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Tag Archives: Uncategorized

Managing and Mismanaging the Covid Shock

An important lesson from both economic analysis and economic history is that when people are relatively unregulated and free to adjust, they can adjust quickly to various economic shocks, even large ones. But when governments heavily regulate people’s economic activities, these governments slow and often prevent adjustments. The good news is that in 2020, the federal government and many state and local governments have temporarily relaxed regulations to make...

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From Harrison to Volstead: How Prohibition Laid the Foundation for the War on Drugs

In my previous post, we began a discussion of the War on Drugs™ by highlighting some of the failures of its close historical precedent, Prohibition. Not only are there parallels between the two that are quite instructive; in a sense, Prohibition begat the modern drug war. This is not to say that the War on Drugs™ began with the Eighteenth Amendment; indeed, it began with the Harrison Narcotics Tax Act of 1914 (Redford and Powell 2016, 509), although some posit that it...

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How Transaction Costs Change the Analysis

Hang around freedom-friendly circles long enough and you’ll eventually hear a claim like the following. “Under private ownership of roads, congestion would be eliminated through the implementation of market pricing.” Claims like this range the gamut of sophistication. In the more sophisticated, truly dynamic pricing would adjust in real time as cars enter and exit the roadway. A somewhat less sophisticated idea still improves on the current non-price means of...

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A win for monetarism?

Later on, I’ll have more to say about the Fed’s new approach to policy, but this portion of Jay Powell’s speech caught my eye: [O]ur revised statement says that our policy decision will be informed by our “assessments of the shortfalls of employment from its maximum level” rather than by “deviations from its maximum level” as in our previous statement. This change may appear subtle, but it reflects our view that a robust job market can be sustained without causing an...

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Bannon’s Nationalist Adventure: Natural Justice?

Economists assume that each individual has his own preferences that guide his actions. The moral problem starts when an individual wants to force his preferences on other individuals’ choices. If, for this kind of moral sin, God had wanted to strike Steve Bannon off his horse on the road to Damascus and perhaps punish him with a nervous breakdown, He would have done exactly what He did on August 20: get Bannon arrested by federal agents on a Coast Guard boat. Bannon...

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Open Letter to Mercatus Center

Patrick HoranProgram Manager for Monetary PolicyMercatus CenterVia Internet Dear Mr. Horan and Mercatus: It just came to my attention that on 20 July you wrote an article prompted by the then-upcoming Senate Banking Committee vote on Judy Shelton for a seat on the Board of Governors of the Federal Reserve. You ask the question: Is a Gold Standard Practical Today? The question is more urgent than ever. But your answer does not really answer the question. The lede of your article...

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What’s Behind the Mask?

The response to COVID-19 has been breathtaking. Both sides of the political spectrum quickly agreed to shut down and suffocate the economy. And even before that, countless homeowner’s associations, condominium boards, retailers, and corporate employers beat the rush and shut down their facilities voluntarily. We quickly ended up in a world that no one has thought much about, and few would want. People were forced into isolation. They were not allowed to go to work, or to bars and...

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Interesting Airline Pricing

I had an interesting experience with airline pricing in the last 2.5 weeks. About 2.5 weeks ago, I got on line with United, the airline I usually use to go to Winnipeg. (From there, I drive 3 hours to Minaki, Ontario.) I wanted to go to Winnipeg on or about July 9. But I got a surprise. The airline literally wouldn’t let me reserve anything in July. I don’t just mean anything to Winnipeg. I mean anything anywhere. I hadn’t seen that before. You might think that I...

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Restore Laissez-Faire Capitalism

When I first saw Daniel Henninger’s 2020 op ed “Restore Laissez-Faire Capitalism.” (Wall Street Journal; p. A13, April 16) I said to myself “Whoop di do.” No. I lied. Actually, I said: “Double Whoop di do.” This is a title that a Ludwig von Mises or a Murray Rothbard could easily have chosen for many of their sterling contributions. But a careful perusal of this short essay greatly moderated my enthusiasm for it. I now give it an A-, not the A++++ I was ready to award...

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10 Percent Less Democracy

One of the principles I taught my economics students the first day of class and then applied incessantly thereafter was the importance of thinking on the margin. Garett Jones, an economics professor at George Mason University, has written a whole book in which he does just that. Jones considers what would happen if we made highly democratic countries less democratic and entrusted certain political decisions more to unelected officials. If you think he’s attacking...

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