Crowding Out: The Fed May Be Killing the Private Sector to Save the Government
2023-05-20
The Federal Reserve’s balance sheet reached its all-time high in May 2022. Since then, it was supposed to drop at a steady pace and shed three trillion US dollars by 2024. The normalization of monetary policy was built on the idea of a soft landing for the economy. However, the Fed may be killing the private sector to save the government.
Curbing inflation requires a significant reduction in the money supply and aggregate demand. However, if government deficit spending is left untouched, the entire burden of normalizing monetary policy will fall on families and businesses.
The current situation is the worst possible. The Fed’s balance sheet is not falling as fast as it should; government spending has not even been scratched, but the money supply is falling at the fastest pace since the
Energy and Economic Efficiency: The Market versus the Politicization of Our Energy Futures
2023-05-17
In the book Green Tyranny—a fantastic history of the environmental alarmism movement—author Rupert Darwall lays responsibility for the beginning of this movement at the feet of the Germans and the Swedes.
In 1967, a Swedish scientist published the first ever “theory” on acid rain. Four years later, Bert Bolin, a Swede who would go on to chair the UN’s Intergovernmental Panel on Climate Change (IPCC), wrote the first-ever government report on acid rain. It was a typical government report. Ninety pages long, it starts out with certainty: “The emission of sulfur into the atmosphere . . . has proved to be a major environmental problem.” Fifty pages later, however, Bolin does admit to some doubt when he says, “It is very difficult to prove that damage . . . has in fact occurred.” Nevertheless,
Making Nonsense from Sense: Debunking Neo-Calvinist Economic Thought
2023-02-25
A few years ago I wrote about some of the errors made by economists who try to apply what they believe are Christian principles to both Austrian and neoclassical economic analysis. These economists believe that the standard economic way of thinking is not only fatally flawed but actually immoral, and that an entire new paradigm must be brought to economics.
In the mid-1990s, I taught economics as an adjunct at a Christian college near Chattanooga, being essentially the entire department. For the most part, it was a good experience, and the students were attentive and talented. However, in the spring of 1995, I was asked to teach a course (along with other faculty members) from a neo-Calvinist perspective, which meant presenting a very different view of economics using a neo-Calvinist book,
Do Falling Prices Cause or Predict a Recession?
2022-12-07
In the midst of excessive US economic and geopolitical uncertainties due to rampant inflation and the continuing Russian invasion of Ukraine, the 7.7 percent October inflation report comes as a small relief. The unemployment rate touched 3.7 percent in October, remaining near the 3.5 percent prepandemic level and slightly above the 3.4 percent natural rate of unemployment of the fourth quarter of 2021.