Should we worry about rising inflation? September’s Consumer Price Index showed an increase of 1.22 percent in just one month. The Producer Price index came in even higher at 1.9 percent. Whether this merits great concern depends on how you…
Category: Other
Demand “elasticity” key to profits
The U.S. economy is challenged by high energy costs, rising interest rates and the eventual effects of prolonged federal budget deficits. People naturally wonder how businesses they own — or that employ them — will fare in these rougher economic…
U.S. stance on farm subsidies appears dubious at best
Tuesday’s newspaper juxtaposed one headline, “U.S., EU move closer on trade” with another, “Game theory yields economics Nobel.” The two stories are more connected than they might appear. Nobel winner Tom Schelling’s insights on the dynamics of negotiation should make…
Health insurance is different, but why?
When we buy car insurance or a homeowner’s policy, we usually have a choice of buying a standard bread-and-butter contract or paying more for extra coverage. Health insurance doesn’t necessarily work that way. For example, a recent news story examined…
U.S. holds Nobel Prize dominance–for now
Regardless of who wins the Nobel Memorial Prize in Economics Sciences on Monday, odds are the announcement will extend U.S. domination of that category. Of the 55 individuals who have won the prize since 1969, 43 were born in the…
Price indexes help little in capping city spending
Few people like to pay taxes, but most of us agree that we would be worse off without any government. Moreover, all taxes distort economic incentives in some way and create undesired and unintended consequences. The real estate tax has…
Fuel tax the fairest way to motivate conservation
Maybe I’d better find my WIN button. That was my initial reaction to President Bush’s call Monday for citizens to voluntarily conserve fuel. For those too young to remember, WIN buttons were an initiative of the Gerald Ford administration and…
Anti-gouging activities are bad policy
The price gouging going on these days is outrageous. Just a few weeks ago, someone sold a modest house for $389,000 that could not have cost $100,000 when it was purchased 25 years ago. The sellers didn’t seem to feel…
Choices not as simple as good vs. bad
When it comes to economic policy, decision-makers rarely face a choice between good and bad. More often, it’s a matter of deciding what’s better or worse. For example, I argued recently that the Fed tightening of the money supply was…
To survive, airlines must play the game
The saying “life is just a game” is not true, but the survival of some companies may depend on acting as if it is. Bear that in mind as Northwest Airlines’ bankruptcy proceedings and union negotiations play out. The airline…