Year: 2013

GDP: Who Needs It?

Warren Gibson Current Events, Economics, History, Liberty

“For so it is, oh my Lord God, I measure it, but what it is that I measure I do not know.” –St. Augustine

Gross Domestic Product (GDP) gets a lot of attention these days. It’s fair game for bloggers, talking heads, perhaps your local barber.  While most agree that higher GDP is better than lower, there are problems, some better-known than others. Some theorists have considered the concept hopeless, such as Austrian economist Oskar Morgenstern, who called GNP (the predecessor to GDP) “primitive in the extreme and certainly useless.” Lamenting the idea that the whole of a nation’s economic activity could be captured in a single number, he said that “very few men, even few economists, or should I say regretfully, especially economists, have a real appreciation and understanding of the immense complexity of an economic system.”

Let’s get the formal definition out of the way. GDP is the market value of all final goods and services produced in a particular country in a given year. The federal Bureau of Economic Analysis computes this number and releases it quarterly. The level of GDP is used as a basis for evaluating other things, like the national debt, which currently stands at about 85 percent of one year’s GDP in the United States. GDP growth rates are closely followed. These are inflation-adjusted, seasonally adjusted, and annualized, and are of course supposed to tell us how well the economy is doing.

Simon Kuznets gets credit for the first serious attempt to calculate national income figures, publishing his first work on the subject in 1941. Following in his footsteps, calculation of GDP and other “national income accounts” has become a core area of the economics profession. The explosion of economic and financial news has thrust GDP into the limelight in recent years. Continue reading →

From the Comments: Militias and the Second Amendment

Brandon Christensen Current Events, History, Law , ,

Longtime reader (and blogger) Hank Moore has been on a roll lately. In response to a condescending (and fact-free) comment made by a Leftist concerning gun rights, Hank responds with this:

That is very interesting that you would bring up the militia. Were you sincere and knowledgeable on this matter you might know that THIS, the militia, more properly to keep the militia from becoming a rabble and to circumvent the need for a standing army, was the main point of the Second Amendment. Not gun ownership.

The right to own whatever you could legally acquire without causing harm to someone by way of that acquisition was (and is) already an inalienable right, protected not only by the Constitution’s very structure (negative law) but by the Ninth and in a sense Fourth and Tenth Amendments as well.

The Second Amendment threw in that much-hyped line about the right to bear arms precisely so people like you wouldn’t interpret “well-regulated militia” as anything other than what it was (FYI, it had absolutely nothing to do with “conquering the frontier”). That is, a group of local men banding together when the need arose to protect what’s theirs (including their guns). But that is exactly what you have done. Misinterpreted it. But not because the language of that particular Amendment is so unclear (although I do wonder if their is a language barrier between collectivists and people who like to mind their own business, and no I don’t refer here to that obnoxious limey Piers Morgan’s pretentious accent), but because as a whole, the document the Constitution has fallen into disuse. In the era of positive law and positive rights, why even have one?

The answer is so that you (the politician or the lobby or the activist) can appeal to people who know deep down that arbitrary power is morally reprehensible, and thus bitterly cling to some semblance of a social contract; but who still have stupid ignorant ideas (by this I mean gun-control) that they want to shove down everyone else’s throat. Oh, and our founders wouldn’t know what you meant by military style weapons. Do you mean the military-style weapons that they used to defeat the British and would have been mercilessly slaughtered without? Or do you mean today’s military-style weapons that only certain classes of benign uniformed government-employees are permitted to own under your reading of the Second Amendment?

Anybody out there care to answer Hank’s questions? Well done! Here is Hank’s blog one more time. Do check it out.

How to Make the New Year Better

Fred Foldvary Current Events, Economics, Politics , , ,

Many economists and financial analysts are making conjectures about when the recession will bottom out and how strong the recovery will be. The speed of recovery depends on the policies of government world wide. With the best policies, the economy could recover within three months. With bad policies, such as occurred during the Great Depression, the economy could stay down for years.

One bad policy that made the depression worse was the erection of trade barriers. The US enacted a high tariff in 1930, and other countries also restricted imports, and world trade broke down. Companies that sold goods abroad could no longer stay in business. Farmers suffered as foreigners could not buy their crops.

Unfortunately, many countries today are repeating this policy error. The German philosopher Hegel was right when he observed that governments do not learn from history. Indonesia is requiring new licenses and taxes for imports. Russia has raised tariffs on imported cars and food. India has levied a tariff on imported soybean oil. The chiefs of each country think that they are protecting their home industries, but they are ignoring the lessons of the Great Depression, as trade limitation is contagious. If political pressure induces them to do something, a money subsidy is preferable to a trade barrier, since that does not distort prices as much. Continue reading →