The Dirty Little Secret of Economics

Never mind about the debt ceiling.  Here's a more important question for you.  How come after 235 years of modern economics we are stuck in a lackluster economic recovery from the worst business recession since the 1930s?  On Friday the news came in that GDP growth was a mere 1.3 percent in the second quarter, and first-quarter growth was revised to 0.4 percent.  How is that possible? Weren't we told, over and over, that with modern economics we now knew how to moderate the business cycle?  And weren't we told that, even if a recession should occur, we now had the tools to get out of it, pronto?  So what went wrong? The answer is as old as the hills.  Knowledge is a two-edged sword.  It can be used for good: economics gives us the tools to understand the ways of commerce and guide businesses and consumers to non-inflationary growth.  Or it can be used to game the system: to pile up bigger debt and more ingenious subsidies so politicians can...(Read Full Article)