If you’ve ever wanted to learn about economics by listening to rap, then you are in luck. You can now listen to “Demand, Supply” by Rhythm, Rhyme, Results: a very catch rap about a very interesting subject. On an awesomeness scale from one to ten, this is clearly an eleven.

From: Greg Mankiw’s Blog.

One of my former professors sounds off on the new economic stimulus package:

Such stimulus, however, is futile. Government cannot create genuine spending power; the most it can do is to transfer it from Smith to Jones. If the Treasury sends a stimulus check to Jones, the money comes from taxes, from borrowing, or is newly created.

If it comes from taxes, the value of Jones’s stimulus check is offset by the greater taxes paid by Smith, who will then have fewer dollars to spend or invest. If Uncle Sam borrows to pay for the stimulus checks, this borrowing takes money out of the private sector. Any dollars borrowed – whether from foreigners or fellow Americans – for purposes of stimulus would have been spent or invested in other ways were they not loaned to the government.

It makes sense.  If $300 appears in the hands of every person in the United States, it’s not as if we now have more purchasing power as a whole.  The total stock of dollars in circulation can always buy the same amount of goods, no matter how many dollars are in circulation…

When I was in undergrad studying economics, we talked about “Rational Ignorance.” The idea is that acquiring information is costly because it takes time that one could spend doing something else. For instance, instead of reading the newspaper, I could watch a movie.

The concept of rational ignorance explains the reason why many people are poorly informed about the news. Many people simply have other tasks that they find more valuable than reading the newspaper, and if those activities fill up 24 hours in a day, the newspaper will not be read.

Rational ignorance is such an interesting concept to me because I have always considered it to be a “good American citizen” thing to do to be very informed about the political process to make an informed vote in an upcoming election and participate in general political discourse. However, when I’m busy, I don’t read the newspaper. Over the past few months, I’ve been busy, and I really have not kept up with primaries and debates. At first, I felt bad about it, but the more that I think about it, the less bad I feel.

Full Disclosure: This is not an advertisement, although the link to the Amazon Kindle is an affiliate link to Amazon.  I am actually going somewhere with this article beyond the Amazon Kindle. 

The Amazon Kindle is not getting the kind of hype it deserves.  Why?  Because although the Kindle is far from a perfect product - it’s not close yet - it is going to shine some much-needed light on E-Book readers.  This could potentially lead to the end - or at least the near death - of the majority of print media.

The Kindle is an E-Book reader.  It’s about the size of a book, it has a small keyboard, a cellular internet connection, and most importantly an “E-Ink” screen that displays books.  The battery can last for more than a week without recharging.  The Kindle’s main purpose is to read books.  If you want to buy a book, you can use the Kindle’s built-in online store to purchase books wirelessly, using its free cellular internet connection.  Additionally, you can subscribe to NEWSPAPERS/blogs/other publications on the Kindle, so that every morning when you wake up, today’s paper is ready for you to read.

Many Americans who support the use of alternative energy in the United States believe that subsidizing the cost of producing alternative energy will lead to more alternative energy use.  That may be true in the short run, but in the long run, it might not be the case.  Instead, the subsidies on dirty fossil fuels should be eliminated.

Subsidizing alternative energy use, in the short run, will of course lead to increased use of alternative energy.  If it is more profitable for firms to enter the industry, more firms will enter.  Because subsidizing, all else equal, leads to increased profits for a firm, subsidization of alternative energy will lead to more firms entering the energy sector.  Because more alternative energy firms enter the energy sector, competition will cause prices for alternative energy to drop, so consumers will consume more alternative energy.  The caveat here is that perhaps a subsidy is needed to get a particular industry off the ground.  Well, hasn’t that happened already?  Solar, wind, hydro, and nuclear power are all supposed to be somewhat competitive cost-wise with coal and oil when you net away the subsidization of coal and oil.