by Chidem Kurdas As Fannie Mae goes for its next withdrawal from the $200 billion kitty the US Treasury graciously made available to this government-created and -sustained mortgage financer, it may be useful to look beyond the current housing slump and consider what it augers for the future. Having made yet another loss, the government-sponsored … Continue reading Pain in the Fannie
by Mario Rizzo The work of Elinor Ostrom, the first woman to receive the Nobel Prize in economics, is not very well-known among economists. In fact, I would venture the guess than most economists had not heard of her before the prize was announced yesterday morning. Two reasons for this are that her degree is … Continue reading Elinor Ostrom and the Relevance of Economics
by Chidem Kurdas You’d think that the federal government wants Citigroup to return to financial health—if for no other reason to recoup the $45 billion of taxpayer money spent to shore up the bank in the credit freeze. You’d think the government wants a real effort to boost efficiency and profits. You’d be wrong. What … Continue reading Citi Phibro Selloff Shows Government Sham
by Roger Koppl Obama has been a bitter disappointment to me, though not really a surprise. He is skilled at signaling goodness while concentrating benefits and dispersing costs. That’s the norm for elected officials, especially at his level. Bush was an exception because he was only mediocre at signaling goodness and yet a genius at … Continue reading Props to Obama
by Roger Koppl It is better to signal goodness than to do good. That’s it. That’s the lesson. (Thanks to Steve Horwitz for the title of this post.) Democratic politics is mostly about signals not substance. The lesson is simple, but somehow hard to learn. Okay, okay, I admit that’s not really the One Great … Continue reading Politics in One Lesson
by Chidem Kurdas French president Nicolas Sarkozy reportedly wanted the G20 leaders to introduce a special tax on all financial transactions, known as the Tobin tax. Mr. Sarkozy took the idea from Adair Turner, the head of the British Financial Services Authority. Lord Turner suggested last month that the tax might be used to shrink … Continue reading Ghost of Socially Useful Labor Haunts G20
by Gene Callahan In Chapter 5, "Organization of Human Activity," Buchanan and Tullock discuss what constitutes a "rational" choice concerning social arrangements. They write, "We have assumed that the rational individual, when confronted with constitutional choice, will act so as to minimize his expected costs of social interdependence, which is equivalent to saying that he … Continue reading The Calculus of Consent II
by Mario Rizzo President Obama is complaining that the “special interests” are threatening his as-yet uncertain healthcare proposals. (Recall there is no Senate bill and nothing says that House bill won’t change significantly.) There is an interesting lesson here. What is meant by “special interests” and “general interests”? For the classical liberal the general interest … Continue reading Special Interest Hypocrisy
by Gene Callahan I have a confession to make: I'm currently reading The Calculus of Consent for the first time. I thought it might be interesting and useful to post some of my thoughts on the book here. (And, please note, I'm posting to a blog, not writing a research paper -- I am not … Continue reading The Calculus of Consent and Rawls
by Chidem Kurdas Cost savings from Medicare are claimed as one of the major sources of finance for the new medical entitlement program making its way through Congress, a claim that is astonishing in its brazen disregard of history. President Obama talks about eliminating waste and inefficiency in Medicare, then turns around and reassures people … Continue reading Healthcare Honesty
by Jerry O'Driscoll More than 250 economists have signed an "Open Letter to Congress and the Executive Branch" calling upon them to "defend the independence of the Federal Reserve System as a foundation of U.S. economic stability." Allan Meltzer is not a signatory to the petition and he has explained why not. The Fed has … Continue reading What Fed Independence?
by Chidem Kurdas “You'll save money,” says President Obama a propos health reform. You’ll consume more medical services, the demand for those services will go up and you’ll save money. Truly a miracle, like ancient Kings curing scrofula by touch. The bill passed by a Senate committee requires employers to provide medical coverage for employees … Continue reading Healthcare Miracle
by Gene Callahan This is an excerpt from a longer work of mine. While I thought it possibly of interest to readers here, they will have to excuse me if in some places I refer to 'another part of this work' or something of the sort: A leading contemporary constitutional theorist, Russell Hardin, rejects the … Continue reading Russell Hardin on Constitutions as Coordination Devices
by Roger Koppl The Los Angeles Times reports, “Industry is warming up to Obama’s climate plan.” It seems many big businesses, including Alcoa, want to go green. To what do we owe this sudden tree-hugging zeal? It could be an altruistic desire to save the planet, but I have a more skeptical opinion. I think … Continue reading Water does not run uphill
by Mario Rizzo In a recent talk on Keynes, Roy Weintraub refers to an idea he finds in Keynes that can be characterized as the confidence multiplier. Spending in particular areas builds confidence in other areas because businesses in the latter can rely on complementary spending in the former. Thereby a generalized resumption in spending … Continue reading Economic Confidence: An Empty Box?
by Roger Koppl Dick Cheney has intimated that water boarding yielded important, actionable intelligence. The evidence points the other way, however. Some evidence suggests that there may have been an ulterior motive for at least some “harsh interrogations,” namely, to link Iraq and al Qaeda. We need more analysis of Bush-era torture from an economic … Continue reading Rent Control and Torture