Economics Notes

- Remember when Obama was going to cut taxes?  Yeah, those were the days

- There can’t possibly be any public choice problems with having the regulated bail out the regulator.  Nope, that’ll never come up the next time any of the banks run afoul of FDIC regulations…  But since the money’s flowing freely between friends, what’s the problem with making public the already-existing capture of regulators?

- Russ Roberts has an interesting question, especially at this point in the game:  will massive government spending tame the “animal spirits” or will it, instead, cause things to get worse because people will realize that the government can’t possibly make good on all of its debts?  A proper Keynesian would have wanted to cut spending drastically during the 1990s and 2003-2008 and have a rainy day fund for downturns.  Instead, we get the spend-spend-spend crowd who piggy-back off of Keynes’s ideas (ill-suited as they are to the world in which we live).  Their day is coming, but unfortunately, they won’t be the ones bearing the brunt of it.

- From the “do we really need government?” files:  government officials sell driver’s licenses in India.  This might help explain some of why people in India are such bad drivers.  It doesn’t explain why Americans are such bad drivers…  This is another reason to advocate deregulation whenever possible:  many regulations seem to exist in order to enrich bureaucrats and particular groups of individuals, at the expense of those locked out from the regulation process.  The answer isn’t some addle-brained idea of “broadening the system” or “participatory democracy” or whatnot, but rather to destroy the capacity for such malfeasance.

What Could Be The Harm?

The G-20 nations apparently are looking to enact banker-compensation regulations.  Tyler Cowen wonders where the literature is to justify this.  If he doesn’t know about it, I question its existence…

To learn a bit more about investment companies and how employees get paid, you could do a lot worse than read this (currently) two-part series by the Epicurean Dealmaker.  Starting off with a description of “anti-bonus zombies” as “generally dim-witted, slow-moving, and awkward” is awesome.

I’m Shocked!

The Government Motors bailout probably won’t be paid back. I thought this was a slam-dunk deal that was going to be a profit for the American taxpayer, though—that’s what Congress and the President (a man with considerable business expertise—he once walked inside an office!) told us.  You mean that handing hundreds of billions of dollars over to politician-bribing businesses doesn’t benefit the general taxpayer?  I’m absolutely shocked.  Shocked and amazed.