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…)
Since the 1930s, the racial unemployment gap has widened dramatically. Economics and history, rather than verbose rhetoric, explain the influences that caused a sustained gap in the unemployment rates. The attached graph shows that blacks had about the same unemployment rate during the early 1900s; even less than whites at one point. There are many reasons why and each have their own merit. The most important reason, however, is the minimum wage. (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…)
Progressives often tout compulsory government programs as examples that America is already socialist. They are right, but they seem to lack an understanding of what their “success” entails. Occupy Democrats has taken the position of “if you don’t like it, don’t use it”. Speaking for myself, I would love to opt out of Social Security and Medicare among others.
Only one problem: I cannot. (more…)
MISLEADING CLAIM: Capitalism is bad because all of these people die every year from poverty, vacant homes go unfilled while homeless are on the street, people starve while food is stockpiled, and households are submerged in debt.
REALITY: This bit of propaganda was posted by Occupy Wall St. As you can see, they’ve attributed annual deaths-by-capitalism to THREE TIMES the number of Jewish people killed in the Holocaust. All of these “statistics” are sourced according to the original post. Of course, their claims are “accurate” to the degree that they’re reported, but it’s easy to see how they’re misleading if you care to double check. Let’s take a closer look. (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…)