Free to Choose

Prices transmit info, provide an incentive to adopt cheap methods of

production, determine who gets how much of the product due to the
distribution of income
Government must protect individuals from coercion, ability to serve justice
(aka use the government judicial system), preserve and strengthen free
society by constructing certain public areas, protect members of the
community who arent responsible individuals

A Random Walk down Wall Street

4 determinants to estimate the proper value for a stock

o Expected growth rate
o Expected dividend payout
Pay a higher price for a share if a larger portion of the earning
are paid out in cash dividends
o Degree of risk
o Level of market interest rates
Pay higher if interest rates are lower

Dwindling Deficit Disorder

Debt needs to grow slower than the economy

After the Music Stopped

Factors that created the great recession

o Inflated asset prices (houses)
o Heavy borrowing
o Little financial regulation
o Bad banking with mortgages
o Unregulated securities on mortgages
o Bad performance of statistical rating agencies
o Weird compensation that encouraged bankruptcy