Over at EconLib, Rob Bradley tells some little-known truths about Enron. A slice:
But as closer inspection shows, the opposite was true. Enron Gas Services, the gas-trading division that made Enron famous, was enabled by the “infrastructure socialism” of mandatory open access, a regime imposed by the Federal Energy Regulatory Commission on interstate pipelines beginning in the mid-1980s. Enron Capital & Trade Resources, the successor to Enron Gas Marketing, tried to promote and exploit similar infrastructure socialism in the electricity industry.
Apologists for this novel agency structure, such as the bureau’s Godmother and now-Senator Elizabeth Warren of Massachusetts, contend that its extreme independence from external controls (such as congressional appropriations oversight) or internal controls (a bipartisan commission structure) are necessary to avoid the distorting effects of special interest pressures.
But political scientists have also identified a number of pathologies to which bureaucracies succumb when set adrift without sufficient public accountability: a tendency toward imperialistically expanding their reach and a tunnel vision focus that ignores the full cost of their regulations on the economy.
More from Randy Holcombe: his review of Joseph Stiglitz’s The Price of Inequality.
Tyler Cowen isn’t impressed with Paul Krugman’s assessment of the distribution of the costs of inflation. By the way, some of the very best analyses of both the efficiency effects and the distribution effects of inflation were done by the late Armen Alchian – an economist whose insights, on this and other matters, are consistently ignored by Krugman and too many other contemporary economists. Alchian’s works here include his and Reuben Kessel’s important December 1962 Journal of Political Economy paper “Effects of Inflation“; Alchian’s and Kessel’s 1959 Science paper “Redistribution of Wealth Through Inflation“; and Alchian’s 1976 study “Problems of Rising Prices.” (These – and all other of Alchian’s important papers – are collected in this vital two-volume series edited by Dan Benjamin. I urge especially the young economists who read this blog to buy Alchian’s collected works and read carefully every word in them. Then read them again. If by the end of your careful reading you understand even half of Alchian’s insights, you will be a better economist than at least 20 percent of economic Nobel laureates.)
And here is a long-ago brief conversation about inflation between Alchian and Hayek:
