Posts Tagged ‘economics’

I spend a significant amount of time online reading and learning. And one of my favorite areas of interest is economics. It’s weird, I have a high school diploma, a BA, and an MA, and if you had talked to me immediately after completion of my MA I would have said I basically had an elementary, maybe even cartoonish view of economics and economic theory. All I had in college was Micro, and I barely remember getting anything out of that class other than realizing I was bored every day I was there. I have spent years learning more about the topic, and I’m amazed what I learn each day about the topic. It’s that complex and that interesting.

I get it. On the surface, economics is not the most interesting stuff for the average Joe, but the average Joe is supposedly tasked with maintaining this Republic.

It’s arguable that the economic system that we live inside of is as important in any ecosystem biologists study. Economics is a fascinating mixture of history, sociology, and psychology. It is not an exact mathematical science and it is not primarily math driven, far from it.

All history and current events should be seen through the lens of economics. This is why I never watch any mainstream news. These people are often moronic talking heads who just have a news fetish. There’s no depth of knowledge. I learn far more from the people I follow in the investing space.

Why?

Because not knowing the importance of what is happening is what kills returns.

This is just an outstanding lecture, and really does a good job of destroying some of the cartoonish nonsense you were taught if you attended a public school or typical university.

Tom Woods is one of my favorite Libertarian thinkers. He’s a phD historian who has degrees from both Harvard and Columbia. He went off the reservation of allowable opinion years ago because when you start honestly questioning and studying the reservation, it isn’t that inviting of a place for anyone of any intelligence.

Turn off whatever crap you’re watching on your TV or your phone, and open your mind and learn. You won’t regret the time spent.

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The other day I had some harsh words for the “average” American. While I still stand by what I say when it comes to taxation, there may be some hope after all.

65% of voters favor across the board spending cuts.

I hate to break it to the political class in Washington. The American people may be ignorant about things that matter, it seems they get that we have a spending a problem. Failure to compromise could hold some interesting political consequences to the tyrants that currently “represent” us.

I am actually willing to go along with small tax increases on everyone, including myself, as long as we get massive spending cuts. The thing is the Democrats have no intention of compromising and there will be no spending cuts offered. The mainstream media has somehow managed to convince the American people that the Democrats and the Marxist in Chief are willing to compromise. It could also be that the American people are just a bit naive in believing the elected members in the Democrat party actually care about America. The American people are about to learn how much they have been duped.

Any Republican that goes along with a crap compromise that has no spending cuts of any size should be primaried and removed from office. I already will not be voting for Roy Blunt in the next Senate primary, and I definitely won’t vote for him in the general if he supports the wrong path in the next year.

Another interesting piece of data is this, 68% of people are favorable to capitalism only 24% are favorable to socialism. We still believe in the things that made this country great. The problem is I don’t think Americans are well educated on the ins and outs of each system. It is up to us to educate our neighbors, friends, and families.

Over the next year, pledge to learn more about American history and economics. Become an expert, and earn the trust of your friends and family, so that when what we are doing  as a country quits working (and it will!) you are there to educate them on the truth.

I love John Mauldin. He is probably one of the smartest economic minds alive today. If you like economics I suggest you subscribe to his newsletter at http://www.mauldineconomics.com/. Mauldin is brilliant because he is capable of synthesizing a large amount of theory, statistics, and research into a cohesive whole. He was one of two economists to call the collapse of 2008 months before anyone else (while all the “experts” were convinced there was no top to the market.)

In his newsletter from July 23, 2012 Mauldin shared the Hoisington Quarterly Review. Two paragraphs that you must read if you don’t have the time to check out the whole thing:

“Three recent academic studies, though they differ in purpose and scope, all reach the conclusion that EXTREMELY HIGH LEVELS OF GOVERNMENTAL INDEBTEDNESS DIMINISH ECONOMIC GROWTH. In other words, DEFICIT SPENDING SHOULD NOT BE CALLED “STIMULUS” as is the overwhelming tendency by the media and many economic writers. While government spending may have been linked to the concept of economic stimulus in distant periods, such an assertion is unwarranted, and blatantly wrong in present circumstances. While officials argue that governmental action is required for political reasons and public anxiety, governments would be better off to admit that traditional tools only serve to compound existing problems.” 

“Reinhart, Reinhart and Rogoff dealt with the idiosyncrasies of countries of different sizes and their abilities to engage in different policy actions (such as devaluations and subsequent inflation) by limiting their samples to advanced countries. In the second study “Government Size and Growth”, Bergh and Henrekson found that to the extent there are contradictory findings of the relationship between the size of government and economic growth they are explained by variations in definitions and the countries studied. The Swedish economists focused their study on the relationship in rich countries by measuring government size as either total taxes or total expenditures relative to GDP. Using a very sophisticated econometric approach under this criterion, they revealed a consistent pattern showing government size has a significant negative correlation with economic growth. Their results indicate “an increase in government size by ten percentage points is associated with a 0.5% to 1% lower annual growth rate.”

Dear politicians and Obama supporters, read the above two paragraphs until you actually understand them.