Play By The Rules:  EXAMINING VARIATIONS OF THE TAYLOR RULE

America Is More Fragile Than The Left Understands
by Victor Davis Hanson via American Greatness
Like a stunned adolescent whose reckless incompetence totaled the family car, the Left seems shocked that America proved so fragile after all.

Essays In Honor Of Marvin Goodfriend: Economist And Central Banker

What Causes Economic Growth?

The Federal Reserve has begun taking decisive action to combat inflation. Desmond Lachman explains why the Fed should not overly commit itself to a pre-determined policy course at a time when economic surprises are all too likely to occur. James Pethokoukis discusses how even officials in the Biden administration were reportedly concerned in private about the inflationary risk posed by the $1.9 trillion American Rescue Plan. And James Capretta considers the fiscal implications if the Fed reverses its decade-long reliance on quantitative easing to support the economy.

Lawmakers face a variety of issues related to health care policy. Capretta explores how Medicare’s trust funds are so flawed they could be impeding reforms that would stop the program from pushing the federal government toward a debt crisis. ​

Medicare’s Fiscal Challenges: A Look at the 2022 Trustees Report
James C. Capretta | Bipartisan Policy Center

'An Economist’s Outlook: Essays by John H. Makin from a Transformative Era'
John H. Makin, Carmen M. Reinhart, and Vincent R. Reinhart | AEI Press
This collection is an invaluable guide for both the beginner who wants to understand economic history, concepts, and policymaking and the seasoned expert who will appreciate John Makin’s impressive range and always thoughtful perspective on a transformative economic period. 
Order the Book

James Pethokoukis  reviews China's central planning and productivity challenge. ​

The ECB’s Dilemma
John Cochrane, The Grumpy Economist
 
Industrial Policy Is Unwise But Not Impossible
Alexander William Salter, National Review

City Journal’s Eric Kober critiques the proposal for reducing the viability of mixed-income housing while implementing and maintaining economically inefficient policies.

Reverse Repurchases Soar Amidst Pandemic
Allison Schrager, E21

Since 2008 the Fed changed how it conducted monetary policy. It started paying interest on reserves and did more reverse repurchase agreements. This is when the Fed sells a security to an eligible party (often financial institutions that do not have a reserve account at the Fed) with the agreement to buy it back the next day for a different price. Read more here.... 

Inflation: What Next?
by David R. Henderson

ALLISON SCHRAGER
Course Correction?
The Federal Reserve has announced a tighter monetary policy, but its stance remains accommodative.

A False Choice
Biden’s top labor economist suggests a trade-off between inflation and employment.

The Rising Tide of Government Transfer Payments
Joseph Sullivan, National Review
 
Fed’s Infighting Shows Lack of Answers About Inflation
Brian Chappatta, Bloomberg
 
Connecting the Dots in China
Stephen Roach, Project Syndicate

James Capretta  assesses the fiscal risks of the Build Back Better plan, and  Phil Gramm and Mike Solon  contemplate the return of stagflation. ​

It’s time for a budget policy U-turn
Desmond Lachman | The Hill

Migration, Islam, and Western Atonement
An Interview  Eesti Päevaleht (Estonia) (pdf)
December 13, 2021
https://www.danielpipes.org/20883/the-west-tries-to-atone-for-its-great-sins

The Great Thomas Sowell
featuring Thomas Sowell via Prager U
He’s an economist, a historian, a philosopher, and one of the greatest social theorists America has ever produced. His name is Thomas Sowell, and he might be the most important scholar you’ve never heard of. Jason Riley, Senior Fellow at the Manhattan Institute, tells his inspiring story.

​Kevin Warsh: Is Inflation Back?
interview with Kevin Warsh via AEI
Hoover Institution fellow Kevin Warsh discusses the Fed's loose monetary and fiscal policies and how that will affect the economy, taxes, and growth.

UNDERSTANDING POVERTY: 
 Lehigh University gives faculty a lesson in the price of wrongthink

George Shultz understood that money was power
Hal Brands | Bloomberg Opinion

 Despite wishful thinking, cities won’t come back without major reform
Samuel J. Abrams and Joel Kotkin | AEIdeas

https://americanconsequences.com/economic-collapse-john-tamny/

https://www.realclearmarkets.com/articles/2021/01/26/as_tom_brady_reaches_his_10th_super_bowl_does_inequality_still_bother_you_657839.html

https://www.startribune.com/economic-policy-should-focus-on-economic-issues-bidenomics-has-other-ideas/600015693/

https://www.discoursemagazine.com/economics/2021/01/19/bidens-stimulus-plans-will-create-unacceptable-debt/

STEVEN MALANGA
Remotely Competitive
Cities and regions are betting that working from home is the next big thing in economic development

How Markets Make the Common Good Possible
by samuel gregg
If we truly want to promote America’s common good, even more government intervention than we already have is probably not the way to do it.
READ MORE ›

Lee Ohanian On Scientific Sense
interview with Lee Ohanian via Scientific Sense
Hoover Institution fellow Lee Ohanian discusses whether Phillips Curves are useful for forecasting inflation as well as New Deal policies and the persistence of the Great Depression, and much more.

What Goes Wrong When The Government Mandates Prices
featuring Russ Roberts, Richard A. Epstein, Milton Friedman, Thomas Sowell, Lee Ohanian, John H. Cochrane, Daniel Heil via PolicyEd
Prices contain vital information. Too often, governments interfere with them. In an attempt to protect consumers, politicians mandate lower prices. Other times, governments push prices up to benefit certain industries. These efforts might be well intentioned, but they distort the information that prices convey and tend to make us poorer.

The Classicist: An Exhausted Civilization
interview with Victor Davis Hanson via The Classicist
Victor Davis Hanson examines the confluence of trends — a contempt for American history; the decline of the rule of law; the intellectual rot of the academy; the rise of ingratitude and cultural contempt — that are weakening the foundations of American society.

Low Interest Rates And Government Debt
by John H. Cochrane via The Grumpy Economist
This is a talk I gave for IGIER at Bocconi (zoom, sadly) Jan 11 2021. Olivier Blanchard also gave a talk and a good discussion followed. Yes, some content is recycled, but on an important topic one must go back to refine and rethink ideas. This post has mathjax equations and graphs. 

Is Inflation Still A Thing?
quoting Charles I. Plosser via National Review
Not so long ago, during the age of Milton Friedman, the chief concern of monetary policy was inflation. The Federal Reserve’s job was seen as a balancing act: Too low a money supply would slow spending, and too much would erode purchasing power. Of course, given the inoculation of monetary economists against anything resembling deflation, we really only worried about erring in the other direction. Good monetary policy meant open-market operations to keep the money supply on a predictable path, which gives markets a stable foundation for short-term and long-term contracting, facilitating economic coordination.

Germany: Meet Angela Merkel's Second Successor  by Soeren Kern  

Why America remains exceptional
Frederick W. Kagan | The Hill

Inflation is coming. That might even be a problem.
Michael R. Strain | Bloomberg Opinion
Prices rising faster than the Federal Reserve’s 2 percent target would be welcome, but too much price growth could be a problem. If that happens, the Federal Reserve could be in a bind.

The Uncertain Future of Inflation
Allison Schrager, E21
The 10-year breakeven inflation rate returned to its 2018 level this week. The 10-year breakeven is the difference between the 10-year nominal and 10-year inflation-linked bond, it is a measure of what the market thinks inflation will be in several years. The higher rate could mean people may think inflation will return soon. Read more here....

The Growth Machine West of the Hudson
Nolan Gray, City Journal
 
A Physicist Claims Everything About Modern Economic Theory Is Wrong
Brandon Kochkodin, Bloomberg
 
How to Fix American Capitalism
Edward Glaeser, City Journal

Who Will Succeed Merkel?
by Josef Joffe via Project Syndicate
Germany's Christian Democrats are poised to choose a new party leader, and that person is almost certain to replace Chancellor Angela Merkel when she steps down in September 2021. All three contenders must somehow distinguish themselves from their rivals while boldly campaigning for continuity.

Erdogan Will Play Biden, But Stick To Putin
by Soner Cagaptay via The Caravan
A key foreign policy challenge for President-elect Joe Biden is going to be getting along with Turkey’s president Recep Tayyip Erdogan and managing Washington’s ties with Ankara. To this end, Biden needs to understand the dynamics and fears that inform the decisions of Erdogan, Turkey’s powerful president, including the latter’s view of Russian president Vladimir Putin.

The Strategic and Geo-economic Implications of the COVID-19 Pandemic

The Trump administration’s fake China trade policy
Derek Scissors | AEIdeas

Biden’s defense secretary inherits a military-civilian crisis  
Hal Brands | Bloomberg Opinion

What AI Can and Cannot Do for the Intelligence Community // Zigfried Hampel-Arias and John Speed Meyers: A realistic appraisal of artificial intelligence shows limits but real promise.

Niger is holding three days of national mourning after more than 100 civilians were killed in attacks on two villages near the border with Mali this past Saturday, AP reported Tuesday.
What you need to know: "The attacks are among the deadliest in Niger and come on the heels of several others, including one by the Islamic State West Africa Province in the Diffa region a few weeks ago in which dozens of people were killed. While no group has claimed responsibility for the attack, Islamic State in the Greater Sahara has increasingly staged assaults in this region." More here.

Diplomacy in the Gulf follows the money  
Karen E. Young | Al-Monitor

Jean-Baptiste Say And Henry Brougham, M.P. Discover The Laffer Curve
by David R. Henderson via EconLog
In 1804, the English government raised the duties on sugar 20 per cent. It might have been expected, that their average product to the public exchequer would have been advanced in the same ratio; i. e. from 2,778,000l. the former amount, to 3,330,000l.: instead of which the increased duties produced but 2,537,000l.; exhibiting an absolute deficit. Speech of Henry Brougham, Esq., M. P., March 13, 1817.

Virginia Postrel On Textiles And The Fabric Of Civilization
by Russ Roberts via EconTalk
Author and journalist Virginia Postrel talks about her book The Fabric of Civilization and How Textiles Made the World with EconTalk host Russ Roberts. Postrel tells the fascinating story behind the clothes we wear and everything that goes into producing them throughout history. The history of textiles, Postrel argues, is a good way of understanding the history of the world.

Steven Levitt On Freakonomics And The State Of Economics
by Russ Roberts via EconTalk
Author and economist Steven Levitt is the William B. Ogden Distinguished Service Professor of Economics at the University of Chicago and host of the podcast "People I (Mostly) Admire." He is best known as the co-author, with Stephen Dubner, of Freakonomics. The book, published in 2005, became a phenomenon, selling more than 5 million copies in 40 languages. Levitt talks with EconTalk host Russ Roberts about the book's surprising success, the controversy it generated, and how it shaped his career. 

Thinking About Long-Term Debt
by John F. Cogan, John H. Cochrane, Michael J. Boskin, Joshua D. Rauh, Richard A. Epstein, Daniel Heil via PolicyEd
Whether they’re overlooking skyrocketing federal debt or unfunded state pension obligations, lawmakers continue to make short-run budget decisions that will disproportionately burden future generations. How big are these problems, and are there any good solutions?

'In Order To Export, You Have To Import': Raghuram Rajan Cautions Against Import Substitution
featuring Raghuram Rajan via The Hindu
Former Reserve Bank governor Raghuram Rajan on Wednesday cautioned against import substitution under the ‘Aatmanirbhar Bharat’ initiative of the government, saying the country has gone down this route earlier but could not succeed.

Properly Political Scientists: The Great Barrington Declaration
By David Deavel on Oct 14, 2020 04:00 pm
Science does not give us all the answers. When it comes to forming policy, there are no technocratic answers. The Great Barrington Declaration is a sensible statement by a group of scientists daring to stand against the “consensus” of experts. It is based not merely on science but on prudent thought based on a ...
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Why pro-growth economics is about connections, networks, and trust
James Pethokoukis | AEIdeas

Don't bet against the dollar
Desmond Lachman | The Hill 

Is the Federal Reserve out of ammo to fight the coronavirus economic slowdown?
Desmond Lachman | The National Interest

The CEE is also available online at Econlib, and the online version includes several online-only entries, including:

• Hoover's Economic Policies
• The 2008 Financial Crisis
• Division of Labor
• Gordon Tullock and Israel Kirzner biographies

Irving Kristol lecture honoring Nicholas Eberstadt Kristol.AEI.org

Global economic stimulus will lead to stagnation
Derek Scissors | InsideSources
The enormous amounts of credit extended to people and companies are not “stimulus”; this is fiction. Even when necessary, borrowing will slow global growth for many years to come.

Steven Kamin explores long-term monetary policy challenges, and Desmond Lachman adds that the Federal Reserve may be out of ammo to fight the economic slowdown.

The wall and the bridge
R. Glenn Hubbard | National Affairs 
 
New ideas, openness to trade, and technological advances have propelled the US economy to new heights. While America's dynamic economy has been the engine of our prosperity and opportunity, it has also been a source of our political division. Instead of constructing walls of protectionism and regulation, policymakers should work to build bridges to opportunity.

Short-term progress, longer-term challenges for the Federal Reserve
Steven B. Kamin | AEIdeas

Milton Friedman was right about shareholder capitalism
Michael R. Strain | @MichaelRStrain | Bloomberg Opinion
 
In 1970, economist and Nobel laureate Milton Friedman wrote that a business' social responsibility is to increase its profits. This view, now under attack by a group of politicians and business leaders, is well grounded in solid economics, common sense, and practical considerations.

​A Partial Defense Of Milton Friedman's 1970 NYT Essay
by David R. Henderson via Econlib
To understand my story, you first need to understand Friedman’s basic point. Here it is in a nutshell: Managers are employees of corporations. In the decisions they make with corporate resources, they should be responsible to the corporation.

 The myth of stability: Why the economic golden age of postwar America was not as golden as we remember
James Pethokoukis | @JimPethokoukis | AEIdeas
 Critics of Milton Friedman's doctrine often view the immediate postwar decades as an economic golden age that never turned into a golden century. And that failure, they say, is partly because of the rise of short-sighted capitalism that Friedman supposedly recommended. But what if this economic golden age was not as golden as we remember? 

How the State Can Guide NYC’s Fiscal Recovery
E.J. McMahon, Manhattan Institute

In the wake of the coronavirus pandemic, New York City is facing its biggest economic and fiscal challenges since the mid-1970s. The Big Apple’s recovery prospects are uncertain and hotly debated, but this much already is clear: with tax revenues cratering, the city government’s pre-pandemic spending trends are simply unsustainable. Personal service costs, inflated by fringe benefits and inefficient work rules, are by far the biggest chunk of New York’s nearly $90 billion budget. Read more here...

The Fed just de facto increased its inflation target to 2.5%

https://www.mercatus.org/bridge/commentary/multiplier-myths

The Four Paths of US-China Relations
Yuen Yuen Ang considers the possibility that either or both countries could experience a change in leadership.

The Crowding-Out Myth
Robert Skidelsky rejects the orthodox economic view that public investment is bound to be less efficient than private capital.

Are We All Keynesians Again?
Andrés Velasco asks what an era of larger, more robust state intervention in the economy can and should mean.

China’s Digital Currency Will Rise but Not Rule
Eswar Prasad explains why a new version of the renminbi will fail to challenge the US dollar’s global dominance.

The End of Western Opportunism
Joschka Fischer says that US and European policymakers and businesses have no choice but to accept that China as it is.

https://www.aier.org/article/opposed-to-government-intervention-crisis-or-not/

https://www.realclearmarkets.com/articles/2020/08/11/automatic_stabilizers_would_exacerbate_the_pain_of_recessions_501564.html

 Checking in on the American Dream: 3 charts that show US living standards and upward mobility are far from stagnant
James Pethokoukis | AEIdeas 

5 questions for Glenn Hubbard on the COVID-19 pandemic, productivity growth, and US fiscal policy
R. Glenn Hubbard and James Pethokoukis | AEIdeas 

Faster wage growth? A lighter debt burden? Is there anything faster productivity growth can’t accomplish?
James Pethokoukis | AEIdeas 

THE ENVIRONMENTAL COST OF GREEN ENERGY

The “Stakeholder” Fallacy
Allison Schrager, City Journal

Joe Biden unveiled his economic plan last week. It’s mostly unremarkable, containing Donald Trump-like nods to economic nationalism, but one thing that stood out was Biden’s vow to “put an end to the era of shareholder capitalism.” The former vice president and presumptive Democratic presidential nominee rejects “The idea the only responsibility a corporation has is with shareholders. That’s simply not true. It’s an absolute farce. They have a responsibility to their workers, their community, to their country. That isn’t a new or radical notion.” Read more here..

The Journey Home: Wilhelm Röpke & the Humane Economy

The Effect of Economic Freedom on Labor Market Efficiency and Performance
By Lee Ohanian via the Human Prosperity ProjectLee Ohanian surveys the history of American labor since 1960 and demonstrates that economic freedom has led to greater workforce participation and, consequently, has increased levels of production and per-capita compensation. Conversely, he maintains, when the United States has heavily regulated labor markets via high taxes, minimum wages, collective bargaining, or occupational licensing, it has caused reduced investment, slowed productivity, increased unemployment, and, over the long term, depressed wages.

A tribute to an economic giant — Friedrich Hayek — who would have celebrated his 121st birthday on May 8  
Mark J. Perry | Carpe Diem

What Austrian Economists Can Learn From Roger Scruton
By Allen Porter Mendenhall on May 10, 2020 07:59 pm
There can be no freedom absent some authority. Conservatives and libertarians alike may locate that authority in mediating institutions of modest size, recognizing the importance of consent and localism, family and place, to good government. Sir Roger Scruton’s example shows that certain conservative cultural conditions enable market-based economies to flourish. The room is alive with ...
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E21:  PANDEMIC & JOB LOSS

The Second Phase of Unemployment Will Be Harsher – Victor Tan Chen & Ofer Sharone, The Atlantic

Subsidiarity and solidarity during a pandemic
James C. Capretta | RealClearPolicy

Why Communism Failed And Liberal Democracy Prospered
by Peter Berkowitz via PolicyEd
Liberal democracy triumphs where communism fails because it limits the government’s ability to make important decisions on behalf of its citizens.

The Journey Home: Wilhelm Röpke & the Humane Economy
Building American Institutions During a Cultural Crisis

The Christian Moral Economy
By Cicero Bruce on Jun 20, 2020 04:00 pm
The contributors to “Wealth, Poverty, and Human Destiny” underscore the truth that liberal intellectuals who foster the illusions that God is dead, that man is self-sufficient, are but tools in the hands of the actual dominant force: global corporations that wield economic power, power that the liberal intellectuals unwittingly serve by providing corporate advertisers ...
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The Invisible Hand
by Milton Friedman via PolicyEd
When people follow their own interest, 

Friedman Fundamentals: Good Questions Gone Awry
By Milton Friedman via PolicyEd
When reformers create new regulations, they create opportunities that special interests can exploit to accumulate money and power. As long as we believe that the way to solve our problems is to permanently give the government more power, it will continue to grow.

Reforming The Fed

China’s Coming Economic Shift

 The Phillips Curve: A Poor Guide for Monetary Policy By James A. Dorn
PDF

The Once and Future Worker: A Vision for the Renewal of Work in America by Oren Cass
By Daniel Griswold
PDF

A Century of Federal Reserve Monetary Policy: Issues and Implications for the Future by Thomas R. Saving
By Peter Ireland
PDF

Milton Friedman, An 'Elfin Libertarian' Giant
by David R. Henderson via Defining Ideas
A response to the carping c

Things we know that aren’t so  It’s not just homo economicus who threatens us
 Clifford D. May | Founder & President