Category Archives: Economics

Here’s to You, Doug Rogers

One of the most selfish pleasures I’ve taken away from my time in George Mason University’s economics department is witnessing the accomplishments of the people I got to know there. Reading a former professor’s book, seeing a fellow grad student’s paper in a journal, or reading their op-eds and blog posts brings me endless delight.

That pleasure will be denied me with Doug Rogers. He was one of the best friends I made during that time. He passed away on January 30 in a car accident. He was 26. Right in the prime of life.

What a shame then, that the world will be denied his achievements. He was well on his way to becoming a fine economist. Scratch that. He already was a fine economist. For a quick example of the clarity and principle of his thought, see this article on the economics of prohibition that he authored for a recent issue of The Freeman, published by the Foundation for Economic Education.

We met in Peter Leeson’s class in development economics. For the uninitiated, development economics attempts to answer why some countries are rich while others are poor, and how poor countries can become rich. In short, one of this century’s defining issues. Class discussion often grew heated as a result. Doug was the class’ voice of reason.

There were radical free-market types in the room, and their opposites. Doug made no bones about siding with the former. But he never lost sight of the fact that both sides agree on ends, even when they disagree on means. The world would be a better place if more people shared Doug’s simple insight.

He also noticed that I would often wear a Green Bay Packers hat to class. After class one day, he asked if I played football. It turned out that Doug and some other grad students got together on weekends to play touch football. I grew up playing baseball, and had hardly touched a football in my life. But softball season was over by this time of year, and football seemed a more appealing way to get some exercise than the tedium of a gym. So I lied and said yes.

Lies rarely turn out well. This one did. I still come out most weeks, despite having graduated almost two years ago. The games themselves are fun enough. But the real treat is that I got to know a whole cast of characters who I am proud to call my friends.

Doug was definitely the leader of the gang. More often than not, he would send out the weekly emails to gauge attendance. He would get things started once we reached a quorum. He would call the plays in the huddle. Good ones, too. If you were playing receiver, you wanted Doug to be your quarterback. If you were defending against him, Doug was the last guy you wanted to cover.

When everyone’s endurance was flagging, Doug would promise to buy everyone burgers from Five Guys if we’d just play one more game. First team to score three touchdowns wins. It’ll be quick. So of course, we’d play. And everyone’s sides would be heaving with exhaustion by the time that third touchdown finally came. Then he’d flash a smile and say he was just kidding about the burgers. This was a regular enough occurrence that the group came up with a word for it: getting Dougled.

Then January 30, 2011 happened. No more reading Doug’s articles. More importantly, no more getting Dougled. I suspect our weekend football group will continue. If it doesn’t, so it goes. But if it does, it won’t ever be the same. The world of ideas will continue on as it ever did. But for the next half century or more, it will be missing an important voice. My life is far from the only one that will be left poorer by Doug’s death.

I don’t have any religious beliefs. But when I get to know a good person, I do have the habit of describing them as a good soul. Doug was a good soul. I will miss seeing what he would have accomplished had he lived longer. But more than that, I will miss him just being around. Here’s to you, friend. You’ll be missed. In fact, you already are.

Bush’s Third Term Continues

President Obama’s policies are remarkably similar to President Bush’s. Most of their differences are in matters of degree, not principle. Both presidents believe in expanding federal involvement in health care, education, energy, you name it. Both grew regulation, spending and deficits at tremendous rates. Even their foreign policy is almost identical.

Over at the Daily Caller, I analyze last night’s State of the Union address (I also live-blogged it here) and find it wanting. There are some real stretches of logic:

In 1957, the Soviet Union launched a satellite into space. Therefore, taxpayers should give more money to politically favored corporations. This is not a rigorous line of thought. But it was typical of yesterday’s State of the Union address.

It wasn’t all bad, though:

There was some good in yesterday’s speech. The president would like to lower corporate tax rates. After Japan’s recent rate cuts, America now has the highest corporate tax rate in the developed world — nearly 40 percent in most states. This is not the way to encourage businesses to invest in America.

I wish the president had spent a little more time on the rate cut. He could have explained to the country and his party that businesses don’t actually pay corporate taxes. That’s because businesses pass on their costs. Consumers — you and I — foot the bill.

Read the whole thing here.

State of the Union Live-Blog

As promised, here is my live-blog of last night’s State of the Union address:

8:17 In line with recent tradition, the full text of President Obama’s speech leaked early. National Journal is hosting it – http://nationaljournal.com/whitehouse/exclusive-obama-to-declare-the-rules-have-changed–20110125

8:18 Here are excerpts from Rep. Paul Ryan’s response – http://budget.house.gov/News/DocumentSingle.aspx?DocumentID=221278

8:41 Here comes Biden. Introduced as President of the Senate, not as Vice President.

8:42 Just turned on the tv. Curious to see which Ds and Rs will be sitting together. I hear Pelosi declined Cantor’s offer.

8:47 CNN is using the music from the John Adams miniseries. Inappropriate?

8:48 If you’re bored while waiting for the speech to start, you can read last year’s State of the Union live-blog here – http://www.openmarket.org/2010/01/27/state-of-the-union-live-blog/

8:53 CNN poll – Which is more important? 78% say not cutting social security is more important than reducing the deficit. 21% say the reverse.

Remember, in a democracy, the people get what they want in the long run. This is why neither party is willing to take on entitlement reform.

8:53 Wolf Blitzer looks like he just got out of a wind tunnel.

9:00 Important People continue to file in.

9:01 The Supreme Court is front-and-center. I’m guessing there will not be a repeat of Scalia’s mouthing “that’s not true.”

9:05 There sure are a lot of Important People in Washington. They’re still arriving.

9:05 Here he is.

9:06 Much applause.

9:08 I’m guessing this is as much “face time” as most of these Congress-critters will get.

9:08 Nice acknowledgment of Coburn’s missing beard.

9:10 CNN is debating the political significance of the color of Obama’s tie. It’s not news, it’s CNN.

9:11 Here we go!

9:11 But first, much applause and many thank yous.

9:12 That’s two standing ovations already.

9:12 Hearts to you, Rep. Giffords.

9:13 Please recover quickly.

9:14 Oh, dear. He’s blaming the Tucson tragedy on partisan bickering. But it wasn’t that. It was the act of a crazy person. Tone had nothing to do with it.

9:15 “We need to work together tomorrow.”

Somehow, I don’t see this happening.

9:16 “We will move forward together, or not at all.”

Given how politicians move, let’s hope for the latter.

9:16 [Comment From KevinKevin: ]
Hello from Elyria Ohio !

9:17 Congress didn’t actually pass tax cuts in December. Tax cuts are when rates go down. Congress voted to keep them the same.

9:18 People don’t have the same job for life, anymore. A reference to the decline of American manufacturing.

9:19 One problem with that is that U.S. manufacturing output is near an all-time high.

9:19 Another is that few people want their children to grow up to be factory workers.

9:19 India! China! Scary!

9:20 “The competition for jobs is real.”

Except there isn’t a fixed number of jobs to be fought over between different countries.

9:21 Lots of talk about the future. A way of avoiding talking about the present?

9:22 “We need to out-innovate the rest of the world.” Get out of the way, then!

9:22 Curious to hear his thoughts about how he wants to make America a better place to do business.

9:23 Needs to encourage innovation. Sounds to me like an open invitation to rent-seeking and lobbying for politically popular industries.

9:23 First mention of Facebook in a State of the Union address?

9:23 [Comment From KevinKevin: ]
Blah Blah stop the bs

9:24 Ah, Sputnik.

9:24 [Comment From KevinKevin: ]
yes stop the spending Obama !

9:25 The Soviet Union launched a satellite in 1957. Therefore the federal government needs to invest in green jobs.

9:26 Yes, take money out of the economy, waste some of it on bureaucracy, then put it back into the economy. Maybe that’ll work!

9:26 [Comment From KevinKevin: ]
We need less goverment !

9:26 [Comment From KevinKevin: ]
didnt he cut NASA money ?

9:27 Kevin — don’t believe so. The shuttle program is ending soon, but budget remains the same

9:28 End oil subsidies — good! Government-sponsored innovation — yeesh.

9:28 How about ending all energy subsidies, period?

9:29 If it’s commercially viable, it doesn’t need a subsidy. If it isn’t commercially viable, no amount of subsidy will make it so.

9:29 Education.

9:30 Family rhetoric. Trying to appeal to Republicans, no doubt.

9:30 Much applause.

9:31 [Comment From KevinKevin: ]
not teachers ?

9:31 Race to the Top as meaningful reform.

9:32 Do people in Washington really know how to educate kids in California, Texas, Maine, and beyond? This is properly a state and local issue. Get the feds out of it.

9:33 Is anyone against good schools across the country?

9:33 Teachers unions have to be loving this.

9:33 Merit pay! maybe not.

9:34 100,000 new teachers, in the fields of his choice. Echoes of Clinton, except not in a good way.

9:35 Student debt for all!

9:36 I like that he’s giving two-year colleges some respect. But they are also properly state and local issues, not federal.

9:36 [Comment From KevinKevin: ]
Yes !!!!!!!!!!!!!!!!!!!!!

9:36 [Comment From KevinKevin: ]
NO jobs for teachers ! local schools are broke

9:37 Much applause.

9:37 Immigration.

9:37 Sounds good so far…

9:38 “Protect our borders.” Yeesh. Sounds like a Republican.

9:39 The best way to end the problem of illegal immigration is to make the legal channels easier, faster, and cheaper.

9:39 Prohibition doesn’t work.

9:39 Infrastructure.

9:40 Paid for by…

9:40 Good luck keeping politics out of this!

9:40 Especially with high-speed rail.

9:41 Nice pat-down joke. Please do something about those, Mr. President. They don’t make the country safer.

9:41 [Comment From KevinKevin: ]
Yes I need the votes !

9:41 [Comment From KevinKevin: ]
taxes !

9:41 [Comment From KevinKevin: ]
get the shovels its getting thick

9:42 If the government spends more on education, innovation, and infrastructure, good things will happen.

9:43 Lower corporate tax rate, with an allusion to the Laffer Curve.

9:43 Makes sense — who knows about the revenue, but U.S. corporate tax rates are now the highest in the developed world.

9:44 Not the way to encourage businesses to locate in the U.S.

9:44 Korea FTA – no specifics

9:44 I hear it may implemented by July. Let’s hope.

9:45 Increase exports! Fewer goods and less direct foreign investment for all!

9:45 Ah, regulation.

9:45 They are why food is safe and air is clean. I’d wager that wealth has more to do with it.

9:46 Child labor laws didn’t hit the books until that vile practice was well in decline.

9:46 Ditto with Clean Air Act, Clean Water Act, etc.

9:46 The health care bill. The elephant in the room.

9:47 The reactions are very partisan.

9:47 Anecdote!

9:47 Another anecdote!

9:47 How about some data?

9:48 “Fix what needs fixing, let’s move forward.” Curious as to his definition of what needs fixing.

9:48 National debt.

9:48 Blames Bush for beginning the spending binge. Right on.

9:49 Not sustainable. Quit sustaining it, then! His presidency has been Bush’s third term in almost every respect.

9:49 Spending freeze.

9:49 $40 billion per year. That’s roughly 1 percent of federal spending.

9:50 Deficit is something like 25%+ of federal spending. Try harder, please.

9:50 Curious to see how fast people spin this into spending cuts.

9:50 Oh wait, he just did.

9:51 A cut is when spending goes down. He is proposing that 12% of the budget stay the same, while the rest continues to increase.

9:51 [Comment From KevinKevin: ]
never going to happen

9:51 [Comment From KevinKevin: ]
Lip service !!!!!!!!!!!!

9:51 [Comment From KevinKevin: ]
more TAXES !!!!!!!!!!!!! lost jobs!!!!!!!

9:51 Taxes.

9:52 Reduce Medicare and Medicaid? Don’t see this happening in the current political environment.

9:52 Medical malpractice reform to rein in frivolous lawsuits. Much applause. Rightfully so!

9:53 Bi-partisan solution to Social Security reform. In other words, punt it down the road.

9:53 Distrusts IRAs, apparently.

9:53 Not just personal accounts.

9:54 Millionaire tax break equals taking scholarships away from children. How about reducing spending on frivolities?

9:54 Simplify the tax code. Yes! If only either party had any interest in this.

9:55 Government should be affordable, competent, and efficient.

9:55 Brave stance.

9:55 Nice job poking fun at salmon regulations!

9:55 [Comment From KevinKevin: ]
how many jobs is the health care reform making ?

9:56 Sell off unused federal real estate.

9:56 “I will send a vague proposal to Congress in the near future.”

9:57 People need to believe in their government.

9:57 Good transparency rhetoric. Put it online.

9:57 Earmark ban! I’m guessing the definition of ‘earmark” will change, or else Congress will be, shall we say, less than cooperative.

9:58 [Comment From KevinKevin: ]
BLAH BLAH !!!!!!!!!!!

9:58 Foreign policy. New threats could emerge at some point! EVERYBODY PANIC

9:59 [Comment From KevinKevin: ]
God bless the troops !

9:59 [Comment From KevinKevin: ]
get them HOME !!!!!!

9:59 Right on, Kevin.

10:00 Armies can fight wars. but they can’t build nations.

10:01 Don’t hate Muslims. Blame the individual, not the ideology. Hopefully this is widely heeded. Sound advice.

10:02 Congress likes it when he gets belligerent towards foreigners.

10:03 [Comment From ChrisChris: ]
I’ll believe the part about N Korea abandoning nukes when I see it.

10:04 South American tour. Hopefully this means action on the Colombia and Panama free trade agreements?

10:06 Democracy for all! I hope he realizes that freedom and democracy are not the same thing. They often correlate. But they are not the same thing.

10:07 Sounds like he wants to spend more on defense.

10:09 Franken looks bored.

10:09 He is not alone.

10:10 Constitutional rhetoric.

10:11 Biden and Boehner are quite the pair.

10:11 Anecdote!

10:11 [Comment From GuestGuest: ]
McCain applauds like there is no tomorrow.

10:12 [Comment From ChrisChris: ]
This seems like it’s falling flat.

10:14 Just like last year, this was a long one. Much applause.

10:15 On to Rep. Paul Ryan’s response.

10:21 This will be an important speech for Paul Ryan.

10:24 His style is policy-heavy. I don’t always agree with his voting record, but here’s hoping he stays true to form. Policy is far more important than rhetoric, even if it is less glamorous.

10:25 It also helps that President Obama takes him seriously, even when they disagree.

10:25 Here he is.

10:25 Oops, they cut out his first few words.

10:26 Nice words about Tucson.

10:26 Necessary. But get on with it.

10:27 House as cut its own budget. Nice symbolism,but small potatoes.

10:27 Debt is growing.

10:27 “No economy can sustain such levels of spending and taxation.”

10:28 It’s a bipartisan problem. Yes. See the Bush years as well the Obama years.

10:28 Obama has increased domestic spending by 25%, added $3 trillion to the debt.

10:29 Doesn’t like the health care bill. It will increase costs.

10:29 Washington should not pick winners and losers.

10:29 Regulatory reform. CEI has many, many ideas for that.

10:30 What was a challenge is now crisis. Hyperbole, but with a grain of truth.

10:30 Unlike last year, Congress will actually propose a budget.

10:31 I like his ambition, but I doubt he’ll get all he wants.

10:31 Founders rhetoric alert.

10:31 Definitely trying to appeal to conservatives.

10:32 “Individual liberty requires limited government.”

10:32 Dems want to increase government, even though it’s already at an all-time high.

10:33 But not just over the last two years. His own party is just as guilty when they hold the reins.

10:33 Transform the social safety net into a hammock.

10:33 We still have time, but not much. Cf. Greece, et al.

10:34 Day of reckoning?

10:35 Spirit of initiative should triumph over political clout. hear, hear. Too bad two major political parties disagree with him.

10:36 American exceptionalism. no, it’s actually institutional exceptionalism that has made America great.

10:36 Nice and brief!

10:36 Sometimes it’s good to be the opposition. You can be more honest, less flowery, and mercifully brief.

10:38 Well, that’s all for tonight. Thanks for following along, and thanks for your comments. My CEI colleagues will have more in-depth analysis for you tomorrow. Good night!

State of the Union Wrap-Up

I’ll post the full text of tonight’s live-blog sometime tomorrow.

Until then, here’s my one-sentence reaction: Bush’s third term continues.

Live-Blogging the State of the Union

Since I wasn’t clever enough to figure out how to syndicate the content to this blog, just click on over to CEI’s staff blog, OpenMarket.org, to read my live-blog of tonight’s State of the Union address.

I’ll paste the full text over here sometime after the speech. But at OpenMarket, you can follow along as it happens. So head on over.

On the Radio Again – State of the Union

Tomorrow morning at 6:50am EST, I’ll appear on The Talk of Connecticut to discuss the State of the Union address. I don’t know if you can listen live online, but the network’s website is here.

On the Radio – State of the Union

Today at 3:35 EST, I’ll be on WTIC 1080 AM (Hartford, CT) to talk about the State of the Union address. You can listen online here.

I will also be live-blogging the speech starting around 8:30 EST for CEI’s blog, OpenMarket.org. You can follow the action here. I will also try to syndicate the feed to this blog, but no guarantees since I’m not exactly tech-savvy.

CEI’s Agenda for Congress: End Corporate Welfare

CEI’s biannual Agenda for Congress is out. You can read the whole thing here (PDF, 84 pp.), or you can see the table of contents and access individual articles here.

Wayne Crews and I wrote the corporate welfare section. Here’s a taste:

One of government’s primary current undertakings is transferring wealth. Many such transfers are from taxpayers to corporations. Before the financial crisis and recession, these transfers were called corporate welfare. Now they are called stimulus, bailouts, or infrastructure investments. But a rose by any other name has thorns just as sharp…

Corporate welfare, whether in the form of subsidies or competitor-hampering regulations, creates distortions and inefficiencies, injures consumers, and undermines the evolving, competitive market process.

PDF version here.

Tim Carney Knows How Washington Works

Tim’s latest column, “Bail them out, regulate them, then work for them,” is a must-read.

Amy Friend, a former staffer for Sen. Chris Dodd, played a large role in writing the Dodd-Frank financial regulation bill. And she just got a new job at a lobbying firm. Tim explains:

There are two types of people on K Street: access people, who can get you in the door; and policy people, who know what’s on every page of every relevant bill and regulation. Friend is the latter. While business will dry up for other Dodd alumni on K Street, Friend is valuable because — to quote one Republican lobbyist — “she knows what’s on page twenty-three-[bleep]ing-hundred of that bill,” and every other page, too.

In other words, Friend didn’t just write a landmark piece of legislation — she wrote her meal ticket.

Tim doubts that Friend is corrupt. But her story is very common in Washington. Lobbying wouldn’t be such a booming business if regulation wasn’t, too. And the revolving door between the Hill and K Street can be very profitable, even when no corruption is involved. Most people forget that regulators act just as self-interestedly as the people they regulate.

CEI Podcast for January 20, 2011: The Future of Space Policy

Have a listen here.

CEI Adjunct Scholar and space policy expert Rand Simberg explains why NASA stagnated after its early success in bringing man to the moon. Fortunately, the future of private exploration is looking brighter every year. Private exploration’s increasing viability means that it is time to reevaluate NASA’s role in future space travel.