Archive for January, 2009

The Myth of Public Works as an Economic Stimulus

Words to ponder as the stimulus bill snakes through Congress: While we have legitimate infrastructure needs, public-works spending historically has been too slow, has delayed private and local government spending, and created few jobs for the unemployed. The programs are not labor-intensive and require skills few unemployed have. Public works did not end the Great [...]

23Jan2009 | Sheldon Richman | 0 comments | Continued

"Vive la liberte!"

Or so came the cry of the French Revolutionaries.  As anyone interested in history and liberty can attest, liberty requires a good deal of hard work.  I was especially struck by the relationship between liberty and work when reading French chef Jacques Pepin’s autobiography earlier this week.  The Apprentice: My Life in the Kitchen recounts [...]

23Jan2009 | Margaret Morgan | 2 comments | Continued

The War Between the State and the Family: How Government Divides and Impoverishes

Sympathy and compassion help make humans caring, moral beings. Adam Smith, the father of modern economics, understood that, as illustrated by his emphasis on sympathy in The Theory of Moral Sentiments. Often, however, sympathy and compassion are transformed from tools of moral judgment and action into weapons of blind ideology, irrational emotionalism, and cynical politics. [...]

22Jan2009 | Raymond J. Keating | 3 comments | Continued

Economic Facts and Fallacies

You don’t have to read far to find the focus of Thomas Sowell’s latest book, Economic Facts and Fallacies. It begins by quoting John Adams—“Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence”—then immediately argues for the [...]

22Jan2009 | Gary M. Galles | 5 comments | Continued

Opening the Floodgates: Why America Needs to Rethink its Borders and Immigration Law

In recent years there have been numerous highly publicized federal raids against companies that had violated the law by employing illegal aliens. The hapless people were deported and the companies slapped with stiff penalties. Generally, the reaction has been, “Well, it’s about time the government got tough!” For the most part, the strident voices of [...]

22Jan2009 | George C. Leef | 3 comments | Continued

Falling Behind: How Rising Inequality Harms the Middle Class

Robert Frank, a professor of economics at Cornell, has long argued that affluent Americans spend too much on conspicuous consumption, which he relabels “positional” goods. His favorite examples include big houses, expensive watches, barbecue grills, and wine. If Smith has more positional goods than Jones, then Jones is said to suffer “relative deprivation” because “what [...]

22Jan2009 | Alan Reynolds | 3 comments | Continued

How Rapidly Should the Money Supply Grow?

I would like to make one correction to Howard Baetjer’s article “Inflation 101” (September). The author suggests that inflation results when the money supply expands faster than the rate at which goods and services are produced. The author correctly points out that this expansion of the money supply will lead to rising prices. But inflation [...]

22Jan2009 | Mike Van Winkle | 0 comments | Continued

FEE Summer Seminars 2009

FEE is pleased to announce our 47th consecutive summer of student seminars. We have altered a few things in the program, and it promises to be a rewarding seminar season.One of the exciting changes on the agenda is our expansion to include different seminar locations. In addition to our home in Irvington, New York, we [...]

22Jan2009 | Margaret Morgan | 0 comments | Continued

Regulatory or Market Failure?

Freeman contributor Gerald O’Driscoll’s ThinkMarkets blog post on the failure of regulation in the current economic turmoil is worth reading. Here’s a taste: With the exception of health care, financial services is the most highly regulated industry in America (and, generally speaking, in all developed countries). No segment of the industry escaped regulation….We have witnessed [...]

22Jan2009 | Sheldon Richman | 0 comments | Continued

Surreptitious Serendipity

Though I’m almost hesitant to draw an economic conclusion from the recent airplane crash on the Hudson, I’m only almost hesitant.  Examples of spontaneous order are always, by their nature, unplanned.  Jeff Kolodjay (a passenger on the plane), perhaps unknowingly, articulated his encounter with spontaneous order.  When asked to describe his experience, he said that [...]

22Jan2009 | Margaret Morgan | 0 comments | Continued

The Knowledge Problem, cont'd.

An occasional series exposing the “pretence of knowledge” of government officials.From Barack Obama’s inaugural address: The state of the economy calls for action, bold and swift, and we will act — not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids [...]

21Jan2009 | Sheldon Richman | 0 comments | Continued

“The issue is always the same: the government or the market. There is no third solution” (Ludwig von Mises, Planned Chaos, p. 28).

I have to confess that I really do want to like the Sarkozy’s.  I find President Sarkozy endlessly entertaining, though sometimes more for gaffes that would be simply unheard of in U.S. politics than for his policy (take, for instance, his recent insult sans apology episode).  And Carla Bruni, though her past may not speak [...]

21Jan2009 | Margaret Morgan | 0 comments | Continued

Ludwig von Mises: Political Realist

Here’s Ludwig von Mises, in Human Action (4th rev. ed., 793), writing about what governments–and individuals–can and cannot do during economic crises: We may admit that for the British and American governments in the ‘thirties no way was left other than that of currency devaluation, inflation and credit expansion, unbalanced budgets, and deficit spending. Governments [...]

21Jan2009 | Sheldon Richman | 0 comments | Continued

Paul Krugman Flunks Capital Theory

Paul Krugman is said to have beat up on George Will during this joint appearance on ABC’s “This Week” back in November. But all Krugman really did was show that he, like Keynes, holds an unrealistic Play-Doh model of capital, as opposed to the heterogeneous, multistage, intertemporal structure-of-production model of the Austrian school. When Will [...]

21Jan2009 | Sheldon Richman | 0 comments | Continued

Liquid Lies

Government programs rely on deception from start to . . . well, none of them ever seems to finish, but if one did, the end would doubtless be as devious as the beginning. Politicians propose programs to solve imaginary problems and perpetuate them with blatant lies. Predictably, this wreaks havoc not only on the program’s [...]

20Jan2009 | Becky Akers | 10 comments | Continued

Gun Control: An Economic Analysis

In Economics 101 we teach students about several fundamental concepts, including the relationship between means and ends, forward-looking behavior, the use of substitutes, opportunity cost, and the role of moral hazard. Further, we insist that these concepts can be used to help understand the world around us and have applicability far beyond the classroom. Yet, [...]

20Jan2009 | and and Scott A. Kjar | 12 comments | Continued

Bailing Out Statism

The key to understanding the saga of Fannie Mae and Freddie Mac—the recently nationalized twin government-sponsored enterprises (GSEs) that dominate home financing—is this: They were set up—intentionally—to distort the housing and mortgage markets. Government planners were not content to let voluntary exchange and spontaneous market forces configure those industries unmolested. So—holding the taxpayers hostage—they intervened. [...]

20Jan2009 | Sheldon Richman | 12 comments | Continued
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