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.

Red Alert: Biden’s Biggest Chips Act Expense Yet

“When politicians resort to deficit spending to bankroll industrial ventures, they put upward pressure on interest rates by issuing more debt and competing with scarce private funds.” ~Vance Ginn

Fixing A Big Mistake in Risk-Based Capital Rules

“Both long Treasuries and mortgage-backed securities guaranteed by government agencies are in current regulation included as ‘High Quality Liquid Assets.’ But of course they both can and have created plenty of interest rate risk.” ~Alex J. Pollock

“The Price of Time” and Broken Central Banking

“The unique value of Chancellor’s book, beyond tracing this intellectual history of interest and illustrating it by financial debacles up and down the centuries, is to connect the social and market outcomes with the broken money markets.” ~Joakim Book

Fiscal Federalism Turned Upside-Down

“Federal spending spikes immediately after a recession or emergency, then lowers when the crisis subsides, but never down to pre-crisis levels.” ~Peter C. Earle and Thomas Savidge 

China’s Economic Facade is Cracking 

“The country is reaping the whirlwind of conscious decisions on Beijing’s part over the past 15 years to embrace more state-centric economic policies.” ~Samuel Gregg

Uber and Lyft Drive Out of the Twin Cities

“When costs go up, the money to pay for the increase can only come from one of three places: customers paying higher prices, business owners earning less profit, or workers being laid off, losing work hours, or losing benefits.” ~James Harrigan

Correlation Is Not Enough

“The ‘look here, too’ method provides a valuable check on statistical interpretations adopted because they advance someone’s agenda, rather than accuracy.” ~Gary Galles

Business Conditions Monthly January 2024

“In addition to a softening labor market and US consumer activity finally appearing to hit a wall, the potential for shocks of an endogenous or exogenous nature elevated.” ~Peter C. Earle

Too Much: Three First World Problems

“Where our ancestors lived lives that were solitary, poor, nasty, brutish, and short, the twenty-first century has us overwhelmed with connections, opportunities, and experiences.” ~Art Carden

Congress Could Unload the Fed’s Weapon

“If Congress could balance its budget, which hasn’t happened since 2001, it would remove a bullet the Fed could shoot at the economy.” ~Vance Ginn

We Should Follow Lord Palmerston’s Example

“It is past time to revisit the wisdom of Palmerston, Washington, and Jefferson: the United States should have no permanent allies. Alliances that no longer serve US interests should be done away with or modified.” ~Andrew Byers

Can Prosperity Feed Perceptions of Poverty?

“The only sense in which the American middle-class is disappearing economically is that an ever-increasing percentage of American households earn annual incomes that are in the upper brackets.” ~Donald J. Boudreaux

Dynamic Pricing Puts the “Fast” Back in Fast Food

“By offering lower prices in off-peak hours, Wendy’s would be able to attract more customers overall, thus charging lower prices on average, even if prices during peak periods were higher than what they charge now.” Thomas Savidge and Louis Rouanet

Young People Aren’t Nearly Angry Enough About Government Debt

“We each owe more than $100,000 as a share of the national debt… Our earning years are subsidizing not our own economic coming-of-age, but retirement and medical benefits for people who navigated a less-challenging wealth-building landscape.” ~Laura Williams

Fact-Checking “Greedflation”

“By fueling an overall increase in demand, central banks can generate a sustained increase in the general level of prices — inflation. Central banks are the primary source of money creation, not firms.” ~Nicolás Cachanosky

Red Alert: Biden’s Biggest Chips Act Expense Yet

“When politicians resort to deficit spending to bankroll industrial ventures, they put upward pressure on interest rates by issuing more debt and competing with scarce private funds.” ~Vance Ginn

Fixing A Big Mistake in Risk-Based Capital Rules

“Both long Treasuries and mortgage-backed securities guaranteed by government agencies are in current regulation included as ‘High Quality Liquid Assets.’ But of course they both can and have created plenty of interest rate risk.” ~Alex J. Pollock

“The Price of Time” and Broken Central Banking

“The unique value of Chancellor’s book, beyond tracing this intellectual history of interest and illustrating it by financial debacles up and down the centuries, is to connect the social and market outcomes with the broken money markets.” ~Joakim Book

Fiscal Federalism Turned Upside-Down

“Federal spending spikes immediately after a recession or emergency, then lowers when the crisis subsides, but never down to pre-crisis levels.” ~Peter C. Earle and Thomas Savidge 

China’s Economic Facade is Cracking 

“The country is reaping the whirlwind of conscious decisions on Beijing’s part over the past 15 years to embrace more state-centric economic policies.” ~Samuel Gregg

Uber and Lyft Drive Out of the Twin Cities

“When costs go up, the money to pay for the increase can only come from one of three places: customers paying higher prices, business owners earning less profit, or workers being laid off, losing work hours, or losing benefits.” ~James Harrigan

Correlation Is Not Enough

“The ‘look here, too’ method provides a valuable check on statistical interpretations adopted because they advance someone’s agenda, rather than accuracy.” ~Gary Galles

Business Conditions Monthly January 2024

“In addition to a softening labor market and US consumer activity finally appearing to hit a wall, the potential for shocks of an endogenous or exogenous nature elevated.” ~Peter C. Earle

Too Much: Three First World Problems

“Where our ancestors lived lives that were solitary, poor, nasty, brutish, and short, the twenty-first century has us overwhelmed with connections, opportunities, and experiences.” ~Art Carden

Congress Could Unload the Fed’s Weapon

“If Congress could balance its budget, which hasn’t happened since 2001, it would remove a bullet the Fed could shoot at the economy.” ~Vance Ginn

We Should Follow Lord Palmerston’s Example

“It is past time to revisit the wisdom of Palmerston, Washington, and Jefferson: the United States should have no permanent allies. Alliances that no longer serve US interests should be done away with or modified.” ~Andrew Byers

Can Prosperity Feed Perceptions of Poverty?

“The only sense in which the American middle-class is disappearing economically is that an ever-increasing percentage of American households earn annual incomes that are in the upper brackets.” ~Donald J. Boudreaux

Dynamic Pricing Puts the “Fast” Back in Fast Food

“By offering lower prices in off-peak hours, Wendy’s would be able to attract more customers overall, thus charging lower prices on average, even if prices during peak periods were higher than what they charge now.” Thomas Savidge and Louis Rouanet

Young People Aren’t Nearly Angry Enough About Government Debt

“We each owe more than $100,000 as a share of the national debt… Our earning years are subsidizing not our own economic coming-of-age, but retirement and medical benefits for people who navigated a less-challenging wealth-building landscape.” ~Laura Williams

Fact-Checking “Greedflation”

“By fueling an overall increase in demand, central banks can generate a sustained increase in the general level of prices — inflation. Central banks are the primary source of money creation, not firms.” ~Nicolás Cachanosky