Lansing Economist Makes Free Money Pursuing His Greatest Passion

Lionel Cretu from Lansing, Michigan, is an Economist and Free Money believer, who writes the problem is that the general population in Europe doesn’t participate in capital gains even though e.g. ETFs have made that really easy. He questions if all of the population would participate: Could this lower bond yields or inflate stock prices to dramatic levels? In other words: Could it be socially optimal that parts of the population stay away from capital gains?

Lionel writes the Marxist theory of the falling profit rate is perhaps the most stupid ones of all times. He further writes the econometric paper claims this as the evidence. He says he could easily plot a regression around this and look at the R*2 it would be so low and demonstrating statistical insignificance, many authors are already implicitly denying trend stationarity which adds to the irony of claiming this as scientific evidence.

Lionel once wrote about a major problem he faced. He imagined Bertrand competition but one firm had the lowest cost function, therefore becoming a natural monopoly. The other firms close, then the natural monopoly takes the monopoly price. Because of time lag, the natural monopoly can enjoy a temporary profit but the other firms enter again because they can offer at a lower price. Then the natural monopoly bids the lowest price again and becomes a natural monopoly again. The other firms lose money entering and leaving and because they are anticipating that they will get thrown out by the natural monopoly, the firm becomes a permanent monopoly but with the profit maximizing price. There are no entry barriers, so how can you prevent this structurally and make the natural monopoly stay at the lowest possible price?

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