The media are bombarding us with stories of how sequestration, with its “drastic cuts” in government spending, will affect our lives. Marketplace ran one yesterday about the USDA and the potential loss of federal meat inspectors. Don’t worry, we were told, the authorities won’t allow tainted meat on the shelves! But they might inspect...
Read More »

Speaking of regime uncertainty, even distinguished mainstream economists get it. Here’s Nobel Laureate Paul Krugman: I think that the main thing keeping long-term interest rates low right now is cognitive dissonance. Even though the business community is starting to get scared — the ultra-establishment Committee for Economic Development now warns that ”a fiscal crisis...
Read More »

Following up Carl’s post, while Bork is remembered largely as a Constitutional scholar, his important early contributions dealt with antitrust. He was sharply critical of the modern application of US antitrust law, while remaining wedded to the Knight-Friedman-Stigler idea of perfect competition as a welfare benchmark, leading to a number of confusions and contradictions....
Read More »

The U.S. Supreme Court has agreed to hear a challenge to the 75-year-old Agricultural Marketing Agreement Act, one of the few pieces of New Deal legislation to survive to the present day. The AMAA authorizes the US Department of Agriculture to establish and enforce “marketing orders” for particular agricultural commodities, detailed federal regulations that...
Read More »

Well, no, the IMF chief is a moderate Keynesian, like all her Establishment colleagues, and praises the world’s central banks for flooding the globe with cheap money. But she does recognize the critical role of regime uncertainty in hindering recovery: Lagarde said a number of factors are eroding growth. “At the center of them...
Read More »

The for-profit higher-education sector is routinely smeared in the media and established universities as low-brow, unproductive, pedestrian, a scam. Of course, the University of Phoenix isn’t Yale, and doesn’t pretend to be. But Hyundai belongs in the automobile market as much as Mercedes, and the market for higher education is no different — at...
Read More »

Peter Wallison on Dodd-Frank The question is why—why did this act have such a dramatic effect on the U.S. economy, essentially stifling the modest recovery that had begun almost a year earlier? The most likely explanation is uncertainty. The Dodd-Frank Act was such a comprehensive piece of legislation—and required so many new regulations before...
Read More »

When over the weekend the media began breathlessly repeating claims from unnamed intelligence officials that the CIA had foiled a deadly terrorist plot, I immediately suspected this would turn out like all the other cases, in which the episode is at least partly manufactured by some intelligence agency then used to demonstrate the need...
Read More »

Here is another of those head-scratchers, this one from Amartya Sen, about how neoclassical economics is partly responsible for the financial crisis because neoclassical economists hold that markets work “perfectly”: Since the crisis broke out the economics profession in general and mainstream economics in particular have been severely criticised. Do you think this is justified? The...
Read More »

Beacon readers will not be surprised by Wharton Professor Howard Pack’s verdict on of industrial policy: it doesn’t work. (Perhaps surprised only that a Wharton Professor holds this view.) Pack provides a concise summary of the academic literature on Japanese industrial policy: Knowledge@Wharton: What does the empirical evidence show? Does it show that interventionist...
Read More »