What came first, the rising U.S. trade deficit or the soaring amount of foreign investment in the United States? It’s a classic chicken-and-egg question. And it’s timely because recent changes in the value of the dollar alter the incentives for…
Month: May 2003
Zoning can bring economic efficiency–and bigotry
Zoning is always troublesome for hard-core, free-market economists. There are a few true-blue libertarians in the discipline. They argue that government should not regulate who does what where. But most economists accept the argument that some level of zoning can…
Revealing “refund loans”
You can tell that a lending institution is trying to take advantage of borrowers when it refuses to tell them exactly what interest rate it is charging them. That is not any principle of economics but rather a practical observation…
Ups and downs of the dollar can be good and bad news
If you read Superman comics as a kid, you probably remember Bizarro, Superman’s evil double, and Bizarro World, the skewed reality he inhabited. Everything in Bizarro World resembled in a perverse and twisted way some corresponding reality in Superman’s world.…
Age is a factor in valuing life
Is the death of an older person as great a loss to society as that of a young person? The Office of Management and Budget says no. The Environmental Protection Agency says yes. At stake are the cost of pollution…
What factors allow CEOs to earn above-market pay?
Are CEOs paid too much? To most economists, that question does not involve fairness, justice, outrage or any of the other terms that many people use regarding pay in the millions of dollars. Instead, they focus on whether the sums…
Fed facing election pressure
The Federal Open Market Committee met Tuesday and, as expected, announced that it was making no changes in its management of the nation’s money supply, though it did hint at the possibility of reducing an interest rate target when it…
Airline restructuring reveals pecking order
The airline world is moving on from the turmoil at American Airlines and wondering which big carrier will next run the gauntlet of labor strife and bankruptcy threats as it restructures itself. Our hometown hero, Northwest Airlines, is a solid…
Impact of SARS nothing to sneeze at
Severe acute respiratory syndrome is affecting the global economy in an interesting way. Actions by people to avoid getting SARS and public health measures to avoid its spread are the primary cause of economic loss rather than the disease itself.…