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.

AIER’s Editorial Policy.

Democrats Play the Blame Game on Rent Inflation

“Imposing new costly regulations will not make housing more affordable — unleashing the housing supply by deregulating zoning and overly strict building codes will.” ~Louis Rouanet

Stiglitz: When Good Minds Seek Fools’ Favor

“Stiglitz believes ‘education’ should be explicitly designed to attack property rights and to weaken the sense of American exceptionalism, the tradition of classical liberalism.” ~Michael Munger

Don’t Let a Crisis Go to Waste in 2025

” By returning to principles of fiscal responsibility and market-driven activity, America can navigate away from the fiscal abyss and toward a future of economic stability and prosperity.” ~Vance Ginn

Is Promoting to Customers a Crime?

“McKinsey allegedly tried to help Purdue tailor its sales efforts…. There’s nothing mysterious or nefarious about this. To do otherwise would be inefficient and wasteful.” ~ David R. Henderson and Charles L. Hooper

Sense and Nonsense on Petrodollars

“Myths and hyperbole aside, the weakening US-Saudi relationship is one instance amid a growing trend of diminishing US influence in global currency markets and international finance.” ~Peter C. Earle

How Nations Defeat Poverty

“What these stories all have in common is that these nations rose from poverty by embracing a common formula: more economic freedom and free trade… not international aid or central planning.” ~Jon Miltimore

Bitcoin Is ‘Resistance Money’

“Freedom money, wielded by its users and resistant to capture, identification, and censorship, doesn’t dispel unfair laws or make evil rulers go away — but almost nothing else does that either.” ~Joakim Book

Boosters Beware: Stadiums Aren’t Magic

“Just about every economist knows publicly financed stadiums are boondoggles that, if anything, imperil cities’ financial positions.” ~Art Carden

FOMC Holds Rates, Revises Forward Guidance

“Just as the FOMC was slow to adjust policy when inflation surged in late 2021, it will be slow to adjust policy as inflation returns to and falls below its target in 2024.” ~William J Luther

Prices Stable in May: Time to Cut Rates?

“M2, the most commonly cited measure of the money supply, is up 0.53 percent from a year ago. Since real income and population are growing faster than this, current M2 growth also suggests money is tight. But this is speculative.” ~Alexander W. Salter

AIER’s Everyday Price Index Unchanged in May 2024

“The recent data, combined with the deceleration in core CPI in April, suggests the resumption of disinflation. But policymakers have indicated a need for several months of reduced price pressures before considering interest rate cuts.” ~Peter C. Earle

The Super Market

“Something that you can purchase with income you’ve earned with just a few minutes of your work-time is something that includes the work-effort of thousands or millions of strangers.” ~Donald J. Boudreaux

Protectionists Are Wrong: Free Trade is the Path to Prosperity

“Consumers and producers in America are better off with more domestic and international trade. As we don’t want to produce everything we consume daily, trading with others is the most efficient way to meet our needs.” ~Vance Ginn

Government Failure in One Lesson

“Perhaps the easiest way to explain government failure in one lesson is to remember that there is no such thing as ‘the state.’ Instead, essential decisions about resource use will be made by political actors.” ~Michael Munger

AI Eases Its Own Labor-Market Transitions

“Not long ago, search engines like Google were not understood by the masses, which forced people through experience to learn how to ‘Google’ webpages in the proper way. Submitting a search query is similarly a new language to learn, just like prompting a language model.” ~Samuel Crombie and Jack Nicastro

Trade Deficits: Accounting Masquerading as Economics 

“Reducing ‘imports’ would not, in fact, increase GDP at all. At best, doing so would leave GDP unchanged since we would be adding less to consumption, investment, and government spending while subtracting equally less from imports.” ~David Hebert

Politicizing Monetary Policy Won’t Fix the Fed’s Failings

“Even if one thinks Trump is well-suited to make interest rate decisions (and there is little reason to think he is), it does not follow that Trump’s proposed solution would improve monetary policy.” ~Nicolás Cachanosky

The Dollar and its Domestic Enemies

“The greatest threat to the soundness and utility of the US dollar comes not from shadowy figures in faraway lands, but from unremarkable apparatchiks carrying out the edicts of US officialdom.” ~Peter C. Earle

Democrats Play the Blame Game on Rent Inflation

“Imposing new costly regulations will not make housing more affordable — unleashing the housing supply by deregulating zoning and overly strict building codes will.” ~Louis Rouanet

Stiglitz: When Good Minds Seek Fools’ Favor

“Stiglitz believes ‘education’ should be explicitly designed to attack property rights and to weaken the sense of American exceptionalism, the tradition of classical liberalism.” ~Michael Munger

Don’t Let a Crisis Go to Waste in 2025

” By returning to principles of fiscal responsibility and market-driven activity, America can navigate away from the fiscal abyss and toward a future of economic stability and prosperity.” ~Vance Ginn

Is Promoting to Customers a Crime?

“McKinsey allegedly tried to help Purdue tailor its sales efforts…. There’s nothing mysterious or nefarious about this. To do otherwise would be inefficient and wasteful.” ~ David R. Henderson and Charles L. Hooper

Sense and Nonsense on Petrodollars

“Myths and hyperbole aside, the weakening US-Saudi relationship is one instance amid a growing trend of diminishing US influence in global currency markets and international finance.” ~Peter C. Earle

How Nations Defeat Poverty

“What these stories all have in common is that these nations rose from poverty by embracing a common formula: more economic freedom and free trade… not international aid or central planning.” ~Jon Miltimore

Bitcoin Is ‘Resistance Money’

“Freedom money, wielded by its users and resistant to capture, identification, and censorship, doesn’t dispel unfair laws or make evil rulers go away — but almost nothing else does that either.” ~Joakim Book

Boosters Beware: Stadiums Aren’t Magic

“Just about every economist knows publicly financed stadiums are boondoggles that, if anything, imperil cities’ financial positions.” ~Art Carden

FOMC Holds Rates, Revises Forward Guidance

“Just as the FOMC was slow to adjust policy when inflation surged in late 2021, it will be slow to adjust policy as inflation returns to and falls below its target in 2024.” ~William J Luther

Prices Stable in May: Time to Cut Rates?

“M2, the most commonly cited measure of the money supply, is up 0.53 percent from a year ago. Since real income and population are growing faster than this, current M2 growth also suggests money is tight. But this is speculative.” ~Alexander W. Salter

AIER’s Everyday Price Index Unchanged in May 2024

“The recent data, combined with the deceleration in core CPI in April, suggests the resumption of disinflation. But policymakers have indicated a need for several months of reduced price pressures before considering interest rate cuts.” ~Peter C. Earle

The Super Market

“Something that you can purchase with income you’ve earned with just a few minutes of your work-time is something that includes the work-effort of thousands or millions of strangers.” ~Donald J. Boudreaux

Protectionists Are Wrong: Free Trade is the Path to Prosperity

“Consumers and producers in America are better off with more domestic and international trade. As we don’t want to produce everything we consume daily, trading with others is the most efficient way to meet our needs.” ~Vance Ginn

Government Failure in One Lesson

“Perhaps the easiest way to explain government failure in one lesson is to remember that there is no such thing as ‘the state.’ Instead, essential decisions about resource use will be made by political actors.” ~Michael Munger

AI Eases Its Own Labor-Market Transitions

“Not long ago, search engines like Google were not understood by the masses, which forced people through experience to learn how to ‘Google’ webpages in the proper way. Submitting a search query is similarly a new language to learn, just like prompting a language model.” ~Samuel Crombie and Jack Nicastro

Trade Deficits: Accounting Masquerading as Economics 

“Reducing ‘imports’ would not, in fact, increase GDP at all. At best, doing so would leave GDP unchanged since we would be adding less to consumption, investment, and government spending while subtracting equally less from imports.” ~David Hebert

Politicizing Monetary Policy Won’t Fix the Fed’s Failings

“Even if one thinks Trump is well-suited to make interest rate decisions (and there is little reason to think he is), it does not follow that Trump’s proposed solution would improve monetary policy.” ~Nicolás Cachanosky

The Dollar and its Domestic Enemies

“The greatest threat to the soundness and utility of the US dollar comes not from shadowy figures in faraway lands, but from unremarkable apparatchiks carrying out the edicts of US officialdom.” ~Peter C. Earle