People’s willingness to buy something today often hinges on what they expect the good to sell for in the future. This is not true for all products — groceries are a notable exception — but it applies to many durable…
Category: Other
Can divided power yield coherent power?
What effects the 2006 landmark election will have on economic policy or the economy are not clear yet. It is evident that divided government will prevail in Minnesota and in Washington, D.C. In both cases, a Republican will head the…
“Demand shifters” hurt newspapers
The Newspaper Association of America announced last week that the average paid circulation at major U.S. newspapers continues to fall. (The Pioneer Press is an exception, with a tiny increase on Sundays offsetting a tiny decrease during the week.) This…
Neither Senate hopeful has grasp of economics
Neither candidate for Minnesota’s U.S. Senate seat has realistic stands on taxes, spending, annual federal budget deficits, the national debt or Social Security. If these issues are important to you, hold your nose and vote for the least bad alternative.…
How much are we entitled to?
When people receive some benefit over many years, they begin to regard it as an unquestionable right. Economists call these “acquired rights.” Such rights are not strictly defined in law, and thus generate conflict if changed. The arguments center on…
It’s time for truth in property taxation
The tax on real estate that is used to pay for schools and other local government is a bad one for several reasons, but one flaw becomes particularly evident in an election year because the tax practically invites public misunderstanding…
UnitedHealth board typical in its inaction
Where were the directors? While the focus is on William McGuire, who stepped down last week as chairman and chief executive of UnitedHealth Group, not enough attention is being paid to that company’s board of directors. What were they doing…
Corruption affects economy in big, little ways
Does political corruption affect the economy? That is a particularly relevant question given recent news. The answer is that corruption matters economically, but the effects vary depending on the circumstances. Consider the following recent cases: Last week: Rep. Bob Ney,…
Lumber-aid ideas revive new debate
Minnesota’s forest products industries are in a slump. Companies that produce lumber, oriented-strand board and other building materials are particularly hard hit by the sharp decline in new-home construction nationwide. Many have cut back production, and some are closing, at…
Nobel laureate revitalized Keynesian theory
The committee members who choose Nobel laureates worry that history will judge their insights. Sometimes, they hedge their bets by honoring leaders from opposing sects within the discipline. That happened this year in awarding the economics prize to Edmund Phelps,…