The Vaccine Debate and Dr. Sears

I prefer to concentrate on economic matters. Unfortunately, I spent the past month reading a great deal about vaccines because my son Justin is about to start his vaccine schedule and I want to do what is best for him. The hospital where he was born wanted to give him a Hepatitis B shot the day after he was born. I did some quick research and declined. Eventually I came across a good book - Dr. Robert W. Sears' The Vaccine Book. I wanted to share some of what I think are the most important points I learned while reading this book.

What is at stake? Currently, 1 in 88 children in America are diagnosed with autism. 1 in 52 boys are diagnosed with autism. In addition to autism there is ADD, learning disorders, neurological problems, allergic disorders, asthema, and autoimmune diseases. These have all increased substantially in the U.S. in the past 30 years.

The most important point is:

"Perhaps the single most important factor that creates uncertainty in the minds of concerned parents is that the right type of research has not yet been done. I'm talking about prospective, randomized, placebo-controlled, double-blind, large-scale research on vaccination and autism as a whole (not just on the MMR and mercury)..." (page 226)

Why Liberals Should Not Vote For Obama

Obama's term as president could be accurately described as Bush's 3rd term. There have been no significant changes from the Bush administration in economic or foreign policy.

Obama has criticized Bush for invading Iraq which was not involved in 9/11. Yet Obama has no problem waging war in Libya. He also seems to be starting a war in Syria. Bush claimed that the war in Iraq helped free the people from an oppressor, and Obama makes the same excuse for his wars. Also similar to Bush - Obama did not get a formal declaration of war from Congress.

Obama signed the NDAA allowing indefinite military detention.

Obama, like Bush, continues to support oppressive dictatorships around the world including Egypt and Saudi Arabia.

Obama continued the patriot act and continued Bush's war on the rights of American citizens.

Obama has assassinated American citizens abroad without a trial.

Karl Marx and the Labor Theory of Value

In the early to mid-19th century, it was popular to believe that there are objective answers to great questions. This idea was destroyed by the idea of subjectivity in field after field. Albert Einstein introduced the idea of relatively even to Physics - the laws of Physics actually change depending on where you are in the Universe. In Economics, Adam Smith developed the Labor Theory of Value - the idea that what gives something value is the amount of labor that is put into creating that object. Karl Marx took this idea from Adam Smith and stated that since labor produces all value, owners of capital (such as factory owners) do not provide any service to economic production. The owners of capital (capitalists) steal the wealth from the true creators of value - the workers.

The Austrian economist Eugen Böhm von Bawerk made the point that if labor determines value, then businesses that are more labor intensive should produce greater profits. What we find empirically however, is that profit is equal among all industries given the risk. This makes sense because capital will flow from less profitable enterprises to more profitable until the returns are equal. This critique was actually presented during Marx's time, and Marx was unable to solve the problem.

Why I Like to Invest in Gold

Investing in gold is controversial. The reason I prefer gold as an investment is that it is a reliable counter against inflation. Many argue that inflation is not a problem, especially during a recession, but I believe inflation can still be a problem during economic downturns. A second counter is that the federal reserve will not inflate. I believe that the FED will inflate. A third counter is that gold is not a good inflation hedge. While there are times in the recent past when gold did not perform well, I believe times have currently changed for the better for gold (and for the worse for our economy).

The first objection is that inflation is not a problem during a recession. The argument is that during an economic downturn, aggregate demand falls which puts downward pressure on prices. Empirical evidence points to falling prices during the Great Depression. To a certain extent I agree with this analysis. I believe that the overall level of prices is determined by the supply and demand for money. Let's assume that the supply of money is fixed. During a recession, private consumption falls and private savings increases. Part of the increase in savings constitutes physical money and thus during a recession the demand for money increases. An increase in the demand for money increases the value (or the price) of money which means that the price of everything else falls relative to money. Thus, I would agree that prices fall during a recession, assuming that the supply of money is constant.

The important premise is that the supply of money is constant. I do not believe that the government will stand idly by and keep the money supply constant while the economy falls into recession. Milton Friedman wrote that the Great Depression was caused because the FED allowed the money supply to fall, which reduced prices and the reduction in prices caused the economic downturn (I'll write another blog about this idea later). Thus, mainstream economists believe that expanding the money supply to offset the fall in prices helps an economy out of an economic downturn. The newly printed money can be used to buy things which stimulates aggregate demand. The increase in money supply can cause prices to stop falling, and if enough money is printed, to rise. The rise in prices is expected to help the economy by reducing the demand for money which will increase the demand for goods and services. Also, there is a belief among economists that a weak currency helps economic growth by stimulating exports and reducing imports. In my other blog (economyandpolicyreport.blogspot.com) I have written against this idea, but it is generally held.