What We're Reading

Jeffrey Dorfman's recent column in Forbes ("10 Essential Truths Liberals Need to Learn") is not a partisan attack on liberals. It is a clear-cut summary of some basic laws of economics that hold no matter what your political beliefs happen to be. Unfortunately, too many Republicans, Democrats, and bureaucrats are guilty of ignoring these laws. In my experience, it's also true that too many investors fail to understand these fundamental truths. I've only listed the laws here; for an explanation of each be sure to read the whole thing: (HT: Mark Perry)

1) Government cannot create wealth, jobs, or income.

2) Income inequality does not affect the economy.

3) Low wages are not corporate exploitation.

4) Environmental over-regulation is a regressive tax that falls hardest on the poor.

5) Education is not a public good.

6) High CEO pay is no worse than high pay to athletes or movie stars. 

7) Consumer spending is not what drives the economy.

8) When government provides things for free, they

After a recent trip to one of our local Goodwill Stores(btw great place to find investment type books, especially after the market is going through, or just coming out of a bear market), I came away with a copy of "A Journey Through Economic Time, A Firsthand View" by John Kenneth Galbraith. I was truly excited to find and purchase a book by Galbraith, the late renowned and respected economist. Furthermore I was excited that it appeared to be an economic history of the twentieth century with some commentary in a format that was easy to understand.

The book starts with the early part of the twentieth century. Galbraith discusses World War I and the aftermath. He discusses the rise of John Meynard Keynes as an economist and the unintended consequences of German war reparations. Galbraith laments the fact that economic decisions are often made by the stupid or uninformed politicians. Galbraith continues by citing causes for the Great Depression and The Crash. He also discusses the effects