Tuesday , February 19 2019
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High-powered money (100 years of stability)

When I studied economics, the term ‘high-powered money’ was often used synonymously with the monetary base, which consists of currency plus bank deposits at the Fed. This asset was called “high-powered” for three reasons: 1. It is determined exogenously by the monetary authority.2. It is non-interest-bearing.3. It is the medium of account. As a result of these three factors, high-powered money is a sort of “hot potato”. When the Fed injects new high-powered money into...

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Including the Renegade

In the last six months, I’ve found myself stuck in two separate Sermons on Inclusion.  These were public events.  Neither was branded as left-wing.  Both, however, gave the floor to speakers who explained the supreme value of making everyone feel included in the community. In each case, my mid-sermon reaction was the same: “I don’t think I’ve ever before felt so excluded in all my life.” Why would I react so negatively?  It’s not because I disagree with the...

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Fantastic Neoliberal Policies and Where to Find Them

Perhaps the use of the word “neoliberalism” should be taxed, so that its use may become more parsimonious and more thoughtful. In a 2009 paper, Taylor C. Boas and Jordan Gans-Mors highlighted that the word (which now basically an “anti-liberal slogan”) is very frequently used and yet very rarely defined. Historians of ideas may use it to refer to the German Ordo-liberals and some of their contemporaries (like Walter Lippman), who endeavoured to adapt the classical...

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Cowen Interview with Jordan Peterson

Economist Tyler Cowen recently interviewed Canadian psychologist Jordan Peterson. The audio and transcript are here. My three favorite highlights follow. After that, I’ll say what I wish Tyler had asked about. On modern universities: They [universities] do absolutely everything wrong from a psychological perspective because the fundamental rule — if you’re a psychologist who’s interested in increasing resilience — is that you help people identify what they’re afraid...

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Lessons from the Golden State

In many ways, California is the ideal place to build a high-speed rail line. The state has two giant metro areas, separated by 380 miles, which is the “sweet spot” for high-speed rail. A high-speed rail line could (theoretically) cover that distance in less than 2 hours, which makes it competitive with air travel.  (The actual proposal was much slower.) California has many other advantages as well. Governor Jerry Brown was an enthusiastic advocate. The state is...

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Wisdom from Tony Lip

My wife and I went to see the movie Green Book and thoroughly enjoyed it. I highly recommend it. I won’t bother recounting the story; that’s easy to find on line. Instead I want to remark on a line in the movie. The white driver, Tony Lip, says to Dr. Don Shirley: I like what you did back there, Doc. You stood up for yourself. It’s like your friend the President says, “Ask not your country what you could do for it, ask what you do for yourself.” You know? Presumably...

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McCloskey on Liberalism

Concretely I mean that the bizarre 18th-century idea of liberalism—which is the theory of a society composed entirely of free people, liberi, and no slaves—gave ordinary people the notion that they could have a go.  And go they did. In the earliest if hesitatingly liberal societies such as Britain and France, and among the liberi in societies still fully dominated by traditional hierarchies such as Russia and much of Italy, or the slave states of the United States,...

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Against blackmail

David Henderson argues that blackmail should be legal. I’m not so sure. Here’s David: One pair that I would like to hear from on this are Georgetown University philosophers Jason Brennan and Peter Jaworski. They wrote a book titled Markets Without Limits. The description of their book on Amazon states their thesis: “the question of what rightfully may be bought and sold has a simple answer: if you may do it for free, you may do it for money.” Although I haven’t read...

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Candyish Government

If public goods exist, the prime instance must be the fight against real epidemics—epidemics of infectious diseases—and the fight against antibiotic resistance. Recall that the economic definition of a “public good” is a good (or service) that everybody wants, is non-rival in consumption (all consumers can consume it simultaneously), and from which consumers cannot be excluded. The usefulness of government in providing (or financing) public goods does not imply that...

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Should Blackmail be Legal?

In his latest column for Bloomberg, “Seven Lessons About Blackmail,” economist Tyler Cowen takes up the issue of blackmail. What motivated it, of course, as he makes clear, is the recent controversy involving Amazon’s Jeff Bezos’s allegation that the National Enquirer has blackmailed him. Although Tyler recognizes that a case needs to be made that blackmail should be illegal, he doesn’t do justice to the issue. His only statement on the issue in his piece, other than...

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