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Why Economics Matters

Why Economics Matters
[08-09-2015 21:50:18]

( At a lunchtime meeting of the Grassroots
Institute in Honolulu at the Pacific Club, the of Mises
Institute, Jeff Deist, delivered a talk as part of the Mises Institute
Private Seminar series for lay audiences.
Mr. Deist talked about why Economics matters; any Economics. He pointed
out that while economics schools of thought should not be rigid, or
dogmatic or even narrowly defined, classifying economist and theories in
groups help us make sense of economics.

He further points out that “any” economics matter because the subject is
not a popular topic amount the general population and seems to be lost
on the average American. When discussed, if discussed, it is in the
context of politics which ignores the reality and importance of
economics. They prefer to talk about other subjects. After all, who is
inspired by flat tax proposals, or by the Laffer curve, if I may add?

But economics matters, and matters a lot because it affects us all.
Economic 101 teaches us that when the price of something rises, demand
drops, and you have more unemployed people. A likely scenario as result
of increased of minimum wage according to Mr. Deist. This brings us back
to the Laffer curve that illustrates the tradeoff between tax rates and
total tax revenues actually collected by the government. If price of the
output increases, whether by increase in minimum wage or by increases in
taxes, demand drops which in turn creates unemployment, the government
revenues decreases and with it, government programs are cut which
creates further unemployment.

Mr. Deist goes further to say that ignorance of economic allows
falsehoods be accepted as fact by many, which allows politicians to
blame free markets for the very economic problems caused by the state
and its central bank, in the first place. Do we need to remind anyone
about the “house bubble” and the role played by Fannie Mae and Freddie Mac?

For Mr. Deist, the ignorance of economics creates its own de facto
of thought: the Economics of the Moment. It is not discussed in
textbooks, has no theories and no principles beyond political expediency
of the moment. Buy now, pay later and deal with the problem when the
offending politicians or central bankers have retired. Enjoy today and
pass the buck.

Unfortunately as Mr. Deist rightly points out, the economics of the
moment makes current crises worse and sets the state contractions down
the road. We all know what that means: negative growth. The as a
whole is in decline and people start losing their jobs.

Politicians enjoy from the theory of enjoy today and pass the buck as
their popularity increases proportionally to the dollar spent. They love
their earmarks. Remember the 223 million earmark to fund the
construction of a bridge from Ketchikan, Alaska, to the tiny island of
Gravina? The bridge to nowhere.

Do we continue to be willfully ignorant of economics to “blank out” as
Ayn Rand put it or do we do something about it? Mr. Deist answer is to
convince young people that economics matters and make it less dismal and
more relevant. I agree, and also agree with his notation that academia
has a vested interested in making economics seem more complicated than
it is.

After all, what is so difficult to understand that if it costs more, you
buy less, if you buy less, more businesses close, if more businesses
close, there are more people unemployed? If we are unemployed the need
for , water and shelter becomes the worry of our lives.

It is so difficult to understand why countries governed or ruled by a
dictatorship where free market is not allowed to thrive, individuals can
only work for government controlled agencies, salaries and prices are
set at will and not by supply and demand, that democracy takes second
role to the “resolve” of every day needs? Liberty, democracy,
intellectual stimulation, efforts for a better future, is less immediate
and lower in Maslow’s hierarchic of needs.

For Mr. Deist, the Austrian school of economics provides the best
framework for addressing the problem. But it may be fair to question
whether Mr. Deist is falling into the same trap by using the academia,
rather than the School of Common Sense, to explain why economics matter.

A system of laissez-faire capitalism: a social system in which the
government is exclusively devoted to the protection of individual
rights, including property rights, and therefore in which there exists
absolutely no government intervention, best explains to the average
citizen, American or not, why economics really matters.

As a bonus, we may learn to defend better our democratic beliefs from
demagogues who offer free social reforms, expropriation of farm lands;
estate centralized economic resources with no incentive to the employee.
Demogogues that vow to limit profiteering, restrict retail profits, fix
prices and control imports.

When the majority understands why economy really matters, then we’ll
also understand why we shall never allow governments be masters of our
economy and become masters of our destiny.

To read Why (any) Economy Matters by Jeff Deist go to:

Posted: 05 Sep 2015 10:30 AM PDT
By Rolando Anillo-Badia

There is little doubt that the Cuban government will need to provide a
remedy to those whose property was seized by the revolutionary
government after 1959 and have not yet received compensation for the
takings. Such an assumption is based on the requirements of
international and Cuban law, fundamental notions of fairness, and the
evident political necessity to settle property disputes before Cuba can
achieve stability42.
That’s the conclusion of Rolando Anillo-Badia in his analysis
Outstanding Claims to Expropriated Property in Cuba.

Properties of Cubans, Americans and other foreigners were seized in 1959
and expropriated in the second half of 1960. It started with Cuba’s
Reform Law and reached its highest point in July 1960 with the
expropriations of the property of U.S. nationals, continuing through
1963 when most assets owned by Cuban nationals were also expropriated.

Mr. Anillo-Badia notes that U.S. laws arguably require resolution of
U.S. nationals’ expropriation claims before the on trade with
Cuba is lifted and foreign aid can resume; and apart from any legal
requirements, one of the stated political conditions to resume normal
relations between United States and Cuba.

A complete report can be read here

Source: Why Economics Matters – Misceláneas de Cuba –

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