A recent issue of The Economist had an article on monopsony and the “non-compete“ agreements that some lower-paid fast-food chain workers have had to sign as a condition of employment. On the whole, The Economist doesn’t like this because it supposedly holds down wages. The Economist is not alone in thinking this. Even noted economists … Continue reading The “New” Monopsony Argument and the Suppression of Wages
by Liya Palagashvili A couple months ago, a judge ruled in favor of Seattle’s ordinance that will allow ridesharing drivers to engage in collective bargaining agreements. The ordinance has granted the labor union, Teamsters, the right to represent drivers for companies such as Uber and Lyft. Under current U.S. labor laws, the National Labor Relations … Continue reading Rigidity and Flexibility: Unions in the On-Demand Economy?
by Andreas Hoffmann and Sebastian Müller The financial crisis of 2007 eroded the public confidence in financial markets. Many people have come to believe that only the government can guarantee the stability of financial markets. Responding to increased public demand, politicians from across the political spectrum support additional "macroprudential regulation". However, little is known about … Continue reading Two Cheers for Placebo-Regulation
High-speed broadband networks are key to the growth of digital markets as well as most modern forms of communication, and have been subject to far-reaching regulation in many countries. In this piece, we’ll review the rationale behind a cornerstone of the prevailing regulatory paradigm: forced access to incumbent operators’ network infrastructure by alternative operators on … Continue reading A Critical Appraisal of Network Unbundling
by Edward Stringham We hear of high profile cases of police killings, but few look at the larger picture of how often American citizens are killed by police. What is the rate at which police kill citizens and how does that compare to other homicide rates? Although official statistics have historically been scant, we now … Continue reading Calculating the police against citizen homicide rate
by Roger Koppl Oliver Blanchard tells us “Where Danger Lurks” in the macro-finance world. The big theme is nonlinearity, which is a profoundly conservative move: DSGE modeling is just fine and we don’t need to rethink it at all. We just need to add in some nonlinearities. Blanchard does not tell how to calibrate a … Continue reading The Blanchard Danger
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 Roger Koppl Income inequality matters. Let me say that again so you know I meant it: Income inequality matters. This statement may be surprising coming from a self-described “Austrian” economist and a “liberal” in the good old-fashioned pro-market sense. It shouldn’t be. It should be one of our issues. The surprise should be that we … Continue reading Income Inequality Matters
by Chidem Kurdas Paul Ryan is said to be influenced by Milton Friedman, Friedrich von Hayek and Ayn Rand. One might add that as the representative for Wisconsin's first congressional district, he is from a state that has often been in the vanguard of policy thinking. That he came up with specific proposals for Medicare and … Continue reading Wisconsin Policy Lab
by Chidem Kurdas Cass Sunstein, the White House regulatory affairs chief, is going back to academia. It is not clear why he chose this particular time to return to Harvard Law School, leaving behind what looked like an experiment to implement the notions he advocated. Has he made a difference as federal overseer of rulemaking? The record … Continue reading Regulation Czar’s Net Effect
by Roger Koppl Ali Wyne of the big think blog “Power Games” recently posted an interesting set of comments on the theme “Empirics and Psychology: Eight of the World’s Top Young Economists Discuss Where Their Field Is Going.” George Mason’s own Peter Leeson was among the eight “top young economists” sharing their views. Over at … Continue reading Top Young Economists Consider Their Future
by Mario Rizzo Some time ago I was accused by the noted economist and psychiatrist Professor Bradford DeLong of being a "psychopath" and "clinically crazy" because I suggested that people should not tip cab drivers in New York City. I do not intend to revisit that particular issue here. This time I would like to … Continue reading The Unfairness of Taxi Fares
by Chidem Kurdas After all that’s been said and written about financial crises, it is rare to come across useful insights. Financing Failure. A Century of Bailouts by Vern McKinley documents a major continuity with past policy making. He shows that policies intended to prop up failing companies are nothing new—the same basic pattern has recurred time … Continue reading Hundred Years of Bailouts
by Roger Koppl The Supreme Court upheld “Obamacare” because Chief Justice Roberts changed his mind. (It seems that “Obamacare” is no longer a pejorative.) In this curious situation, a stalwart of the Federalist Society has become a Big Player in healthcare markets. A Big Player is a powerful actor who uses discretion to influence a … Continue reading Is Justice Roberts a Big Player?
by Chidem Kurdas Less than two months ago, President Obama claimed that speculators were (or at least might be) artificially driving up the price of oil—a notion that some politician or pundit brings up every time gasoline looks expensive. The idea fades when the market changes direction. Thus in recent weeks, economies worldwide took a … Continue reading Remember Those Oil Speculators?
by Chidem Kurdas Regulation advocates seem to regard the JP Morgan loss as the best thing since sliced bread. Thus Paul Krugman gleefully bawls out Mitt Romney for refusing to see it as a sign for greater government intervention. Krugman repeats the by now well-known argument on banks, as a riff on “It’s a Wonderful … Continue reading Krugman on Banks and Romney
by Chidem Kurdas There’s a widespread impression that the $2 billion-plus trading loss JP Morgan Chase announced a few days ago strengthens the case for more regulation of banks. Below Jerry O' Driscoll makes this argument more thoughtfully than I've seen any where else. Two basic facts are worth remembering. Fact number one is that in … Continue reading Should Banks Just Buy Treasuries?
by Chidem Kurdas The case made for minimal government by Milton and Rose Friedman in their 1979 book, Free to Choose, has been debunked, according to Berkeley professor Brad DeLong. Basically, he avers that the Friedman program has been tried and failed. As a commentary on Friedman, this is outrageously misleading. But Mr. DeLong provides … Continue reading DeLong, Friedman and Maximal Government
by Roger Koppl A front-page article in yesterday’s Washington Post underlines the importance of establishing a substantive defense right to expertise in the US. The article says, “Justice Department officials have known for years that flawed forensic work might have led to the convictions of potentially innocent people, but prosecutors failed to notify defendants or … Continue reading The Passions and the Interests in Forensic Science
by Chidem Kurdas We’ve been going back and forth on the economics of too-big-to-fail banks but paying less attention to the politics. The most recent ThinkMarkets broadside on banks is Jerry O’Driscoll’s post on the Federal Reserve Bank of Dallas annual report. In part of the report, the Dallas Fed’s director of research Harvey Rosenblum argues … Continue reading Big Bank Breakup or Tea Party?
by Chidem Kurdas My previous post about government restrictions on oil and gasoline transportation drew comments saying prices are set in a world market and the effect of United States policy is negligible. Numerous economic and geopolitical forces influence the price of oil, no question. That does not change the fact that the Jones Act … Continue reading Oil Price Politics Implication
by Chidem Kurdas Oil from North Dakota is selling at a record discount, according to a March 1st news item in the local paper, the Bismarck Tribune. By contrast, here in New York gasoline prices are near record highs. Between North Dakota and New York are thousands of miles but more crucially standing between us is … Continue reading Politics of Oil Prices
by Chidem Kurdas Is the Federal Reserve a hotbed of trustbusters? Fed officials (as well as some academics) have been calling for forcible downsizing of big banks . “I am of the belief personally that the power of the five largest banks is too concentrated,” Dallas Federal Reserve Bank president Richard Fisher said a few days … Continue reading Big Bank Obesity Conundrum
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 Early in his career, long before he became a Nobel prizewinner and the household name for free market economist, Milton Friedman worked for the US Treasury. The following anecdote is from his 1998 memoir with his wife Rose, Two Lucky People. This revealing example of how public officials operate illustrates, in Friedman’s words, … Continue reading M. Friedman Goes to Washington