John H. Cochrane and Amit Seru of the Hoover Institution think the hyperactive Fed has become too ambitious in its interventions in the economy and social policy. Their proposal is the title of their essay “Ending Bailouts, At Last,” in the Journal of Law, Economics and Policy.
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The Congressional Budget Office projects budget deficits of 5 to 8 percent of gross domestic product forever. And this, Cochrane and Seru correctly believe, is too unrealistic. CBO assumes no crises, recessions, wars, pandemics or — most laughably — spending increases. But even this optimistic debt path “simply cannot happen.”
Everything is finite, including the U.S. government’s ability to borrow real resources in a crisis,” wrote the authors. Student loans, mortgage and rent forbearance — “it seems impossible for our democratic government to lend money to its citizens and demand repayment, especially in bad times.” And bad times are when money might be tight for the government.
“Food, gas and cars could quickly get pricier under Trump’s tariff plan.”
Rich Vedder is hoping for serious reform of American “higher” education.
Steven Greenhut warns of economically illiterate MAGA nanny-statism. Two slices:
We’re well accustomed to progressive politicians railing against corporate greed, especially here in California where Gov. Gavin Newsom and his Democratic allies blame oil companies—and not their own tax and regulatory policies—for our sky-high gasoline prices.
This economic illiteracy isn’t confined to our state, of course, with the ongoing congressional hearings on credit card rates likely to feature all the usual posturing and big-government claptrap. Here’s a statement by Sen. Bernie Sanders (I–Vt.) about calls for the federal government to cap card rates at 10 percent:
“Americans are being crushed under the weight of record credit card debt—and the biggest banks are just getting richer. The government was quick to bail out the banks just this spring, but has ignored working people struggling to get ahead. Capping the maximum credit card interest rate is fair, common sense, and gives the working class a chance.”
I’m just funning with you. That statement was not from Sanders, but from his colleague, Sen. Josh Hawley (R–Mo.). He’s one of the most pro-MAGA Republicans in the Senate. Here’s what Sanders actually said: “We cannot continue to allow big banks to make record profits by ripping off Americans by charging them 25 to 30 percent interest rates.” Do you detect any difference? Neither can I.
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For many years, classical liberals such as myself have looked for the libertarian moment—a time when the public understands the best way to ensure social peace and prosperity is to limit government meddling and promote free choice. Instead, we’ve arrived at the libertarian anti-moment, where the major parties have, to paraphrase the “Dr. Strangelove” subtitle, learned to stop worrying and love the Nanny State.
Arnold Kling’s advice about econ graduate school is generally sound. (DBx: I say “generally sound” only because GMU Econ genuinely differs from all other serious graduate Econ programs.)
GMU Econ alum Paul Mueller wisely gives thanks for fossil fuels. A slice:
When you think about it, it’s remarkable that humans found a way to take resources that were worthless or even noisome for most of human history and use them to create abundance. A farmer in the 1800s would have dreaded finding oil under his land – because it meant the land would not grow crops very well and there would be danger when digging of releasing sticky black oil into his fields. Today, oil is the equivalent of liquid gold and has made thousands of people fortunes because it has been used to improve the quality of life for billions of people around the world.
These benefits should not be ignored or understated – especially since we live in a time where significant forces work to eradicate our use of fossil fuels altogether. Since this holiday focuses on giving thanks, it might be worth reflecting what giving thanks entails. Gratitude begins with acknowledging what someone or something has done that we believe to be good. It means not taking such things for granted. And it certainly does not mean despising the source of our abundance. Unfortunately, many people in our society have been trained to do just that, to despise the sources of their material wellbeing, as somehow being the virtuous thing to do.
Wall Street Journal columnist Holman Jenkins expresses well-founded criticism of antitrust. Two slices:
As taxpayer, consumer or citizen, don’t expect any benefit from the government’s antitrust lawsuit against Google. Given much precedent, however, it will generate hundreds of millions of dollars in billing and career advancement for the antitrust bar.
Two Brookings Institution-affiliated economists asked 20 years ago whether antitrust improved consumer welfare. “The empirical record . . . is weak,” they said, and the record is hardly better now that courts have been routinely throwing out case after case on which taxpayers have spent millions.
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Joe Biden probably doesn’t know what his government is doing but this week his lame-duck Federal Trade Commission opened a new investigation of Microsoft. Now Mr. Biden will be able to say he left office conducting active warfare against virtually every company that makes the U.S. not a technological backwater like Europe.
The Justice Department claims Google illegally maintains its monopoly by paying Apple $20 billion annually to be its default iPhone search engine. Yet in illuminating international studies, whenever Apple users have been required to choose, they overwhelmingly choose Google anyway. This suggests Google is essentially paying Apple protection money for market share it would have in the absence of Apple’s own market power, but never mind.
