economics

Importantly, these barriers often strengthen over time, as high returns on capital throw off abundant free cash flow which is in turn reinvested in the business.

The Age of Alloy Steel

The early 20th century, Konkel argues, was a world built with steel, almost all of which was produced in one of three locations: the UK, the Upper Midwest, or Central Europe. These regions were the locomotives that drove industrialization; they were also sources of the era’s strongest militaries. Given the need for steel to

We cannot distribute more wealth than is created. We cannot in the long run pay labor as a whole more than it produces.

Baumol’s cost disease to include any sector of the economy where demand is inelastic (goods and services that most consider “essential), and supply/productivity is naturally and/or artificially restricted. With this expanded definition, four sectors of the economy stand out as afflicted by cost disease: healthcare, higher education, housing, and

“They need to like you.”

characterize two types of recessions.

-The first type of recession leaves most people relatively unaffected, but is really bad for the much smaller subset that lose their jobs. This is a classic disinflationary developed market recession.

-The second type of recession spreads the pain a bit more broadly. Perhaps a third or half of people are

The U.S. wasn’t alone in having lots of steel but comparatively few alloying materials. “The four leading steelmaking countries in the world,” Konkel writes, “the United States, Great Britain, Germany, and France—accounted for 90 percent of the world’s steel production, but perhaps only 1 to 2 percent of the world’s manganese.” Most of the world’s

The primary cause of this was Lyndon Johnson’s administration embarking upon serious fiscal stimulus from 1965. Persistently large budget deficits that funded ambitious social programs including the ‘Great Society’ initiative which was to reduce poverty to zero, and equalise home ownership across races. This period also brought the Food Stamp

In April, we returned to the theme in a piece titled “Generational Arbitrage.” As the name implies, a historic price disparity had broken out between the two fuels in North America. This was driven by global oil prices being held artificially high by the Organization of the Petroleum Exporting Countries (OPEC) and the fact that marginal oil