Steve Forbes Endorses My Gross Output Statistic

“Mark Skousen’s Gross Output statistic…will have a profound and manifestly positive impact on economic policy and politics.”  — Steve Forbes, Forbes magazine, April 14, 2014

The Bureau of Economic Analysis will start releasing Gross Output (GO) along with GDP every quarter starting on Friday, April 25.  I consider it a triumph in supply side “Austrian” economics.

I think Steve Forbes captures the importance of this new national statistic in his column in the April 14 edition of Forbes.

Most of the textbook writers are going to include GO in their next edition.  Sean Flynn, now the primary writer of the McConnell/Bruce textbook, is going to highlight it.

Here’s Steve’s commentary — New, Revolutionary Way To Measure The Economy Is Coming — Believe Me, This Is A Big Deal: by Steve Forbes  http://www.forbes.com/sites/steveforbes/2014/03/26/this-may-save-the-economoy-from-keynesians-and-spend-happy-pols/

Here’s my original article in Forbes — Beyond GDP Get Ready for a New Way to Measure the Economy: by Mark Skousen  http://www.forbes.com/sites/realspin/2013/11/29/beyond-gdp-get-ready-for-a-new-way-to-measure-the-economy/

Here’s my op ed in the Wednesday, April 23 edition of the Wall Street JournalAt Last, A Better Economic Measure: by Mark Skousen http://online.wsj.com/article/SB10001424052702303532704579483870616640230.html

 

Chapman Students Are Surprised by the Answer to My Environmental Question

In January, my wife and I had the opportunity to teach at Chapman University, where I am a Presidential Fellow for 2014.  She taught a class in poetry, and I taught “Modern Political Economy:  Who is Winning the Battle of Ideas?”  I used my textbook, “The Making of Modern Economics,” now in its 2nd edition.

One of today’s controversies is about pollution and the environment.  We talked about a recent address by U. S. Secretary of State John Kerry, who warned students in Indonesia that “global warming” is “the greatest challenge of our generation,” more than disease outbreaks, poverty, terrorism and the proliferation of weapons of mass destruction.

Then he demonized anyone who disagrees with him, calling critics of global warming “shoddy scientists and extreme ideologues.” You could say the same about Al Gore.  Kerry added, “We should not allow a tiny minority of shoddy scientists and science and extreme ideologues to compete with scientific fact.”

Kerry is typical of the hysteria surrounding the issue of ecology and the environment. Students are being brainwashed into thinking the problem is getting worse and worse. Kerry and the extreme environmentalists blame any weather disaster, the cold snow in the Northeast or the drought in the West, to global warming.  You can’t argue with these fanatics.

I asked my students at Chapman University, “Has pollution declined or risen in the past 50 years in LA county?”  Over half thought pollution was worse.  The cold, hard fact is that pollution has been reduced sharply in LA county even as gasoline use has risen.  See this chart:

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&docid=pYBObTbuYbS9tM&tbnid=xwtv0ahLCtELQM:&ved=0CAUQjRw&url=http://www.noaanews.noaa.gov/stories2012/20120809_laairqualitystudy.html&ei=ht4EU5jyEKbb2QXRm4CoCg&bvm=bv.61535280,d.aWc&psig=AFQjCNGsuMz1HbLz7IT1IMCVqhIlch9HSA&ust=1392914426522327

The fact is that the average world temperature has been flat or declining for 17 straight years.  If you want to know the facts about global warming and pollution, read this column by Larry Bell in Forbes.com:  http://www.forbes.com/sites/larrybell/2013/08/21/the-new-york-times-global-warming-hysteria-ignores-17-years-of-flat-global-temperatures/

During the class, a journalist visited my class and gave this nice write up:  http://blogs.chapman.edu/happenings/2014/01/28/class-act-economics-comes-to-life-with-mark-skousen-teaching/

I will be returning to Chapman University on Wednesday, April 16, to give a public lecture as part of my Presidential Fellowship.

Students (each holding an American eagle silver dollar) join me in front of the Adam Smith statue at Chapman University.

A Personal Triumph 25 Years in the Making with Launch of New Macro Statistic

For the first time since World War II, the Federal government (Bureau of Economic Analysis) will begin publishing a new macro statistic Gross Output [GO] starting in spring 2014 at the same time it releases its quarterly GDP data.

Forbes.com article has just published my article on this new statistic “Beyond GDP“: http://www.forbes.com/sites/realspin/2013/11/29/beyond-gdp-get-ready-for-a-new-way-to-measure-the-economy/

A shortened version will appear in the Dec. 16 issue of Forbes magazine (circulation over 1 million).

I’ve been advocating this new national statistic since writing The Structure of Production (NYU Press) in 1990. Now it’s finally happening. Steve Forbes calls it a “real breakthrough.”

Steve Moore of the Wall Street Journal and Gene Epstein of Barron’s are looking into writing articles on GO.  So is The Economist.

Bill Nordhaus, professor at Yale University, writes, “Congratulations on the article and the work.  It has been a long slog to get the national accounts to introduce innovative measures, and Steve Landefeld [Director, BEA] has been a superstar in this respect…This will open up the potential for new insights into the behavior of the economy.”

GO goes a long way in providing the right balance in the production-consumption process that is missing in GDP data. As BEA Director Steve Landefeld and co-editors Dale Jorgenson and Bill Nordhaus state: “Gross output [GO] is the natural measure of the production sector, while net output [GDP] is appropriate as a measure of welfare. Both are required in a complete system of accounts.”

I think you’ll find the chart comparing GO and GDP of interest, how GO is consistently more volatile than GDP, and a better measure of the business cycle. (Click on the chart below to go directly to the article)

I’m excited — this is a personal triumph nearly 25 years in the making.

Most of the economics textbook writers are planning to include a section on GO in their next editions (McConnell, Parkin, Gwartney, Hubbard), and economic analysts are now starting to look at it.  In an email, Roger Leroy Miller, professor at University of Texas at Arlington, says that he has added a section on Gross Output for his 18th edition of Economics Today.  It is already part of my own Economic Logic textbook.

I hope you’ll check out the Forbes article, as well as Economic Logic and The Structure of Production for a more in-depth look at this important development.

JFK Assassination: I Remember the Day

What were you doing 50 years ago on the day President Kennedy was assassinated?

I remember it well. I was a junior at Sunset High School in Portland, Oregon, and was sitting with my girl friend Mary Craner in the library when the monitor came on with Walter Cronkite announcing that the President had been shot in Dallas Texas and then later announcing with emotion, “President Kennedy died at 1 pm today.” Many students were in tears during the day (Friday), and even though I was a conservative Republican, I felt bad for the Kennedys and the country.

I was a Goldwater conservative at the time, and involved in the anti-communist movement along with my father Roy Skousen and his brother Cleon.

Today I see many conservatives are trying to make the case that JFK was a conservative, and there’s a book out now of that title (“JFK, Conservative”). I think they are trying to rewrite history. Everyone I knew back then thought that Kennedy was a social Democrat who was a big-spender and wanted more government involvement in the economy. We were opposed to his election. However, almost everyone I knew were saddened by the death of the President.

Looking back now, I see the JFK assassination as a tremendous tragedy. His successor, Lyndon Johnson, took advantage of the sympathy everyone felt about JFK’s death and pushed through “The Great Society” programs such as Medicare, Medicaid, food stamps, expanded Social Security (“The War on Poverty”), which has created a lot of the social problems, unfunded liabilities, and out of control spending that we face today.

LBJ also got us involved in the Vietnam War, although the evidence is pretty clear that JFK supported the war against Communist aggression.

The one good thing that came out at this time was the civil rights legislation, although all my conservative friends and most of the Republican leadership opposed it at the time. I think this was the Republican’s biggest error. Many Republicans such as Warren Buffett switched to the Democrats after Goldwater and other Republican leaders led their watershed opposition to equal rights for blacks. I have read since then that the more rank-and-file Republicans in Congress voted for the Civil Rights Act of 1965 than the Democrats. But the leaders were opposed.

In liberty, AEIOU,

Mark

Mark Skousen
Producer, FreedomFest
www.freedomfest.com
July 9-12, 2014, Las Vegas
Theme: “Is Big Brother Here?”
http://vimeo.com/70558676

Has Government Adopted My New Macro Model?

“How can I possibly put a new idea into your heads, if I do not first remove your delusions?” – Robert Heinlein

For several years now, I have been advocated the need for adding a new national aggregate statistic called Gross Domestic Expenditures (GDE) that measures total spending at all stages of production and not just the final stage (GDP).

I believe that GDE fills in a major piece of the macroeconomic puzzle.  It establishes the proper balance between production and consumption, between the “make” and the “use” economy, and one that is consistent with growth theory.

Most importantly, GDE and my 4-stage model of the economy are compatible with standard national income accounting and neo-classical macroeconomic analysis. You don’t have to rewrite the textbooks, just add it into the chapters.

Now for the good news.  I recently received a letter from Steven Landefeld, the director of the Bureau of Economic Analysis (BEA), the official government agency that releases GDP data every quarter.  He wrote me that starting next year, the BEA will begin publishing an expanded aggregate statistic that is similar to my own GDE, every quarter along with GDP. [Read more…]

Last Chance to “Crash the Party!”

Come “Crash the Party,” Saturday, Oct. 19, Westin LAX: Martin Truax, a long-time friend and senior vice president at Raymond James, is organizing a one-day “Crash the Party” seminar on Saturday, October 19, 2013, at the Westin Los Angeles Airport Hotel in recognition of the 1987 crash and my birthday. This is an ideal location, as travelers can simply fly into LAX and take the Westin shuttle to the hotel (only $109 a night). In addition to Martin Truax and me, speakers include Wellington Letter editor Bert Dohmen, Washington insider Floyd Brown, money manager Adrian Day, #1 real estate guru Jack Reed, coin expert Van Simmons and Everbank President Frank Trotter. We’ve also just confirmed Jeff Phillips, venture capitalist and investment banker extraordinaire, who has made many of us (including me) extremely wealthy with his cheap stock picks. He’s going to give us two recommendations at our one-day seminar. The price is only $99 per person, with $50 for additional guests, for this event. Come crash the party! Find details at www.lainvestmentconference.org. To register, call Steve at 678/333-5361, or email lainvestconference@att.net.

Record 2,500 Gather at “Best FreedomFest Ever”

By Mark Skousen

“FreedomFest was a gigantic conference.  It drew many academics, journalists, activists of all ages, vendors, investors, and a huge variety of professionals in all fields. And of course, Laissez Faire Books was there in full force. The level of fun was totally over the top. But the content of every session I attended was just spectacular.” – Jeffrey Tucker, president, Laissez Faire Books

Everyone seems to agree:  Our 7th FreedomFest was the “best ever” according to the many emails I’ve received – from Alex Green, Floyd Brown, Susana Etcheverry, Bert Dohmen, Brian June, and Gene Epstein, economics editor at Barron’sDinesh D’Souza said that FreedomFest has rapidly become “the premier libertarian gathering.”

We broke all kinds of records this year – number of attendees, sales of books at our official bookstore (Laissez Faire Books), and CDs/MP3s.  Numerous sessions, panels and debates at Planet Hollywood were standing room only.  And for the first time we had a major TV network, Fox Business at FreedomFest, along with C-SPAN.  (Plus a nice mention by Bill O’Reilly on Fox News in his interview with John Stossel.) [Read more…]

Head to Head: “Public Vs. Private Spending: How to Get the Economy Growing Again”

Today’s Orange County Register published a point-counterpoint debate between Mark Skousen and Robert Kuttner on “Public vs. Private Spending:  How to Get the Economy Growing Again.”  See the attached file, that includes an ad to this year’s FreedomFest. 

Public vs. Private Spending: How to Get the Economy Growing Again

 

Announcing My Latest Breakthrough Book – “A Viennese Waltz Down Wall Street”

I’m very proud to announce the publication of my latest book, “A Viennese Waltz Down Wall Street: Austrian Economics for Investors,” published by Laissez Faire Books. See the letter from LFB publisher Jeffery Tucker below, and check out all the details of the book here.

Dear Readers:

The central message of the Austrian school of economics, writes Mark Skousen in this new and wide-ranging book, is that economics is about human beings. That outlook has direct implications for financial markets and personal investing. And this is why the Austrian school has had a huge impact Wall Street.

A Viennese Waltz Down Wall Street, then, is a tutorial on both economics and investment that sheds new light on both fields.

Consider the opening metaphor of the dance. This is the image that Skousen uses to illustrate the direction of prices in financial markets. It is not random, but neither is it entirely scripted. There is a great deal of improvisation and uncertainty. But what makes it all work is that great institution of the mutual benefit of buying and selling. This is what makes markets dance.


Economics and investing are the two fields that Skousen has followed closely during his long career. This book weaves the two together to show how you can use good economics to anticipate market turns. But just as importantly, it shows how you can use investing knowledge to understand economics.

You can download the e-book here.

CONTENTS

  • What Is the Austrian School?
  • Carl Menger: Subjectivism and the Marginal Revolution
  • Eugen Böhm-Bawerk: Saving, Interest Rates, and the Theory of Capital
  • Friedrich von Wieser: The “Great Man” Theory
  • Ludwig von Mises: Human Action
  • Friedrich Hayek: The Austrian Theory of the Business Cycle
  • Schumpeter and Creative Destruction
  • Kirzner and the Discovery Process
  • Murray Rothbard and the “Hard-Money Movement”
  • The 2008 Financial Crisis: Austrian Response to the Chicago School of Milton Friedman
  • Murray Rothbard As Investment Advisor
  • What Every Investor Should Know About Austrian Economics and the Hard-Money Movement
  • The Economist As Investment Advisor
  • Keynes As a Speculator
  • Who Predicted the 1929 Crash?
  • Financial Economics
  • A Tale of Two Dollars
  • Austrian Economics: Newsletters, Books, and Services

We hope you enjoy this wonderful book, and thank you for being a member of the Laissez Faire Club!

Sincerely,

Jeffrey Tucker

George Gilder Wins Leonard E. Read Book Award

FreedomFest, “the world’s largest gathering of free minds,” is pleased to announce that George Gilder has won the Leonard E. Read Book Award for his new work Knowledge and Power (published by Regnery).  This annual award is granted to the “libertarian book of the year” which best advances the principles of liberty.

Knowledge and Power By: George Gilder

Knowledge and Power is a revolutionary work in the tradition of Hayek’s famous essay ‘The Use of Knowledge in Society’ and Thomas Sowell’s influential book Knowledge and Decisions,” states Mark Skousen, economist and producer of FreedomFest.  “Gilder makes the argument that decision-makers must reject the deterministic/mechanistic systems of human behavior and build their policies and economic models on the concepts of human creativity, free will and the unexpected.”  His entire book is built around his thesis that “the freer an economy is, the more this human diversity of knowledge will be manifested….Capitalism is not chiefly an incentive system but an information system.”

The Leonard E. Read Book Award will be presented to Mr. Gilder at this year’s FreedomFest, July 10-13, 2013, in Las Vegas.  The award also comes with a gift of a one-ounce American eagle gold coin, valued at approximately $1,500.  For more information on the annual conference, which attracts over 2,000 attendees each year, go to www.freedomfest.com.

About Leonard E. Read

The Read Book Award is named after Leonard E. Read, the founder of the Foundation for Economic Education (FEE), the first modern free-market think tank in the United States, and its monthly publication The Freeman.  Mr. Read (1898-1983) is the author of hundreds of essays, his most famous being “I, Pencil.”  He was a voracious reader and his FEE library contained thousands of books.  For more information on the Foundation for Economic Education, go to www.fee.org. (Note:  This award is not affiliated with FEE, and the selection of the Read Book Award is exclusively a decision by FreedomFest.)

About George Gilder

George Gilder is one of the original pillars of supply-side economics and author of several bestsellers, including Sexual Suicide, The Spirit of Enterprise, Microcosm, and the Israel Test.  His 1981 bestseller, Wealth and Poverty, had a major influence on the Reagan Administration in the 1980s.  He is editor of the Gilder Technology Report, and a senior fellow at Seattle’s Discovery Institute, where he directs Discovery’s program on high technology and democracy.  Gilder is a frequent writer for major business publications, including Forbes and the Wall Street Journal.