Friday , June 5 2020
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Lockdowns are partly endogenous

In monetary policy, a common mistake is to assume that low interest rates and/or QE are indications of an easy money policy. They might be, but more often they are the effect of a tight money policy that drove interest rates to zero or below, and dramatically increased the demand for liquidity (i.e. base money.) I wonder if something similar is true of lockdowns during the Covid-19 pandemic. Certainly there are occasions when lockdowns are reflective of an aggressive...

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Why We Need to Keep Talking About George Floyd

I must begin by pointing out that this is really not what I wanted to be writing about. This is EconLog, for crying out loud; a virtual property of Econlib.  They don’t just let anyone natter on here, and for that reason, I would rather my introduction to the readers here be a message of freedom and hope. It was a mere few days ago that NASA launched a rocket built by SpaceX into space, ferrying humans to the International Space Station from American soil for the...

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Just Say No to State & Local Bailouts

Why is the HEROES bailout so much greater than the states’ losses? Simple: State governments would likely use a large part of the bailout money to make up for shortfalls in their funds for state government pensions. In April, Illinois Senate Democrats, for example, asked Congress for a bailout of over $40 billion, $10 billion of which would go the state pension fund. A famous Illinois politician, Rahm Emmanuel, famously said “You never want a serious crisis to go to...

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A Humble State with No Motorcade

In many ways, the modern world, including economic freedom, was born from the fear of tyranny and the institutions (generally unsuccessful) to prevent it. In Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships (Basic Books, 2000), famous economist Mancur Olson had interesting historical remarks about Italian city-states in early modern times: Sometimes, when leading families or merchants organized a government for their city, they not only...

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Transaction Costs are the Costs of Engaging in Economic Calculation

This year marks the 100th anniversary of the publication of Ludwig von Mises’s seminal article, “Economic Calculation in the Socialist Commonwealth,” which marked the first salvo in what later became the socialist calculation debate. Though the contributions of F.A. Hayek to that debate, and to economic science more broadly, have been well recognized, what is somewhat forgotten today is that the fundamental contributions of another economist were also born out of the...

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Five (More) Books: Economic, Political and Social Ethnography of Soviet Life

In my previous two posts, I offered recommendations for reading on the Russian Revolution and the Soviet economy. Today, I’d like to turn our attention everyday life in the Soviet Union. My most cherished comment on one of my books dealing with the Soviet system was from then Department Chair of Economics at Moscow State University, who upon reading my discussion of the contrast between how the system was supposed to work and how it really worked wrote to me to tell...

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Herd immunity was never a feasible option

Bryan Caplan has a post on Covid-19 that is full of sensible ideas. But I disagree with one of his claims: 18. Alex Tabarrok is wrong to state, “Social distancing, closing non-essential firms and working from home protect the vulnerable but these same practices protect workers in critical industries. Thus, the debate between protecting the vulnerable and protecting the economy is moot.” Moot?!  True, there is a mild trade-off between protecting the vulnerable and...

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Something to Learn from the Trump Presidency

The president of the United States tweeted a video of an alleged rioter (who, in all likelihood, is an American citizen, not a “Mexican rapist”) with the threatening comment: “Anarchists, we see you!” Is it for the president to identify suspects? So much for the ideal of the rule of law, it seems. But my point is different and relates to the benefits of personal knowledge. I have always hoped that a journalist would, during a press conference, ask the president...

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What I’m Doing

1. The U.S. political system is deeply dysfunctional, especially during this crisis.  Power-hunger reigns in the name of Social Desirability Bias.  Fear of punishment aside, I don’t care what authorities say.  They should heed my words, not the other way around. 2. Few private individuals are using quantitative risk analysis to guide their personal behavior.  Fear of personally antagonizing such people aside, I don’t care what they say either. 3. I am extremely...

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A libertarian is a conservative who has been oppressed

When I was young, there was an old saying that a conservative is a liberal who has been mugged. I suspect that the debates between liberals and conservatives are especially fierce precisely because they are generally based on genetics and random life experiences, not rational thought. Along these lines, a Politico article by Rich Lowry caught my eye: The intellectual fashion among populists and religious traditionalists has been to attempt to forge a post-liberty or...

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