New York Times columnist Paul Krugman attacked the Greek government for putting its people in the untenable position of either accepting even harsher austerity measures or abandoning the euro altogether, claiming that the currency “strapped Greece in an economic straitjacket.” 

“Cases of successful austerity,” he argued, “in which countries rein in deficits without bringing on a depression, typically involve large currency devaluations that make their exports more competitive.” Canada did so in the 1990s, and Iceland did so even more recently — but in both cases, those countries had their own currency, which Greece currently doesn’t.

Europe “never had the preconditions for a successful single currency” – just ask the Greeks

Study: Alabama’s HB56 immigration law could cost state economy $10.8 billion

Study says Alabama’s strict HB56 immigration law will cause 40,000-80,000 to leave the state, hurting the economic recovery (Photo: Wikipedia)

Channel: Economics

The Alabama legislature began its regular session today and debate about its controversial immigration law, HB56, is again heating up. Many immigrants have already fled the state. Proponents of the law argue that this is the desired outcome, but the economic impact of HB56 has been harsh and Alabama business leaders are leading an effort to tweak the law. Others are calling for its outright appeal.

Keep reading


Your Better Life Index. It may sound like a new Oprah project, but it’s from the OECD

Your Better Life Index is designed to let you visualise and compare some of the key factors – like education, housing, environment, and so on – that contribute to well-being in OECD countries.

And the interactive graphic lets you decide how much weight to give to each factor. The scores are then displayed in colorful flowers.

Each flower represents one country. Each petal represents one of the eleven topics. The length of a petal represents the country’s score in a topic, while its width represents the importance you’ve assigned to that topic.

Hat tip: Flowing Data.

Marginal Revolution: Common mistakes of right-wing and market-oriented economists?

Common mistakes of right-wing and market-oriented economists?

This is a companion piece to my post on left-wing economists; see the caveats in that post.  Not everyone commits these, nor are the associated conclusions necessarily false, nor am I postulating any equivalence of mistakes across the two groups.  I am simply serving up two lists.  Here goes:

1. There is excess fear of inflation and hyperinflation in the current economic environment.  Further there is often an excess estimate of the costs of inflation in the two to five percent range.

2. We know much less about the causes and drivers of economic growth than we like to admit, and when pushed on this issue we fall back to citing relatively simple cases with extreme differences, such as East vs. West Germany.

3. Lower taxes don’t spur economic development as much as it is often claimed, at least not below the “fifty percent or less of gdp” range.

4. There are many climate change issues of relevance here, not mostly economics, but it seems remiss not to mention them.

5. I’m all for Health Savings Accounts, but unless done on a Singaporean scale, and with lots of forced savings, they’re not a health care plan to significantly benefit most Americans.  There is less of a coherent health care plan, coming from this side, than one might like to think. 

6. There is already considerable health care cost control embedded in the ACA, most of all for Medicare, and this is not admitted with sufficient frequency.

7. When it comes to the historical determinants of the Industrial Revolution, the Great Divergence, and the like, the importance of state-building in that process is often neglected.

8. The story of steady and significant economic progress for most Americans is accepted too readily.

9. The role of market failure in the recent financial crisis is underestimated.  It is also believed that we can somehow commit to a policy of no future bailouts.  Promoting that myth will make future bailouts more likely.

10. Relying on liability law, whether or not it is a good idea, is not intrinsically more pro-market, more libertarian, or less interventionist.

There are more, but those are what to come to mind right away.  If you wish, you can interpret this list as saying more about me than about the doctrines I am referring to.  Again, you can very often Google back to find more detailed discussions of these individual points.

so during the Irish Famine Ireland was actually exporting food from its country and sending it to england. People were dying of starvation, but Ireland was exporting food to countries that already had plenty of food. If that doesn’t sound crazy enough, the worst part is this makes perfect economic sense. So it was “morally” justified. how fucked up is that?

Reading Hayek’s “The Road To Serfdom”…thought this would be a good time to post this…

21 Economic Models Explained With Cows

SOCIALISM: You have 2 cows

You give one to your neighbour.

COMMUNISM: You have 2 cows

The State takes both and gives you some.

FASCISM: You have 2 cows

The State takes both and sells you some milk.

NAZISM: You have 2 cows

The State takes both and shoots you.

BUREAUCRATISM: You have 2 cows

The State takes both, shoots one, milks the other, and then throws the milk away…


You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income.

SURREALISM: You have two giraffes

The government requires you to take harmonica lessons.


You sell one, and force the other to produce the milk of four cows. Later, you hire a consultant to analyze why the cow has dropped dead.


You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. You sell one cow to buy a new president of the United States, leaving you with nine cows. No balance sheet provided with the release. The public then buys your bull.

A FRENCH CORPORATION: You have two cows

You go on strike, organise a riot, and block the roads, because you want three cows.


You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk. You then create a clever cow cartoon image called ‘Cowkimon’ and market it worldwide.

A GERMAN CORPORATION: You have two cows

You re-engineer them so they live for 100 years, eat once a month, and milk themselves.

AN ITALIAN CORPORATION: You have two cows, but you don’t know where they are

You decide to have lunch.

A RUSSIAN CORPORATION: You have two cows

You count them and learn you have five cows. You count them again and learn you have 42 cows. You count them again and learn you have 2 cows. You stop counting cows and open another bottle of vodka.

A SWISS CORPORATION: You have 5000 cows

None of them belong to you. You charge the owners for storing them.

A CHINESE CORPORATION: You have two cows

You have 300 people milking them. You claim that you have full employment, and high bovine productivity. You arrest the newsman who reported the real situation.

AN INDIAN CORPORATION: You have two cows

You worship them.

A BRITISH CORPORATION: You have two cows

Both are mad.

AN IRAQI CORPORATION: Everyone thinks you have lots of cows

You tell them that you have not one. No-one believes you, so they bomb the shit out of you and invade your country. You still have no cows, but at least now you are part of a Democracy…


Business seems pretty good. You close the office and go for a few beers to celebrate.


The one on the left looks very attractive…


Ultimately, then, sacred economics is part is the healing of the spirit-matter divide, the human-nature divide, and the art-work divide that has increasingly defined our civilization for thousands of years. In our journey of separation, we have developed amazing creative tools of technology and culture that would never have existed if we had not departed from our original wholeness. Now it remains to recover that wholeness and bring it into a new realm, to create with nanotechnology and social media things of the same life, beauty, and soul that the old masters created with adzes and song. Let us insist on nothing else. For what purpose have our forebears sacrificed, if not to create a beautiful world?
We are born creators, here to achieve the exuberant expression of our gifts.
—  Sacred Economics, A New Materialism - Charles Eisenstein