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Business Cycles

Condemning the Profit Motive

By Chris Schwing | Apr 13, 2023

I recently encountered a laundry list of objections to the profit motive. The following is the list with redundancies removed, edits for clarity, and my comments. Many of the complaints are based in ignorance of how markets work, ignorance of the perverse incentives created by government regulation, failure to consider problems with available alternatives, refusal .. MORE


Greenspan on NGDP targeting

By Scott Sumner | Apr 12, 2023

I’ve been reading Robert Hetzel’s excellent new history of the Fed, and came across this November 1992 quotation from Alan Greenspan: We have seen that to drive nominal GDP, let’s assume at  4 1/2%, in our old philosophy we would have said that [requires] 4 1/2% growth in M2. . . .  I’m basically arguing .. MORE

Media Watch

How Valuable is Current Event Reporting? The Case of Vietnam

By Chris Schwing | Apr 12, 2023

I’ve had some complaints about how the news media operates. And my less than rosy view of the news is hardly unique – Bryan Caplan, for example, has written on this very blog about his own misgivings about the news. But because I’ve never seen a dead horse that didn’t look like it needed a .. MORE

Central Planning

Call the Midwife Confronts Intrusive Government

By David Henderson | Apr 12, 2023

You Will Respect My Authoritah! My wife and I are big fans of the PBS series “Call the Midwife.” She also gets a kick out of how teary-eyed I get watching some of the episodes. Season 12, Episode 4, which aired last Sunday on KQED, was no exception. Something else happened on it, though, that .. MORE

Cross-country Comparisons

Shen Yun and Advocacy

By Alberto Mingardi | Apr 11, 2023

Captivated by their scintillating Internet marketing, I went to see Shen Yun, now branded “China before Communism”. Shen Yun is the theatrical enterprise of Falun Gong, apparently a rather profitable venture. Falun Gong is a controversial religious movement that is ostracized in mainland China and Shen Yun is controversial, too: see, for example, the New .. MORE

Politics and Economics

The COVID Emergency Powers Are Over

By David Henderson | Apr 10, 2023

Only 3 years too late. President Biden did something today that I approve of: signed a bipartisan bill to end the COVID emergency that President Trump had declared a little over 3 years ago. The bill passed the U.S. Senate by a vote of 68-23. Here’s a summary of the bill, Senate Joint Resolution 38: .. MORE

Political Economy

Diversity and Transgenderism in School Athletics

By Pierre Lemieux | Apr 10, 2023

Further thinking has tweaked or clarified my opinions about social diversity. It should not be viewed as a fundamental value; it is simply a fact of life in any non-tribal society, and an instrumental value to solve otherwise insuperable problems of social interaction and to promote prosperity and human flourishing. Economics helps see this by .. MORE

Economics of Health Care

COVID and Tradeoffs

By David Henderson | Apr 10, 2023

My frequent co-author Charley Hooper, Stanford epidemiologist and economist Jay Bhattacharya, and I met for lunch in Palo Alto on Friday. See pic above. Not surprisingly, much of what we discussed was the ways in which Twitter, at the behest of various major players, tried to shut Jay down. He was so often accused of .. MORE


Profit margins and inflation

By Scott Sumner | Apr 10, 2023

Some pundits argue that America’s recent inflation is caused by corporate price gouging. I find that claim to be rather implausible. Why would corporations suddenly choose to engage in price gouging in 2022? Why not 2017? Or 2012? So I decided to check the national income accounts. Here are the percentage changes from the 4th .. MORE

Adam Smith

Seeing the Invisible Hand

By Walter Block | Apr 9, 2023

Adam Smith’s “invisible hand” is certainly the most wondrous, astounding and marvelous concept in all of economics, and there are quite a few doozies in the dismal science. I go further than that. The invisible hand ranks as high or higher, in terms of pure beauty, than even the smile of a baby, the music .. MORE

Cross-country Comparisons

Cuba: A Monetary Phenomenon

By Chris Schwing | Apr 8, 2023

To write about statistics and Cuba is, inevitably, to speak of oxymoronic terms. Whenever someone tries to approach the Cuban case from the lens of years prior to 1959, or even after, the stats are either obscure, non-transparent, or nonexistent. That is not to say that the work in this field does not exist. On .. MORE

Labor Mobility, Immigration, Outsourcing

Progress on the Southern Border; Yes, Really

By David Henderson | Apr 8, 2023

I read a lot of right-wing and conservative sites on the web and I often see the authors highlighting the huge number of illegal aliens crossing the southern border. What I rarely see is any of them noting progress, from their viewpoint, when it happens under Biden. That’s one of many reasons that the Cato .. MORE

Business Economics

Who’s to Blame for Excessive Profits?

By Chris Schwing | Apr 7, 2023

A recurrent theme in public discourse centers on the “excessive“ profits that some firms make. These profits are depicted as “immoral“, and people urge the government to intervene. Profits should be distinguished from the remuneration that you receive for your labor or from interest payments on your capital. Profits, in contrast, are what entrepreneurs reap .. MORE

Economics of Health Care

Why We Should Reform Medicare and Social Security in the Next Few Years

By David Henderson | Apr 7, 2023

  Imagine you’re out in the jungle and that in front of you is a steep, miles-long cliff on either side of your location. You see a stampeding herd of elephants coming your way. Unless something very unlikely happens, they will soon be trampling you. Should you act on that information now or wait until .. MORE

Books: Reviews and Suggested Readings

Alternative Approaches to Monetary Policy

By Scott Sumner | Apr 6, 2023

I have a new book out entitled Alternative Approaches to Monetary Policy, freely available at this link.  I plan to revise the book based on feedback I receive, and will eventually come out with a paper version. You can think of the book as fleshing out the implications of this 2003 comment by Ben Bernanke: .. MORE

Moral Reasoning

Ezra Klein and Everything Bagels

By Chris Schwing | Apr 6, 2023

I’ve occasionally heard some version of “I only criticize X because I love it and I want it to be better.” Most of the time, that comes across as little more than a shibboleth to let someone engage in petty dunking, while pretending to be inspired by noble motives. But sometimes it does seem sincere. .. MORE


How I Savings Bonds Work

By David Henderson | Apr 6, 2023

I posted a few months ago how the interest rates on Treasury’s I savings bonds reset. Someone at pickleball asked me to explain further. I looked into it and it’s fairly straightforward: the value of an I-bond bought at a particular time increases by the nominal rate (which is the real interest rate set at .. MORE

Moral Reasoning

You Can’t Say That; I Can

By David Henderson | Apr 5, 2023

Yes I Can. In an episode of Gutfeld! last month, a black guest made a controversial statement about a policy issue involving blacks and whites—I can’t remember what—and his statement was one that many conservatives might want to make. Then he looked at the white host, Greg Gutfeld, grinned, and said, “You can’t say that; .. MORE

Institutional Economics

The Rule of Law and the Proliferation of Laws

By Pierre Lemieux | Apr 5, 2023

The economic benefit of the rule of law comes from its being a necessary condition for the security of private property rights and thus for prosperity, not to speak of individual liberty in general. This is clear both from economic theory and from history. No wonder that classical liberals have considered the rule of law .. MORE

Economic Education

Using Opportunity Cost

By Chris Schwing | Apr 4, 2023

One of the great joys of economics is realizing how applicable it is to the world. The lessons of economics don’t only apply to situations where money changes hands. All kinds of human decision-making can be understood through the ideas of economics. In this way, understanding economics can also help us improve our own decision-making .. MORE


FDIC and small banks

By Scott Sumner | Apr 4, 2023

George Selgin has an excellent post on the history of FDIC.  I already knew that FDR had opposed the idea of deposit insurance and was pressured into agreeing to the proposal in order to achieve his other banking reform goals.  But this was new to me: Carter Golembe (1960, 195) zeros in on the truth. .. MORE