- I don't usually read Jonathan Chait (The New Republic), but he has a very interesting post on Alan Greenspan's argument justifying the Bush tax cuts. I have no clue if this is true - it's so bizarre that I'm almost biased towards thinking Chait is embellishing something. If it is true this will definitely go in the annals of very wacky economic policy positions. This was a hilarious line from Chait: "I've seen theories this convoluted and loopy before. But they've usually been scrawled in long-hand by random cranks who mail letters to magazines." I always figured the bizarre theories of imminent socialist takeover only came out of the woodwork after Obama was elected - apparently our Federal Reserve chairman had a few of his own back in 2001.
- There has been an extensive exchange between Joe Salerno (of the Mises Institute) and Steve Horwitz (St. Lawrence University) over the role of fiduciary media in the business cycle, and specifically Mises's views on fiduciary media and free banking. I haven't followed it in any great detail, but I think these internicene debates can be very interesting. Whenever people with a lot of common ground disagree on something, they have the advantage of having a lot of common material and understanding to draw from - which makes the discussion very dense substantively. So in case you're interested, Peter Boettke sets things blazing here, Salerno responds here, and here more specifically to a comment by Horwitz on Boettke's original post. Horwitz response here and here. Larry White chimes in here on the Division of Labour blog (I don't follow this one, so there may have been more posts on this blog in the debate). If I've missed any posts, I'm sure you can find links to others in these. I'm not a free banker or a 100% reservist, and I don't know Mises so I can't really comment. I of course think that markets tend towards equilibrium, but my entire understanding of the economy is grounded in the prospect of disequilibrium made possible by a monetary economy. So I think if I put more thought into it I might actually agree with the Currency School. Earlier versions of the Banking School seemed to rest their case on the real bills doctrine - and in that sense I guess I agree with the Banking School. Insofar as the real bills doctrine is strictly adhered to, I think the Banking School is right - the whole concern of the Currency School is that practically speaking, there's no reason to assume that it is adhered to. These are just a few reflections after some googling - I'm really not familiar with the debate.
"This is a persistent challenge for government agencies: they get hammered
whenever something goes wrong. People are accustomed to the risks of driving
cars or taking planes. But governments are not supposed to kill people...
Government should focus on long-term, risky research (where the risk is
to projects, not to people), and the private sector should focus on delivering
services that are already well understood and ready to be handled in a routine