Elected Leaders And Economic illiteracy

Thursday, September 14, 2017

Recent comments by politicians including a local mayor shows just how little our elected officials understand economics and just might point to why America is drowning in a sea of debt at every level of government.  

Suggesting that the governor should issue an anti price gouging proclamation makes political sense but no economic sense. Letting prices rise encourages supplies to be replenished, encourages conservation and helps prevent hoarding. Capping prices does just the opposite and hurts far more people.


They continue to show their lack of economic sense by even suggesting that destruction either natural or man made has an upside.  They believe it to be good because in the long run people have to rebuild and this creates jobs and has a multiplier effect. Many economists, mainly those that subscribe to Keynes, suggest the same. Paul Krugman said after 9/11 the terrorist attack could “do some economic good.’’ We have to learn to look at the unseen and the unintended consequences instead of just the seen.
 
Speaking of the broken window fallacy my wife called me on her way home from work yesterday morning and said she has some bad news. She informed me while at work last night someone broke out the front passenger side window. Expecting much worse news by the way she said it I was relieved it was just a broken window. So I told her not to worry the money we pay to fix the window ($165) will stimulate the economy and will be multiplied numerous times and will ultimately benefit us by its multiplier effect .She wasn't buying it, she knew those new shoes would have to wait now.
 
Does it matter if that money comes out of my savings or if it is a part of our disposable income? No, not at all. My savings and your savings is someone else's spending. So that just means if it comes from savings there is $165 less that can be borrowed by someone else. Actually I guess with a fractional reserve system that amount would be much greater. Of course, if it comes from our disposable income that just means my favorite Mexican restaurant won’t see me for a few weeks and those new shoes will have to wait.
 
So what’s the overall net benefit?  The Glassman certainly benefited. He got new unexpected income due to the destruction of our property but the others lost income they would have received if not for the broken window or someone else wasn't able to borrow the $165 taken out of my savings and spend on what they wanted.

It just might be time to admit that John Maynard Keynes didn’t know what he was talking about because the evidence is the financial reports issued by governments. 

Mike Lynn

Cleveland



Supporting Cate White For Circuit Court Judge - And Response (4)

I am writing on behalf of Catherine "Cate" White in support of her campaign for Circuit Court judge. Catherine White has, as a member of the Hamilton County Republican Women, been active in ideas and principles that better promote local and national government that affects citizens' everyday lives.  I have known Catherine White since I began tutoring her son, Shiloh, several ... (click for more)

Tennessee Senate Republican Caucus, House Republicans Weekly Wrap Up

The Tennessee Senate passed several key bills this week, including the state budget and major legislation to curb opioid abuse, as the 2018 session of the Tennessee General Assembly draws to a close. The $37.5 billion “no growth” budget proposes state government spending for the next fiscal year that begins July 1, 2018 and extends to June 30, 2019.  The balanced budget, ... (click for more)

McCallie Coach From 90s Who Is Now Deceased Is Accused Of Abusing Students

A McCallie School coach from the 1990s who is now deceased is being accused of abusing students at the private prep school. Two former students said Steven Lee "Steve" Carpenter sexually abused them. Carpenter was the basketball coach at McCallie for 11 seasons - through 1999. He was boys basketball coach at Ridgeland High School beginning in 2000. Carpenter was ... (click for more)

County Commission Committee Recommends 2-Year Terms For Magistrates; To Advertise For 2 Openings After Pay Raise

A committee of the County Commission has recommended that county magistrates have two-year terms, instead of one year, and for the commission to take applications on two open seats. The commission will proceed with advertising for the two posts and make an official announcement next Wednesday. Applications will then be taken until May 8. The commission will interview candidates ... (click for more)

Peyton Manning To Be Inducted To Academic All America Hall Of Fame

Legendary Tennessee quarterback Peyton Manning will be one of the newest members of the College Sports Information Directors of America (CoSIDA) Academic All-America Hall of Fame when the four-person 2018 Class is inducted this summer.   The Academic All-America Hall of Fame Induction Ceremony will take place at 7:30 p.m. on June 28 at the CoSIDA and NACDA ... (click for more)

Rahaan Gaulden Ready For 2018 NFL Draft

  Rashaan Gaulden is ready for the next level. His nearly four years at the University of Tennessee have prepared him for the NFL and the former Vol defensive back is expected to hear his name called this weekend at the 2018 NFL Draft at AT&T Stadium in Arlington, Texas. “There’s a relief and a calmness about it all because of all of the hard work I know I put in ... (click for more)