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Tag Archives: subsidies

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My intrepid Mercatus Center colleague Veronique de Rugy rightly decries calls for another U.S. government bailout of airlines. A slice: Not surprisingly, bailouts beget more bailouts. My colleagues at the Mercatus Center, Matthew Mitchell and Tad DeHaven, write, “We know from the history of bailouts that the true cost of a bailout is not the taxpayer expense (which is often recouped) but the expectation it sets for future bailouts, an expectation that invites future disaster.” From 2017:...

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An Open Letter to Fred Hochberg

Mr. Fred HochbergFormer Chairman and President, U.S. Export-Import Bank Mr. Hochberg: Unhappy with my Mercatus Center colleague Veronique de Rugy’s recent piece in the New York Times exposing the depth of cronyism at the Ex-Im Bank, you tweet: There she goes again — same old arguments and selective use of facts when it comes to @EXIMBankUS. @veroderugy will use any argument to disarm America in a way that will move jobs overseas. Enough! With respect, the hawker of hackneyed arguments is...

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Quotation of the Day…

… is from pages 38-39 of Kristian Niemietz’s important 2019 book, Socialism: The Failed Idea That Never Dies: Planned economies have no way of replicating this knowledge-collecting and knowledge-disseminating function of market prices. They therefore deprive themselves of vast amounts of information, which must lead to worse economic decisions. This is not just a problem for fully planned economies, where prices are set by a planning board. It is also true in an economy where the private...

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Quotation of the Day…

… is from pages 39-40 of Kristian Niemietz’s superb 2019 book, Socialism: The Failed Idea That Never Dies (original emphasis): It is a common misunderstanding that the main role of competition is to act as a spur: we work harder when we are under competitive pressure than we do when we can take our current position for granted. But this was never the main issue: socialist economies had other (less benign) ways of spurring people on. What they lacked, however, was the knowledge-creating...

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See! No Gulags! Industrial Policy Works!

Here’s a letter to the Washington Post: Editor: As displayed again in Jeanne Whalen’s report “To counter China, some Republicans are abandoning free-market orthodoxy” (Aug. 28), advocates of industrial policy – including Oren Cass and other conservatives – perform according to a well-rehearsed script. Act 1: Repeat fallacies as if they’re established facts. An example, as reported by Ms. Whalen, is to assert that “U.S. businesses also aren’t investing as much as they used to on new...

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What does the UK want from Brexit?

When the UK voted to leave the European Union, many Brexiteers argued that this would allow Britain to move toward free market policies, free of burdensome EU regulations. Today, the two sides are still engaged in difficult negotiations. Contrary to the arguments made by prominent Brexiteers back in 2016, it’s not at all clear that the EU will agree to a free trade agreement. Interestingly, the sticking point seems to be Britain’s reluctance to follow free market...

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My intrepid Mercatus Center colleague Veronique de Rugy bravely stood her ground during a recent meeting of rent-seeking interests: At the public meeting, the EXIM Board heard from a variety of external stakeholders with diverse views on PEFCO’s future. Veronique de Rugy expressed her concern with renewing EXIM’s partnership with PEFCO, stating, “In light of the current economic crisis some may feel that the now is not the time to reconsider or even reform PEFCO. But not even the most...

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Some Links

My intrepid Mercatus Center colleague Veronique de Rugy decries the cronyism festering at the heart of the U.S. International Development Financing Corporation. A slice: This happens all the time in government, and it is always a very big risk with any government agency under any administration when it starts to hand out money to private companies. Why? Because government decisions about where capital should flow are fundamental political decisions; they aren’t guided by economics, price...

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Quotation of the Day…

… is from page 276 of Matt Ridley’s excellent new (2020) book, How Innovation Works: And Why It Flourishes in Freedom: The same is true of America, which became the most advanced and innovative country in the world in the early decades of the twentieth century without significant public subsidy for research and development of any kind before 1940. The few exceptions tend to confirm the rule; for example, the government heavily subsidized Samuel Langley’s spectacular failure to make a...

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Some Links

My intrepid Mercatus Center colleague Veronique de Rugy reminds us to look at the unseen consequences of unemployment-“insurance” payments. A slice: What’s more, even if one supports expanding UI during rough times, we must remember that whether the money is borrowed or taxed, this redistribution of income comes out of the real economy at the expense of other investments that are likely more valuable. This important reality looms especially large as the economy reopens, and businesses...

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