Economics

Central Planning Ignores the Needs of Women

"An American visiting the Communist Bloc in the 1980s would be aghast to find most women still doing laundry the way they had in the United States 50 years prior, without washing machines. The communist system didn’t produce machines to make women’s lives easier for the same reason it neglected their other needs and wants. For all the complaints about the profit motive, markets incentivize people to satisfy each other’s preferences through voluntary exchange, while state-run economies provide no such incentive. There is no shortage of soaring communist rhetoric on gender equality, but that cannot make up for the pervasive and sexist shortages under central planning."

Continue ReadingCentral Planning Ignores the Needs of Women

Washing Machine Tariffs Will Hurt Americans

"The protectionist move against LG and Samsung comes, perversely, just as those companies are set to employ thousands of Americans in Tennessee and South Carolina. It may also inadvertently put the final nail in the coffin of one of the longest-standing bastions of the American service industry, Sears Holdings Corp. Trump should reject the remedy proposal put forth by the International Trade Commission. Making it more expensive for LG to import the washers it produces for Kenmore, one of Sears’ most popular product lines, will jeopardize the retailer’s efforts to revitalize its brand."

Continue ReadingWashing Machine Tariffs Will Hurt Americans

How occupational licensing laws inhibit interstate mobility

"The new study adds to the already substantial evidence indicating that licensing laws are a major obstacle to geographic mobility, particularly for poor and lower-middle class people seeking to move to areas with greater opportunity. We have gotten to the point where some 30 percent of Americans have to have licenses to legally work in their respective fields, including even some states that license florists and tour guides. The evidence also suggests that most of these laws do far more to suppress competition than protect consumers."

Continue ReadingHow occupational licensing laws inhibit interstate mobility

Warning: Trump’s Federal Reserve Pick Hates Gold and Cash

"Marvin Goodfriend thinks there should be a robust negative interest rate placed on cash. For example, if there was a -10% interest rate on cash, your $10 bill would actually be worth only $9. It is basically a penalty for using cash. The excuse is that this will stabilize the economy by keeping more capital in the banks. It means banks, and by extension, the Federal Reserve, have more control over your money. The gold standard, Goodfriend argues, was also an encumbrance on monetary policy, 'destabilizing' prices."

Continue ReadingWarning: Trump’s Federal Reserve Pick Hates Gold and Cash

Senate Tax Bill’s Marginal Rates Could Top 100% for Some

"The possible marginal tax rate of more than 100% results from the combination of tax policies designed to provide benefits to businesses and families but then deny them to the richest people. As income climbs and those breaks phase out, each dollar of income faces regular tax rates and a hidden marginal rate on top of that, in the form of vanishing tax breaks. That structure, if maintained in a final law, would create some of the disincentives to working and to earning business profit."

Continue ReadingSenate Tax Bill’s Marginal Rates Could Top 100% for Some

Millennials Get It Wrong about Socialism

"I’m left to conclude that they have no appreciation for how socialism actually works in the real world. The economic track record of socialism is as dismal as its human rights record. But we need not direct Millennials to history books to see it. They need only look at what has happened to former socialist countries during their own lifetimes, as these countries have moved away from socialism and towards capitalism."

Continue ReadingMillennials Get It Wrong about Socialism

In North Korea, Black Markets Are Saving Lives

"Initially, these markets consisted of disorganized traders meeting in fields, facing seizure from police if they did not come up with a bribe. Today, the jangmadang practice has led to fully-fledged markets, complete with stalls selling street food, smuggled electronics, ingredients, and clothes; certain markets allegedly grew to encompass upwards of a thousand stalls. Today, the markets remain a crucial element of survival for many North Koreans, with some reports estimating that around 5 million (around a fifth of the overall population) are 'directly or indirectly dependent on the markets'."

Continue ReadingIn North Korea, Black Markets Are Saving Lives

The Ponzi scheme that’s more than 100x the size of Bernie Madoff

"Credit-rating agency Moody’s estimates state, federal and local government pensions are $7 trillion short in funding. And corporate pension funds are underfunded by $375 billion. One of the big drivers behind this is that investment returns are way too low. Today with government bonds yielding 3% or less (and in some cases bond yields are NEGATIVE), they aren’t achieving their targets. One or two years with sub-optimal investment returns is not catastrophic. But it’s been like this now for a decade. And that’s just problem #1. Problem #2 is that the ratio between workers and retirees is moving in the wrong direction."

Continue ReadingThe Ponzi scheme that’s more than 100x the size of Bernie Madoff