Mark Skousen, Author at MSKOUSEN.COM

Missing Link in Economics Revealed!

September 15, 2014 By Mark Skousen Leave a Comment

by Mark Skousen
Presidential Fellow, Chapman University

For centuries economists have been searching for the missing link that would tie microeconomics (theory of the firm and individual behavior) with macroeconomics (theory of the economy as a whole).

I believe my four-stage model of the economy does just that. Based on Austrian macroeconomics (known as Hayek’s triangles), I created a four-stage model of the macro economy in my book, The Structure of Production (NYU Press, 1990). A few years later, John Taylor of Stanford University (famous for his Taylor Rule) independently produced a 4-stage micro model involving four stages in the production of Caribou Coffee.

A eureka moment!

I’ve incorporated both 4-stage micro and macro models in my textbook, Economic Logic (Capital Press, 2014), now in its 4th edition. See especially chapter 14: <http://www.amazon.com/Economic-Logic-Fourth-Edition-Skousen/dp/1621572226 It’s available in book print and Kindle. If you want to buy it at a discount for only $34.95 plus S&H, call Eagle Publishing at 1-800-211-7661, and use code ECONL6.

SKOUSEN – TAYLOR LINK MACRO WITH MICRO

Figure 1. Universal 4-stage Macro Model of the Economy

Source: Mark Skousen, The Structure of Production (New York University Press, 1990); Economic Logic (Capital Press, 2014).

Figure 2. 4-stage micro model (production process of Caribou Coffee)

Source: John B. Taylor, Economics, 5^th edition (Boston: Houghton Mifflin, 2006)

U.S. Economy Doing Better Than Expected

August 1, 2014 By Mark Skousen Leave a Comment

U. S. ECONOMIC ACTIVITY HOLDS STEADY IN 1^ST QUARTER 2014

Washington, DC — Gross Output, a broader measure of U. S. economic activity published by the Bureau of Economic Analysis, held steady at $30,210.6 billion in the first quarter of 2014.

“The GO data demonstrates that the economy is not as bad off as GDP figures initially suggested,” stated Mark Skousen, editor of Forecasts & Strategies and a Presidential Fellow at Chapman University, who champions Gross Output as a more comprehensive measure of economic activity. He introduced Gross Output as a macroeconomic tool in his work The Structure of Production (New York University Press, 1990). Now the BEA publishes GO on a quarterly basis in its “GDP by Industry” data.

The GO data was released by the BEA on Friday, July 25, 2014: http://www.bea.gov/iTable/iTable.cfm?ReqID=51&step=1#reqid=51&step=51&isuri=1&5114=q&5102=15 [Read more…]

FreedomFest 2014 Report

July 31, 2014 By Mark Skousen Leave a Comment

Over 2,000 Look to Private Solutions at This Year’s “Greatest Libertarian Show on Earth”

By Mark Skousen
Producer, FreedomFest

“This was my seventh FreedomFest, and the best ever. It’s turned into an annual reunion with old friends and new who come from all over the country and the world. There’s nothing like it.” –Gene Epstein, Economics Editor, Barron’s

Over 2,000 wealthy investors, concerned citizens, and freedom organizations participated into this year’s big show at Planet Hollywood, Las Vegas. They were anxious to find solutions to their financial and economic challenges without government involvement.

The buzz was palpable from the beginning of the opening cocktail party to the gala Saturday night banquet. “It was a WOW experience. I heard that from many attendees,” wrote a reporter. “To see Steve Forbes and John Mackey there all four days, that was something,” said an attendee. [Read more…]

Open Letter to All Freedom Lovers

June 2, 2014 By Mark Skousen 2 Comments

From Mark Skousen, producer of FreedomFest

I woke up this morning thinking about “Why We Need to Get Together Once a Year.” Over the years, I’ve been impressed with the proliferation of free-market think tanks and freedom organizations which are doing their part to make a difference: publishing websites, special reports and books; holding meetings and conventions; influencing elected officials or using the court system to overturn bad legislation.

That’s where FreedomFest comes in. Our mission is simple: to bring together once a year all the freedom groups and provide a place to learn, network, socialize and celebrate liberty. And we do it in the nation’s most libertarian city, Las Vegas. We are a for-profit organization, so we don’t compete for fundraising with all these good causes. We try not to promote one organization over another. We support them all. In Hayekian terms, it’s a spontaneous order, with every think tank and freedom organization deciding for themselves what to talk about. FreedomFest is not “my” conference, it’s “our” conference.

The idea came to me when I was president of the Foundation for Economic Education (FEE), the country’s oldest free-market organization. Why not have an annual reunion, I thought, and bring together all the think tanks and freedom organizations from around the world, to talk about philosophy, history, science & technology, healthy living, music & dance, investments, and geo-politics? We would create an intellectual feast in a fun town, the entertainment capital of the world.

And then invite the general public, concerned citizens, business and political leaders, investors, and young people around the world to join us. I imagined them walking into an exhibit hall full of booths of think tanks, publishers, film producers, and freedom organizations, highlighting their latest efforts. I envisioned it as “one stop shopping for liberty.”

I was told, “It can’t be done. Libertarians are like a herd of cats.”

But the founders did it. At the end of the Constitutional Convention in 1789, Benjamin Franklin wrote, “It is a singular thing in the history of mankind that a great people have had the opportunity of forming a government for themselves. We are making experiment in politics. In these sentiments, I agree to this Constitution, with all its faults, if they are such. For when you assemble a number of men to have the advantage of their joint wisdom, you inevitably assemble with those men all their prejudices, their passions, their errors of opinion, their local interests, and their selfish views. It therefore astonishes me to find this system approaching so near to perfection as it does.”

Franklin also warned, “We must all hang together, or most assuredly we shall all hang separately.”

We all are doing our best to promote the principles of liberty and justice, but we must do more. We are losing the battle, slowly but surely. I’ve felt for some time that the enemies of liberty are better organized, and now more than ever, it is critical that all the movers and shakers in the freedom movement come together once a year if we are going to reverse the tide. There is strength in numbers.

Milton Friedman, before he died, wrote me a letter in which he caught the vision of this gathering: “FreedomFest is THE great place to talk, argue, listen, celebrate the triumphs of liberty, assess the dangers to liberty, and provide that eternal vigilance that is the price of liberty.” Steve Forbes and John Mackey are our co-ambassadors. They understand the importance of this “focal point” of liberty and set aside all four days in their busy schedule to attend. So do most of the other speakers. As Steve Forbes says, “FreedomFest is where the best ideas and strategies are fleshed out. I wouldn’t miss it.”

FreedomFest has been called many things: A Live Wikipedia for libertarians; a Renaissance gathering for free thinkers; the Trade Show for Liberty; the New Mecca for free minds; the Focal Point for freedom lovers; the Gathering of the Tribes; the Disneyland of the mind; the blow-out conference of libertarian gold bugs; the Libertarianism’s Church of What’s Happening Now; and the Greatest Libertarian Show on Earth. There’s something for everyone at FreedomFest.

And it’s catching on. We are growing every year. Practically all the major think tanks and freedom organizations have caught the vision of FreedomFest and are making their way to Vegas every second week in July. Fox News is now coming and taping the Stossel show; other radio and TV stations are doing their shows there. Thousands of concerned citizens, investors, authors, professors, students and experts are joining us from around the world. Some even change their schedule to attend; they sacrifice to be there.

What do we have planned for this year? Check us out. For a list of all the great speakers, panels and debates, go to http://freedomfest.com/blog/2014/04/25/whattoexpect/ And don’t miss our ever-popular Anthem libertarian film festival going on all four days at FreedomFest. This time it includes a sneak preview of the new film “Atlas Shrugged 3” hosted by John Stossel.

I know I’m a dreamer, but I’m not the only one. If not us, then who? If not now, then when?

Spread the word. John Galt is calling….

FreedomFest is only a few weeks away. Now is the time to join us in Las Vegas. Go to www.freedomfest.com to learn more and register. Or call Tami Holland, our conference coordinator, at 1-866-266-5101. It will change your life….and maybe even the world.

Yours for peace, prosperity and 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

Marx Madness is Back

May 28, 2014 By Mark Skousen 2 Comments

“Capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine democratic societies.” — Thomas Piketty, “Capital in the 21st Century” (2014)

The Economist magazine rightly called French professor Thomas Piketty the new Marx, although a watered down Marx. His bestseller (rated #1 on Amazon and the New York Times) is a thick volume with the same title as Karl Marx’s 1867 magnum opus, “Kapital.” The publisher, Harvard University Press, appropriately designed the book cover in red, the color of the socialist workers’ party.

Piketty cites Karl Marx more than any other economist, even more than Keynes. He barely mentions Adam Smith. Instead of the modern scientific name “economics,” he prefers the old term “political economy,” a favorite of radical professors. [Read more…]

Economist Makes Lead Story in the Wall Street Journal….Barron’s….and Forbes

April 28, 2014 By Mark Skousen 4 Comments

I made the lead story in the Wednesday, April 23, 2014, edition of the Wall Street Journal. The title: “At Last, a Better Economic Measure.” You can read it here: http://on.wsj.com/PsdoLM

The editors of the WSJ don’t allow the author to see or approve the headline or subhead, but they nailed it perfect. And I love the cartoon graphics! It’s a perfect rendition of my four stage model of the economy.

Many readers captured the essence of my message. As economic forecaster Jim Hagerbaumer of Florida wrote: “Skousen is introducing a whole new species. This is one of the most important WSJ op-ed articles in years.”

I also wrote about Gross Output (GO) in the December 16, 2013, issue of Forbes. Here’s the online version, with charts and response to critics:

My original article in Forbes Magazine (December 16, 2013):

Mark Skousen, Beyond GDP: Get Ready For A New Way To Measure The Economy, Forbes

http://www.forbes.com/sites/realspin/2013/11/29/beyond-gdp-get-ready-for-a-new-way-to-measure-the-economy/

Additional Commentary by Steve Forbes:
Steve Forbes, New, Revolutionary Way To Measure The Economy Is Coming — Believe Me, This Is A Big Deal, Forbes

http://www.forbes.com/sites/steveforbes/2014/03/26/this-may-save-the-economoy-from-keynesians-and-spend-happy-pols/

Gross Output Includes B-to-B….GDP doesn’t [Read more…]

Steve Forbes Endorses My Gross Output Statistic

April 23, 2014 By Mark Skousen 3 Comments

“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 Journal — At 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

February 25, 2014 By Mark Skousen 1 Comment

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:

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

December 2, 2013 By Mark Skousen 2 Comments

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 18^th 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

November 22, 2013 By Mark Skousen Leave a Comment

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