Some claim "the rich" will be fine—or even better off—after the COVID panic destroys the economy for most of us. But there's a problem: the wealthy depend heavily on an economy fueled by the production and consumption of all workers and entrepreneurs.
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Thanks to past interventions, the economy is now rife with malinvestments and prices that don't reflect real demand. The solution is to allow deflation and other types of painful readjustment. Otherwise true growth will elude us.
Central banks have decided that one of their main missions is to prevent deflation. But this only ends up causing the malinvestments that lead to economic busts.
Paul Krugman is now claiming that reopening the economy and allowing people to go to work almost surely will cause a depression.
For many parents, the ongoing closure of public schools will just reinforce growing suspicions that public schools just aren't worth it anymore. Maybe they never were.
Buyers and sellers in the free market do indeed act from self-interest, but Adam Smith never argued that this excludes friendly feelings for those they do business with.
Panic over the COVID-19 virus has led to the closure of many schools and new forays into education outside the government school system. Many will find that they don't need the state's schools at all.
Hacking off soldiers' limbs was a favorite technique of Civil War surgeons, largely because doctors wanted to avoid blame for later cases of gangrene. So doctors erred on the "safe" side. Many patients may have disagreed.
With their bizarre and extreme lockdowns, governments are forcing very low-risk populations to endure social isolation and unemployment. The mental health effects will be significant.
Media outlets, both left and right, are mostly narrative driven. Also, journalists have a tendency to lazily reprint whatever "experts" say. This makes media reporting thoroughly unreliable.
Presenting "saving lives" as a more or less equal alternative to commerce and community is a misguided view of what the lockdown debate is really all about.
The COVID-19 panic has provided a myriad of opportunities for politicians to exploit the fear and pain of ordinary people for personal profit.
How do the shutdowns increase ageism? Because millions have arguably been thrown out of work in the name of protecting the elderly. The resulting economic devastation comes at the expense of younger workers, parents, students, and families.
Crashes are fast, like that first hill on a coaster. Recoveries are not, for the simple reason that production is more difficult than destruction.
The EU has now become essentially a makeshift, lawless regime designed to prop up bankrupt states. So much so, in fact, that even the German supreme court has become alarmed.
While the Left has agitated for more government spying and harsher "lockdowns," Brazil's president—perhaps fearing economic implosion—has been reluctant to crack down.
Why would an investor buy a bond that pays a negative interest rate? The answer lies in understanding how central banks manipulate the economy.
Prices of consumer goods have grown rather slowly in spite of sizable money supply growth. Why is there a gap?
In this crisis the money supply has already increased far more than during the last crisis. But it's hard to say when this will produce inflation because we're still in the midst of a demand shock and a collapse in oil prices.
Prices and purchasing power are determined by how individual consumers value goods and services. The "velocity of money" won't help us understand prices or the money supply.
