Welcome to another installment of Swamponomics: Liberty Nation’s dive into the week’s morass of top news stories and the stream of economic fallacies that have been accepted as conventional wisdom by swamp creatures for years.
Show Us Your Marx
Quite possibly the greatest living economist, Thomas Sowell, set the modern-day post-secondary education system on fire when he said: “Too much of what is called ‘education’ is little more than an expensive isolation from reality.” The results of a new survey suggest that Sowell was quite right.
According to a College Pulse poll of more than 10,000 undergraduates, 39% have a favorable view of socialism, 39% have an unfavorable opinion of the failed economic system, and 18% were unsure. While even 1% support for socialism is too much, the really interesting part of this study is the divide in majors.
The survey revealed that students studying philosophy were far more likely to be ebullient over socialism than a pupil dealing with numbers, statistics, and facts. Researchers found that 78% of philosophy majors endorsed socialism, followed by anthropology (64%), English (58%), and international relations (58%). On the other side, finance majors were the least likely to be enthusiastic over the failed ideology, with 63% holding an unfavorable view. This is followed by economics (61%) and accounting (60%).
The report quoted an Appalachian State student who said that “capitalism is a failure of a system” and that it only benefits the rich. The young adult added that students who are defending capitalism are dying on a hill for “a system designed to keep them poor and exhausted.”
Philosophy is an important, interesting, and intense subject that stimulates the little gray cells. That said, it can be difficult to be a successful contributor to society with this degree. Let’s be honest: There are not too many middle-class jobs that request philosophy degrees as a chief qualification. Indeed, you are not going to pontificate on man’s existential crisis in the age of deconstruction or if #IceBae is the most beautiful civil servant in recorded history while trying to repair someone’s toilet or attempting to fulfill shipments for three orders of Paul Krugman’s The Return of Depression Economics.
But when you can get $100,000 from the federal government to study Immanuel Kant and smoke pot with your professor, then why would you pass up on the opportunity?
Paul Samuelson is considered one of the greatest economists of the 20th century. He has influenced some of today’s most famous lackeys for the globalist elite, including Joseph Stiglitz, Paul Krugman, and Stanley Fischer. Samuelson rose to the top of the profession with his seminal introductory textbook, titled Economics. First published in 1948, there have been 19 different editions, but the most fascinating one came out in 1961.
Jeff Deist, president of the Mises Institute, posted an image of the textbook after author Thomas DiLorenzo reminded everyone “how Paul Samuelson’s rotten textbook predicted the Soviet economy would outpace the US by 2000 or so.”
It is true. Samuelson had forecast that the Soviet gross national product (GNP) would surpass America’s by as early as 1984 and as late as 1997. Well, we all know what happened. What made it worse for Samuelson is that he used the same calculations and analysis repeatedly throughout the 1980s. Then, in the years following the Soviet Union’s collapse, he never adequately acknowledged his failures, choosing to mimic a meteorologist and just say whoops.
The thing that most everyone believes about economics is that it is a divine subject, a living crystal ball that can look into the future. The reality of economics is different. Legendary writer Henry Hazlitt explained it best:
“The economic future, like the political future, will be determined by future human behavior and decisions. That is why it is uncertain. And in spite of the enormous and constantly growing literature on business cycles, business forecasting will never, any more than opinion polls, become an exact science.”
Most economists, at least from the Austrian persuasion, do not see themselves as fortune-tellers. It is the central planners who believe they are an apotheosis, hence the constant and arrogant intervention into the marketplace with asinine production quotas, price controls, and other central planning efforts that have done more harm to the world than the Counterfeit News Network. So, no, just because you’re an economist, it doesn’t mean you’ll make a billion dollars on the stock market.
We All Flow Down Here
One thing that protectionists often complain about is when capital exits the US and gets planted in a foreign market. But what is often ignored is the amount of money that flows into the US from these same foreign countries. It is a two-way street and part of global economic trends.
The Treasury Department released the latest US Net Treasury International Capital Flows data for May. The figures suggest that the rest of the world has been bullish on the US economy as overseas investors purchased $33 billion in American assets, beating market forecasts of $13.1 billion.
Despite who is running the federal government and the perpetual chaos in the nation’s capital, the outside money keeps entering the world’s largest economy. Interestingly enough, for all the talk that Trump is supposedly isolating the US from the international community, net capital flows have reached some of their highest levels on record.
And this is even with a trade war lingering in the background. Is this because of Trump? Yes and no. Yes, because he has pushed other companies to invest billions into the US economy. No, because on a longer outlook, foreign investors have been steadily boosting their purchases of US assets since the late-1990s.
That said, this is a great notch in the belt of the administration.