Posts filed under “Philosophy”

Mary Matlin’s Economics

Paul Kasriel will be retiring from The Northern Trust Company on April 30. In the last month of his tenure, he plans to share some of his parting thoughts on economics.

He begins with this humdinger:

“Now, on to Mary Matalin. I saw her on one of the cable news shows on Wednesday defending Republican presidential candidate Mitt Romney’s planned car “elevator” in his new La Jolla home in terms of job creation. Ms. Matalin argued that by installing this elevator, Romney would be creating new jobs for the economy. How might Bastiat, the 19th century French political economist, have reacted to Ms. Matalin’s argument? My suspicion is that he would have made a distinction between what Ms. Matalin “sees” and what is “unseen.” Ms. Matalin sees the additional workers manufacturing and installing the elevator. What she apparently does not see are the workers who otherwise would have been hired for some other unrelated project had Mr. Romney forgone the installation of the elevator and rather invested, or saved, these “elevator” funds. Ms. Matalin, a Republican partisan, appears to have bought into the Keynesian fallacy often trumpeted by Democratic (or is it Democrat?) partisans that an increase in saving implies less total spending in the economy and diminished job creation. If Mr. Romney chooses to forgo the installation of a car elevator in favor of, say, purchasing some additional financial assets, in effect, he is transferring some of his purchasing power to another entity – a business, another household or a governmental body – that has a greater urgency to spend currently than does Mr. Romney. So, although Mr. Romney would be hiring fewer workers to manufacture and install a car elevator, the recipient of Mr. Romney’s investment funds would be hiring additional workers to produce whatever they were purchasing. (This concept of transfer credit comes from the Austrian school of economics, whose pupils greatly admire Bastiat.)The only way Mr. Romney’s decision to forgo the installation of a car elevator would not lead to a creation of jobs is if Mr. Romney chose to increase his saving by holding more bank deposits and/or currency, in which case would result in a decline in the velocity of money.

So, boys and girls, like Bastiat, keep your eyes open. Try to see everything when analyzing economic issues. Ms. Matalin was not incorrect to argue that Mr. Romney’s decision to install a car elevator in his new abode would create new jobs. But what she apparently failed to see is that new jobs would have also been created if Mr. Romney had chosen to forgo the purchase of the car elevator and instead invested those funds. Increased saving in general does not result in decreased aggregate spending. Rather, it merely changes the composition of who is engaging in the new spending.”

Rather intriquing . . .


Kasriel’s Parting Thoughts – Mary Matlin’s Economics
Paul Kasriel
The Northern Trust Company March 29, 2012

Category: Humor, Philosophy, Politics

Complexity, Context, Probability & Bias

No one seems to remember the second part of Occam’s razor as rumored1 to be stated by Albert Einstein: “Everything should be made as simple as possible, but not simpler.” That is an issue I am encountering quite frequently these days. We see it in discussions about markets, politics, sports, economics, indeed, just about any…Read More

Category: Apprenticed Investor, Investing, Markets, Mathematics, Philosophy, Politics, Psychology

Jim Grant Does His Best John Galt Impression

Category: Philosophy, Video

Founding Fathers’ Intelligent Design

Source Wuerker, Politico

Category: Philosophy, Science

Pleasure Principles

“What will fill the vacuum formerly occupied by religion?” The most thoughtful, as well as the most memorable wedding gift my spouse and I received in 1993, the year of my first (and only) marriage, was neither the most expensive, nor an object. Rather it was a “Brunch” – that uniquely American invention deplored by…Read More

Category: Philosophy

Socrates’ Advice to Greece Today

This post was originally published at The Financial Philosopher, by Kent Thune. “I do nothing but go about persuading you all, old and young alike, not to take thought for your persons or your properties, but and chiefly to care about the greatest improvement of the soul. I tell you that virtue is not given…Read More

Category: Economy, Philosophy

Is America Becoming More Conservative? Why?

Why has the economic crisis deepened America’s conservative drift? The trend towards the hard right is most pronounced in the least well off, least educated, most blue collar, most economically hard-hit states. Why? It is a fascinating glimpse into the Human (or is it American?) Psyche — and I am very curious about it: >…Read More

Category: Data Analysis, Philosophy, Politics, Psychology

Rapture Ready: The Christians United for Israel Tour

Max Blumenthal’s latest takes us on a shocking and at times bizarre tour of right-wing Pastor John Hagee’s annual Washington-Israel Summit, blowing the cover off the Christian Zionist movement in the process. Starring Joe Lieberman, Tom DeLay, Pastor John Hagee, Ambassador Dore Gold and a host of rapture-ready evangelicals praying for Armaggedon.

Category: Philosophy, Video

Anecdotes Wanted . . .

“The reason capitalism has triumphed in the West and sputtered in the rest of the world is because most of the assets in Western nations have been integrated into one formal representational system . . . By transforming people with real property interests into accountable individuals, formal property created individuals from masses. People no longer…Read More

Category: Philosophy, Real Estate

Most of the World Wants More Bank Regulation

More business regulations. That is what survey after survey around the globe shows that the world’s populations wants. Despite a relentless propaganda campaign of misinformation, fabricated data and false narratives, the public has not been fooled by the 1%. The best efforts of a well funded group of ideologues — Free Market absolutists, anti-Democracy and…Read More

Category: Philosophy, Regulation