One of the hot topics discussed among many economists in the last month was the anomalies found in the Indian GDP estimates. A working paper published by Arvind Subramanian, the former Chief Economic Advisor to the Government of India exposed how that the GDP estimates of India are overstated.

Before Margaret Thatcher became prime minister in 1979, Britain’s epithet was “the sick man of Europe.” The preceding drift into ever-greater socialism was accompanied by monetary inflation, which was driven in part by unionised labour in nationalised industries striking, or threatening to do so, for wages which were uneconomic. The differences between cause and effect during periods of monetary inflation only serve to conceal the root of the problem, and that is inflationary financing.

A future prime minister must have a clear understanding of his enemy, the socialist myth, why it fails, and why free markets succeed. 

Barack Obama proclaimed income inequality to be “the defining challenge of our time” in a 2013 speech. Inequality continues to be a hot political topic and serves as the pretext for recent proposals floated by various politicos like a 70 percent marginal tax rate, student loan forgiveness and universal day care.

The appointment of Christine Lagarde as president of the ECB has been greeted with euphoria by financial markets. That reaction in itself should be a warning signal. When risky assets soar in the middle of a huge bubble due to a central bank appointment, the supervising entity should be concerned.

Lagarde is a lawyer, not an economist, and a great professional, but the market probably interprets correctly that the European Central Bank will become even more dovish. Lagarde, for example, is a strong advocate of negative rates.

[Patrick J. Deneen. Why Liberalism Failed. New Haven and London: Yale University Press, 2018. 225 pgs.]

For most economists and financial commentators the heart of economic growth is the increase in the demand for goods and services. It is held that increases or decreases in demand are behind rises and declines in the economy’s production of goods and services. It is also held that the overall economy’s output increases by a multiple of the change in expenditures by governments, consumers, or businesses.

In a characteristically excellent post, the Bionic Mosquito calls attention to Murray Rothbard’s ethical “absolutism”. In this view, human beings can grasp what is objectively case in ethics. If, for example, stealing is wrong, its being wrong is not just an expression of individual or group preference. Rothbard held that an adequate defense of libertarianism depends on objective values and that political freedom was not the only such objective value needed for this defense.