Rising Costs for Public Pensions Drive Up Tax Bills
Monday November 29, 2021 | Craig Eyermann

Imagine a state that puts the pensions of its government employees ahead of just about everything else it does. Would you choose to live there? And if you did live there, how long could you afford to stay? These are real life questions that were faced by people who lived in cities like Detroit and Stockton. In these cities, public officials gave very generous pensions and benefits to government employees in return for their political support. So generous, they contributed to their bankruptcies in a very non-virtuous cycle. (more…)

From Biden’s $1.9 Trillion “Rescue” Plan to Today’s Inflation
Monday November 29, 2021 | Craig Eyermann

It’s not often you get to see cause and effect in action for government spending. Take the Biden-Harris administration’s $1.9 trillion “American Rescue” plan. That’s the one I described as a “failure of fiscal discipline” for which “ordinary Americans will ultimately pay” back in March of this year. That spending bill is back in the news because it lived up to that billing! If you saw the October 2021 inflation report, you already know how ordinary Americans are paying for it. Whatever “sugar high” President Biden’s spending gave to the Americans who got “stimmy” checks has worn off. (more…)

Komsomol Currency Controller Nominee Pivots from Marx to Maggie
Monday November 29, 2021 | K. Lloyd Billingsley

Saule Omarova, Joe Biden’s nominee for comptroller of the currency in the Treasury Department, went to Moscow State University on a Lenin Scholarship and wrote a thesis on “Karl Marx’s Economic Analysis and the Theory of Revolution in ‘The Capital.’” Omarova has yet to provide the Senate banking committee with readable copies and the Biden nominee recently indulged a fascinating dodge. Omarova wants the government to take ownership of financial firms and attributes this view to the late British Prime Minister Margaret Thatcher. Trouble is, the Thatcher government wanted to privatize inefficient state industries and had to temporarily retain a stake in those industries as it shifted them to private ownership. (more…)

The Costs of the Build Back Better Act
Saturday November 27, 2021 | Craig Eyermann

The Congressional Budget Office released its estimate of the costs of H.R. 5376, a.k.a. the “Build Back Better” Act. According to the CBO’s budget math, the much smaller spending bill that we talked about a few months ago doesn’t cost $0 as President Biden claimed it would. In fact, it doesn’t cost anywhere close to $0. Despite that, the U.S. House of Representatives voted to pass the spending bill. Rather than trying to describe how much it does cost in both new spending and taxes, it’s easier to show you. The chart below reveals how much new spending and taxes the CBO expects from the shrunken bill over each of the next 10 years. (more…)

The Pilgrims’ Real Thanksgiving Lesson
Wednesday November 24, 2021 | Mary L. G. Theroux

With Thanksgiving upon us once again, we offer a reminder of the economic lesson that made our first Thanksgiving possible: The Pilgrims’ Real Thanksgiving Lesson
by Benjamin Powell Feast and football. That’s what many of us think about at Thanksgiving. Most people identify the origin of the holiday with the Pilgrims’ first bountiful harvest. But few understand how the Pilgrims actually solved their chronic food shortages. Many people believe that after suffering through a severe winter, the Pilgrims’ food shortages were resolved the following spring when the Native Americans taught them to plant corn and a Thanksgiving celebration resulted. In fact, the pilgrims continued to face chronic food shortages for three years until the harvest of 1623. Bad weather or lack of farming knowledge did not cause the pilgrims’ shortages. Bad economic incentives did. (more…)

Biden, not “Big Oil”, is to Blame for Energy Price Spikes
Wednesday November 24, 2021 | William F. Shughart II

“President Calls for Inquiry into the Price of Gas” reads a frontpage headline in November 18’s Wall Street Journal. President Biden apparently wants Americans to believe that the major producers and distributors of fossil fuel energy (“Big Oil”) are responsible for recent price increases at the pump and looming sticker shock on home heating bills.  As President Reagan might have said, “there he goes again”. Seeking to duck responsibility for his own policy actions, Biden has asked Federal Trade Commission chairperson Lina Kahn, appointed for her relentless hostility to Big Tech, to launch an investigation into whether U.S. energy companies have conspired or engaged in other unlawful behavior to profit at the expense of consumers of gasoline, diesel fuel, and heating oil. (more…)

An Empirical Defense of Congressional Filibusters and Super-Majority Voting Rules
Tuesday November 23, 2021 | James A. Montanye

Deliberative democracy is a noble ideal that politics reduces to romantic fiction. Deliberations rarely produce unanimous agreement due to the divergent interests of politicians and their constituencies. The upshot is that policy issues, both great and small, often are resolved by narrow majority votes. As the jurist and legal scholar Robert Bork noted, even scant majorities rule for no better reason than that they are majorities. Whether a policy decision requires a simple majority (i.e., 50 percent plus one of the votes cast), or else a super-majority of some degree, should depend—at the very least—upon the significance of the policy under consideration; i.e., a vote to commemorate Groundhog Day surely is of less significance than a vote to transform American society. Regrettably, the choice of degree is itself a policy issue that typically eludes unanimous consent. That choice often follows tradition; in other instances it turns ad hoc on the whim of interested politicians. A variety of ideally objective voting schemes have been proposed by economists and political theorists (e.g., variations on “Wicksellian unanimity”), but none so far has gained widespread traction. This failure is attributable partly to the impracticality of the schemes proposed, and partly to the fact that they constrain the felicitous degree of flexibility that politicians, judges, and bureaucrats presently enjoy. (more…)