Dangerous Political Naifs

Being well past the age of 50 and having spent nearly all my adult life as an academic economist, I seize the privilege of doing what so many other economists of my age and rank do—namely, offer unsolicited speculations about what is right and what is wrong with modern economics. First, something that is right. [...]

Greece: The Canary in the U.S. Coal Mine?

With everything that was going on in the U.S. economy this past winter, the beginnings of the crisis facing the Greek economy were certainly easy to miss. As that crisis has now come to full flower, American observers overlook it at their peril: Greece’s problems, and those of other European countries, might well represent a [...]

Transforming America: The Bush-Obama Stimulus Programs

George W. Bush’s and Barack Obama’s “stimulus” programs will permanently transform the American economy. The market-based system that has produced unprecedented prosperity relies on profit and loss, which rewards individuals and firms that add value to the economy and penalizes those that detract value. The various stimulus programs undermine that system. My discussion will focus [...]

Economics on Trial

The Laffer Curve—the theory that when taxes are too high, reducing them would actually raise tax revenue—is dismissed. “When Reagan cut taxes after he was elected, the result was less revenue, not more,” reports Mankiw in his popular textbook.2 Never mind that tax revenues actually rose significantly every year of the Reagan administration; the perception is that supply-side economics has been discredited.

Samuelson’s Last Hurrah

As readers of The Freeman know, this column has documented the dramatic changes in Samuelson’s thinking over the past few years.[1] Along with the rest of the economics mainstream, he has shifted gradually from standard Keynesian analysis to the Classical model of Adam Smith.

Another Shocking Reversal in Macroeconomics

Who wrote this? “Fiscal policy is no longer a major tool of stabilization policy in the United States. Over the foreseeable future, stabilization policy will be performed by Federal Reserve monetary policy.”

Milton Friedman? No, it was not a monetarist.

I recently met with Milton Friedman in his home in San Francisco, and asked him who he thought wrote the above statement. “Alan Greenspan?” he queried. No, it wasn’t a Federal Reserve official.