Tuesday , March 26 2019
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Greg Mankiw Gets It Partly Right

In a blog post titled “Who is the prototypical rich person?” Greg Mankiw responds to a pretty bad New York Times op/ed by Emmanual Saez and Gabriel Zucman. I was waiting for someone to spot a pretty big error in Greg’s piece, but no one has. So I’ll point it out. Greg wants to argue that it matters how one becomes rich. He and I agree that that really matters. But check out how he illustrates the point. Greg writes: Saez and Zucman seem to think that rich people are...

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Government Needs No Money to Curtail Pollution

People often complain that government isn’t spending enough money fighting pollution.  Even many economists repeat this complaint.  That’s very odd, because standard market failure theory tells us that governments don’t need any money to fight pollution. Why not?  Simple: In standard market failure theory, governments are supposed to tax pollution!  Such taxes simultaneously reduce pollution and collect revenue.  As a result, fighting pollution is one of any...

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CBO As Agenda Setter on Tax Policy

The Case of the Missing Child Tax Credit Reduction In December 2018, the Congressional Budget Office published a 316-page report titled Options for Reducing the Deficit: 2019 to 2028. Those reports are often useful because they can tell you the implications for the deficit of various changes in government spending and in tax law. This report is relatively comprehensive. It examines dozens of ways in which the U.S. government could cut spending and dozens of ways in...

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A brief intellectual biography

But a very long blog post. I hope this will be of some value to younger researchers. In the summer of 1986, my personal life had hit rock bottom and I decided to immerse myself in economic research, as a form of therapy.  That year I came up with most of the ideas that I’ve used throughout my career.  Here’s how I did it. 1. As a teenager, I had greatly enjoyed reading Friedman and Schwartz’s Monetary History of the United States, and this led me to spend a lot of...

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The Unearned Compliment of Neoliberalism

Most free-market economists take “neoliberalism” as a term of abuse.  Rather than actually respond to our arguments for smaller government and less regulation, the hard left just switches to name-calling. I disagree.  People who denounce neoliberalism are unintentionally paying free-market economists a great compliment.  But sadly, we don’t deserve this compliment. How so?  Well, free-market economists have two kinds of views.  Some are distinctive, such as: 1. We...

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Anthony de Jasay, RIP

Anthony de Jasay died on Wednesday January 23. It was my understanding that the family wanted the news not come out for a few more days, as a private funeral was arranged, but it did anyway on social media, and Pierre Lemieux dutifully reported it. Jasay’s last few years, and particularly his last months were very difficult, for him and his beloved wife Isabelle. May he rest in peace. I’ve known Tony for the last twenty years, which means my entire adult life. We...

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Pride and Prejudice and Violence

Pride and Prejudice Growing up in Manitoba, I had to read Jane Austen’s Pride and Prejudicein 12thgrade. I read it once because I had to; the second time to answer questions on exams; the third time because I loved the book. What I got from it, besides the fact that it was good drama and good romance, was the importance of not being proud about my preconceptions, my prejudice. We all need prejudice. That is, we all need to make pre-judgments. The reason is that we...

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Anthony de Jasay (1925-2019) Has Died

Anthony de Jasay died yesterday in Normandie (France), where he was living. In a recent Econlib “Liberty Classics” review of his book The State (1985), I wrote: When the dust settles, Anthony de Jasay’s The State will probably be recognized as one of the great books of the 20th century. It may be the most serious and subversive challenge to state authority ever written. That this book is not banned must be proof that we are not living under real tyranny or at least...

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MMT is wrong

I have a new piece in The Hill, discussing the increasingly popular “Modern Monetary Theory”: The basic problem is that MMT proponents mix up the roles of fiscal and monetary policy. They argue that monetary policy should play a supporting role, holding down interest rates to reduce the cost of public borrowing. Meanwhile, the thinking goes, fiscal austerity should be the tool used to hold down inflation when aggregate spending begins to exceed the productive capacity...

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A Rare Exception

“More Americans believe in global warming–but they won’t pay much to fix it.” So reads the headline of an article by James Rainey on NBC News’s web site. Read the piece and see if you agree with me that that is the most important part of the article. Why? The line underneath the title says why: “Americans are unwilling to pay $10 a month to fight climate change, a survey found.” Or you can just read the second paragraph: But even as two new surveys confirm the...

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