Lobbyist Job Creation Act

By Chidem Kurdas

Happy Fourth of July! Don’t want to rain on anyone’s parade, but  the state of the Republic requires serious thought. Our government has managed to create endless opportunities, but not for ordinary people—only for political operators and influence peddlers, with the Obama Administration pushing some 4,500 pages of medical and financial regulation just in its first 18 months.

What is more, those reams of regulation are an epitome of vagueness, of “unfathomable murk” in the fine phrase Daniel Henninger used in the WSJ to describe the problem.  In the murk and the wide-open discretion given to public bureaucrats lie gems for lobbyists. The White House and Congressional Democrats – even as they chided business lobbies – maximized the bills’ scope and vagueness, laying the groundwork for massive growth in the crony system that intermingles government with private interests.

What we see is something James Madison predicted.   Continue reading

Grounding Oil Spill Politics

by Chidem Kurdas

BP flounders, the Obama administration hastily reverses its deep-water oil drilling policy and bans what it previously wanted to expand and another regulator proves itself worse than useless. Better – or at least more realistic – decisions should be made about a valuable common resource like offshore oil. For that, we need a different institutional setup.

Elinor Ostrom, who shared the Nobel Prize in economics last year, pioneered public choice research as to what makes for well governed commons—click for a review by Alex Tabarrok of George Mason University.  Professor Ostrom’s concept of bottom-up “thick rationality,” Mario Rizzo wrote in ThinkMarkets, “recognizes the importance of local knowledge and diverse approaches in the management of resources.”

Those insights are relevant for the Gulf of Mexico debacle.  Continue reading

Props to Obama

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 increasing state power.  Still you gotta give Obama your props when he deserves them.  His statement on the prize was beautiful.  That’s the Obama I voted for!  Too bad that’s not the Obama making real choices as this Toronto Star op ed by Haroon Siddiqui chronicles.

Another Blog Post On Gates-Gate

by Roger Koppl

One comment on Gene’s recent post on the Beer Summit blasts “Obama’s PREjudice, his knee-jerk observationless, evidenceless accusation at Crowley.”  I think we need to remember that the police are monopoly representatives of state power.

Many serious people believe 1) that municipal police officers tend to be too eager to arrest people for, essentially, being disrespectful and 2) that black people, especially black men, are disproportionately at risk of inappropriate, arbitrary, or false arrest.  Continue reading

Big Players and the Rule of Law

by Roger Koppl

Greg Mankiw quotes a recent WSJ article:

“Like many others I made the mistake of buying what I believed was ‘value,'” Mr. Gwin says, adding that investors who bought at the time believed the loans were worth more than their market price. “We did not contemplate having our first liens invalidated by a sitting president,” he adds.

Mankiw is worried that Obama may be “trying to achieve a ‘fair’ outcome as he judges it, regardless of preexisting rules and agreements . . . . in which case politics may start to trump the rule of law.” Continue reading

Infrastructure: Here’s what Robert Moses would do today

by Sandy Ikeda

Mid-Manhattan Expressway
(Map by “vanshnookenraggen.”)

With your indulgence, I’ll get to my main point, and this map, in a moment.

But first, as we all know, the House has just passed a special ex post tax on bonuses awarded to individuals working for companies that received bail-out money. (One egregious violation of the rule of law deserves another then?) Over at Marginal Revolution they’re blogging about one really bad consequence of this hasty piece of policy-making: It seems that any family earning more than $250K with a member connected to a bailed-out institution will be marginally taxed at 90%. If it passes, I’m sure this in turn will give rise to further interventions as Congress tries to deal with THAT snafu (assuming the Supreme Court doesn’t overturn it).

The AIG fiasco is just one, economically insignificant but politically sensitive, instance of the countless unintended consequences that we should expect in the coming months and years issuing from the various bailouts and stimuli. Continue reading

In Defense of Reasonable Ideology



by Mario Rizzo


There have been many statements recently to the effect that we should not let “ideology” or “philosophy” stand in the way of solving our economic problems.  Indeed, the Obama Administration (and the previous Bush Administration) are keen to persuade us to drop all of this prejudice and to go after each problem – banking, stimulus, and so forth – on its own terms. We should examine each solution on its own merits.


President Obama’s inaugural address includes an apparent attack on ideology:


“What the cynics fail to understand is that the ground has shifted beneath them – that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works …”



What appears to be a sensible idea to turn our problems into purely technical ones is, on the contrary, profoundly unscientific and, more generally, anti-intellectual.


This is a big subject and deserves comprehensive treatment. Let it suffice here to make a few crucial observations. Continue reading

Science and Truthiness

by Roger Koppl

President Obama seems to be setting himself up as the scientific President.  He has a Nobel Prize winning physicist for his Secretary of Energy.  Monday he reversed the ban on stem-cell research and issued an interesting memo meant, presumably, to restore scientific integrity to the Executive Branch of the federal government.

Obama’s attitude toward science is a vast improvement over the Bush attitude that, in Stephen Colbert’s brilliant satire, “truthiness” trumps science.  I think the celebration of “science” has its risks, however.  Obama gets it right, I think, when his memo says, “If scientific and technological information is developed and used by the Federal Government, it should ordinarily be made available to the public.”  And he is right to say, in effect, that we don’t get to pick our facts.  Right.  But I fear the tyranny of experts, especially when their funding comes from one source, the federal government. Continue reading

Orthogonal mindsets

by Sandy Ikeda

At the Colloquium lunch on Monday, one of my esteemed colleagues wondered aloud whether Paul Krugman’s insistence that the humongous stimulus package needs to be much bigger wasn’t evidence of madness. Then, something came up during the actual colloquium – with Larry White, with whom we were discussing a chapter, dealing with Hayek versus Keynes in the 1930s, from his forthcoming book on the “clash of economic ideas” in the 20th century – that helped a non-macro-guy like me better understand, from a sociological perspective, why economists on different sides of the bailout/stimulus debate often just don’t seem to get each other. Continue reading