Daily economy news from the American Institute for Economic Research: data, stories, research, and articles touching on economics, politics, culture, education, policy, opinion, technology, markets, healthcare, regulation, trends, and much more.
Arthur Okun, Class Warfare, Redistribution, and Income Growth
“The low-income worker is a net beneficiary of bigger government for about 10 years. But as time goes on, the worker would be far better off with smaller government and faster growth. Different assumptions will lead to different results, of course. My goal is simply to help readers understand two things: bigger government leads to less economic growth, and less growth leads to big income losses over time.” ~ Daniel J. Mitchell
April Jobs Report Disappoints but The Outlook Remains Favorable
“Payrolls posted a modest and disappointing gain in April. Despite the result, other data suggest the economic recovery is gaining momentum as government restrictions on consumers and businesses are lifted.” – Robert Hughes
Dissenters, Unite!
“Nemeth falls for the classic writer’s mistake of telling her readers something rather than showing them. She repeats her talking points about the group value of dissent and she explains the results from various experimental studies, but she never really delves into precisely how those studies convincingly prove the psychological results they aim for: that majorities can pressure us into disbelieving our own senses; that dissenters even in error can improve group decision-making; that consensus can quell creativity and the search for truth.’ ~ Joakim Book
The New York Times Argues With Itself About Biden and Taxes
“Government spending by its very name is the politicized allocation of precious wealth first created in the private sector. In other words, government spending delays the mass production of yesterday’s luxuries and tomorrow’s must-haves by limiting investment. Page B1 in the April 29th New York Times shows us why this is true.” ~ John Tamny
Competing With China Shouldn’t Entail Becoming More Like China
“When we talk about competing with China to win the 21st century we first need to be very clear on what that means. President Biden’s rhetoric seems to suggest he just wants to use the geopolitical tensions between the US and China as an excuse to pass his list of big government policies. The massive expansion of state power into the American economy is not a novel innovation in response to China but a failed and tired dream held by Progressives since the early 20th century.” ~ Ethan Yang
Initial Claims and Continuing Claims for Unemployment Benefits Fall in the Latest Week
“Initial claims for unemployment benefits continue to decline, suggesting a strengthening labor market and improving economic outlook.” – Robert Hughes
The Rise of Bitcoin
“The blockchain technology at bitcoin’s core provides a new and fundamentally different way to process payments. It relies on neither decentralized nor centralized clearing. Instead, it processes transactions over a distributed network. And, by solving the double spending problem without recourse to a trusted third party, it has the potential to offer a degree of financial privacy comparable to decentralized payment mechanisms like cash.” ~ William J. Luther
GosFed Looming at the Fed?
“It’s easy to see why the comrades of Gosbank showed so little dissent. Say, or think, the wrong thing in the Soviet Union, and you risked a one-way ticket to Siberia. What in the world is GosFed’s excuse?” ~The New York Sun
Services Sector Expands Again in April
“The services sector expanded again in April, but logistical and labor issues as well as shortages of materials are boosting pressure on prices.” – Robert Hughes
“After the Revolution, You Will Like Going Camping!” G.A. Cohen’s Camping Trip Reconsidered
“This doesn’t require a thought experiment: people vote for capitalism and against socialism in droves by trying to move to freer and more prosperous countries. Socialists might have laudable goals like feeding, clothing, and sheltering everyone–and I agree with these–but I would no more suggest socialism to treat poverty and inequality than I would prescribe leeches, mercury, and bloodletting to treat cancer.” ~ Art Carden
Is This Our 1914 Moment?
“Last year’s government power-grabbing disasters could be the modern equivalent of 1914 – the war to end all wars, where ‘We’ll be back by Christmas’ is to be replaced by the ‘Two weeks to flatten curve,’ that unfathomably stretched into years or decades. It took Europe some 50 years to recover from that initial governmental blunder and in many ways it never did. Let’s hope that Trump and Biden are harmless Kennedys and not Herbert Henry Asquith, the British Prime Minister of 1914. I have my doubts.” ~ Joakim Book
Policy Uncertainty Causes Sundry Shortages
“Policymakers seem determined to force through as many policy changes as rapidly as possible, possibly in an attempt to create confusion over causes, much the way Covid and lockdowns became conflated in the public mind. They need to tread carefully, though, because our technological and military might will not save us if the core cause of our prosperity withers.” ~ Robert E. Wright
Imperial College Predicted Catastrophe in Every Country on Earth. Then the Models Failed.
“Why is Ferguson, who has a long history of absurdly exaggerated modeling predictions, still viewed as a leading authority on pandemic forecasting? And why is the ICL team still advising governments around the world on how to deal with Covid-19 through its flawed modeling approach? In March 2020 ICL sold its credibility for future delivery. That future has arrived, and the results are not pretty.” ~ Phillip W. Magness
Biden’s Infrastructure Boondoggle
“The immediate lesson from all of this is that Biden’s plan is a boondoggle waiting to happen (just as would have been the case with Trump). The longer-term lesson is that we should get the federal government out of the business of infrastructure.” ~ Daniel J. Mitchell
Auto Sales Hit highest Level Since 2005
“Light-vehicle sales rose again in April, moving above the recent range to the highest pace since 2005. The gain was broad-based across most segments and signals strength for consumer spending.” – Robert Hughes
From AI to UBI?
“AI cannot credibly justify a radical policy like UBI at this point. Misunderstanding AI adds to a natural fear of the unknown though we know that technological change always proves beneficial to the economy and that society will have ample resources to aid anyone who might be displaced by AI in the future. People should concentrate on how AI can automate mundane tasks and stop technological fear mongering. Your job, like the world, will still be here tomorrow.” ~ Robert E. Wright & Aleksandra Przegalinska
The Covid-19 Emergency Did Not Justify Lockdowns
“Whatever the novelty and dangers of Covid-19, the novelty and dangers of Covid-19 lockdowns are at least arguably of the same magnitude. The dismissal of the unknown possible horrors of lockdowns in order to focus attention exclusively on the unknown possible horrors of SARS-CoV-2 is as unjustified by science as it is unpardonable as policy.” ~ Donald J. Boudreaux
Manufacturing Survey Suggests Strong Demand, Materials Shortages, and Rising Prices
“The Institute for Supply Management survey of manufacturers suggests ongoing expansion for the sector in April, but also continued production and logistical issues as well as rising materials costs.” – Robert Hughes
