Tag Archives: law of demand

Yes, Regulation Does Keep Unemployment High

Over at RealClearMarkets, my colleague Wayne Crews and I argue that the law of demand holds. Hard to believe that’s actually controversial, but that’s Washington for you. Here’s our conclusion:

Eberly was put in an uncomfortable position when she came to Washington. Just as a lawyer’s job is to vigorously defend clients even if she knows they are guilty, Eberly’s job is to vigorously defend policies that are obviously harmful to the economy. Try as she might, she cannot argue against the law of demand.

Regulations make hiring costlier and thus make jobs scarcer. And regulatory uncertainty makes companies reluctant to hire employees they might not be able to afford down the road. Case closed.

Read the whole thing.

Precisely Backwards

People buy less of something when it becomes more expensive. That’s what economists call the law of demand. It is one of the key drivers of every facet of human behavior. And it’s a simple concept. Easy to understand. Easy to apply.

Or maybe it only seems that way. 366 members of Congress just voted to attract tourists to the U.S. by taxing them $10 when they enter the country.

That noise you hear may well be Adam Smith rolling over in his grave.

Few things are more taxing than our elected officials’ economic illiteracy. How sad that visiting a wonderful country like America may soon be one of them.