If a tax hike increases the price of some sector’s products, politicians and journalists air the issue. But when some other economic factor does the same, the response may be oblivious neglect. That seems to be the case with a…
Author: Ed Lotterman
Stiffer penalties would deter white-collar crime
If there are no penalties for actions that harm society, you will have more such damage than if such damaging acts are punished. We have come to a pass in our nation where we punish small-scale acts of obvious fraud,…
U.S. aid is all about influence globally
U.S. foreign aid is not well understood, to put it mildly. It is an important tool in achieving our objectives in our relations with other nations. Any benevolent or altruistic motives are secondary. But the public highly overestimates its costs…
Canadian train wreck raises economic questions
External costs of transportation are making news. The first is tragic, the train derailment and fire in Lac-Megantic, Quebec, that has killed at least 15 people. The second, buried in the back pages, is the ongoing controversy about more restrictive…
Rhetoric aside, this new tax is a bad idea
A plague on both their houses. Imposing taxes on two business-to-business services, warehousing and repair and maintenance of business equipment, passed by a DFL majority in the last legislative session, is bad public policy. But some critics of the taxes…
Airline consolidation hurts consumers, bad for markets
It is good that Minnesota is among the 19 states plus the District of Columbia that are asserting their voices about the proposed merger of American Airlines and US Airways. This deal, just the latest in an ongoing series of…
Mandates often fail market’s smell test
Two current issues illustrate the pitfalls of traditional command-and-control approaches to environmental policies. The first is that of power plants that burn trash to generate electricity and that were constructed as the result of a state law passed a third…
Don’t look to markets for rational behaviors
The financial markets’ extreme reactions last week to sundry pronouncements by the Federal Reserve’s policy-making Open-Market Committee, and its individual members, call into question some of the assumptions of contemporary economic theory. If people really are highly rational in their…
Nothing sweet in U.S. sugar policies
U.S. sugar policies are complex. A century ago, there was a joke in Europe that the sharpest graduates of the Imperial German army general staff college, who went into the railroad scheduling bureau, would end up in insane asylums after…
Prolonged low interest rates create topsy-turvy markets
The Federal Reserve’s policy-making Open Market Committee is meeting as I write this. They are not likely to take drastic action at this meeting, but the extraordinary degree to which prices of stocks and bonds respond to actions by the…