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.
Business Conditions Monthly August 2023
“As social scientists we remain alert for and open to cogent, economically-sound and well-reasoned hypotheses pertaining to the current state of the economy. Presently, though, our expectation of a US recession on or before August 2024 remains undeterred.” ~Peter C. Earle
You’re No Einstein, Einstein
“While he does seem to have intuited that socialism increased the dangers of authoritarian government, he doesn’t seem to have fully grasped that what he sought were two goals in fundamental tension.” ~James A. Hanley
Adam Smith’s Great Power Politics in One Paragraph
“It is said that an armed society is a polite society. Smith, by analogy, suggests that an international cosmos of armed nations will be a polite international cosmos.” ~Daniel B. Klein
An Insider Untangles the Causes of the Financial Crisis in American Cities
“Balancing budgets without reassessing what municipal governments should or should not do, and the long-term benefits and costs of their activities is insufficient.” ~Jason Sorens & Robertas Bakula
Why is Baby Formula Kept Under Lock and Key?
“Patent restrictions, a deliberate oligopoly, protectionist tariffs, and the highest inflation in four decades have resulted in an extremely expensive product at the end of a frangible production process and supply chain.” ~Peter C. Earle
Inflation was Worse than We Thought
“Although Fed officials were late to tighten monetary policy, their efforts over the last year appear to have worked. The risk today is that monetary policy is too tight—and will remain so for too long.” ~William J. Luther
Reaching Across the Aisle for the Bill of Rights: Learning from a Political Odd Couple
“If Americans want to expand and guarantee protections for free speech, they can gain inspiration from the contributions of Republican Alfred Landon and Socialist Norman Thomas.” ~David Beito
Is America Today Less Able Than In the Past to Economically “Absorb” Immigrants?
“The contempt with which some native-born Americans today hold the people whom they fear would immigrate to the US under a more liberal regime differs not one iota from the contempt with which these same Americans’ immigrant ancestors were held by earlier generations.” ~Donald J. Boudreaux
How Crazy Do You Have to Be to Support Dollarization?
“The whole reason why it is an advantage for a developing country to tie to a major country is that historically speaking the internal policies of developing countries have been very bad. US policy has been bad, but their policies have been far worse.” ~Nicolás Cachanosky
Wishful (Protectionist) Thinking
“Specialization and productivity increase when the market’s size extends across national borders. But tariffs reduce the extent of the market and thereby reduce specialization.” ~Paul Mueller
Weighing Whether the Standard Scale Makes Sense
“Largely thoughtless adoption of a grading scale inherited from primary school can increase the emphasis on rote instead of reason at the university level.” ~Gary M. Galles
Eyes, Shoulders, Knees, and Toes: Rebutting Robert Gordon’s ‘The Rise and Fall of American Growth’
“We are wealthier now, not because we earn more but because we trade less of our time for goods. The real ‘superabundance’ comes not from ample money or wealth but ample leisure time.” ~David Gillette and Lauren Frazier
What Should the Federal Reserve Do Now?
“Inflation is running above 2 percent by any measure, and a current temporarily higher rate on short-term securities can reassure markets that the Federal Reserve is aiming at a lower inflation rate.” ~Gerald P. Dwyer
Another Rate Hike? Let’s Not
“Interest rate and liquidity data point to the same conclusion: monetary policy is sufficiently tight. Further tightening could cause a painful economic contraction.” ~Alexander W. Salter
The Multiyear Decline in US Economic Freedom
“In 2007 only three countries were economically freer than the US, but by 2015 eleven nations were. Today, 24 are freer.” ~Richard Salsman
There Are No Democratic Socialists And No Liberal Dictators
“The dictator who finishes off democracy is not an enlightened individual. A dictator can then indeed liberalize, but this will not be from a true commitment to political or economic liberty.” ~Vincent Geloso
How To Be Accidentally Right, Central Banking Style
“Money is broken, and while these activists might not be able to explain how, they’re not wrong in pointing their fingers at the monetary authority at the center of it all.” ~Joakim Book
Taxation as Social Justice
“The goal is not to raise revenue so we can support the poor; instead, the US is pursuing the simpler goal of eliminating private concentrations of wealth.” ~Michael Munger
Business Conditions Monthly August 2023
“As social scientists we remain alert for and open to cogent, economically-sound and well-reasoned hypotheses pertaining to the current state of the economy. Presently, though, our expectation of a US recession on or before August 2024 remains undeterred.” ~Peter C. Earle
You’re No Einstein, Einstein
“While he does seem to have intuited that socialism increased the dangers of authoritarian government, he doesn’t seem to have fully grasped that what he sought were two goals in fundamental tension.” ~James A. Hanley
Adam Smith’s Great Power Politics in One Paragraph
“It is said that an armed society is a polite society. Smith, by analogy, suggests that an international cosmos of armed nations will be a polite international cosmos.” ~Daniel B. Klein
An Insider Untangles the Causes of the Financial Crisis in American Cities
“Balancing budgets without reassessing what municipal governments should or should not do, and the long-term benefits and costs of their activities is insufficient.” ~Jason Sorens & Robertas Bakula
Why is Baby Formula Kept Under Lock and Key?
“Patent restrictions, a deliberate oligopoly, protectionist tariffs, and the highest inflation in four decades have resulted in an extremely expensive product at the end of a frangible production process and supply chain.” ~Peter C. Earle
Inflation was Worse than We Thought
“Although Fed officials were late to tighten monetary policy, their efforts over the last year appear to have worked. The risk today is that monetary policy is too tight—and will remain so for too long.” ~William J. Luther
Reaching Across the Aisle for the Bill of Rights: Learning from a Political Odd Couple
“If Americans want to expand and guarantee protections for free speech, they can gain inspiration from the contributions of Republican Alfred Landon and Socialist Norman Thomas.” ~David Beito
Is America Today Less Able Than In the Past to Economically “Absorb” Immigrants?
“The contempt with which some native-born Americans today hold the people whom they fear would immigrate to the US under a more liberal regime differs not one iota from the contempt with which these same Americans’ immigrant ancestors were held by earlier generations.” ~Donald J. Boudreaux
How Crazy Do You Have to Be to Support Dollarization?
“The whole reason why it is an advantage for a developing country to tie to a major country is that historically speaking the internal policies of developing countries have been very bad. US policy has been bad, but their policies have been far worse.” ~Nicolás Cachanosky
Wishful (Protectionist) Thinking
“Specialization and productivity increase when the market’s size extends across national borders. But tariffs reduce the extent of the market and thereby reduce specialization.” ~Paul Mueller
Weighing Whether the Standard Scale Makes Sense
“Largely thoughtless adoption of a grading scale inherited from primary school can increase the emphasis on rote instead of reason at the university level.” ~Gary M. Galles
Eyes, Shoulders, Knees, and Toes: Rebutting Robert Gordon’s ‘The Rise and Fall of American Growth’
“We are wealthier now, not because we earn more but because we trade less of our time for goods. The real ‘superabundance’ comes not from ample money or wealth but ample leisure time.” ~David Gillette and Lauren Frazier
What Should the Federal Reserve Do Now?
“Inflation is running above 2 percent by any measure, and a current temporarily higher rate on short-term securities can reassure markets that the Federal Reserve is aiming at a lower inflation rate.” ~Gerald P. Dwyer
Another Rate Hike? Let’s Not
“Interest rate and liquidity data point to the same conclusion: monetary policy is sufficiently tight. Further tightening could cause a painful economic contraction.” ~Alexander W. Salter
The Multiyear Decline in US Economic Freedom
“In 2007 only three countries were economically freer than the US, but by 2015 eleven nations were. Today, 24 are freer.” ~Richard Salsman
There Are No Democratic Socialists And No Liberal Dictators
“The dictator who finishes off democracy is not an enlightened individual. A dictator can then indeed liberalize, but this will not be from a true commitment to political or economic liberty.” ~Vincent Geloso
How To Be Accidentally Right, Central Banking Style
“Money is broken, and while these activists might not be able to explain how, they’re not wrong in pointing their fingers at the monetary authority at the center of it all.” ~Joakim Book
Taxation as Social Justice
“The goal is not to raise revenue so we can support the poor; instead, the US is pursuing the simpler goal of eliminating private concentrations of wealth.” ~Michael Munger