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331. A Constant Unit of Account

Author:
Richard W. Rahn
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Over the past several decades, I have been a professional economist, government advisor, financial regulator, and have also engaged in international business. After this variety of experience, I am now more than ever convinced that Hayek was absolutely correct in how the government monopoly of the issuance of money leads to a never-ending cycle of economic crises. A decade ago, I was hopeful that the ability of private parties to create their own digital currency might be our salvation, and that led me to write a book, The End of Money and the Struggle for Financial Privacy (Rahn 1999). At the time, Milton Friedman told me that I was much too optimistic about how long it would take. Friedman was right, as usual, and we still seem decades away from this ideal.
Topic:
Government

332. A Market-Based Regulatory Policy to Avoid Financial Crises

Author:
Luigi Zingales
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
When it comes to “saving capitalism,” dealing with the “too big to fail” doctrine is a top priority. This doctrine has increasingly become the government policy on this issue, and it is probably the most dangerous policy for capitalism we can imagine. It under- mines capitalism in many ways: not only does it make the system less stable, but it also undermines the moral basis of capitalism. If you have a sector or a set of institutions where losses are socialized but where gains are privatized, then you destroy the economic and moral supremacy of capitalism. Either we deal with the perverse incentives created by this doctrine or we undermine the long-term sustainability of capitalism. So it is really important to think what we can do against this too-big-to-fail policy.
Topic:
Economics

333. Jimmy Stewart Is Dead: Ending the World's Ongoing Financial Plague with Limited Purpose Banking

Author:
Gerald P. O'Driscoll Jr.
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Chapter 1 of the book is titled “It's a Horrible Mess,” and in it Laurence Kotlikoff, a professor of economics at Boston University, reminds the reader of the breadth, depth, and horror of the global financial crisis. It is a cure for the dispassionate observer of events, an indictment that would send all but those with ice water in their veins to sign up for the Tea Party Express. The book is a particularly well-written account of the crisis that begins in housing finance, spreads throughout the financial system, and then throughout the real economy. The crisis hit in tsunami-like waves beginning in 2007 and continued into 2009.
Topic:
Financial Crisis

334. The New Holy Wars: Economic Religion vs. Environmental Religion in Contemporary America

Author:
Richard L. Gordon
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Robert H. Nelson, one of the world's leading natural resource economists, long has argued that the ideologies in economics are secularizations of traditional religion and that this concealment is ill advised. Less convincingly, he advocates linking these new ideologies to their religious roots. He now also brands environmentalism as a secular religion whose roots need examination. This book postulates a war between that religion and the economic religion that he previously criticized.
Topic:
Disaster Relief
Political Geography:
America

335. The Rational Optimist: How Prosperity Evolves

Author:
Aaron Ross Powell
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Science writer Matt Ridley is, as the title of his new book suggests, optimistic about humanity's future—and not just at the prospect of even better lives for those lucky enough to have excellent lives already, but at the possibility of radically transforming, for the better, the lives of those today suffering near the bottom. The key, he thinks, is economic growth, that boogeyman of naysayers and concerned citizens everywhere. “It is precisely because there is still so much further to go that those who offer counsels of despair or calls to slow down in the face of looming environmental disaster may be not only factually but morally wrong,” he argues. The path to that better world 100 years from now will not be smooth. Mankind is likely to experience traumas both of a natural sort and of its own creation. Most troubling, “The wrong kind of chiefs, priests and thieves could yet snuff out future prosperity on earth.” Ridley doesn't let this possibility get him down. Humans are too driven to trade, exchange their ideas, and imagine new ones for a few bad apples to ruin the future.
Topic:
Disaster Relief

336. Congress Should Account for the Excess Burden of Taxation

Author:
Christopher J. Conover
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
A well-established principle of public finance holds that taxes impose costs on society beyond the amount of revenue government collects. Estimates vary depending on the type of tax, but the “marginal excess burden” of federal taxes most likely ranges from 14 to 52 cents per dollar of tax revenue, averaging about 44 cents for all federal taxes.
Topic:
Economics, Government, and Markets
Political Geography:
United States

337. Fiscal Policy Report Card on America's Governors: 2010

Author:
Chris Edwards
Publication Date:
09-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
State governments have had to make tough budget choices in recent years. Tax revenues have stagnated as a result of the poor economy, and that has prompted governors to take a variety of fiscal actions to close large budget gaps. Some governors have cut spending to balance their budgets, while others have pursued large tax increases.
Topic:
Economics, Government, Markets, and Monetary Policy
Political Geography:
America

338. Editor's Note

Author:
James A. Dorn
Publication Date:
02-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
This special issue of the Cato Journal was made possible by a generous grant from the Arthur N. Rupe Foundation . The question posed in this issue—Are Unions Good for America?—has both normative and positive aspects. Normatively, if one takes freedom as a fundamental principle, then compulsory unionism cannot be justified in a free society; it violates the rights of both workers and employers. Under current U.S. labor law, workers are often compelled to join unions and employers are compelled to negotiate “in good faith.” Public sector unions are even more onerous than private sector unions; they limit consumer choices and impose heavy tax burdens.
Political Geography:
United States and America

339. Unions, Economic Freedom, and Growth

Author:
Randall G. Holcombe and James D. Gwartney
Publication Date:
02-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The freedom to enter into contracts and to direct the use of economic resources one owns are essential to the operation of a market economy. Allowing employees to form unions to bargain collectively over wages and employment conditions is consistent with economic freedom, and any government intervention preventing unionization would be a violation of economic freedom. Nevertheless, American labor law, especially since the 1930s, has altered the terms and conditions under which unions collectively bargain to heavily favor unions over the firms that hire union labor. Labor law has given unions the power to dictate to employees collective bargaining conditions, and has deprived employees of the right to bargain for themselves regarding their conditions of employment. While unions and economic freedom are conceptually compatible, labor law in the United States, and throughout the world, has restricted the freedom of contract between employees and employers.
Topic:
Economics
Political Geography:
United States and America

340. Unions, the Rule of Law, and Political Rent Seeking

Author:
Armand Thieblot
Publication Date:
02-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Under the Obama administration, the influence and involvement of trade unions in government policy decisions has surged to unprecedented levels. Some of the more egregious examples include the proposed Employee Free Choice Act, which abolishes the secret ballot among workers deciding on union representation and imposes forced interest arbitration of contract disputes; the selective protection of union healthcare benefits from proposed “reform” legislation; the awarding of assets seized from major automotive companies to the United Automobile Workers; and the involvement of union personnel, especially members of the Service Employees International Union, in electioneering efforts and counter-demonstrations on behalf of the Democratic party. That all of this has occurred within less than a year is especially troublesome. What makes it more so is the well-established pattern, on the part of unions, to disregard and disrespect the rule of law.
Topic:
Government