All posts in Economics

→ Understanding the Laffer Curve

The key takeaway is that the IRS collected fives times as much income tax from the rich when the tax rate was far lower. This isn’t just an example of the Laffer Curve. It’s the Laffer Curve on steroids and it’s one of those rare examples of a tax cut paying for itself.

Dan Mitchell points out that people on both sides of the aisle need to understand the Laffer Curve a little better.

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→ A Refresher on What is Wrong with Keynesian Economics

Those who heaped high praise on Keynesian policies have grown silent as government spending has failed to bring an economic recovery. Except for a few diehards who want still more government spending, and those who make the unverifiable claim that the economy would have collapsed without it, most now recognize that more than a trillion dollars of spending by the Bush and Obama administrations has left the economy in a slump and unemployment hovering above 9%. (emphais mine)

A good article to revisit during the election season. It points out a number of problems with Keynesian economic theory, such as:

First, big increases in spending and government deficits raise the prospect of future tax increases.

and

Second, most of the government spending programs redistribute income from workers to the unemployed.

Those are only the first two.

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→ Beats by Dre and Olympic Marketing

Thus far, Beats products have been spotted on a number of highly visible athletes, including swimmer Michael Phelps, who wears a pair of Beats-branded noise-canceling headphones before races. The company achieved a similar coup in 2008, when it gave a pair of headphones to LeBron James, who proceeded to hand them out to the rest of his US teammates.

I have to admit, I want a pair of Beats headphones. Even though reviews seem to consistently say there are better and cheaper options available, Beats marketing has won me over.1


  1. It might just be that I want the Red Sox branded version 

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→ Keynesian Economics Explained

Hilarious.

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Why Keynesian Economics Fails Every Time it’s Tried

This video from Dan Mitchell gives a simple explanation of why keynesian economic theory is inherently flawed. Basically, you’re not not actually making more money, you’re simply taking money from your left pocket and moving it to your right.