For the first time in US history, the rate of firm exit exceeds the rate of firm entry. The new trend represents a shift in our economic structure towards entrenched industries instead of “creative destruction” – or the process by which more productive firms drive out less productive ones through competition. Our economy becomes less competitive when entrepreneurial growth slows. (more…)
Detractors of capitalism often blame the market for government. I mean, it couldn’t be any more obvious here. The government (FDA) “approved” a product (cigarettes), which is now sold in a highly regulated market. It must be capitalism’s fault. You know, how leftists claim that “deregulation” has been a problem, and then go blame capitalism for regulations.
It really doesn’t make any sense how they’ve reached this conclusion. Somehow, deregulation equals regulation. More FDA should fix that. (more…)
Today’s lesson in economics: Everything has costs and costs affect prices!
Noble intentions always begin somewhere in the political sphere. At face value, they sound great. Who wouldn’t support feeding the homeless? Every noble endeavor, however, does not come cost-free and we must consider those costs to fully understand the issue. (more…)
The hunting death of a lion sparked me to do some research on the economics of trophy hunting. You can still morally oppose trophy hunting (that’s your opinion), but there are objective economics of it. If the ultimate goal of conservation is to increase wildlife populations, then the trends of populations before and after trophy hunting are worth considering. My findings coincide with the economics of any valuable resource: for-profit privatization affects supply via a market price. (more…)
You often hear people talk about how the United States does not produce anything because manufacturing was taken over by China. Although some manufacturing has left the United States, it has been replaced with more specialized manufacturing and new industries. Furthermore, there are foreign companies with manufacturing operations in the United States because of the access to a larger pool of highly qualified employees. (more…)
We often hear political groups advocate for economic regulations to address an externality or “protect” some group – usually consumers and labor. They only consider the initial and visible outcomes with little or no regard for the secondary and indirect consequences. At the same time, they fear America’s “unregulated capitalism”.
It is often thought that without regulation, corporations MIGHT carry out destructive acts that result in social externalities. Many of these regulations are crafted on the grounds of what MIGHT happen, as opposed to what has happened. Net neutrality is an excellent example. (more…)
CHILD LABOR is one of the more controversial topics in economics. At face value, most people probably support restricting or banning it. Understandably, child labor evokes emotional responses and images of horrendous working conditions of the Industrial Revolution. Times have changed, however, and this discussion is worth revisiting. (more…)
NARRATIVE: Redistributive measures, such as social welfare spending, are necessary adjustments to “fix” wealth inequality.
REALITY: Politicians and pundits often advocate for policies to “fix” a supposed ill. More often than not, these policies are supported without consideration for the unseen, unintended effects. (more…)
Economics becomes convoluted once injected with political conviction. Emotional rhetoric quickly replaces logic and empirics. Catch phrases manifest and misconstrue reality to accomplish an agenda. If we think beyond stage one, many of these purported economic ills quickly dissipate. (more…)