by Andreas Hoffmann and Nicolás Cachanosky The Federal Reserve’s (Fed) and European Central Bank’s (ECB) policy responses to the recent financial disasters offer two tales of unintended consequences. Our previous post outlined undesired effects of the Fed’s policies. In this post, we suggest that the ECB’s stabilization policy did not only fail to achieve its … Continue reading Unintended Monetary Policy Effects – Tale II: ECB Crisis Policies
by Gerald P. O’Driscoll, Jr. I have been reading Central Bank Governance & Oversight Reform, edited by John H. Cochrane and John B. Taylor. It is a conference volume of unusually high quality with all the discussions of presentations included. I plan to write more about the book later, but to highlight one chapter here. … Continue reading The Fed’s Institutional Design
by Jerry O’Driscoll For the month of November, Cato Unbound features an essay by me on “The Fed at 100.” Over the course of a week, there will be comments by Larry White, Scott Sumner and Jerry Jordan. I will respond to these as appropriate. “End the Fed” has become a political slogan. Long … Continue reading Instead of the Fed
by Mario Rizzo I grant that the government “shutdown” and the perceived threat of default on the debt was a public relations disaster for the Republican Party. I think that the shutdown problems, like those of the Sequester, were grossly exaggerated by the traditional media and as well as by various left-wing hysterics. Neither of … Continue reading The Government Shutdown and the Debt Default Issue: The Dreadful Lesson
by Andreas Hoffmann (University of Leipzig) In a recent piece Jesus Huerta de Soto (2012) argues that the euro is a proxy for the gold standard. He draws several analogies between the euro and the classical gold standard (1880-1912). Like when "going on gold" European governments gave up monetary sovereignty by introducing the euro. Like … Continue reading The Euro: a Step Toward the Gold Standard?
By Jerry O’Driscoll Cyprus is the latest country to succumb to the financial rot in the European Union. Once a banking center, its citizens now cannot pay for their own imports. Exporters are demanding cash only for goods sent to Cypriote businesses. Credit has dried up. Businesses are closing because they have no goods … Continue reading Cyprus
by Mario Rizzo I now favor expiration of the Bush era tax rates for everyone. Why? Because the only way to curb spending in the long run is to make as large a number of Americans as possible truly feel the consequences of the expenditures they appear to desire. If Americans saw the cost of the gigantic welfare … Continue reading Raise Middle Class Taxes Now!
by Mario Rizzo Some people rest the case for representative democracy on the idea that its decisions express the “will of the people.” Those who believe this have never thought deeply about what they are saying. I am inclined, in response to these believers, to use my favorite paraphrase of Ludwig Wittgenstein, “You can mouth … Continue reading THE WILL OF THE PEOPLE
by Gene Callahan Joseph Fetz's blog alerted me to an interesting video comparing the same intersection in New Zealand on a day when its traffic light was out versus the next day with the light back in operation. The video certainly illustrates the fact that people's ability to achieve spontaneous order can be greater than one … Continue reading Ban the Traffic Light?
by Gene Callahan I am writing a solicited comment for Dan Klein's new book, Knowledge and Coordination: A Liberal Interpretation, for the journal Studies in Emergent Order. This is an especially interesting task for me, as Klein's topic is obviously vital to my preliminary work on social cycles. And Dan is always an intelligent and … Continue reading Spontaneous or Planned: A Sharp Dichotomy, or a Gradient?
by Chidem Kurdas A trustee of the New York Public Library, Robert Darnton, defends in the New York Review of Books the controversial plan to revamp the library’s Fifth Avenue building. The issue goes beyond one building – however iconic – and one institution. Any book lover will sympathize with the plight of libraries. Despite the … Continue reading Libraries Linking Past to Future
by Mario Rizzo This will not be a review of her scholarly contributions. I have already made some attempt at that in a post shortly after her richly-deserved Nobel prize in economics. And I also link an announcement of her death here. I met Professor Ostrom at a celebration of her work at GMU after she won the prize. … Continue reading Elinor Ostrom, RIP
by Chidem Kurdas The European crisis, in progress for years and still showing no sign of resolution, is largely the result of elite hubris. To create the euro and ram it down the throats of populations that, left to their druthers, would have stayed with their old currencies—this was a massive, top-down social engineering project. … Continue reading Euro Crisis from Long Perspective
by Gene Callahan I was sitting in a session of the British Political Studies Association Conference today, listening to several speakers talk about sortition (using random selection in the political process) when I was struck by a way to employ it to achieve campaign finance reform without any restriction on donations or campaign length. So, I share: … Continue reading Using Sortition to Achieve Campaign Finance Reform
by Jerry O’Driscoll The issue of banks viewed as too big to fail has been taken up several times on this site. In its Annual Report, the Federal Reserve Bank of Dallas has weighed in on the topic with an essay on “Choosing the Road to Prosperity: Why We Must End Too Big to Fail … Continue reading Too Big to Fail – Again
by Jerry O’Driscoll By now, most readers of ThinkMarkets are aware that there is a nasty battle for control of the Cato Institute. The Koch brothers have filed a lawsuit against Cato and two individuals. It made the front page of the New York Times earlier this week, and has been blogged about endlessly from all … Continue reading The Battle for Cato
by Chidem Kurdas The point of term limits is to prevent the buildup of political power by one person or group. In Russia’s ersatz version, Vladimir Putin merrily plays revolving door with his protégé Dmitry Medvedev. Mr. Putin may win the election on March 4th despite the persistent protests sparked by his latest round of musical chairs with … Continue reading Russian Lesson on Term Limits
by Chidem Kurdas Barack Obama sounded a number of themes in his 2012 State of the Union Address this week, all underpinned by the proposition that socioeconomic ills can be solved by interventionist government in general and his administration in particular. Indiana governor Mitch Daniels, giving the Republican rebuttal, effectively replied to the main claims. He … Continue reading President Obama’s State of Regulation
by Mario Rizzo For those who enjoy trying to figure out what important thinkers might have thought about specific issues they never faced (and I am one of them!), the following letter I discovered will prove interesting and perhaps disconcerting to some. Below is a brief excerpt from a letter that F.A. Hayek wrote to the journalist and … Continue reading Hayek on the Large Corporation (aka “Breaking up Big Banks?”)
by Mario Rizzo This will be a short post. Nearby is a Venn diagram showing the intersection between Goldman Sachs and the federal government: people who before or after were attached to both. This is one reason that the current political-economic system will continue to fail. Those who exercise positions of political influence are not about the … Continue reading The Free Market versus Crony “Capitalism”
Chidem Kurdas The United States Postal Service is in a deep financial hole that looks to get deeper unless the institution undergoes a major revamp. Postmaster General Patrick Donahoe says current bills in Congress do not provide enough savings to get out of the hole. US Mail has historical roots. What would Benjamin Franklin, who was appointed … Continue reading Is USPS as American as Pumpkin Pie?
by Chidem Kurdas In their new book, First Thing We Do, Let's Deregulate All the Lawyers (Brookings Institution Press, 2011), Clifford Winston, Robert W. Crandall and Vikram Maheshri reach the surprising conclusion that America has too few lawyers rather than too many. They make a strong case but it raises a major question. Legal costs … Continue reading Deregulated Lawyers and Regulatory Spread
by Jerry O’Driscoll I recently read Money, Markets and Sovereignty by Benn Steil and Manuel Hinds. I highly recommend it. The jacket blurb accurately summarizes the book’s importance: “Benn Steil and Manuel Hinds offer the most powerful defense of economic liberalism since F. A. Hayek published The Road to Serfdom more than sixty years ago.” … Continue reading Monetary Nationalism
by Mario Rizzo I have been away in France for almost two weeks. I missed the "earthquake" and Hurricane Irene for I which am very happy. What being away reminds me is that if you follow the day-to-day news you can easily get bogged down in the small events -- though they seem big and important … Continue reading Look to the Long Run
by Chidem Kurdas I just read The Politics of Bureaucracy by Gordon Tullock, one of the best books written on the behavior of bureaucrats. Although originally published in 1965, it remains very much relevant today, especially as the debt deal currently in Congress could bring spending caps on programs administered by numerous bureaucracies. These entities … Continue reading Spending Cuts and Politics of Bureaucracy