Economics for the Intelligent Amateur

Well it turns out John Maynard Keynes would have probably completely disagreed with the counter-cyclical policies we are currently seeing (reactions to free markets and deregulation leading to the over-regulations and over-muzzling of markets). I confess not having read Keynes’ Treatise on Money (apart from several excerpts in our Macroeconomics class which I must have glazed over), but I now have it on my wishlist (it is currently out of print, so I do have a good excuse).

To quote Jerry O’Driscoll from ThinkMarkets:

In Keynes’ Treatise on Money (1930), Keynes analogizes (stimulus injections) to a family taking care of a sick child with doses of castor oil, a laxative. “It is as though different members of the family were to give successive doses to the child, each in ignorance of the doses given by the others. The child will be very ill. Bismuth [an antidiarrheal] will then be administered on the same principle.Scientists will announce that children are subject a diarrhoea-constipation cycle, due, they will add, to the weather, or failing that, to alternations of optimism and pessimism amongst members of the family.”

The parallels seem obvious, and so this book should certainly be enlightening. On the other hand, we have mentioned this principle in the past, referring it as the pendulum swinging too far one way and then too far back (once pundits stop seeing behavioral economics as a panacea they will start referring to it as wishy-washy and a waste). I would have loved to have a conversation in this respect with Keynes. Maybe through his book I can.

Full ThinkMarkets article here.

A nice quote from Businessweek, worth repeating:

U.S. education gets rapped, too. India and China produce more scientists and engineers than the U.S., and international students who attend American universities generally must return home as soon as they’ve graduated. “We’re forcing these people to do their productive work elsewhere,” says Mark Chandler, general counsel of Cisco Systems. “They should have a green card stapled to their admittance letter.”

We agree heartily with that paragraph. Of course, they start this article off with:

“For the first time in 2009, non-Americans were granted more U.S. patents than resident inventors, accounting for 50.7% of new grants”

As global citizens, we wonder if this really is a bad thing. Then again, maybe that is why we’ll never make good politicians (nor, apparently, mainstream financial magazine writers).

For those of you happy that Google refuses to censor itself in China, here is a list of countries in which it continues to do so [via Forbes].

“We are all Keynesians now”. This phrase, uttered by Milton Friedman and popularly attributed to Richard Nixon (who did say something similar), shows the influence this one man and his economics has had on our past century, and continues to have in this one. No Economic analysis is complete without an explanation of John Maynard Keynes and what is now called Keynesian Economics. We therefore include some videos and tutorials here on precisely this subject:

From the Dumb Agent Youtube channel, where you can find many other subjects and tutorials as well. All collected and grouped by subject matter.