… if you understand some pictures I took at the park, you’re on your way to understanding economics, and therefore the world, better. … If even the ducks and pigeons respond to incentives, people may do so too.
Category: Economics
Tax Increases and the Great Depression
Did tax increases deepen and extend the Great Depression?
Laffer and coauthors argue that the “chief cause of the Great Depression was taxation.” That is a bold claim because policymakers made many mistakes during the 1930s. Aside from adverse monetary and tax policies, the government undermined the economy with regulatory interventions, labor union laws, and a general antagonism toward businesses and high earners.
New Analysis Finds Expanded Child Tax Credit Reduces Work and Growth
As policymakers continue to look for ways to make family life easier, more convenient, and more affordable, it is key that they avoid reforms that inadvertently undermine families or reduce the size of the economy and associated opportunities for workers.
https://www.cato.org/blog/new-analysis-finds-expanded-child-tax-credit-reduces-work-growth
The False Face of SBF, FTX, and ESG
The vast majority of ESG funds and firms are similarly misdirective. Freewheeling use of terms like “sustainable” obscure a wide variety of investment activities, some decidedly at odds with common public notions of “green” investing. Between 2019 and June 2022, some 65 US funds were re-branded as “sustainable,” without any consensus as to the meaning of the term.
Washington Has Been Much More Successful Than California in Displacing the Black Market for Pot
Lighter regulation is one likely explanation.
California’s striking failure to shift consumers from illegal to legal dealers is largely due to a combination of high taxes, onerous regulations, and local retailing bans. While Washington has a relatively high retail marijuana tax (37 percent, plus standard sales taxes), in other respects the state has made it easier for licensed suppliers to compete with illegal sources.
The Pilgrims Dreamed of Socialism. Then Socialism Almost Killed Them.
Private property was the solution to their failed experiment. But people keep repeating the Pilgrims’ mistakes.
The Pilgrims had run into the “tragedy of the commons.” No individual Pilgrim owned crops they grew, so no individual had much incentive to work.
Bradford’s solution: private property.
https://reason.com/2022/11/23/the-pilgrims-dreamed-of-socialism-then-socialism-almost-killed-them/
The Vast Collateral Damage of Zoning
Robert C. Ellickson exposes in convincing detail the deleterious impact of restrictions on new housing.
“Local zoning measures may be the most consequential regulatory program in the United States. Local barriers to housing production elevate housing costs and distort household migration decisions. Nonetheless, members of the mass media tend to regard anything that happens at a city hall as unworthy of attention.” He characterizes zoning’s reach into private life as “Leviathan gone Local.”
https://www.city-journal.org/the-vast-collateral-damage-of-zoning
On Second Thought, Just Throw Plastic Away
Even Greenpeace now admits the obvious: recycling doesn’t work.
Environmentalists’ zeal to ban plastic is far more destructive than their former passion to recycle it; it’s also harder to explain…Why ban products that are cheaper, sturdier, lighter, cleaner, healthier, and better for the environment?
https://www.city-journal.org/greenpeace-admits-recycling-doesnt-work
Government Is Largely Guesswork
Even the local government that supplies policing services paid for with tax dollars has no solid information about just how much policing to supply and how best to supply these services. Consumers don’t express their demands for government-supplied policing by voluntarily spending money for it, with the ability to change the amounts they spend in response to changes in the quality of, or the desire for, the service provided.
When Karl Marx Made the Case for Capitalism
What Marx had in mind was the triumph of the North’s free labor system and the accompanying spread of Northern capitalism throughout the would-be Confederate States of America.
https://reason.com/2022/10/22/when-karl-marx-made-the-case-for-capitalism/