What are the ten most popular economic myths?

Miscellaneous General
1
  1. War is good for the economy
  2. Minimum wage helps poor people
  3. The banks were deregulated before the crisis
  4. Inflation is required for a growing economy
  5. A free market leads to monopolies
  6. The economy is a big pie and therefore profits are evil
  7. ..

Any help?

The Economic Pet Peeves Thread
2

economics is a branch of mathematics

3

Myths about International Trade: http://video.google.com/videoplay?docid=-2981568283514474772#

4

Heh, I uploaded that to Google Video.

I would help if you could formulate exactly one though. I was thinking of making a cool video on it. “10 most popular economic myths” is rather catchy, you see.

5

Mercantilism is still pervasive… As is fiat currency and fractional reserve central banking…

6

It’s to complex for ordinary citizens to comprehend.

7

the government can create jobs

8

  1. Unions are good for the working class

  2. “My boss is my enemy.”

  3. “My boss is my friend.”

  4. “I don’t see why he’s complaining. He has lots of money and owns a company.”

9
  1. Economic prosperity is dependent upon consumer spending rather than capital accumulation
  2. Corporatism and laissez-faire are the same thing
  3. There exists absolute, quantifiable value in things
  4. The economy is a zero-sum game
  5. Government can create new resources out of thin air
  6. Private actors are motivated by greed; government actors are motivated by compassion
  7. Debt is useful to a nation’s economy
  8. Without government providing service X, service X would not exist
  9. Without bank bailouts, the economy would have collapsed
  10. Golden mean fallacy: a Keynesian economy is best because it will combine the advantages of a free and a totalitarian economy.
10

That there’s a causal connection between the aggregate demand of final goods and employment.

11

Without government regulation, products, working conditions, etc wouldn’t be safe.

12

From Econ. in One Lesson:

Tariffs Protect Industries.

The X Industry Must Be Saved (ie, General Motors Chrysler, etc. etc.).

Production for Use and Not for Profit (profit stands in the way of production). Similar to #6, but perhaps more precise.

Government Must Fix Prices to Keep Them Low (or High).

Wages Must be High Enough to Buy Back the Product.

Saving Causes Unemployment.

13

  1. Hoarding is economically detrimental.

  2. Consumption constitutes 70% of the economy

  3. The loans market (banks) is how most savings are channeled into investments

14

That’s the same one as:

“Economic prosperity is dependent upon consumer spending rather than capital accumulation”

And I agree, that’s one for the top 10.

Making A Comic About Economics
15

I think that one can be tied in with the ‘spending is good, savings/hoarding is bad’ one. Because when government spends (either via taxes or via inflation), people think of the new jobs as positives.

16

That’s the same as my #3.

17

How is this the same as #3? What does this have to do with deregulation?

18

People believe banks acted and act in a ‘free market’ environment. They think loans are based on savings and that this naturally collapses because of greed. This is why they blame the free market for the banking crisis and not the government cartel that it really is.

19

This is not what I was talking about.

The loans market is not the primary method by which capital is channeled into the various lines of production.

20

“4. Inflation is required for a growing economy”

i dont know if myth is the proper word. perhaps inflation is necessary for a growing economy.

if there was barter, apparently people turned to money to increase trade…i suppose this increase in trade grew economies.

at what point inflation harms an economy i dont know.