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.

Substitution Effects and Steering-Wheel Daggers

“Because of substitution effects, we should always be aware that outcomes quite different from those that seem most obvious are possible. Mandating greater automobile safety might reduce traffic fatalities. Or it might not.” ~Donald J. Boudreaux

Illiberal Youth Threaten Freedom

“Like National Socialist youth, individual rights mean nothing to young people today. The loss of talented people with different opinions was a plus for the Nazis.” ~Barry Brownstein

Importing Votes, Not Steel 

“Cooperation between conglomerates can be swept aside by the government for political gain. Ultimately, it is the public who pays for these political plays.” ~Stefan Bartl

Climate “Reparations” Numbers Are Rigged

“Human living standards have improved in unprecedented ways over the past 300 years. These remarkable improvements in human welfare are not limited to wealthy, developed economies but are enjoyed around the world.” ~Paul Mueller

Every Village a Republic

“Article I, Section 10 might protect local communities from federal abuse, as intended by the Founders, but offers no tools to simultaneously protect ourselves from local tyrannies.” ~David Gillette and Thaddeus Meadows

Chairman Powell and The Fed’s Limits

“Congress should applaud Chairman Powell’s candor on uncertainty and strongly support his principle of operating the Fed within the limits of its mandate.” ~Alex J. Pollock

The Magic Food Cupboard

“Every small aspect of the work that people do to deliver and stock those Whole Foods grocery shelves is noble, in its own way. Dismissing the parts as meaningless fails to understand the power of the larger system.” ~Michael Munger

The Bourgeois Deal Brought Us More than Pie in the Sky

“We didn’t need a worker’s revolution to get and enjoy pie in the here and now… Innovation and profit-seeking in a society that embraced the Bourgeois Deal made workers so much more productive that the pie grew. A lot.” ~Art Carden

Apple’s Big Business: Mises is Right, Sen Warren is Wrong

“The government’s ever-growing interest in deterring business expansion, along with granting federal agencies greater say over marketplace matters, is a complete disservice to our nation’s progress.” ~Kimberlee Josephson

Getting Monetary Policy Back on Track

“Experts seemingly identify much more closely with the central bankers — the practitioners of monetary policy — than with those forced to contend with the negative consequences of bad decisions.” ~Judy Shelton

Is Texas Really the Future of Freedom?

“Texas does several big things really well, and I’m rooting for them to improve elsewhere. But let’s not pretend Texas is the free-market archetype for the country.” ~Jason Sorens

Unlimited Growth, Forever

“Every popular scare of the past has been side-stepped, improved, or solved, by one or another human effort, usually serendipitously and rarely at all with well-meaning bureaucrats directing the process. ” ~Joakim Book

The Ratchet Effect on the Fed’s Balance Sheet

“The ratchet effect has locked us in a world with a massive Fed balance sheet — and the insidious problems of runaway deficit spending and easy bailout monetary expansion that come with it.” ~ Paul Mueller

Florida’s Faux-Meat Ban Slaughtered Free Enterprise 

“The public interest is served when fraud, deception, and misleading labeling are prevented. Unfortunately, the Florida legislature has gone far beyond this, at the behest of the ranchers’ lobby.” ~Paul Mueller

Does Market Concentration Signal Monopoly?

“The Coasean theory of the firm is noticeably absent from antitrust discussions. Failure to understand that firms arise to lower costs can lead to incorrect conclusions.” ~Jon Murphy

Stakeholder Statism is Coming

“ESG follows the trajectory of efforts by the progressive left to replace a free, voluntary, and competitive society… with centrally ordered institutions… to engineer their preferred society.” ~Richard M. Reinsch

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

Governments Shouldn’t Be In the Lending Business

“When government officials approve and guarantee loans, lenders don’t have to worry about taking the loss. They can be very generous, pursuing what they regard as socially beneficial goals, and never worrying about the losses the taxpayers will have to bear.” ~ George Leef

Defense Manual for The War on Prices

“The book advocates for a substantial policy shift toward minimal governmental interference, allowing market mechanisms to function unimpeded. Sadly, we are moving in the opposite direction.” ~Vance Ginn

Confounding the Case for Oil and Gas Collusion

“Oil is produced and sold in a global market. Even true cartels like OPEC don’t have total control over prices. It comes down to supply and demand.” ~Alexander W. Salter