Reports of the death of the European Union are highly exaggerated. Yes, in the past week strong majorities in both France and the Netherlands voted to reject the proposed EU constitution. Whatever this means politically, it will have surprisingly little…
Category: Other
GOP finds governing is hard
Each time the pendulum swings in U.S. politics, the party that comes to power learns how much harder it is to make sound economic policy than to criticize that of the opposition. Consider the last century. From William McKinley’s election…
Cigarette tax has its roots in pragmatism
Minnesota Gov. Tim Pawlenty’s call for a big cigarette tax increase raises issues of why we tax tobacco and how high taxes should be. While economists can answer the first question, we can only make rough estimates about the second.…
Assumptions dangerous in war and economics
Staking a great deal on how you think someone else will react is dangerous. An old map I found this week reminded me of how that applies to war as well as to economic policy. It was a standard military…
State’s tax rate is just one factor in migration
Economists are not the only people who abuse the assumption of “all other things being equal.” Just read the letters to the editor. This week, a reader proclaimed her intent to move to Wyoming because of its low taxes, state…
Tax rate lower than many think
$450,000 – Amount a married couple taking the minimum federal personal exemptions would have to earn in adjusted gross income to pay an average tax rate of 28 percent. $200,000 – Amount a single person would have to earn in…
GM, Ford ills boost theory of “creative destruction”
Economists’ ideas are judged by history as well as by their peers. The recent news about the downgrading of General Motors and Ford bonds to “junk” bolstered the reputation of one great 20th century economist but hurt that of another.…
Airbus-Boeing “duopoly” challenges airlines
Two can be an awkward number, as many a prom-goer can attest. That also is true in markets with only two producers. Managers of such firms face difficult choices, and so do their customers. When they make any major decision,…
Budget terms cut both ways
President Bush’s Social Security proposals raise an interesting question: When is a cut a cut? Advocates of his approach assert their plan would merely slow the growth of benefits. Critics talk about large cuts in benefits. Who is right? To…
Tiers may unintended side effects
Blue Cross and Blue Shield of Minnesota has lobbed a hand grenade into the fishpond of Minnesota hospital management by instituting a new system of tiered hospital rankings. People covered by the insurer face doubled co-pays if they choose treatment…