The people's voice of reason
The people's voice of reason
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From the Business Roundtable to the World Economic Forum to leading business schools, many voices promote replacing corporations governed by stockholders with “stakeholder” capitalism. Laws empowering stakeholders might disrupt the social cooperation of corporations. The cutthroat world of business seems decidedly uncooperative. But businesses enable voluntary cooperation between people trying to improve their lives. Never forget the voluntary part. Throughout history, force has been the pre...
Canada’s Fraser Institute just released the 2022 Economic Freedom of North America (EFNA) index. The good news: Alabama’s economic freedom increased slightly. The bad news: we still trail three neighboring states. Economic freedom refers to freedoms to buy, sell, work, and start businesses. A free economy relies on “personal choice and markets to answer basic economic questions such as what is to be produced, how it is to be produced, how much is produced, and for whom is production inten...
Labor Day was established in 1894 to honor America’s workers. “Quiet quitting” refers to working no more than necessary to keep your job and then bragging about it on Tik Tok. Does quiet quitting disrespect Labor Day? Each Labor Day we should celebrate the labor market. The labor market is part of the market economy, an economic system based entirely on voluntary participation and the freely given consent of all parties. The labor market is a foundation of personal freedom. By contrast, throu...
Cities across America own golf courses, but analysis from the Reason Foundation shows that many lose money on them. Is subsidizing golf a proper function of government? The Reason study found over cities reporting finances for their golf courses. Seventy percent of cities lost money in 2020, which may have been unrepresentative due to state COVID restrictions. All four Alabama cities reported on (Fort Payne, Gadsden, Millbrook and Pelham) lost money on golf. In the market, losses indicate that...
The New York Times’ 1619 Project examines the impact of slavery on America. One essay contends that our economic system was built on slavery. Was America’s ascension as an economic powerhouse due to slavery? Slavery was a repugnant and evil institution. Its abolition is a sign of humanity’s moral progress. Slavery taints America’s founding and was incompatible with “all men are created equal.” Yet Emancipation took ninety years and a terrible civil war, plus another 100 years to extend the...
In 2019, Congresswoman Alexandria Ocasio-Cortez introduced the Green New Deal, with a price tag estimated at trillions to possibly tens of trillions of dollars. When asked whether Washington could afford the Green New Deal, Ms. Ocasio-Cortez said Modern Monetary Theory (MMT) showed that we could. In recent years MMT has received considerable attention. The theory was first expounded by investor Warren Mosler and expanded by academic economists. Stephanie Kelton of Stony Brook University offers a...
The 2021 Economic Freedom of the World (EFW) rankings from Canada’s Fraser Institute show freedom essentially unchanged in the United States. But some important changes in the rankings will be coming soon. Economic freedom is based on “the concept of self-ownership.” We should have “a right to choose – to decide how to use [our] time and talents to shape [our] lives.” What does economic freedom mean in practice? “Individuals are economically free when they are permitted to choose for themselve...
Inflation exceeded 5 percent in June. Double-digit inflation burdened Americans in the 1970s. Although we treat inflation as bad, economists find its costs hard to pin down. The three economic functions of money help us think about inflation’s costs. Money’s first role is a medium of exchange, meaning a good way to conduct transactions. With barter, if you have oranges and want potatoes, you must find someone with potatoes who wants oranges. The second role is a store of value, or a way to avo...
State and local governments lure businesses with incentive packages. Yet these governments impose rules stifling entrepreneurs starting new businesses, forgetting that Amazon, offered multi-billion dollar deals for its HQ2, started out of Jeff Bezos’s garage. A new Cato Institute study, “Entrepreneurs and Regulations” by Chris Edwards, details the state and local government burdens on startups. Elected officials should carefully weigh these policies’ benefits against the burdens. The adminis...
The 12-month change in the Consumer Price Index (CPI) exceeded 4 percent in April for the first time since 2008. Many economists have been predicting inflation following a 25 percent increase in the money supply in Spring 2020. Has inflation finally arrived? Inflation was a major issue in the 1970s and early 1980s. We experienced double-digit inflation between 1974 and 1981, hitting 14 percent in 1980. The U.S. has dramatically reduced inflation since then. Economists distinguish between...
Occupational licensing involves government-imposed requirements for practitioners in different professions, or what critics call government permission slips to work. Despite a lack of evidence of benefits to consumers, licensing has been proliferating across Alabama and America, with the percentage of workers covered rising from 5 to over 20 percent. A new report from the Alabama Policy Institute and the Archbridge Institute offers some potential reforms. “Not-So Sweet Home Alabama: How Licensin...
The Biden Administration seems intent on renewing the war against fossil fuels to combat global warming. Before going down this path, I hope Americans will consider Alex Epstein’s argument in The Moral Case for Fossil Fuels. A moral argument requires a standard of value and Mr. Epstein’s is human life. As he explains, “I think that our fossil fuel use so far has been a moral choice because it has enabled billions of people to live longer and more fulfilling lives.” Many environmentalists do not...
Inequality is one of America’s most contentious issues. According to a popular narrative, higher taxes on the rich are needed to control growing inequality. New research from the Johnson Center offers a different perspective. My colleagues G.P. Manish and Steve Miller have edited a new book titled Capitalism and Inequality: The Role of State and Market. The volume features contributions from leading economists on thinking about and measuring inequality and government policies making i...
Every society must protect against those who would use violence to steal from others. After controlling criminals, swindlers become a major fear and motivates many government regulations. Yet regulations against fraud allow far worse swindling than markets. Swindling is always wrong, but most people learn to avoid pedestrian scams like the email from an exiled prince seeking to transfer millions of dollars. Many scams violate customs and laws and the courts will help victims if possible. Smart...
November’s elections imply we will likely see some Federal student loans forgiven. Current student debt levels reflect the morphing of a reasonable program. Loan forgiveness may produce significant changes for higher education. President-elect Joe Biden has indicated a willingness to forgive $10,000 in loans per borrower via executive order. A Democratic Senate will likely result in Congressional action; Senators Charles Schumer and Elizabeth Warren want $50,000 in loans forgiven. C...
Governments across the country have imposed numerous public health policies to control COVID-19. A prominent one has been requiring the wearing of masks in public; Alabama has been under a mask order since July. Americans have largely embraced masks. A recent Harris poll found that 93% of respondents at least sometimes (72% always) wore masks. Nonetheless, Dr. Don Williamson of the Alabama Hospital Association recently expressed frustration over some Alabamians’ unwillingness to wear masks. H...
Joe Biden has won the presidential election, although President Trump alleges fraud. Mr. Trump, however, has not yet offered credible evidence of fraud. The current controversy involves “vote harvesting” and raises questions about the effect of selling votes. Vote harvesting involves individuals collecting mail-in ballots from voters. Clearly persons with limited mobility should receive assistance in voting, which relatives, legal guardians, and election officials can generally provide. Harvesti...
COVID-19 has killed over 200,000 Americans while policies to stem the virus’ spread have caused enormous economic and societal harm. Any comparison must use a common metric, and economics uses dollars, even for human lives. No one can avoid placing a dollar value on saving lives; always choosing safety just places an infinite dollar value on life. Our only option is whether to evaluate tradeoffs. Economists use the value of a statistical life (VSL) for policies regulating risk. The method u...
Two COVID-19 vaccines are in large-scale trials in the United States. Federal bureaucrats have thus far rejected human challenge trials (HCT), which would intentionally expose volunteers to the virus and speed testing. HCT should be part of our vaccine approval process. Vaccine testing employs randomized control trials with subjects assigned to either a trial group receiving the vaccine or a control group receiving a placebo. Neither subjects nor trial personnel should know who receives the...
Knowledge is the basis of economic prosperity, and the knowledge contained in a COVID-19 vaccine or cure would be enormously valuable. We have traditionally relied on patents to reward innovation, but an alternative exists that could be appropriate for vaccines during pandemics. Patents reward knowledge creators with a temporary monopoly. Monopolists generally charge high prices, so patents let inventors recover the costs of research and development plus earn a profit. Patents helped spur the...
Experts in public health and epidemiology have driven policy making during the COVID-19 pandemic. How much should we trust experts? Critics dismiss Republicans who voice distrust of experts as anti-science. Yet even experts know very little about complex economies and societies. Frustration with experts does cross party lines. New York’s Democratic Governor Andrew Cuomo recently remarked of experts’ forecasts of hospital usage, “They were all wrong.” The “Wisdom of Crowds” argument, wonderfully...
The killing of George Floyd by Minneapolis police officer Derek Chauvin ignited nationwide protests. While we advise jurors to withhold judgment until presentation of all the evidence, video of the incident seems definitive. Mr. Floyd joins a much-too-long list of minority victims of police violence. Justice may be served in Minneapolis. The four officers involved were fired the next day, and Mr. Chauvin charged with second-degree murder. Does this render the protests moot? Not necessarily. Mr....
Our Federal and state governments implemented unprecedented measures beginning in March to stem the spread of COVID-19. Informed consent provides a foundation of medical ethics. Did our elected officials and public health experts get our informed consent for policies that have put 30 million Americans out of work? Medical experiments have often been performed on unsuspecting subjects, like the infamous Tuskegee Experiment. The U.S. Public Health Service in 1932 began studying the health effects...
America needs billions of masks to protect against the Coronavirus, particularly high-grade N95 masks for healthcare workers. Nonetheless, fear of litigation delayed delivery of millions of construction masks to healthcare workers. Should the law be slowing our emergency response? America’s largest mask producer, 3M, will soon be producing 100 million a month. The company normally produces more construction than medical masks; while similarly effective, the medical masks must meet more stringent...
Democratic presidential candidate Bernie Sanders contends we should not allow billionaires. His view produced interesting debate exchanges with Michael Bloomberg, who has a net worth of $53 billion. Are billionaires good for America? A first consideration is the source of the riches. Were they earned from a successful business, or by stealing from or swindling others? Bank robbers and con artists do not benefit our economy. For those who inherited their wealth, we should consider the original...