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Fear of Creative Destruction is not new, but why does it persist?

Creative destruction is a term coined by the economist Joseph Schumpeter to indicate that, while temporarily painful to those affected, technological innovation that causes job losses in certain sectors of industries ultimately creates wealth and prosperity for everyone (including those affected). Cars displaced horse carriage manufacturers… a significant advantage for everyone and the modern world, we can all agree. This doesn’t mean there are no horse carriage manufacturers, just a few niche ones left, which are actually profitable. There doesn’t need to be a thousand horse carriage manufacturers anymore… it just doesn’t make any economic sense. Who today can deny that

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The Implications of Dodd-Frank

This weeks EconTalk episode highlights some interesting facts about regulation and the current regulatory landscape. The excerpt below is by Lee Ohanian, professor of economics at UCLA and senior fellow at the Hoover Institution, and pertains to the Dodd-Frank legislation: “Now, some of the regulations we see today, in my view, are perhaps even more inefficient than ones we’ve seen in previous years. There’s Dodd-Frank in the financial sector, which is unique piece of legislation. It doesn’t provide rules directed at individual’s [or] organizations, which is the intent of the legislation. Rather it is a directive for bureaucrats to create

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The Limits of Categorization

There is no one specific way to categorize things. That is the underlying premise of this EconTalk podcast with David Weinberger. In the podcast, Russ Roberts (the host) and David Weinbeger discuss that, as humans, we tend to gravitate towards an intellectual box model of organization; we tend to try to place things into their respective “boxes”. We do this because we categorize things intellectually just as we would categorize things in the physical world. But, as Roberts points out, what happens if more than one thing can go in more than one box, or when one thing can go

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