Economy

The Socialist Dream Will Never Die

Featured image Not long ago I was listening to one of Russ Roberts’s archived “EconTalk” podcasts with the great Thomas Sowell (and if you don’t listen to EconTalk you’re missing one of the top podcast artists of our time—subscribe for free here), and was completely stunned by something Sowell said. When he was assigned Friedrich Hayek’s seminal essay “The Use of Knowledge in Society” as a graduate student, he didn’t get it. »

Exposing Our Fannie Again

Featured image From this morning’s Wall Street Journal: Fannie Mae wants to make it easier for working-class and multigenerational households to get a mortgage. The mortgage-finance company said Tuesday it would roll out a program this year that lets lenders include income from nonborrowers within a household, such as extended-family members, toward qualifying for a loan. The move is expected to open up mortgage access to a segment of the population that »

On Your Mark, Get Set, . . . Crash? (Updated)

Featured image So, I’m back from my overseas idyll, which included bagging a lion I hastily renamed Cecil (see photo below), and which means the usual jet lag, a large pile of snail mail, and lots of undone work even further behind than usual. Anything much happen while I was away? Wait . . . the stock market did what? As I write, about an hour before the Monday morning open on »

From Power Line Baltic Command: “An Ocean Liner Without Lifeboats”?

Featured image I’m not really observing radio silence this week, but if you’ve ever been on a cruise ship you’ll know that shipboard Internet operates by smoke signal or some other antiquated technology. (Not to worry: I already have this Saturday’s “Week in Pictures” filed for posting automatically, in case I end up in a Russian jail cell on Friday.) Currently steaming through the Baltic Sea with our pals at the Pacific »

NY Times on the Right Minimum Wage: Zero

Featured image I know we’ve referenced this before, but it is worth doing again: The New York Times editorial page (!!!), in January 1987, explaining why the right minimum wage should be Zero: The Right Minimum Wage: $0.00 The Federal minimum wage has been frozen at $3.35 an hour for six years. In some states, it now compares unfavorably even with welfare benefits available without working. It’s no wonder then that Edward »

Friedman’s greatest hits

Featured image In honor of what would have been Milton Friedman’s (103rd) birthday this week, John Hawkins has culled “20 best quotes” from Friedman’s work. Friedman was of course a deserving winner of the Nobel Prize for Economics in 1976. Reading through the quotes, I recall that Friedman also had a Newsweek column. He had one or more series on PBS. He wrote books promoting freedom for a popular audience. One or »

Minimum Wage, Maximum Folly

Featured image Interesting news on the minimum wage front this weekend. First, the Brookings Institution, perhaps better known as the Hillary Clinton administration-in-waiting, put out a note by an economist who served in the last Clinton administration that is highly critical of the proposal for a national $15-an-hour minimum wage: A $15-hour minimum wage could harm America’s poorest workers By: Harry J. Holzer Many economists worry minimum wage increases tend to reduce »

Trump thought the housing market was “solid” in 2007

Featured image Donald Trump has tried to explain why he was a Democrat by saying that a Republican president, George W. Bush, crashed the economy. He told MSNBC that in the last two years of the Bush administration, the housing market “was a bubble that was waiting to explode.” Bush, Trump claimed, had a “death wish,” so he ignored the obvious weakness in the housing market and the economy collapsed. We have »

Economic Notes

Featured image Did you happen to catch this little detail in yesterday’s news about the old A & P grocery chain filing bankruptcy: More than 90% of A&P’s workers are union members, with 35 different collective-bargaining agreements that A&P said require benefit increases that are unsustainable. A&P said it would try to negotiate immediate changes to the contracts to prevent “catastrophic” results on sales, but otherwise will seek court orders to force »

Hillary’s Talking Points: Recycled From the 1990s

Featured image I don’t think we have written about Hillary Clinton’s recent speech on the economy. She says we need economic growth, but the policies she advocates would suppress, not encourage, growth. That’s the bottom line. But a reader also pointed out a letter to the New York Times, as quoted in Cafe Hayek, that bears on Hillary’s fixation on the middle class: Eduardo Porter opens his column today by asking “Could »

Puerto Rico Goes Broke

Featured image Most eyes have been on Greece, where events are coming to a climax. Meanwhile, a less-noticed financial collapse has overtaken Puerto Rico. That commonwealth has racked up debts of $72 billion, which seems astonishing for an island with a population of 3.6 million, not much more than Iowa. Puerto Rico’s governor now says that “the debt is not payable.” That seems to be true of a lot of sovereign debt »

Lack of self-restraint makes CEOs, and capitalism, easy targets

Featured image I’ve heard it said that in the 1950s and early 1960s, doctors often drove Buicks even though they could afford Cadillacs. Maybe they didn’t want to show off. Or maybe they didn’t want to be subjected to the kind of joke that Alfred Hitchcock used in “The Man Who Knew Too Much” when Jimmy Stewart (as a doctor) and Doris Day describe the medical procedures that are paying for their »

Ideology trumps charm, and certainly charm’s absence

Featured image The House, as John noted, has thwarted President Obama’s attempt to expand his trade negotiating power, casting considerable doubt over whether he will be able to secure the Pacific trade accord he craves (and which, in my opinion, America could use). Despite a furious last-minute lobbying effort by Obama, only 40 House Democrats voted in favor of “trade adjustment assistance” to workers unemployed as a result of free trade, a »

House Rejects Trade Promotion Bill [Updated]

Featured image In a dramatic conclusion to a hard-fought battle, the House of Representatives has rejected the Trade Promotion Authority bill for which President Obama lobbied furiously. Procedurally, what happened was that House Democrats voted to kill “trade adjustment assistance” to workers unemployed as a result of free trade, a program Democrats have long supported. Not enough Republicans supported trade adjustment assistance to make up the difference. So the trade promotion authority »

Minimum Wage, Maximum Ignorance

Featured image Seth Meyers, in his Late Show monologue last night: Chipotle has announced plans to provide paid vacation, tuition, reimbursement, and sick days for hourly workers, which is great. But now if you want guacamole, it’s $400. If a late night talk show host gets this, why can’t our legislators, or the New York Times editorial page? Meanwhile, regarding Paul’s earlier note on “white privilege,” worth six minutes to review the »

Does Illegal Immigration Explain the Disconnect Between Jobs and Wages?

Featured image After seven years of “recovery,” the jobs picture is finally beginning to brighten a bit. Last month’s jobs number, 280,000, was relatively good. But economists are puzzled: if hiring is picking up, why are wages and GDP stagnant, or even shrinking? At ZeroHedge, the pseudonymous Tyler Durden proposes an answer. It begins with the fact that nearly all job gains have gone to immigrants: There were other curiosities: the vast »

The Economy Disappoints Again. What Could Be the Problem?

Featured image As you probably have already seen, the Commerce Department announced today that GDP contracted by an annual rate of 0.7% in the first quarter of 2015, a downward revision from the previously estimated 0.2% growth. This continues a pattern that many observers find puzzling and disappointing. This graphic shows quarterly GDP growth from the first quarter of 2009 to the present; the last bar would need to be changed to »