when density doubles producitivity of each individual goes up about 10%. The Gated City was a really good summary of this literature.

u/Banko · 2 pointsr/Economics

Anyone remember DOW 36,000?

I can't believe that the review section of Amazon isn't filled with more laughter and hooting...

u/dmsheldon87 · 2 pointsr/Economics

>A move announced by central bankers on Wednesday to contain the European debt crisis resulted in euphoria in global stock markets, but it also prompted skeptics to wonder: will this time be different?

I would like to direct your attention to this book, which says that the answer is almost assuredly "no."

u/IrrigatedPancake · 1 pointr/Economics

Read a few pages of the book he's talking about here. I'm sure there are also articles about it like this one.

u/Blueberryspies · 4 pointsr/Economics

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism by Shiller and Akerloff

Predictably Irrational by Daniel Ariely

One Economics, Many Recipes By Dani Rodrik

Each book encourages readers to think differently about economics than the standard policy models dictate. The first two focus on the role of human psychology in economic decision making, while Rodrik's work is one of the preeminent works on second-best development economics, which looks to find policy solutions that are specific to the social, political and economic context in which they will be implemented.

u/the_jak · 4 pointsr/Economics

I think u/tritisan is talking about the google's selfish ledger. They're looking at ways to incentivize you towards better choices and they get the data for how, when, and where to place incentives through the data they collect about you.

Some people are very against this sort of thing, some people look at it as the way of the future. If you'd like to know more about behavioral economics check out Nudge

u/DoktorSleepless · 8 pointsr/Economics

Dean Baker, one of the most prominent Keynesians writers, correctly identified the housing bubble in 2002 and was the most vocal voice during the bubble build up.

Robert Shiller, another bubble predictor and author of Animal Spirits, co created the Case Shiller Home Price Index, which is the basis of Peter Schiff's and other Austrians prediction of the housing bubble.

u/dstz · 11 pointsr/Economics

>No, families found it more beneficial to have the second worker get a job outside the home.

Here's someone who disagrees quite strongly with that view:

u/pingish · 1 pointr/Economics

u/Bukujutsu · 1 pointr/Economics

Fucking christ, an issue effected by the voting habits of leftists (not using the term disparagingly) comes up and suddenly no one can figure out if they're to blame:

Here's an idea: Maybe people with a political ideology that favors more economic intervention are more likely to vote for policies of economic intervention that lead to housing shortages and costs rising.

Being liberal doesn't mean average voters are always going to make good decisions, as much as r/pol would like to believe otherwise. There's a wealth of data showing how far the average voter's and politician's views, including Democrats, tend to stray from the consensus of economists. Downvote away you fucktards, I'll be shocked if this isn't hidden by the time I get back.

u/Matticus_Rex · 1 pointr/Economics

The comment does exist, and hasn't been moderated. Reddit's servers may be having an issue.

Here's the reply again:

"This is really somewhat hilarious. You're dismissing the plurality view of the academic field because I "haven't posted evidence of it" (even though the research we're discussing actually supports that conclusion, if you read the paper), and it hurts your feelings.

Fine, here are some citations. Since you don't even know what "literature" means, I'll leave out things behind paywalls:

Why Nations Fail by Daron Acemoglu and James Robinson

Can Foreign Aid Buy Growth? by William Easterly

The Elusive Quest for Growth by William Easterly

Institutions as the Fundamental Cause of Long-Run Growth by Daron Acemoglu, Simon Johnson, and James Robinson

Coffee and Power by Jeffrey M. Paige

The Mystery of Capital by Hernando de Soto

The Anti-Politics Machine by James Ferguson

Social Cohesion, Institutions, and Growth by William Easterly, Jozef Ritzen, and Michael Woolcock

African Economies and the Politics of Permanent Crisis by Nicolas Van de Walle

Development as Freedom by Amartya Sen

Doing Bad by Doing Good by Christopher Coyne

From Subsistence to Exchange by Peter Bauer"

As a note, several of these are ones that one of the mods posts when asked about good books on development.

u/dumky · 1 pointr/Economics

Read Rothbard's "Man, Economy and State" if your really serious.

For a less thorough and rigorous introduction, but an easier read, I'd say Callahan's "Economics for Real People".



u/thegabeman · 1 pointr/Economics

I heard good things about Nudge - Thaler and Sunstein

u/yeropinionman · 3 pointsr/Economics

I think this is true only if you don't let people build enough housing, as is currently the case in SF, NYC, to a lesser extent Chicago. It's not true in Atlanta and Houston. Housing is affordable there even though they are big cities generating lots of money and jobs. (People do pay a high cost in terms of traffic congestion, but that's due to a different set of policy issues.)

We're so used to high housing prices in some of our cities because it just seems to "make sense" that housing is expensive in Manhattan or LA. But housing really doesn't need to cost much more than the cost of constructing it.

My thinking on this is influenced by two Kindle Singles on the topic. One is by the author of the article this thread is about. The other is by another economics blogger I like a lot.

u/We_Fear_Change · 5 pointsr/Economics

If anyone is interested in this topic, I recommend Nudge by Richard Thaler.


u/iamelben · 1 pointr/Economics

>Not sure what the difference is between those two things?

I should have said "in certain situations." Most people act quite rationally most of the time. They eat when they're hungry, they drink when they're thirsty. The take an aspirin when they have a headache. They look for bargains. To say that they're irrational by nature is a mistake. I believe (and the research would seem to indicate) that people are rational with somewhat predictable lapses into irrationality.

>Anyway, what's the solution to the problem?

Good choice architecture

Default choices are important. A high default price with a discount signals "this is a good deal." It appeals to thrift.

Good information

The email I reference in another comment on this thread in which Uber warned me in advance that prices would be much higher than normal allowed me to make alternative plans for transportation

Good feedback

Making decisions while intoxicated is hard. Using a harsh color scheme or warning prompt to ensure people realize that that the rate is 5x what it normally is might be beneficial, or a prompt letting people know if they wait an hour, the price will drop by 1/3. In novel situations, people need to know where a price or opportunity lie along a spectrum of good value to poor value.

This book really changed the way I think about microeconomic choice.

u/RichKatz · 1 pointr/Economics

Oh. Ok. There are two kinds of developmental sources I would look at: the mathematics and the early ideas. The math I believe comes from mathematician Frank Ramsey in the 1920s.

Some of the early ideas about utility come from J.S. Mill and possibly Jeremy Bentham. One source I would suggest for Mill and other early sources of economics is (yet) another Heilbroner: The Worldly Philosophers.

u/saywhaaaat · 2 pointsr/Economics

Yeah a few people have mentioned it, but not in a main thread:

The Worldly Philosophers is just what you're looking for. TRUST ME!

u/psykocrime · 3 pointsr/Economics

Mmm... I have this but haven't gotten to it yet. Just started Sowell's Intellectuals and Society, but maybe I'll finally start this one next. But I also want to get through Friedman's Capitalism and Freedom and Free To Choose and F.A. Hayek's The Road to Serfdom. Gah... so many books, so little time to read...

<sigh />

u/RockyMcNuts · 5 pointsr/Economics

These are not finance books, but popular books on behavioral economics by leading academics

Daniel Kahneman, Thinking Fast And Slow (a classic, I think)

Richard Thaler, Cass Sunstein - Nudge

Dan Ariely - Predictably Irrational

u/econ_learner · 4 pointsr/Economics

If you want a book, read The Worldly Philosophers.

If you want a twitter, follow Beatrice Cherrier (@Undercoverhist).

u/stupid_asshole · 11 pointsr/Economics

>I think connecting usury to Judaism is incorrect, and offensive.

It's still the historical foundation of modern banking systems. One which gave Europe a decisive economic advantage leading to the Western dominated world we live in.

All Abrahamic faiths (Jews, Christians and Muslims) have prohibitions against usury. In Judaism's case, it only banned charging fellow Jews interest. A fact exploited by various Gentile city states looking to finance their mercenary driven proxy wars. This loophole provided an incentive to lessen Christian oppression while integrating/exploiting Jews into the Catholic dominated society.

Check out Niall Ferguson's The Ascent of Money if you're interested in going further forward or back.

Unrelated to this thread but to the OP, don't forget that the Bible craps on currency exchange too.

u/darthrevan · 30 pointsr/Economics

"Technological unemployment" reminds me of the "Joe Smith" example from Henry Hazlitt's Economics in One Lesson:

>...some writers [have gone] to the extreme of looking only at the immediate effects [of new technologies] on certain groups. Joe Smith is thrown out of a job by the introduction of some machine. "Keep your eye on Joe Smith," these writers insist. "Never lose track of Joe Smith." But what they then proceed to do is keep their eyes only on Joe Smith, and to forget Tom Jones, who has just got a new job in making the new machine, and Ted Brown, who has just got a job operating one, and Daisy Miller, who can now buy a coat for half what is used to cost her. And because they think only of Joe Smith, they end by advocating reactionary and nonsensical policies. (p. 59)

I'd be interested in hearing opposing views to this, however.

u/abetadist · 0 pointsr/Economics

If you want books, check out Predictably Irrational. If you're up for a light textbook, check out Thinking and Deciding.

Otherwise, you could probably get an overview from the Wiki page for Behavioral Economics.

u/yudlejoza · 2 pointsr/Economics

A better (contemporary and with more hindsight) battle would be Sowell vs Piketty.

u/Yokisan · 1 pointr/Economics

Exactly. However I think they may be complementary, in which case i'd add
Why nations fail and The mystery of Capital - Enough there to give you a more informed understanding of why things are as they are.

u/fancy_pantser · 2 pointsr/Economics

It's the one lesson you need to grasp to understand basic economics.

u/GVChamp1 · 3 pointsr/Economics

>I think this time is fundamentally different.

That's what the financial folk thought about the bubble

u/strafefire · 2 pointsr/Economics
u/Hayeku · 2 pointsr/Economics

Choose Gene Callahan's

Econ intro for "real people"

Here at amazon

u/RKBA · -1 pointsr/Economics

Because you're too lazy to pick up an introductory book on macroeconomics and read it? You need to understand certain economic terms and concepts in order to understand any explanation. Some things cannot be explained in ten words or less using only words a child can understand.

u/gottabtru · 1 pointr/Economics

Historically, according to This Time It's Different, it's right. Their book examined financial crises going back centuries and, at one point in the book they make the statement that a financial crisis occurs around 8-10 years after a major deregulation. In our case, it timed it fairly perfectly. I've been thinking about that for a while and I've gotten to wonder if, after deregulation, banking regulators just meander around, sorta confused about what to enforce. In any case, that's what seems to have happened, both in terms of being unsure as well as an Executive Branch position against regulation viewing it as 'red tape'.

u/thebrightsideoflife · 0 pointsr/Economics

"health care and jobs" are just the temporary distractions... the real problem started in 1931 and the people of the US are almost totally oblivious to it - and the media keeps it that way. The two parties won't touch that issue and in fact both work to maintain it for their benefit.

So I agree with your observation.. but I think the real problem that they're refusing to fix is much larger than just healthcare or jobs.

u/Hamilton_Alexander · 2 pointsr/Economics

If the USD was defined as "X grams of metal Y", and some country Z, happened to accumulate a large reserve of metal Y. Z could then drive the value of the dollar down by selling a large quantity of metal Y.

In Milton Friedman's book Money Mischief he described how the US gov't accidently caused financial ruin in China in the 1930's and 1940's through change in US policy with regard to silver

u/mmhall79 · 4 pointsr/Economics

The Creature from Jekyll Island: A Second Look at the Federal Reserve

It's not new, (2nd edition created after crash), but it puts our current crisis in it's proper historical perspective... definitely a must read.

u/johnpseudo · 2 pointsr/Economics

The author of this article is also the author of "the two income trap", which details precisely the problem with transportation, food, and childcare that you mentioned.

u/TheMacroEvent · 4 pointsr/Economics

This isn't exactly a novel criticism. Thomas Piketty stresses in Capital in the Twenty-First Century that economists have gone too far with mathematical models and more qualitative assessments should be used in developing models.

u/yellowstuff · 1 pointr/Economics

Perhaps, but human behavior is a mix or rational and irrational, and people seem to be especially irrational when deciding whether or not to cheat at something.

Most people don't cheat in most situations because of habit and social convention, not because the risk of cheating outweighs the reward. Check out Predictably Irrational for an example of how a study influenced people to cheat more or less using social cues without changing the risk or reward of cheating.

u/Sethex · 2 pointsr/Economics

> That actually wasn't really discussed in the book.

Oh I must have misread the chapter titled: Extreme inequality of wealth: a condition of civilization in a poor society? No wait, that seems to be a chapter about extreme inequality and the negative implications.

Or the Amazon synopsis of the book:

"The main driver of inequality--the tendency of returns on capital to exceed the rate of economic growth--today threatens to generate extreme inequalities that stir discontent and undermine democratic values. "

u/captain_gordino · 4 pointsr/Economics

>Automation — long a force in agriculture and manufacturing — is accelerating in the retail sector, a trend that could hamper efforts to bring down the nation's stubbornly high jobless rate.

This is stupid. See: Economics in One Lesson, chapter 7; the curse of machinery. For anyone on this subreddit who doesn't have that book: Amazon.

u/blueskyonmars · 1 pointr/Economics

America is sinking, and solutions are going to be new ideas and whatever works. The Democrats throw money at the problems and hope it sticks, and the Republicans want the return of share cropping.

some brief excerpts

>U.S. households without bank accounts grew by 821,000 from 2009 to 2011, pushing the so-called unbanked population to 8.2 percent of the nation’s total, according to the FDIC’s National Survey of Unbanked and Underbanked Households.
>The result is that about 17 million adults manage their finances without checking or savings accounts at insured institutions, many of them relying instead on non-banks such as payday lenders and check-cashing stores.

further on in the article

>Unbanked households vary significantly by ethnicity, according to the 2011 report. Black households were 21.4 percent unbanked, and Hispanics registered a 20.1 percent rate, while American Indians were at 14.5 percent. White and Asian households were at 4 percent and 2.7 percent, respectively.

One issue is how poor communities often have bad relations with law enforcement, yet the crime rates are highest in those communities (example North Minneapolis). My suspicion is that the economies are tied to lack the benefits of the rule of law. Also social programs are probably at fault, allowing the problems to be veiled as well as creating dependency rather than incentive.

some books on related subjects

The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else

Broke, USA: From Pawnshops to Poverty, Inc.

u/redaniel · 1 pointr/Economics

they are all but dangerous. what a glenn beckish headline.

for a long time, and in their "famous" book and thesis, solely based on past debt ratios and growth, they observed that whenever a country's gross govt debt hits the 90-100% of gdp mark, growth stalls. that's all.

before americuh panics, one should consider that japan (with twice as much debt) and the european union (with same), are at a relatively worse place; and relatively matters a lot.