EconLog Archive
Tariffs
Error in Crushing Capitalism
I posted last week about my review of Norbert J. Michel’s new book, Crushing Capitalism: How Populist Policies Are Threatening the American Dream. In my review, I stated: Although even low-income people are doing better, one way not to help them is to impose high tariffs. Even before President Donald Trump’s first term in .. MORE
Labor Market
Are Immigrants Self-Deporting?
A recent paper from the Center for Immigration Studies suggests that the answer is yes: We preliminarily estimate that the number of illegal immigrants has fallen by one million since the start of the year, perhaps due to their leaving in response to President Trump’s election and stepped-up enforcement efforts. But it is important to .. MORE
Business Economics
Companies Don’t Need Regulation to Cut Back on “Excessive Packaging”
Former Obama staffer Rahm Emanuel famously said, “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not before.” There is a corollary here: never overlook an opportunity to invent a crisis. Perhaps it would be better said, .. MORE
Economic and Political Philosophy
Military Action and Linguistic Shortcuts
Humans have a tendency to obey political authorities even when it may not seem in each individual’s self-interest to do so. Nationalism is a modern manifestation of this phenomenon. After the US government’s strike on nuclear facilities of the Iranian government, there is little doubt that nationalism or tribalism will lead a large number of .. MORE
Labor Mobility, Immigration, Outsourcing
My Weekly Reading for June 22, 2025
Foreign Students Help Make America Great by Michael Crow, Wall Street Journal, June 20, 2025 (electronic version) Excerpts: The administration’s actions this spring to terminate visas of international students for minor legal infractions such as traffic violations and its scrutiny of students’ social-media accounts have sent a message that foreign students aren’t wanted here. And: .. MORE
Cross-country Comparisons
Small Government in Somalia
I’ve seen progressives derisively refer to a “libertarian paradise” in Somalia, where the government is largely absent. While it’s true that Somalia is a good example of the importance of having enough “state capacity” to protect property rights, even Somali anarchy has some unexpected benefits. Here is The Economist: Thirty years ago, making a phone .. MORE
Incentives
Thoughts from Crushing Capitalism
In my review of Norbert J. Michel’s Crushing Capitalism, which I quoted from yesterday, I didn’t have room to highlight 2 other striking parts. First, in a section on why technological improvements in productivity have not caused net job loss, he has a discussion of ATMs. He writes: ATMs automated some of the basic tasks .. MORE
Moral Reasoning
You Cannot Have it Both Ways
You can be a realist or an idealist, but you cannot have it both ways. A few weeks back, I heard Kevin Hassett being interviewed on NPR. At one point, he claimed that economics textbooks explain that tariffs do not raise prices. I’m pretty sure that Hassett knows that this is not the case, that .. MORE
Economic Growth
The Resilient American Dream
We often hear that the American dream is no longer achievable for a large fraction of Americans. Some of the people who make that claim go on to advocate more government regulation and spending to help restore the dream. But what if the American dream is alive and well, and what if current government .. MORE
Adam Smith
Adam Smith, George Orwell, and Rules for Writing
In The Theory of Moral Sentiments, Adam Smith used rules about writing as a metaphor for rules of conduct. He examines conduct by two different measures. In one measure, he considers what rules one would need to follow to, in my inelegant paraphrase, avoid being an actively scummy person. On the other hand, he also considers .. MORE
Cross-country Comparisons
Getting “Screwed” on Trade?
Back in February, Donald Trump claimed that the European Union was formed to “screw the US” on trade. With the reimposition and then the repausing of tariffs on the European Union, the Trump Administration has repeated that claim, sometimes including that a value-added tax (VAT) also exists to screw Americans. Of course, these are silly .. MORE
Liberty
June is Liberty Month
Celebrate the liberty trifecta on a site funded by, appropriately enough, the Liberty Fund. Five years ago, I didn’t even know why Apple put Juneteenth on my Mac calendar. I just assumed that it was a play on words. And then I checked. Juneteenth really is rightly celebrated as the end of slavery in America. .. MORE
Economic and Political Philosophy
Political Violence in Minnesota and Elsewhere
Political violence is violence for political reasons. More precisely and to avoid circularity, the difference between political violence and ordinary violence is that the former is motivated by resistance to, or promotion of, the imposition of some collective choices on others. For example, “the left” wants to impose redistribution (of money and other advantages of .. MORE
Economic and Political Philosophy
Basic Public-Choice Analysis of Attacking Iran
Public choice theory and its methodological-individualist foundations can be illustrated with a currently hot question: Will President Trump order an attack on Iranian military assets? It is, of course, not “the American people” who will decide; nobody has had lunch with him or her. (On this point, see my Independent Review article “The Impossibility of .. MORE
College Economics Topics
Teaching College Students About Money & Cryptocurrency
Introduction: This teaching note provides college instructors with guidance on teaching students about money, including what it is, what it is not, and distinctions between different forms like fiat money and cryptocurrency. Teaching college students about money is one of the easiest tasks. They arrive in class with a strong interest in money, motivated by .. MORE
Free Markets
Lessons from Chinese History
The Economist has an interesting review of a new book entitled Peak Human, by Johan Norberg. This caught my eye: Song emperors were much keener on the rule of law than their predecessors, who tended to rule by whim. To enforce predictable rules, they hired lots of officials via meritocratic exams. The first Song emperor .. MORE
Economics and Culture
Gates, Giving, and Government
Bill Gates has for many years been focusing on philanthropic projects through the Gates Foundation. He recently announced an end date for this endeavor. As Bill Gates put it in his recent announcement: I will give away virtually all my wealth through the Gates Foundation over the next 20 years to the cause of saving .. MORE
Government Growth
The “Big Beautiful Bill” and the Wisdom of Friedman
President Trump has fended off Republican criticisms of his “big, beautiful [budget] bill” by declaring that a vote against it is a vote for “the biggest tax increase” in American history, an estimated $4 trillion over a decade. The hidden irony is that, as the late Milton Friedman warned a half century ago, even if .. MORE
Economics of Health Care
A Pointless Vaccine Purge
The Wall Street Journal ran a letter co-authored by Charley Hooper and me today (print version tomorrow). I have hesitated to quote more than 2 paragraphs, but I think my contract that allows full quotation only after 30 days applies to my paid work, not my free work. So I’ll take the chance and quote .. MORE
Macroeconomics
Mission Accomplished?
A recent Bloomberg article suggested that the Fed should declare victory over inflation: Granted, it may feel premature, if not foolhardy, to declare “mission accomplished” on inflation. It’s not just the rise in tariffs and the fall in immigration; there are a lot of structural factors in the economy pointing to more inflation: more debt, .. MORE
Regulation
My Weekly Reading for June 15, 2025
First, to all the fathers out there, Happy Father’s Day. Walmart and Amazon Are Exploring Issuing Their Own Stablecoins by Gina Heeb, AnnaMaria Andriotis, and Josh Dawsey, Wall Street Journal, June 13, 2025 (electronic edition) Excerpt: A move to launch crypto-based payments by Walmart or Amazon that bypasses the traditional payments system would send shivers .. MORE