Chris Joye argues that the origins of the US mess was the crimped banking system that prevented the emergence of nation-side deposit taking institutions.
Note: the crimping clearly was a result of government intervention. I recommend Joye's article below.
http://economics.com.au/?p=2735
Joye writes:
"Trouble nevertheless arises when you create artificially strong incentives, as US governments repeatedly did, to predicate your entire housing finance edifice on securitised forms of funding to the detriment of the traditional deposit-taking market. Over and above stunting the growth of a nationally-integrated banking sector, synthetic incentives that instill securitisation as the preferred source of funding expose the overall financial system to a number of potentially destabilising conflicts. The most obvious of these is that the organisations that source new home loans and which are responsible for assessing their credit risk are removed from the institutions that ultimately own the assets and hence bear that risk. We have, therefore, a classic principal-agent problem."
A wonderfully accessible analysis.
http://www.businessspectator.com.au/bs.nsf/Article/Joye-$pd20090226-PM69X?OpenDocument&src=sph
Saturday, February 28, 2009
Friday, February 27, 2009
Pigovian Taxes and Mankiw's Pigou Club
I am currently taking an FTE online class - The Economics of Disasters. This is a wonderful course and will be offered fall, 2009 and I recommend it highly.
In the course of an online discussion about responses to disasters a classmates mentioned Pigovian taxes as a least worst solution.
My reply:
If the world is constant externalities - that is every transaction impacts third parties in some way, then what would be the approach to considering a world of constant externalities?
The deadweight of government involvement is justified by those who have great confidence in their ability to determine social costs and benefits. This type of paternalism constitutes an incidious threat to liberty and to freedom of action, in my view.
That said, all government action in the form of tax creates a deadweight loss, taxes do not eliminate deadweight loss.
http://www.basiceconomics.info/tax-and-deadweight-loss.php
As you say, Mankiw would argue that the deadweight loss from the gas tax is justified, because the taxing authority knows the social costs and benefits. When I think about this, I wonder why I use Mankiw's text. Note to self - next semester move to The Economic Way of Thinking. Hayek and others were very skeptical that central authority can acquire and act on knowledge.
That said, as you indicate, it is indeed stimulating to explore these points of view. As I write this, I am trying to think of any tax at any time that moved society closer to socially efficient outcomes and . . .
The foundation of a free society is absolute protection of property rights. Surrendering that absolute right must be justified by significant and extraordinary potential gain.
From a source with an admitted skepticism toward taxation
CATO - the Pigovian Problem
http://www.cato.org/pubs/regulation/regv31n2/v31n2-5.pdf
and
CATO - Against the New Paternalism
http://www.cato.org/pubs/pas/pa563.pdf
In the course of an online discussion about responses to disasters a classmates mentioned Pigovian taxes as a least worst solution.
My reply:
If the world is constant externalities - that is every transaction impacts third parties in some way, then what would be the approach to considering a world of constant externalities?
The deadweight of government involvement is justified by those who have great confidence in their ability to determine social costs and benefits. This type of paternalism constitutes an incidious threat to liberty and to freedom of action, in my view.
That said, all government action in the form of tax creates a deadweight loss, taxes do not eliminate deadweight loss.
http://www.basiceconomics.info/tax-and-deadweight-loss.php
As you say, Mankiw would argue that the deadweight loss from the gas tax is justified, because the taxing authority knows the social costs and benefits. When I think about this, I wonder why I use Mankiw's text. Note to self - next semester move to The Economic Way of Thinking. Hayek and others were very skeptical that central authority can acquire and act on knowledge.
That said, as you indicate, it is indeed stimulating to explore these points of view. As I write this, I am trying to think of any tax at any time that moved society closer to socially efficient outcomes and . . .
The foundation of a free society is absolute protection of property rights. Surrendering that absolute right must be justified by significant and extraordinary potential gain.
From a source with an admitted skepticism toward taxation
CATO - the Pigovian Problem
http://www.cato.org/pubs/regulation/regv31n2/v31n2-5.pdf
and
CATO - Against the New Paternalism
http://www.cato.org/pubs/pas/pa563.pdf
Thursday, February 26, 2009
From David Warsh
But no outsider’s voice is more striking at the moment than that of Simon Johnson. And no site better demonstrates the power of the Web to restructure debate, by bringing deep and different thinking to the fore.
http://baselinescenario.com/
http://baselinescenario.com/
Wednesday, February 25, 2009
Russ Roberts on The State of the Union
Russ Roberts on the State of the Union address over at Cafe Hayek
The
short-term vision is that massive amounts of borrowed money can be
spent effectively by the federal government to get us out of a
recession. I think that's unlikely to work . . .
http://www.cafehayek.com/hayek/2009/02/the-obama-vision.html
What was in last night's state of the union address?
A short-term vision and a longer-term vision.
The
short-term vision is that massive amounts of borrowed money can be
spent effectively by the federal government to get us out of a
recession. I think that's unlikely to work . . .
http://www.cafehayek.com/hayek/2009/02/the-obama-vision.html
Saturday, February 21, 2009
ASET Conference
The Arizona Society of Economics Teachers presented - the 8th Annual ASET Conference at Mesa Community College Saturday, February 21, 2009 from 7:30 am - 12:00 pm
Announcements:
Summer courses - ASU (June 4 - 11)and UofA (June 11 - 24) - tuition subsidized total of 9 graduate hours
MCC online courses for teachers - pass the APEA- tuition subsidized.
FTE programs (graduate credits $50/semester hour).
Institute on Environment and the Economy - registration deadline March 5.
ACEE upcoming programs
8:00 a.m. Welcome and Introductions
Dr. James Mabry, Vice President of Academic Affairs, MCC
8:15 a.m.
Guest Speaker – Don Wentworth, PhD,
“Globalization Viewed Through a Wine Glass”
9:00 a.m. Break - Meet the ASET Board Candidates
9:15 a.m. Lesson Demonstrations:
John Morton, ACEE
Vanessa Schneider, Fraser Institute, Canada
Announcements:
Summer courses - ASU (June 4 - 11)and UofA (June 11 - 24) - tuition subsidized total of 9 graduate hours
MCC online courses for teachers - pass the APEA- tuition subsidized.
FTE programs (graduate credits $50/semester hour).
Institute on Environment and the Economy - registration deadline March 5.
ACEE upcoming programs
8:00 a.m. Welcome and Introductions
Dr. James Mabry, Vice President of Academic Affairs, MCC
8:15 a.m.
Guest Speaker – Don Wentworth, PhD,
“Globalization Viewed Through a Wine Glass”
9:00 a.m. Break - Meet the ASET Board Candidates
9:15 a.m. Lesson Demonstrations:
John Morton, ACEE
Vanessa Schneider, Fraser Institute, Canada
Frazier Powerpoint - Economic Freedom
2008 Winning Student Entry - Frasier Video Contest
“Economic Growth & Economic Freedom”
Economic Freedom Map
10:30 a.m. Break – Voting for ASET board
10:45 a.m. Keynote Speaker – William Boyes, PhD, ASU
“The Global Financial Crisis”
11:45 a.m. Awards, Raffle,
New ASET Board: Dr. Alice Temnick, President Susan Ford, Secretary, Debbie Henney, Darcy Brodson, Brett Haglin and Charles Frazier board members.
Thanks to
the Thomas R. Brown
Foundation for the lodging stipend for
hotel stay Friday night!
Contact Mark Sammons at
programs@trbfoundation.org
for more information.
Friday, February 20, 2009
Economic Freedom Map
Arizona Council on Economic Education and the Frasier Institute sponsored the Economic Freedom Map in Tempe, Friday, February 20, 2009.
Frazier Powerpoint - Economic Freedom
 |
| Economic Freedom Map |
Charting a Path to Prosperity
Workshop Highlights
* Learn what economic freedom is and how it relates to global prosperity, health, environmental quality, and civil liberties.
* Be among the first teachers in the United States to see the influence of Vancouver-based Fraser Institute's Economic Freedom of the World Annual Report, which measures economic freedom in an accurate, comprehensive, and objective manner.
* Use the Economic Freedom of the World Wall Map and six complete, innovative, and active-learning lessons to teach your students about economic freedom and its effects.
Participants Received
* A stunning 3'x2' full-color wall map, illustrating the economic freedom of 141 nations.
* A book of six complete lessons that use the map to teach about economic freedom and its consequences.
* Certificate for 7 hours professional development.
* PLUS Continental breakfast and lunch.
Thursday, February 19, 2009
Analysis online
A great resource:
AnalysisOnline is an online service of The Communications Institute with core funding from the Thomas R. Brown Foundations.
The goal of AO is to provide policy makers, journalists, and leaders from the public, private, and nonprofit sectors with objective, nonpartisan analysis of complicated national and regional issues. The site is also intended to serve citizens looking for more information and knowledge beyond news headlines.
Partnering with leading academic scholars, AO provides news, primers and video content on critical issues. The site also features coverage of TCI programs, and in-depth backgrounders on pressing public policy issues.
AnalysisOnline is an online service of The Communications Institute with core funding from the Thomas R. Brown Foundations.
The goal of AO is to provide policy makers, journalists, and leaders from the public, private, and nonprofit sectors with objective, nonpartisan analysis of complicated national and regional issues. The site is also intended to serve citizens looking for more information and knowledge beyond news headlines.
Partnering with leading academic scholars, AO provides news, primers and video content on critical issues. The site also features coverage of TCI programs, and in-depth backgrounders on pressing public policy issues.
Tuesday, February 17, 2009
CIS 237 - Web Based Teaching and Learning II
Mesa Community College is offering a sequence of entirely online professional development classes to assist faculty in online learning. The first course, CIS 236 Web Based Teaching and Learning I begins on March 23, and the second CIS 237 Web Based Teaching and Learning II begins on Feb. 16.
Two posts on state level intervention
Two excellent posts
Robert Higgs
Economic Fascism Marches On
Reporting on a February 9 Business Week article by Pete Engardio on “State Capitalism,” the National Center for Policy Analysis summarizes:
Across the United States, state governments are crafting economic strategies that blur the boundaries between the public and private sectors. They are targeting specific industries and intervening in ways that go far beyond traditional perks like tax breaks and cheap land.
http://hnn.us/blogs/entries/62598.html
Perspective ~ The State Is Morally Hazardous To Your Health
By Sheldon Richman • May 2008
It’s never been more important for advocates of individual liberty to emphasize that what is failing today is not the free market but the state. To claim otherwise is to ignore generations of pervasive and deep-seated privilege through government interference with the marketplace.
http://www.thefreemanonline.org/departments/perspective-the-state-is-morally-hazardous-to-your-health/
Robert Higgs
Economic Fascism Marches On
Reporting on a February 9 Business Week article by Pete Engardio on “State Capitalism,” the National Center for Policy Analysis summarizes:
Across the United States, state governments are crafting economic strategies that blur the boundaries between the public and private sectors. They are targeting specific industries and intervening in ways that go far beyond traditional perks like tax breaks and cheap land.
http://hnn.us/blogs/entries/62598.html
Perspective ~ The State Is Morally Hazardous To Your Health
By Sheldon Richman • May 2008
It’s never been more important for advocates of individual liberty to emphasize that what is failing today is not the free market but the state. To claim otherwise is to ignore generations of pervasive and deep-seated privilege through government interference with the marketplace.
http://www.thefreemanonline.org/departments/perspective-the-state-is-morally-hazardous-to-your-health/
Monday, February 16, 2009
President's Day
From 2008 over on Austrian Economists
Laissez-fairist U.S. Presidents
A few weeks ago at a dinner, I was sitting across from the great Martin_van_buren_3 Leonard Liggio. Over the course of the meal, we talked about various U.S. Presidents and I asked who, in his opinion, the real laissez-faire supporters among all the U.S. Presidents were. Leonard came up with the following list (there are only six of them). The order is from the most laissez-fairist to the least (dates of presidency in brackets):
• Grover Cleveland (1885-1889 and 1893-1897)
• Martin Van Buren (1837-1841)
• Andrew Jackson (1829-1837)
• Thomas Jefferson (1801-1809)
• Calvin Coolidge (1923-1929)
• Ronald Reagan (1981-1989)
Laissez-fairist U.S. Presidents
A few weeks ago at a dinner, I was sitting across from the great Martin_van_buren_3 Leonard Liggio. Over the course of the meal, we talked about various U.S. Presidents and I asked who, in his opinion, the real laissez-faire supporters among all the U.S. Presidents were. Leonard came up with the following list (there are only six of them). The order is from the most laissez-fairist to the least (dates of presidency in brackets):
• Grover Cleveland (1885-1889 and 1893-1897)
• Martin Van Buren (1837-1841)
• Andrew Jackson (1829-1837)
• Thomas Jefferson (1801-1809)
• Calvin Coolidge (1923-1929)
• Ronald Reagan (1981-1989)
Tuesday, February 10, 2009
Blogs to check out
Tim Schelling and the Powell Center
http://valuingeconomics.blogspot.com/
William Easterly
http://blogs.nyu.edu/fas/dri/aidwatch/
Aplia presents current events with outstanding analysis and discussion questions for use in your class.
http://econblog.aplia.com/
Economic Principals by David Warsh
http://www.economicprincipals.com/
Development Blog
http://chrisblattman.blogspot.com/
http://valuingeconomics.blogspot.com/
William Easterly
http://blogs.nyu.edu/fas/dri/aidwatch/
Aplia presents current events with outstanding analysis and discussion questions for use in your class.
http://econblog.aplia.com/
Economic Principals by David Warsh
http://www.economicprincipals.com/
Development Blog
http://chrisblattman.blogspot.com/
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