Thursday, August 13, 2009

Vodoo Economics

Over at Organizations and Markets, economist Peter Klein reminds us of the subject of the boring lecture in the late, great John Hughes classic, Ferris Bueller's Day Off.

Reading the script is almost as funny as hearing Ben Stein act it out.

"In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics."

Ferris Bueller's Day Off came out in 1986. Do you think it did to the economics profession what Sideways did for merlot?

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