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Mark Perry

Mark Perry

Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

Articles by Mark Perry

Sunday afternoon links

1 day ago

AEI
Sunday afternoon links

1. Venn Diagram of the Day (above). Inspired by the March 6, 2013 article Salon article titled “Hugo Chavez’s economic miracle” (by David Sirota), here’s a slice:
Chavez became the bugaboo of American politics because his full-throated advocacy of socialism and redistributionism at once represented a fundamental critique of neoliberal economics, and also delivered some indisputably positive results.
As I wrote more than 20 years ago:
In the same way that a Ponzi scheme or chain letter initially succeeds but eventually collapses, socialism may show early signs of success. But any accomplishments quickly fade as the fundamental deficiencies of central planning emerge. It is the initial illusion of success that gives government intervention its pernicious,

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The 25-year reign of CDs is over as low-cost digital music takes over and makes us all ‘music millionaires’

2 days ago

AEI
The 25-year reign of CDs is over as low-cost digital music takes over and makes us all ‘music millionaires’

The Recording Industry Association of America (RIAA) recently released recorded music sales revenue figures for 2016 and some of the historical music sales data from the RIAA are displayed in the two charts above (press release here). Here are some observations:
1. After declining in 15 of the 16 years from 2000 to 2015 (and each of the 11 years from 2005 to 2015), recorded music sales revenues increased last year by 10% to a five-year high of $7.57 billion. It was the largest annual increase in recorded music sales in more than 20 years, going back to a 19% increase in 1994 (in inflation-adjusted dollars). Reason for the turnaround in recorded music sales last year? A more

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Quotation of the day for Earth Day 2017 on the ‘science of economics versus the religion of environmentalism’ …

3 days ago

AEI
Quotation of the day for Earth Day 2017 on the ‘science of economics versus the religion of environmentalism’ …
… is from Steven E. Landsburg’s book “The Armchair Economist: Economics and Everyday Life,” in his chapter titled “Why I Am Not an Environmentalist: The Science of Economics versus the Religion of Ecology“:
The hallmark of science is a commitment to follow arguments to their logical conclusions; the hallmark of certain kinds of religion is a slick appeal to logic followed by a hasty retreat if it points in an unexpected direction. Environmentalists can quote reams of statistics on the importance of trees and then jump to the conclusion that recycling paper is a good idea. But the opposite conclusion makes equal sense. I am sure that if we found a way to recycle beef, the

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Recommended reading for Earth Day 2017: ‘Recycling is garbage’ from the NYT in 1996 – it broke hate mail record

3 days ago

AEI
Recommended reading for Earth Day 2017: ‘Recycling is garbage’ from the NYT in 1996 – it broke hate mail record
Tomorrow is Earth Day and to recognize that annual environmental holy day, I recommend reading the classic 1996 New York Times Magazine article titled “Recycling is Garbage” by New York Times science columnist John Tierney, especially if you’re one of the millions of Americans who suffer from “garbage guilt” — one of the religious components of recycling according to Tierney.
Tierney’s controversial argument that he made back in 1996 is this: recycling may be the most wasteful activity in modern America, especially if we value of the opportunity cost of everybody’s time at the $15 an hour that everybody now wants to be the minimum hourly wage an unskilled worker can be paid.

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On Earth Day 2017, let’s appreciate our fossil fuel energy treasures that come from the Earth’s natural environment

4 days ago

AEI
On Earth Day 2017, let’s appreciate our fossil fuel energy treasures that come from the Earth’s natural environment

Below is an updated, slightly revised version of my op-ed around the time of Earth Day 2014 in Investor’s Business Daily (“Earth Day: Hail Fossil Fuels, Energy Of The Future,” requires subscription):
On Earth Day, according to various advocates, “events are held worldwide to increase awareness and appreciation of the Earth’s natural environment.” As we observe the annual event on Saturday of this week, it might be a good time to appreciate the fact that Americans get most of their plentiful, affordable energy directly from the Earth’s “natural environment” in the form of fossil fuels: coal, natural gas, and petroleum.
It’s largely those natural energy sources that fuel

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18 spectacularly wrong predictions made around the time of first Earth Day in 1970, expect more this year

4 days ago

AEI
18 spectacularly wrong predictions made around the time of first Earth Day in 1970, expect more this year

In the May 2000 issue of Reason Magazine, award-winning science correspondent Ronald Bailey wrote an excellent article titled “Earth Day, Then and Now” to provide some historical perspective on the 30th anniversary of Earth Day. In that article, Bailey noted that around the time of the first Earth Day in the 1970, and in the years following, there was a “torrent of apocalyptic predictions” and many of those predictions were featured in his Reason article. Well, it’s now the 47th anniversary of  Earth Day, and a good time to ask the question again that Bailey asked 17 years ago: How accurate were the predictions made around the time of the first Earth Day in 1970? The answer: “The

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Cargill CEO: Let’s collectively stand up for free trade and resist the currents of protectionism

5 days ago

AEI
Cargill CEO: Let’s collectively stand up for free trade and resist the currents of protectionism
Cargill CEO Dave MacLennan spoke on March 28 at a global meeting on commodity trading in Lausanne, Switzerland, sponsored by the Financial Times of London. The title of MacLennan’s talk was “Standing Up for Trade” and he made a very refreshing case in favor of free trade and against the rising waves of protectionism and nationalism in the US. Here are some key excerpts, organized into five sections, but the entire speech of more than 2,000 words is well worth reading in its entirety (emphasis added):
1. I wanted to be here today, because we are at a turning point in our global story. As leaders in the commodities industry, it’s time for us to make a strong stand for trade. At Cargill, we

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On Earth Day, we can celebrate being the only country to significantly reduce CO2 emissions – thanks to fracking

6 days ago

AEI
On Earth Day, we can celebrate being the only country to significantly reduce CO2 emissions – thanks to fracking

According to data released recently by the Energy Information Administration (EIA), CO2 emissions from America’s electric power sector have dropped by more than 25% since 2007, reversing a multi-decade increase, and they fell last year to a 28-year low, dropping to the lowest level since 1988 (see chart above). What accounts for that historically unprecedented reduction in CO2 emissions from generating the nation’s electricity over the last nine years? Smart government policy? That may have played a minor role. Increased electric power generation from renewables like wind and solar? That also might have helped a little. But solar as an energy source accounted for only 0.90%

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Video of the day: Johan Norberg explains how protectionism destroys more jobs that it saves

6 days ago

AEI
Video of the day: Johan Norberg explains how protectionism destroys more jobs that it saves

According to President Trump, his trade advisers, other politicians and many US domestic industries competing with foreign rivals, we need trade protectionism to stop foreign competitors, because they destroy our industries and “steal our jobs.” Shouldn’t we all be willing to pay a little bit more for consumer goods if it saves some US jobs? Cato Institute Senior Fellow Johan Norberg explains how this popular idea of protecting domestic industries from foreign competition has already failed time and time again in the US and elsewhere, and ends up destroying more jobs that are saved.
Video of the day: Johan Norberg explains how protectionism destroys more jobs that it saves

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In early observance of Earth Day 2017, some brilliant wit and wisdom from George Carlin on ‘saving the planet’

6 days ago

AEI
In early observance of Earth Day 2017, some brilliant wit and wisdom from George Carlin on ‘saving the planet’

Green trigger warning: This blog post may be upsetting to those who consider Earth Day to be a green holy day of obligation in their religions of ecology or their churches of sustainability.
Earth Day is coming up this Saturday (April 22) and it’s the 47th anniversary this year of the “Green Holy Day” that started in 1970. According to the Earth Day website, this year’s theme is “Environmental & Climate Literacy.” To observe Earth 2017 Earth Day, I’ll be featuring a series of educational posts about environmental issues (and climate literacy) over the next week.
To help start the celebration of 2017 Earth Day, this post features the late stand-up comedian/philosopher George

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Declining living standards? New research finds 164% increase in consumption for low-income Americans from 1960-2015

8 days ago

Greg Mankiw recently pointed to an NBER research paper “Fifty Years of Growth in American Consumption, Income, and Wages,” by Bruce Sacerdote, with some really interesting results and findings that run counter to the media narrative of a stagnating/disappearing/struggling middle class in America. Some key excerpts appear below (emphasis mine):
The paper’s abstract:
Despite the large increase in U.S. income inequality, consumption for families at the 25th and 50th percentiles of income has grown steadily over the time period 1960-2015. The number of cars per household with below median income has doubled since 1980 and the number of bedrooms per household has grown 10% despite decreases in household size. The finding of zero growth in American real wages since the 1970s is driven in part by

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Some thoughts, facts, and charts for Tax Day: Bring us back to 1913 (or better yet, bring us back to 1912!)

8 days ago

Today is April 15, which means we are quickly approaching the deadline for filing (and paying) our federal and state income taxes (extended to April 18 this year because of Emancipation Day), and that means it’s time for my annual post at tax time to help put things in perspective.
1. Some Historical Perspective. “In the beginning” when the US federal income tax was first introduced in 1913, it used to be a lot, lot simpler and a lot easier to file taxes; so easy in fact that it was basically like filling out your federal tax return on a postcard.
For example, page 1 of the original IRS 1040 income tax form from 1913 appears above. There were only four pages in the original 1040 form, including: two pages of worksheets, the actual one-page 1040 form above, and only one page of

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Wednesday morning linkage, via Positano, Italy

13 days ago

1. Venn Diagram of the Day (above), inspired by the Wall Street Journal article “U.S. Steelmakers Press Their Luck With Price Increases,” which reminds us there are no “free tariff lunches.” While US steelmakers (and their workers) benefit greatly from the legal plunder that steel tariffs bestow upon them through protection from foreign competition and higher prices (and profits), that comes at a great cost as US consumers and steel-using American companies (and their workers) suffer greatly from the burden of higher steel prices.  Here’s a slice:
U.S. steelmakers moved fast to raise prices after new tariffs were levied on some foreign competitors last year, but the quick increase has alienated some buyers and threatens to short-circuit a steel-market rebound. Domestic steel companies

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Our trade deficits with China et al. aren’t ‘killing us,’ but rather providing us with job-creating investment capital

15 days ago

Below is an excerpt from an excellent  2016 article by George Reisman about how “China et al. Are Not ‘Killing Us‘”:
Donald Trump has repeatedly claimed that China, and many other countries, such as Mexico and Vietnam, are “killing us” in foreign trade. The basis of his claim is the fact that U.S. imports from those countries substantially exceed U.S. exports to those countries. In 2015, for example, the overall, total difference between U.S. imports and exports, known as “the balance of trade,” was in excess of $500 billion, with trade with China accounting for about 70% of that sum.
An excess of imports over exports is typically described as an “unfavorable balance of trade.” The description of the balance as “unfavorable” derives from the belief that exports are a source both of money

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Quotation of the day on the self-proclaimed moral superiority and superhuman powers of the busybody political class.

16 days ago

…. is from Frederick Bastiat’s classic book “The Law,” published in 1850:
The conscience of the social democrats cannot permit persons to have any liberty because they believe that the nature of mankind tends always toward every kind of degradation and disaster. Thus, of course, the legislators must make plans for the people in order to save them from themselves. This line of reasoning brings us to a challenging question: If people are as incapable, as immoral, and as ignorant as the politicians indicate, then why is the right of these same people to vote defended with such passionate insistence?
The claims of these organizers of humanity raise another question which I have often asked them and which, so far as I know, they have never answered: If the natural tendencies of mankind are so

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Michigan senators introduce ‘Make It In Michigan Act.’ If successful, ‘Make It In Flint/Detroit Acts’ to follow next

19 days ago

Well, not really, the democratic Michigan senators (Debbie Stabenow and Gary Peters) are actually co-sponsoring the “Make It In America Act.” But to help illustrate how economically nonsensical the “Make It In America Act” is, I’ve taken the liberty of doing some editing below of this recent news report:
GRAND HAVEN, Mich. — If it is going to be paid for by the American Michigan tax payer and used by American Michigan soldiers and others or spent on state government projects, it should be made here in the state too.
The “it” is anything purchased by the federal state government and the person promoting the Buy Michigan idea is U.S. Sen. Debbie Stabenow (D-MI). Sen. Stabenow was in the area Friday promoting more strenuous enforcement of the Buy American Michigan Act. The senator says the

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‘Equal Pay Day’ this year is April 4 — the next ‘Equal Occupational Fatality Day’ will be on January 21, 2029

21 days ago

Every year the National Committee on Pay Equity (NCPE) publicizes its bogus feminist holiday known as Equal Pay Day to bring public attention to a completely spurious apples-to-oranges comparison of incomes by gender. According to the NCPE, Equal Pay Day will fall on Tuesday, April 4 this year, based on a 20% unadjusted difference in median annual earnings for women and men in 2015 (most recent data available) when absolutely nothing relevant is controlled for that would explain income differences like hours worked, marital status, number of children, education, occupation, and the number of years of continuous uninterrupted job experience.
Therefore, Equal Pay Day on April 4 this year misleadingly represents how far into 2017 a typical woman will allegedly have to continue working to earn

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Some thoughts on Equal Pay Day, an annual event that spreads statistical misinformation about the gender pay gap

22 days ago

The American Association of University Women (AAUW) and the National Committee on Pay Equity (NCPE) are major participants in the feminist propaganda machine that mobilizes forces every April and engages in statistical misrepresentations to publicize the annual feminist holiday known as Equal Pay Day. According to the NCPE, Equal Pay Day will fall on Tuesday, April 4 this year, based on a 20% unadjusted difference in median annual earnings for women and men in 2015 when absolutely nothing relevant is controlled for that would explain income differences like hours worked, marital status, number of children, education, occupation, and the number of years of continuous uninterrupted job experience. Therefore, Equal Pay Day on April 4 this year misleadingly represents how far into 2017 a

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Thanks to technology, our circumstances are much more equal today than conventional income measures would suggest

24 days ago

In an important National Affairs article in 2013 (the year before Thomas Piketty’s best-selling book “Capital in the Twenty First Century” was released) “Innovation and Inequality” Northwestern University law professor John O. McGinnis presents some very interesting ideas about income inequality, innovation and technological advances. Here’s the opening of Professor McGinnis’s article (emphasis added):
The inequality debate has long been a prominent feature of our politics, and many other social and cultural forces are now interpreted in light of it. We have certainly come to understand the progress of technology in that light: Many analysts have argued in recent years that technological advances tend to intensify economic differences, because technology disproportionately increases the

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Creative destruction: Thousands of traditional retailers close as consumers switch to online retailers like Amazon

26 days ago

Traditional retailers have been struggling in the 21st century, and there’s been a steady stream of news highlighting those struggles. For example, J.C. Penney is closing 140 stores this spring, GameStop is closing up to 190 stores, Sears Holding will be closing 150 stores this spring including 108 Kmart and 42 Sears locations in 40 states, electronics and appliance retailer H.H. Gregg has filed for bankruptcy and is closing 88 stores and three distribution centers in 15 states, Macy’s is closing 68 stores, MC Sports is closing 68 stores, Gander Mountain is closing 32 stores, RadioShack is closing 187 stores, and Payless Shoes may file for bankruptcy and close up to 500 stores. And the list goes on….
Based on just the partial list above, store closings for that group of retailers totals

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New Carpe Diem economic news and data quiz

27 days ago

It’s time for another Carpe Diem quiz. Test your knowledge of recent economic news and data, most of which have been featured in recent CD posts, with this new 10-question quiz below. Good luck!
Loading Carpe Diem Economic News and Data Quiz March 28, 2017

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QuizWorks.push(
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The post New Carpe Diem economic news and data quiz appeared first on AEI.

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‘Buy America’ is a form of impoverishing economic poison, and legalizes discrimination based on national origin

28 days ago

Senator Tammy Baldwin (D-WI) has recently re-introduced “Buy America” legislation that “would help rebuild America’s crumbling drinking water infrastructure with American made iron and steel” and in the process protect American steel corporations and workers from foreign  competition and force US taxpayers to pay higher prices. Here’s the press release from Sen. Baldwin, and here’s Don Boudreaux’s excellent response on the Cafe Hayek blog:
Seeking to protect American steel corporations and workers from foreign competition, you introduced legislation to require that “100 percent American-made iron and steel is used in water infrastructure projects funded by the Drinking Water State Revolving Fund (DWSRF).” In your statement meant to justify this legislation, you insist that “workers cannot

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Evidence of employers paying women 20% less than men for the exact same work is as elusive as Bigfoot sightings

28 days ago

We’re just about a week away from the feminist holiday event known as “Equal Pay Day,” which will occur next Tuesday on April 4. That annual event brings awareness to a completely bogus apples-to-oranges comparison in incomes by gender. Specifically this year’s Equal Pay Day will publicize the 20% unadjusted difference in median annual earnings for women and men in 2015 (most recent data available) when absolutely nothing relevant is controlled for that would explain that 20% raw differences in income like hours worked, marital status, number of children, education, occupation, number of years of continuous uninterrupted job experience, etc.
(This is an update of a November 2015 CD post, and is the first in a series of posts this week and next week to help bring some awareness to the

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Domestic producers falsely promote fear of foreign monopolies to secure monopoly power themselves with protectionism

March 24, 2017

The Venn diagram above was inspired by Don Boudreaux’s post on Cafe Hayek titled “This DiMicco Guy Is Precisely the Sort of Business Person Upon Whom Adam Smith Rightly Poured Such Scorn” that was in response to a comment by Daniel DiMicco – former CEO of Nucor Steel and Trump’s top trade adviser and transition head in 2016 – in response to Kristofer Harrison’s expose of the cronyism that drives protectionism of U.S. steel producers (“Big Steel Is the New Solyndra“). DiMicco’s response to Harrison is the first comment below the article.
Here’s Don response to DiMicco (my emphasis):
Knowledgeable people are aware of the parade of excuses that you and other trade-restrictionists offer for why American consumers should allow Uncle Sam to force them to pay higher prices so that steel-industry

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A tribute to an economic giant — Friedrich Hayek — on the 25th anniversary of his death

March 23, 2017

Today (March 23) is the 25th anniversary of the death of the great Nobel economist Friedrich Hayek (pictured above). For a very detailed and extensive overview of Friedrich’s life and intellectual contributions you can visit his Wikipedia page here.
Friedrich Hayek was one of the most influential thinkers of the 20th century and his work still resonates today with economists, scholars and lovers of liberty around the world. A quarter century after Hayek’s death, his ideas are increasingly relevant in an era where many governments grow ever larger and more interventionist. To honor the contributions of a giant in economics, here are ten items:
1. Matt Ridley remembers Hayek today in his article “Friedrich Hayek and the collective brain”:
Hayek died 25 years ago today, yet his ideas are

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Wednesday evening links

March 22, 2017

1. Charts of the Day (above) show new airfare data, updated now through 2016. The top chart show average annual inflation-adjusted domestic airfares (in 2016 dollars) in the US, both with and without fees from 1979 to 2016 based on data from Airlines for America. The average round-trip US airfare last year was just under $349 without fees, and just under $380 with fees. Both of those airfares (unadjusted and adjusted) fell last year for the second straight year, and are the lowest since 2010. It also marks the 16th year in a row (starting in 2001) that average airfares (without fees) have been below $400. Compared to the early 1980s when airfares (in 2016 dollars) were above $600, the real cost of air travel has fallen by more than 46% and by more than $300 per round trip. The bottom

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Saturday’s choice: Earth Hour celebrating ignorance and poverty or Human Achievement Hour celebrating human progress

March 22, 2017

We are quickly approaching the annual one-hour event in energy self-flagellation and green nitwitery known as Earth Hour, which takes place this Saturday, March 25, at 8:30 p.m. Our friends at Earth Hour are asking us to “set aside an hour to host events, switch off their lights, and generally make noise to shine a light on the need for climate action.”
In 2009, Canadian economist Ross McKitrick was asked by a journalist for his thoughts on the importance of Earth Hour. Here is his excellent response on why he “abhors” Earth Hour (my emphasis):
I abhor Earth Hour. Abundant, cheap electricity has been the greatest source of human liberation in the 20th century. Every material social advance in the 20th century depended on the proliferation of inexpensive and reliable electricity.
Giving

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We hear about US jobs outsourced overseas (or stolen), but what about the ‘insourced’ jobs we ‘steal’ from abroad?

March 20, 2017

We hear a lot lately, especially from President Trump, about US firms outsourcing jobs overseas, along with accusations that countries like Mexico, China, Japan, Singapore, and India are “stealing US jobs” (see more than 50,000 Google search results for “Trump” + “stealing jobs”). Further,  Trump warned in December that his government would punish US companies seeking to move operations and jobs overseas with “consequences.” But we don’t very much from Trump or others about the jobs that are “insourced” into every US state by foreign companies, even though those insourced jobs totaled more than 6.4 million Americans in 2014 (most recent year available) and represent 5.2 percent of all private sector US jobs based on the August 2016 BEA report “Activities of U.S. Affiliates of Foreign

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