Tuesday , March 26 2019
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EconLog Library

FDR and George Warren

I am currently about one half way through an excellent book entitled "American Default", by Sebastian Edwards. The primary focus of the book is the abrogation of the gold clause in debt contracts, which (I believe) is the only time the US federal government actually defaulted on its debt. But the book also provides a fascinating narrative of FDR's decision to devalue the dollar in 1933-34. Here's what I...

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Compassionate Diversified Capitalist

Early Tuesday morning, a car crashed into a local McDonald's restaurant in Seaside, California, about 5 miles from where I live. The McDonald's caught on fire and collapsed. Fortunately all the employees were able to get out safely. The owner, Landon Hofman, owns 7 local McDonald's franchises. Here's a clip from a local news story about how he reacted:On Tuesday Hofman found jobs for all 42 of the...

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Obama Trumped Trump

One of the great things about blogging is the frequent times one learns from commenters. The Trump tweet on the unemployment rate is a case in point. When I posted about it, I thought, naively, as did co-blogger Scott Sumner, that Donald Trump had set a precedent by revealing something about the unemployment numbers before they were officially announced by the Bureau of Labor Statistics. Wrong! It turns...

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Kevin Erdmann on the housing “bubble”

Kevin Erdmann has produced a report for the Mercatus Center, discussing the housing bubble. Here is an excerpt: Contrary to Chairman Bernanke's assumption, at the national level there was no overhang of housing supply that needed to be worked off in 2011. Indeed, even in 2005 there was no national oversupply of housing. Rather, the American economy was burdened by a shortage of housing, especially in the...

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Why We Work for the Chinese

by Pierre Lemieux Regarding the offer of the Chinese government to force or incentivize (or stop disincentivizing with import barriers) Chinese importers to buy $70 billion more in food and energy products from America, a story in the Wall Street Journal of June 5 says:U.S. officials ... argue that Chinese energy purchases would largely divert U.S. sales to other nations and have no overall impact on the...

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“State Capacity” is Sleight of Hand

Suppose I proposed the following theory of economic development:The root cause of economic development is social capacity.  Highly-developed societies have immense social capacity, as evidenced by their countless achievements.  Backwards societies lack social capacity, as evidenced by their countless problems.  You'd probably be unimpressed.  At first glance, this is a circular theory that explains nothing:...

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Szasz and the Statistics of Rare Events

Many years ago, Thomas Szasz largely convinced me that mental illness is radically different from ordinary physical illness.  In economic terms: People with physical illness have unfavorable constraints; people with mental illness have socially disapproved preferences.  Physical illness is about what you're able to do; mental illness is about what you want to do.  Yes, it's generally bad manners to loudly...

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A Cure for Our Health Care Ills

Some progressives claim that they have an easy solution, one that proceeds from their belief that more government it is often the answer: Medicaid or Medicare for all. What is the easy solution of classical liberals? There are two sets of reforms: one on the demand side and one on the supply side. On the demand side are a surprisingly simple combination of out-of-pocket payments, a new type of event-based...

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Trump’s Unemployment Tweet

As most economists who follow the unemployment statistics released by the Bureau of Labor Statistics probably know, President Trump broke with a strong tradition by tweeting, over an hour before the official release date, a hint about what the statistics would be. He tweeted:Looking forward to seeing the employment numbers at 8:30 this morning.Many economists were fit to be tied. How dare he do that! My...

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