THE PUBLIC CHOICE CAPITALIST WRITES
Markets in Everything: Paranormal
As I have said before Tyler Cowen from George Mason usually does this but I have found some myself. This one is:
“Since 1964, $1 million has awaited anyone who can show proof of the paranormal.
That year, noted skeptic James Randi first offered anyone $10,000 if they could show objective proof of the paranormal or supernatural. Donations quickly raised the amount to $1 million.The Foundation offers copies of its financial statement as proof of the existence of the money, and it has repeatedly extended its Paranormal Challenge to high-profile psychics like Sylvia Browne, so far to no avail.”
Funny Invention: Sunglasses
The market rewards those who come up with products that we have never known we needed with grand profits. These people are entrepreneurs. In Austrian Economics, they are considered the driving force in the market. I seem to agree. Things like iPods and computers have really boomed our economy.
One interesting item is the invention of sunglasses. Almost everyone uses them and we never really think where do they come from. We probably can hardly imagine a world without them. Here is a tidbit about sunglasses’ great history:
“The first reason why they darkened glasses was because of smoke tinting, which was held in China before 1430. It was so far back in time, that of coarse their glasses were not of any prescription, and they were not used to protect your eyes from the sun. The Chinese judges had often worn sunglasses with quartz to hide the expression in their eyes while during a court case.
The experimentation of tinting lenses came from a man named James Ayscough in the 18th Century. He as well, did not seek sunglasses as protecting your eyes from the rays of the sun, but for the correction of vision impairments.”
The rest can be found here.
Thanks to this entrepreneur we can save our eyes from the sun and drive better.
~PCCapitalist
Inflation does slow growth…
The title of the post is very true but people do not understand inflation as much. Inflation is just the quantity of money in the system. Central bankers try to let out as much money as the economy grows if it doesn’t do enough its deflation, if it does it too much its inflation. Europe has been slow growing for a while but it is geting even slower with inflation. The Financial Times has it here:
“The eurozone moved closer to recession on Thursday after it emerged that the economy contracted in the second quarter for the first time since the launch of the euro.
Yet, while concerns mounted in Europe that the weakness in growth could prove protracted, evidence of growing global inflationary pressures continued to build. Just hours after the eurozone figures were released, US data showed consumer prices rose twice as fast as forecast by economists in July, hitting an annual rate of 5.6 per cent – the highest since January 1991.”
The rest can be found here.
~PCCapitalist
OPEC does abide by the Law of Supply!
For those of you who buy the whole OPEC is an effective cartel and they work together at restricting output and raising prices. Even though nothing has changed in the past 20 years for them to become less effective to more effective. This from the Financial Times:
“Opec last month pushed its production to the highest level in its 48-year history even as demand was slipping in the US and Europe, the International Energy Agency (IEA) said on Tuesday.
The combination of surplus supply and weaker demand has pushed oil prices to $113.50 a barrel, down 24 per cent in the past month and the lowest level since late April.”
Of course, the people that wrote this article believe the cartel works and that they agreed to do this to lower prices. I am sure that is partly true but what would any producer do if the demand increases? The would increase supply to meet the demand. They want to do this for two reasons and this will also explain why cartel do not work in free-markets.
First, cartels do not work because there is not a good enforcement mechanism. This is especially true for an international organization. As there is no international justice system to enforce this and people are more spread out. If Nigeria decides to produce a little more than it was allowed to, it will. They have an incentive to do so because they are undercutting the other producers. Then they sell more of their oil and make more money. Now the demand has been staying high the profits to do this is even higher. Each country will follow until we get back down to the market price.
Second, even if you believe that cartels do work this still holds true. If the price of oil continues to stay high, it increases the profits of those who innovate away or to more efficient energy solutions. For example, in the seventies when gas prices were high the race car industry invent more efficient fuel injected engines. This caused less gas to go to waste when burning the fuel. Since places like Saudi Arabia have only one real commodity, they don’t want to look down 20 years and see no jobs for themselves.
The law of supply states that as price goes up producers will produce more to meet demand. This is all that is happening. What you see in the news is OPEC pretending to “give us” more of a supply. When they are just abiding by the market.
The rest of the article can be found here.
~PCCapitalist
Pennies are really worthless…
I have written before that we should abolish the penny. No one uses it or accepts it hardly and it costs more to make it. Here is an example of what I am talking about:
My old post on pennies here.
~PCCapitalist
Homeless: Out of Sight, In-mind?
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This from The National Review:
“During the upcoming Democratic convention, homeless residents of Denver will be given bus tokens as well as tickets to movies, the zoo, and museums - all located at conveniently great distance away from the convention center.”
Which looks a lot like this:
“(Because of the Olympics) Like thousands of others who packed Beijing’s main train station on Thursday, Li was prompted to leave town by a lack of work and an unwritten government policy encouraging migrant workers to clear out until the dignitaries and journalists have gone home.”
It seems like the popular thing to do is to sweep the homeless under the rug because we wouldn’t want them to ask the Democrats or foreigners visiting China for help. It seems that the leftist apple doesn’t fall far from the leftist tree.
Of course, I am not calling Democrats Communists. It is merely an observation that it seems that Democrats and Communists are using the same type of tactics.
The rest of the China article can be found here and the Denver one here.
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