Wednesday , March 20 2019
Home / Tag Archives: Regulation and Subsidies

Tag Archives: Regulation and Subsidies

The Philosophy of Poverty?: My Opening Statement

Here’s my opening statement for yesterday’s poverty debate with David Balan.  Enjoy! The world is rich, but billions of people are still poor.  What’s the morally right response? The default view is that the government should dramatically expand redistribution programs, forcing the well-endowed – especially business and the rich – to provide a decent standard of living for everyone.  I strongly reject this default view. Why?  Most glaringly, because the default view...

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Outfoxed and conned, part 2

I grew up in Wisconsin and still have warm feelings for the state (where it was recently 26 below zero.) Thus I’m sad to see my concerns about the new Foxconn manufacturing plant come to pass.  Here’s Tim Culpan of Bloomberg: Then-Governor Scott Walker, backed by President Donald Trump, loved exactly what he sold: the promise of thousands of jobs to make stuff in the U.S. Walker loved it so much that he pledged as much as $3 billion in sweeteners, a deal that likely...

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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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Market Failure Theory as Reproach to Government Practice

The theory of market failure is a reproach to the free-market economy.  Unless you have perfect competition, perfect information, perfect rationality, and no externalities, you can’t show that individual self-interest leads to social efficiency.*  And this anti-market interpretation is largely apt.  You can’t legitimately infer that markets are socially optimal merely because every market exchange is voluntary. Contrary to popular belief, however, market failure...

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The Wizard of OZK

This past July, Bloomberg had an interesting story on the Bank of the Ozarks, soon to be rebranded “OZK Bank.” The bank has been very aggressive in making loans to property developers all over the country: If there’s a marquee project in America—the tallest residential building in Nashville, condominiums in Miami’s Brickell financial district, a 450-unit apartment tower in the midst of Seattle’s booming Amazon campus—chances are “the Little Rock bank that could,” as...

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Britschgi on Mass Transit

Reason assistant editor Christian Britschgi has posted an excellent piece critiquing another piece in the New York Times by writer Steven Hill. Britschgi makes multiple good points. Here's one:For starters, for all that he writes about Uber's low fares, Hill spills not a drop of ink on the fact that those public transportation services are themselves subsidized up to their eyeballs. Unlike Uber, whose losses...

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Why I favor taxing subsidized goods

A number of people have asked me why I opposed the repeal of the medical devices tax. Taxes generally create deadweight losses, as they reduce output to a position below the socially optimal level (which is usually the free market level.) There are a few exceptions: 1. Taxes on externalities, such as pollution. 2. Taxes on goods that are already heavily subsidized. Here's the standard graph showing the deadweight loss from a subsidy: Recall that a subsidy will tend to increase...

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Do Steps Toward Freedom Create Net Benefits?

Noah Smith recently wrote a piece titled "Being an Ideologue Means Never Having to Say You're Wrong." It starts out well. He writes:"Communism would have worked, if the Soviet Union had only tried it for real." I must have heard this argument a dozen times from die-hard leftist friends. Marxist economists such as Richard Wolff and Stephen Resnick even wrote a book making exactly this claim. No doubt, true believers will be just as unwavering in the face of Venezuela's collapse. That...

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Henderson on Reich’s Saving Capitalism

The good news is that Saving Capitalism is nothing like Locked in the Cabinet, his earlier memoir about being labor secretary, in which he literally made up stories that made himself look good, as reported by Jonathan Rauch in his Slate review, "Robert Reich, Quote Doctor," (May 30, 1997). In the new book, Reich starts by making an important--probably correct--point and, to his credit, documents virtually all of his empirical assertions with checkable citations. But some of his most...

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Don’t Make Canadians Poorer

In short, because the price of oil has fallen, Canadians as a whole are somewhat poorer than if the price had not fallen. What should government do about this? Not make them poorer. Wasteful government spending is bad enough when the taxpayers who pay for it are doing well. It's even worse when the taxpayers are worse off than they were. Unfortunately, government officials are often very much like the politician in the British comedy "Yes, Prime Minister." They say, "Something must be done....

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