EconLog Archive
Media Watch
Synecdoche, Bullets, and Politics
The following is not the most important aspect of the murder of Brian Thompson, the CEO of UnitedHealthcare. But it does illustrate how using the correct words and being conscious of figures of style help avoid confusion. Technically, a firearm cartridge is made of (1) a casing that holds gunpowder and a primer to ignite .. MORE
Monetary Policy
Gell-Mann Amnesia and AI
Tyler Cowen recently challenged us to try to stump an AI named “o1”: 1. o1 is a very good economist. Try to stump it if you can. I could not find o1, so I used ChatGPT 4o mini. I hope someone will try the following question with an o1 and report the results in the .. MORE
Macroeconomics
The Monkey’s Paw and Interest Rates
A recent article in The Economist discussed what they assume is the president-elect’s view of interest rates: A more hawkish Fed may, in turn, invite the wrath of Mr Trump, who has insisted that, as president, he should have a say over interest rates. He will surely want to see steeper rate cuts now that .. MORE
Economics of Crime
My Weekly Reading and Viewing for December 8, 2024
Indiana Cops Seized Their Cash From a FedEx Hub. Prosecutors Just Agreed To Return It. by C.J. Ciaramella, Reason, December 3, 2024. Excerpts: Indiana prosecutors will return $42,000 in cash they seized from a California small business, several months after the owners filed a class action lawsuit alleging that law enforcement is exploiting a major FedEx shipping .. MORE
Adam Smith
Economics In Personal Decision Making
Two main reasons for studying economics are often given in textbooks and classes. First, it helps us understand the social world we live in and, secondly, it informs better public policy decisions. An example comes from Adam Smith in The Wealth of Nations. By understanding what makes a nation wealthy compared to others, we might .. MORE
Adam Smith
Does National Security Justify Trade Restrictions?
In a recent Defining Ideas article, “Why Trade Should Be Free,” I made the case for free trade. Although my way of stating it is slightly original, the case for free trade is one that many economists, including Adam Smith, have made. Free trade causes people in the free trade country to produce the .. MORE
Economic Education
Thinking About Imports and Exports
A thought experiment, dear reader, on how to think about international trade and its impact on the wealth of a nation. Suppose one day, every country in the world suddenly said, in unison, “Hey America! We’ve decided we think you’re just the best and to show how much we love you, we’ve decided that from now .. MORE
Uncategorized
Jeff Hummel on Tether
My friend and monetary theory teacher (of me) Jeff Hummel writes beautiful responses to various friends who comment on monetary issues. In a discussion of Tether, one of his friends quoted a source saying, “Tether is the third largest buyer of three-month US Treasuries and is projected to be the first next year. Tether now .. MORE
Incentives
Wanna bet?
Some bloggers take bets on the ideas they express in their writing. A few have been quite successful. I have chosen not to do so (thus far.) In some cases, those who refrain from betting are criticized for not having the courage of their convictions. I don’t believe that criticism is reasonable, and I’ll explain .. MORE
Economic and Political Philosophy
The Self-Government of the People
Explaining his nomination of Russell Vought for the position of director of the Office of Management and Budget, President-elect Donald Trump wrote (“Donald Trump Picks Scott Bessent as Treasury Secretary,” Financial Times, November 23, 2024): Russ knows exactly how to dismantle the Deep State and end Weaponized Government, and he will help us return Self .. MORE
Business Economics
What Deindustrialization?
Many critics of free trade argue that globalization has led to the US becoming deindustrialized; That is, trade is eroding our manufacturing base. Economists refute this claim by pointing to the fact that US industrial production is near the record highs set in 2018 or that the manufacturing component, while off the highs set in .. MORE
Regulation
What Cass Sunstein Omits in Discussing DOGE
Harvard Law professor Cass Sunstein has a short list of six factors that people in a Department of Government Efficiency need to consider. It’s worth paying attention to and those who don’t, yet want to deregulate, ignore his list at their (and possibly our) peril. I won’t repeat the list here. It’s brief. I will .. MORE
Price Controls
Letting the Rich Subsidize the Poor
In a recent post, I imagined a hypothetical situation where cranberries turned out to be a surefire way to prevent cancer. I described how this would create a huge shift in demand, leading to an increase in prices, which in turn would lead to an increase in supply: Suppose tomorrow, scientists announce that eating 100 .. MORE
International Trade
The Bitter Irony of the Attack on U.S. Steel
On December 2, President-elect Donald Trump wrote: I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan. So you would expect that he would dislike foreign investment in the United States, right? Wrong. Donald Trump says he wants more foreign investment. .. MORE
Business Economics
Pumpkin is a Feeling
A chain of coffee shops near me has had a sign outside their establishments this fall that simply reads, “Pumpkin is a Feeling.” Some might read this and simply conclude that it’s false. Pumpkin isn’t a feeling. It’s a plant! But when it comes to the pumpkin flavored treats that are popular each autumn, the .. MORE
Political Economy
Notre-Dame: Private Financing of a “Public Good”
Visiting a 13th-century cathedral, climbing a bell tower stairway with stone steps bowed by centuries of human footsteps, and meeting the chimeras and gargoyles that look over Paris roofs provide a unique esthetic if not religious experience. But in the restoration of Notre-Dame de Paris ravaged by fire five years ago, an economist may see .. MORE
Finance
The Roots of Debanking
There has been a great deal of recent discussion of the problem of debanking. Most of what I’ve read seems to miss the root causes of the problem; debanking is a symptom of deeper problems with our system of governance. The problem cannot be fixed through “regulation”, because the problem is caused by regulation. Debanking .. MORE
Fiscal Policy
My Weekly Reading for December 1, 2024
Republican Populism Aims To Expand the Nanny State by Steven Greenhut, Reason, November 29, 2024. Excerpt: The progressive movement is best known for meddling in everything and trying to ban and cajole us. Instead of sticking with the idea of freedom, however, the MAGA movement has decided to echo its enemies, rally people around their .. MORE
Economics of Crime
Supply and Demand for Fentanyl
The FT has an article with the following headline and subhead: Fentanyl deaths are falling. What’s behind the decline? The evidence points to changes in the drug supply It’s an excellent article, but there’s really no evidence to support the subhead (which is usually written by the editor, not the journalist.) The article does provide .. MORE
Economic Education
Is Econ Grad School a Good Idea?
For me, it was a great idea. Your mileage may vary. On his Substack yesterday, Arnold Kling posted yesterday about the pitfalls of going to graduate school in economics. It’s titled, appropriately, given the content, “Beware of Econ Grad School.” Arnold lists 3 possible motives for getting a Ph.D. in economics. Intellectual Curiosity. You like .. MORE
Economic Education
Some Aspects of Economic Illiteracy
Earlier this week, President-elect Donald Trump announced that he intends to implement on his first day in office some of the tariffs he had threatened. The following quotes illustrate but do not exhaust the economic illiteracy involved, that is, the ignorance of the economics of trade and protectionism as it developed over the past three .. MORE