EconLog Archive
Economic Growth
My Weekly Reading and Viewing for July 6, 2025
I will be traveling for the next 19 days and so will be posting less frequently. Cincinnati’s Beer-Loving Germans Endured Anti-Immigrant and Anti-Alcohol Resistance by Elizabeth Nolan Brown, Reason, August/September, 2025. Excerpts: Cincinnati’s population ballooned throughout the 19th century, from 2,540 residents in 1810 to 115,435 in 1850, when it ranked as the sixth-largest .. MORE
Government Growth
DOGE Was Always Doomed
I’m sure DOGE will have a long history as the textbook definition of overpromising and underdelivering. There were a lot of reasons to be skeptical of their chances to meet their goals. But I just want to focus on simple realities DOGE didn’t – and couldn’t – alter. In 2024, federal spending was $6.8 trillion. .. MORE
Books: Reviews and Suggested Readings
Bryan Caplan on Antitrust
I’ve started reading Bryan Caplan’s excellent new book entitled Pro-Market and Pro-Business: Essays on Laissez-faire, and have covered the first 12 (short) chapters. I had hoped to find lots of things to post about, but unfortunately I tend to agree with almost all of Bryan’s arguments. There is one chapter on antitrust, however, which I .. MORE
Liberty
Jeff Hummel on the American Revolution
Every few years, I post on an excellent article on the American revolution by economic historian Jeff Hummel. It’s on Econlib. I asked Jeff to write it in 2018 and it has been a perennial hit. Indeed, in a newsletter a few years ago, Liberty Fund stated: Our most popular Article ever is from Jeffrey .. MORE
Law and Economics
Transaction Costs and the Law
Despite Ronald Coase’s many contributions to economics, he is most famous for the co-called Coase Theorem, which is just one small part of his paper The Problem of Social Cost. Simply put, in a world of sufficiently low transaction costs, property rights, institutions, and the law don’t matter. If rights are assigned randomly, the result .. MORE
Economic Education
Cash Transfers: Cutsinger’s Solution
Question: One common argument against public assistance taking the form of direct cash handouts is that the recipients will use the money to buy things that taxpayers find objectionable, e.g., illicit drugs, gambling, etc. To avoid this outcome, the argument goes, public assistance should take the form of in-kind transfers, e.g., food, housing, medical care, .. MORE
Political Economy
The Marriage of Jeff Bezos in Venice
The vocal opposition of some locals to Jeff Bezos’s marriage in Venice, in line with the reaction against tourism, illustrates a few important points in economics and political philosophy. The Financial Times reports (“Jeff Bezos’s Wedding Draws Storm of Protest in Venice,” June 24, 2025): “What is happening here is blatant arrogance,” said Marta Sottoriva, .. MORE
EconTalk
Defying the Data: Standard of Living Edition
In 2007, Eliezer Yudkowsky wrote an interesting article advocating for what he called “defying the data.” The idea was fairly simple – say you have some theory explaining how the world works. A new study is published with data that can’t be accounted for with your theoretical framework. How should you respond? One response is .. MORE
Income and Wealth distribution
Which Class Are You In?
I’m not a fan of left wing views on “class”. Progressives often define class in terms of income or wealth, which makes no sense to me. I’ve spent time in all 5 income quintiles, from the bottom 20% to the top 20%, and yet I have never identified my “class” with my income. The following .. MORE
Economic and Political Philosophy
Fascism, the Right, and the Left
What is fascism, and what place does it occupy in political philosophy? There is more to that question than the standard identification with the extreme right, as echoed by the encyclopedia Britannica: Although fascist parties and movements differed significantly from one another, they had many characteristics in common, including extreme militaristic nationalism, contempt for electoral .. MORE
Adam Smith
My Weekly Reading for June 29, 2025
ADAM SMITH AND THE NAVIGATION ACTS: A NEW INTERPRETATION by Caleb Petitt, Libertarianism.org, June 25, 2025. Excerpt: Smith’s discussion of the Navigation Acts has been a boon for protectionists and a thorn in the side of those who love Smith and support free trade and liberty. A deeper examination reveals that Smith was not the wholehearted supporter of the .. MORE
Cross-country Comparisons
Two Housing Crashes
China recently experienced a housing crash comparable in size to what the US experienced during 2006–10. Before considering the impact of that housing crash, let’s review what happened in the US. Between January 2006 and April 2008, housing construction in the US plunged by more than 50%. Despite that crash, the economy continued to do .. MORE
Incentives
Missing the Mark: When Punishment Reinforces the Wrong Behavior
Secretary of Transportation Sean Duffy seems intent to repeat the mistakes of the past. While responding to an NBC Nightline interview question regarding the recent spate of aviation accidents and incidents (most recently to the interview, a private jet inadvertently entering an active runway in Chicago Midway Airport causing a Southwest flight to execute a .. MORE
Books: Reviews and Suggested Readings
The Importance of Foreign Literature
My winter read this year was Natsume Sōseki’s 1906 satirical novel I am a Cat (original title: Wagahai wa Neko de Aru). The novel is told from the perspective of an unnamed cat and contains vignettes of its observations of its master Mr Sneaze (Sōseki’s conception of himself), Mrs Sneaze (his wife), and several of .. MORE
Economic and Political Philosophy
Voice, Exit, and Cheerleaders
The newest season of the Netflix documentary America’s Sweethearts, which traces the 2024 audition, training, and performance season of the Dallas Cowboys Cheerleaders, is a lot more than just a pretty face. The philosopher Loren Lomasky has argued persuasively in Persons, Rights, and the Moral Community that one of the things that makes humans human .. MORE
Macroeconomics
Cochrane on Monetary Policy
People occasionally ask me how my views on economics differ from those of John Cochrane. In a recent Cochrane post on Fed independence, I found a paragraph that nicely illustrates how our views differ: Congress also gave the Fed limited tools. The Fed can only buy and sell securities and set interest rates. The Fed .. MORE
International Trade
Highlights of Don Boudreaux Talk: Championing Free Trade in an Age of Economic Nationalism
George Mason University economics professor Don Boudreaux gave an excellent Zoom talk last week to a group I’m part of: the Stanford Classical Liberals. One of the things I most enjoy about Don’s talks is his nailing each point with loads of relevant data. The other thing, which is rare nowadays, is the perspective .. MORE
Law and Economics
Kelo at 20 Years: How to Regulate the Regulators?
This month marks 20 years since the U.S. Supreme Court ruling in Kelo v. City of New London. This 5-4 ruling upheld the Court’s rational basis deference to legislatures in determining whether economic development (jobs, tax revenue, etc.) satisfies “public use”, even when the government conveys the seized property to other private parties. Although Kelo .. MORE
Rule of Law
Law and Policy
Whenever a legal challenge to a given policy is decided, a discussion tends to arise as if the court is making a statement on the desirability of the policy itself. For example, after the US Court of International Trade struck down Trump’s tariffs enacted under the International Economic Policy Act (IEEPA) of 1977 (VOS Selections, .. MORE
Labor Market
Are Immigrants Self-Deporting?
A recent paper from the Center for Immigration Studies suggests that the answer is yes: We preliminarily estimate that the number of illegal immigrants has fallen by one million since the start of the year, perhaps due to their leaving in response to President Trump’s election and stepped-up enforcement efforts. But it is important to .. MORE
Business Economics
Companies Don’t Need Regulation to Cut Back on “Excessive Packaging”
Former Obama staffer Rahm Emanuel famously said, “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not before.” There is a corollary here: never overlook an opportunity to invent a crisis. Perhaps it would be better said, .. MORE