Browsing Category Economics

Venezuela. Cryptocurrency and backed by oil. Bullshit

the petro has intrinsic value because it’s backed by oil, ok, but what does backed by oil actually mean?
The only way any currency, fiat or crypto, is “backed” by any real-world commodity is if the currency is convertible into the commodity on demand, that is, the currency can be exchanged for the commodity at a transparent published conversion rate.

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Economy, Tax. Industry. Market. Wow. How do we win some more?

..tax cuts (subtitled the fallacies of “paper investments” vs. “real investments)

Suppose company 1 gets a tax cut, but it doesn’t know what to do with the money. On top of all the extra cash the company may already have, it doesn’t have good investment projects. It  sends the money to shareholders….Well, what do shareholders do with it?…
… They most likely roll the money in to other investments. Th

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Corporate tax cut. OK, and then what do they do with the money?

Investment in the whole economy has nothing to do with the financial decisions of individual companies. Investment will increase if the marginal, after-tax, return to investment increases. Lowering the corporate tax rate operates on that marginal incentive to new investments. It does not operate by “giving companies cash” which they may use, individually, to buy new forklifts, or to send to investors. Thinking about the cash, and not the marginal incentive, is a central mistake.

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At last some sense on climate change

A few years back perennial BS vendor Naomi Klein wrote a book called This Changes Everything. She argued, in typically economically illiterate fashion, that the threat of climate change requires us to reject mainstream economics and instead embrace the sort of socialist, planned economy that she has always supported. Klein and her ilk’s political opportunism may explain why so many on the right are sceptical…

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We should be careful glorifying Denmark

Last week, Denmark was mentioned in a American TV debate between Bernie Sanders and Ted Cruz. Instinctively, as a Dane, I always feel a sense of pride whenever Denmark is mentioned on the big stage. However, in this instance I would like to take a step back and look at the facts because Denmark is far from the utopia politicians and pundits often claim it…

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