EconLog Archive
Economic Institutions
The Political Economy of Cruelty: Some Elements
Why are some people cruel? Why are some governments cruel? Do cruel governments require cruel citizens? I take cruelty to refer to Merriam-Webster’s definition of cruel as “disposed to inflict pain or suffering: devoid of humane feeling.” An individual is cruel who has a taste for cruelty, i.e. cruelty is an argument of his utility .. MORE
#ReadWithMe
We Have Never Been Woke, Part 9: Why Have Elites Never Been Woke?
(This post is part of a series that began with this post.) The overarching theme of Musa al-Gharbi’s book is examining the gap between the ideas most supported by those who are woke and the actions of those same people. While al-Gharbi isn’t overtly hostile to woke ideas as such, he is troubled by how .. MORE
Economic Methods
What Would Success Look Like?
President Trump fired the Bureau of Labor Statistics commissioner, Erika McEntarfer, after July’s jobs report showed very little job growth over the past quarter. Initially, the President accused her of “rigging” the numbers to make him look bad. More recently, members of his administration have tried to reduce the criticism to just that of substantial .. MORE
Fiscal Policy
Fiscal Dominance Brings Financial Repression
“Fiscal dominance” refers to the state’s expenditures (fiscal policy) dominating monetary policy. Instead of the legislature (Congress in the US) controlling government expenditures while the central bank (the Fed) tries to control inflation, the latter helps finance expenditures and Congress obtains more leeway to run deficits. Fiscal dominance is the opposite of central bank independence. .. MORE
Money and Inflation
Milei’s Message for Economists
Soon before the election that made Javier Milei president, 108 economists around the world (including prominent names like Thomas Piketty, Gabriel Zucman, and Jose Ocampo) signed an open letter warning about the dangers of “non-traditional” economic thinking. Even at the time, the letter was cluttered with flawed thinking. The letter then bemoans that “the laissez-faire .. MORE
#ReadWithMe
We Have Never Been Woke Part 8: Totemic Capital and Consecrated Elites
My last post in this series on We Have Never Been Woke by Musa al-Gharbi ended by mentioning another form of symbolic capital very valuable to symbolic capitalists, particularly with the advent of victimhood culture – what al-Gharbi calls totemic capital. As he describes the concept, In sociological terms, a totem is a sacred symbol that represents .. MORE
Economic and Political Philosophy
A Collectivist Judge Is a Contradiction in Terms
It is a bit of a mystery why people who claim to be American-style conservatives do not embrace Friedrich Hayek, the economist and legal theorist who was awarded a Nobel Prize in economics in 1974. The mystery dissipates when one realizes that most self-identified conservatives are in fact as collectivist as the self-defined progressives (“liberals” .. MORE
Government Growth
Will the Fed Lowering Rates Reduce Government Borrowing Costs?
Short version: no. In my recent post on central banks and independence, I cited Harvard economist Jason Furman in discussing how lower central bank rates won’t necessarily translate into lower private borrowing costs: The Federal Reserve only sets a handful of interest rates, and those are limited to rates between banks—the discount rate (the rate .. MORE
Moral Reasoning
My Final EconLog Post
I began my blogging career at TheMoneyIllusion in early 2009 and ended that blog last year. In January 2014, I started blogging here at EconLog and have greatly enjoyed the opportunity. This will be my final post. I wish to thank everyone who works at EconLog, and I wish the best to all of my .. MORE
Free Markets
Farewell to EconLog
After almost 17 years of blogging at EconLog, I have decided to resign, effective today, and focus more on my Substack. It’s called “I Blog to Differ.” The big advantage of my Substack is that I have total control over subject matter and content. These 17 years, which include my last 9 as an economics .. MORE
Economics of Education
My Weekly Reading and Viewing for August 24, 2025
Are the BLS and Other Government Statistical Agencies Partisan? Here’s What My Research Found by Vincent Geloso, The Daily Economy, August 18, 2025. Excerpt: There is little to substantiate the claim that the BLS produces low-quality data. The BLS (and every other statistical agency) frequently issues preliminary reports from surveys it conducts. As such, revisions .. MORE
Economic History
When the Big Apple Went Bust: Bankruptcy and Austerity in New York, 1975
In 1975, New York City’s government ran out of money. “On the simplest level” journalist Martin Mayer wrote, “the story of New York’s financial collapse is the tale of a Ponzi game in municipal paper – the regular and inevitably increasing issuance of notes to be paid off not by the future taxes of revenue .. MORE
Economic Theory
“They” not “It”: Understanding Group Behavior Through Methodological Individualism
In his 1992 article “Congress is a ‘They,’ not an ‘It’: Legislative Intent as Oxymoron” (International Review of Law and Economics 12 (2)), Harvard University political scientist Kenneth Shepsle opens: An oxymoron is a two-word contradiction. The claim of this brief paper is that legislative intent, along with military intelligence, jumbo shrimp, and student athlete, .. MORE
Economics of Health Care
Make Drug Approval Easier
A few days ago, I listened to Russ Roberts’s EconTalk interview of cardiologist Eric Topol on the health issues involved with aging. For some reason, I’m getting increasingly interested in that issue. An interesting issue comes up at about 36:00 point. Topol states: We should be using better nanoparticles and keeping that mRNA from .. MORE
Moral Reasoning
Meanwhile, in Mexico
A report in the Financial Times indicates that Mexico is in the process of eliminating the checks and balances in its political system: But the bills passed in the past two weeks ultimately implement key elements of the former president’s agenda, including eliminating autonomous regulators and replacing them with ones under greater central government control. .. MORE
#ReadWithMe
We Have Never Been Woke Part 7: Victimhood Culture
(This post is part 7 of a series of posts on We Have Never Been Woke by Musa al-Gharbi. The previous entry is here.) One of the questions that animated Musa al-Gharbi’s investigation into the causes and consequences of wokeness was why highly successful elites seem so eager to portray themselves as otherwise. As he .. MORE
International Trade
Useful Counterfactuals on Trade
Counterfactuals are a necessary part of any scientific analysis: If X didn’t happen, then Y would have. But counterfactuals, by definition, can never be known. They never occurred, so we can never truly know if the counterfactual would have happened. For example, there was much debate in the Truman Administration and the US military during World .. MORE
Labor Market
A Serious Look at Interest Rates
These tweets caught my eye: I suspect that it would be possible to create some sort of argument that the AI boom is hurting the job market, but at the risk of being unserious I don’t find this one to be particularly persuasive. Suppose I made the following argument: Interest rates would be lower if .. MORE
International Trade
Freedom as a Loophole
The August 29 planned abolition of the de minimis customs exemption in the United States may come as a shock to those who believe that, as the physical universe is made of visible matter and dark matter, the political world is made of Democratic and Republican stuff, “the Left” and “the Right.” The restriction of .. MORE
Economic Education
Fentanyl Elasticity: Cutsinger’s Solution
Question: Suppose the demand for fentanyl is perfectly inelastic, and that the users of fentanyl steal from others to acquire the money to pay for it. In an effort to crack down on fentanyl use, the government imposes harsher penalties on suppliers of fentanyl, reducing its supply. How will this policy affect the amount of .. MORE
Free Markets
My Weekly Reading and Viewing for August 17, 2025
Government Should Experiment with Eliminating Patient Barriers, Not with Covering Ozempic by Akiva Malamet, Bautista Vivanco, and Michael F. Cannon, Cato at Liberty, August 11, 2025. Excerpts: While Ozempic and other GLP‑1 drugs are great at helping patients lose weight(among many other promising uses), these impressive medications come with an impressive price tag. For those paying out of .. MORE