Ever since passage of the Budget Control Act of 2011, most people have assumed that, eventually, some sort of deal would get done. Both sides have something to lose, the thinking went, so both sides will eventually compromise to spare the country from going over the fiscal cliff.

And everyone also assumed that, while the outcome of the election would tilt the balance of power, still both sides had something to lose, so a deal would get done.

And that makes sense, if you assume both sides have something to lose.

But what if, even before the election, one side thought it did NOT have much to lose? What if, in fact, one side thought it had almost nothing to lose and much to gain, and the outcome of the election simply confirmed this calculation? What then? Read More >>

Posted by Tom Giovanetti | Comments

Posted by Svetozar Pejovich | Comments

Posted by Tom Giovanetti | Comments

Good stuff from Alan Reynolds at Cato:

In the real world of politics, however, Congress and the White House use borrowed money to placate constituencies with the most political clout. Federal spending on investment projects has essentially nothing to do with the huge 2009-2012 budget deficits (only 29 percent of which can be blamed on the legacy of recession, according to the CBO).

Posted by Tom Giovanetti | Comments

According to an opinion piece in today's Politico, Mitt Romney has revealed that he is a Keynesian. Is Romney a Keynesian? Is that a problem? And is anyone surprised? Read More >>

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Posted by Tom Giovanetti | Comments

It's been announced that the next round of Trans-Pacific Partnership negotiations will be held in San Diego July 2-10, 2012. Read More >>

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The free-market position has always been that minimum wage laws actually put people out of work by raising the marginal cost of employing a "marginal" employee. This helps deny to young, inexperienced, low-skilled workers those bottom couple of rungs on the employment ladder. Read More >>

Posted by Tom Giovanetti | Comments

Nobel Prize Alert: Robert Reich has discovered a new economic law: 

"Without the government as competition, the private sector has little incentive to improve."

This is truly breathtaking. As it turns out, it's not the private sector that drives innovation, growth and efficiency, it's the government. 

Posted by Tom Giovanetti | Comments