Archive for January, 2014

The LAF econ crew blew through the section test today on prices and markets.  All agreed that their hard work and prep paid off in a stellar performance.

Sounds good... but most of the benefits accrue to the wealthy

Sounds good… but most of the benefits accrue to the wealthy

We then dug into the  consequences of price controls.  We discussed how both floors and ceilings have results as predictable as the sunrise.  Hint: it’s isn’t pretty.

On the ceiling side, rent control destroy a city like a bomb, in the immortal words of Assar Lindbeck.  Gas price controls in the ’70s led to massive shortages and hours-long gas lines.  We also looked at floors such as those enjoyed by the sugar producers, which cost the American consumer billions each year.  And we’ll dig deeper  into minimum wage laws in the future.

Here’s the link to I Pencil by Leonard Read.  Be prepared to discuss this.

And here’s the PPT from today.  Week 4, January 28


We started to grind the osmium away from prices today with a spirited discussion about prices and their importance to free markets.   Prices, we discovered, wear a lot of hats.  But most important, they provide incentives to affect behavior of SRTHAU and convey terms of financial transactions among the participants.

We now see prices as clearly as this

We now see prices as clearly as this

The students shared their findings about the prices they tracked and the news they carried… from movie tickets to eggs, prices are packed with information for budding economists.  Any time you see a price head up or down, something is afoot.   Sniff it out.

We also touched on why losses matter as much as profits in the free market.  Should a business owner ignore continued losses, bankruptcy looms large.  We contrasted that with centrally controlled markets, where official can make the same errors over and over with no consequences, except on their helpless subjects… hello Comrade Castro.

Here’s the PPT from today.   Week 3, January 21 Final

Good luck prepping for next week’s test.

The Sowellians today enjoyed their first DPQ and from the sounds of things, most students turned in a stellar performance.

267 mph of scarcity... the Veyron

267 mph of scarcity… the Veyron

We then spent our precious class time discussing why it’s important to be fluent in basic economics.  We learned we can choose not to be informed, but our ignorance does not exempt us from the consequences of bad economic policies.

The choices our leaders make about SRTHAU determine the prosperity of society as a whole.  And it’s not money, but the good and services that determines the wealth of a land.  Kenya and Venezuela testify to failed economic decisions.

The two other foundational theories we studied were:

  • We must analyze economic polices by the incentives they create
  • Consequences matter more than intentions

Enjoy the reading and assignment this week about prices… messengers conveying news.   Here’s the PPT from today.  Week 2, January 14

maxresdefaultWelcome aboard for 17 weeks of Basic Economics, led by the great one… Dr. Thomas Sowell.

We opened our journey by learning what econ is and what it is not.  We laid the first bricks in the foundation by examining what progressive means, briefly reviewing Karl Marx’s views of inequality, and seeing how President Obama’s and new NYC Mayor de Blasio’s language reflect neoprogressivism.

Dr. Sowell, we discovered, had a difficult childhood, yet he managed to serve in the U.S. Marines and earn degrees from two Ivy Leagues and the U of Chicago.  His flirtation with radical left politics dissolved after working for the federal government.  Today, he is one of the more influential economists and commentators in the land.

Enjoy your first readings from Dr. Sowell.  Here’s a link to his column today so you can check out his weekly columns.  And here’s the PPT from today.  Week 1 January 7