Developing economies regularly grow at 5, 7 or even 10 percent a year. So why can’t our country do the same? That is the good question former Minnesota Gov. Tim Pawlenty raised in the recent Republican presidential candidates’ debate in…
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A smoldering Europe threatens to burn the U.S.
Are we living in a new age of Nero? The Roman emperor, of course, is infamous for fiddling while Rome burned. Historian Barbara Tuchman used the phrase “Neroism is in the air” to describe German attitudes prior to World War…
Swipe-fee battle more complex than at first sight
This week’s decision by Congress that the Federal Reserve may regulate the “swipe fees” merchants must pay banks on sales paid via debit cards provides a mother lode of examples for microeconomics teachers like me. On the surface, the fight…
Too-rosy claims can undermine even the best ideas
Even the best ideas can be undercut by overselling. A classic case: President Barack Obama’s pledge that if his stimulus bill were passed, unemployment would not exceed 8 percent. Now the same mistake is being made with excessively optimistic claims…
Shutdown’s impact depends on extent of ‘public goods’
As Minnesota toys with a “shutdown” of state government due to the budget impasse, many people wonder what effect a layoff of thousands of state employees will have on the state’s economy. Nationally, many states and local governments are reducing…
Porn industry’s threat to move provides lesson in global economics
Many outcomes of globalization are positive, giving people more goods and services from the same resources than if economies were isolated. Some outcomes are tragic, however. And then there is the occasional farce. That was evident in a recent wire…
Shenanigans aside, speculation has its place in the market
The mills of our nation’s legal system grind slowly indeed, but they often sprint ahead of economic theory. The Commodity Futures Trading Commission last week charged a set of hedge funds with illegally manipulating oil prices in 2008. A story…
Pawlenty’s promise a challenge for him – and voters
In proclaiming himself as the candidate who is “going to tell the truth,” Tim Pawlenty on Monday laid down a gauntlet to Iowa Republicans. Pawlenty is right. Many politicians, even ones who trumpet their willingness to make hard choices, dance…
Rules or discretion? Debate will never end
Does giving broad discretion to allow reaction to complex challenges result in better outcomes for society? Or does discretion inevitably motivate popular short-term actions that cause harm in the long run? This argument, initiated by University of Chicago Nobelist Milton…
Oil subsidies don’t affect prices much in the U.S.
I believe we need more bipartisanship in Congress, so in principle, I was pleased that Democrats Tim Walz and Colin Peterson joined Republican John Kline in supporting measures that would promote offshore drilling for oil. History shows we can get…