Relevant and even prescient commentary on news, politics and the economy.

Expenditure-Switching and Inflation – The National Review v. The New Economist

Thomas Nugent coins a new term – Graham-Schumer-push inflation only after he tells us that the labor market is wonderful: Heretofore, the gloom-and-doom crowd fixated on the slow creation of jobs during this economic cycle and on the idea that outsourcing and illegal immigration were combining to steal American jobs. But at the current unemployment […]

I Thought Slower Population Growth was a Good Thing

On March 31, David Altig discussed this paper by Stephanie Aaronson, Bruce Fallick, Andrew Figura, Jonathan Pingle and William Wascher: On balance, the results suggest that most of the decline in the participation rate during and immediately following the 2001 recession was a response to business cycle developments. However, the continued decline in participation in […]

The 2001 and 2003 Tax Cuts and the Economic Recovery

While I profess to being a Keynesian economist, I have never bought into the notion that fiscal stimulus is the only way to reverse a recession. Max Sawicky – who may be more Keynesian than yours truly – writes: My question in all this, which no conservatives are rushing to answer, is this: What sequence […]

A Milestone, of Sorts

This is one of those milestones (in some ways like the Dow breaching 10,000) that obviously means nothing from a strictly financial point of view, but is an important psychological threshold. If nothing else, this news draws our attention to the real story, which is the slow but steady upward march of interest rates that […]

Do We Pay Too Much in Taxes?

Bruce Bartlett has been invited to contribute to the National Review: The question is ambiguous because it is not clear whether people are being asked about the effective rate of taxation (taxes as a share of income) or the marginal rate of taxation (that which applies to the last dollar earned). But either way, taxes […]

The Failure of Berlusconi’s Free Lunch Economics

The New Economist predicted the failure of the Berlusconi coalition: But these all take second place to Silvio Berlusconi’s central crime since his coalition came to power in May 2001: economic mismanagement. As the German economy has steadily improved its competitiveness and boosted exports in recent years, Italy has lost a lot of ground. This […]

Worrying at the IMF

The IMF’s economists think that the chances of a negative surprise to the world economy are bigger than the chances of a positive surprise: Storm clouds seen over markets: IMF WASHINGTON (MarketWatch) — After several years of low interest rates and ample liquidity, storm clouds are developing over global financial markets, according to a new […]

Iran v. Bush: A Game of Chicken?

Tyler Cowen reads Seymour Hersh and writes (somewhat optimistically): The core economic issue is this: in the midst of a “chicken” game, which verbal cues should lead you to conclude that things are going well (poorly) for your side? … How about this? We make lots of noise, hoping to scare Iran. If the noise […]

Milton Friedman on Sarbanes-Oxley

Phil Kerpen & Mallory Factor attack the Sarbanes-Oxley legislation citing two sources: The staggering costs of Sarbox bear repeating. An analysis by Sarbanes-Oxley Ivy Xiying Zhang of the University of Rochester measured the total stock market impact of the law, and found that it has cost over $1 trillion, with a “T.” About a third […]

The FED’s Year 2000 Transcripts

After reading the recently released FOMC transcripts from the year 2000, Dr. Altig laments on The Woes Of Making Policy In Real Time. Dr. Altig also provides excerpts of Greg Ip’s FOMC transcript summary from the WSJ. In 2000, as the economy slowed from the booming ’90s, the Federal Reserve, for the most part, missed […]