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In light of Bernanke’s plans to purchase $600 billion of longer-term government debt, many academic economists are beginning to worry : Could the Federal Reserve itself become insolvent ? In this article I’ll explain these fears and I’ll argue that the Fed, with its printing press, cannot really go bankrupt the way other corporations can. However,

In reaction to the growing public anger at the TSA and its “ freedom fondles ,” some pundits are rushing to the bureaucracy’s defense. An illustrative example is Marc Thiessen’s call for Americans to give thanks to the “men and women of the TSA who give up time with their families during the holidays to keep us safe from terror.” As we’ll see,

In a recent post “ Triumph of the Austrian Economists ,” David Frum laments the displacement of the respectable Chicago School as the economists of choice among the political Right. Frum fails to see that conservative Republicans are justified in switching their allegiance to the Austrian economists, because supply-side monetarists have a glaring

Over the past two weeks, National Public Radio (NPR) has carried stories on the plight of the bluefin tuna and on the conservation campaign designed to save the endangered fish. Restaurants and supermarket chains have pledged to boycott the delectable creature until governments lower fishing quotas. Some vocal fishermen naturally oppose reductions

It is understandable, though still harmful, when economists completely mischaracterize the policies of the Herbert Hoover Administration. But in his recent Salon piece on Sarah Palin’s new book, historian David Greenberg distorts the legacies of both Calvin Coolidge and his ill-fated successor, Hoover. To set the record straight, it’s worth

Austrians in the tradition of Mises and Rothbard stress the resilience of a free-market economy, and they believe that the institution of private property — along with the profit-and-loss test — will steer resources into their most valuable niches. However, most Austrians stop short of following Chicago School economists’ advocacy of the “

I recently discussed David Frum’s lament that conservative Republicans are defecting from “respectable” economists and joining the ranks of the Austrians. One of the reasons for this is that many conservative pundits — Frum included — are Keynesians, plain and simple. Many rank-and-file conservatives are recognizing that it makes no sense to

Jim Manzi is not a professional economist, but he has been asking some very good questions about the confidence economists have in their models. In response, actual economist Karl Smith has defended the broad macroeconomic models that invite further “stimulus” from both the government and Federal Reserve. Ironically, Smith claims to be a fan of

One of the most subtle aspects of modern economic theory is the relation between subjective value and objective money prices . This is an area where the Austrians have an advantage over other schools, because they care more about their forebears than most other economists, and because Austrians were instrumental in the development of

Economists and other pundits have been discussing the deal struck between Obama and the Republicans. It is an interesting topic because it showcases the enormous gulf between what makes good political sense and what policies are economically beneficial. Paging Orwell: Baseline Budgeting Perhaps the single biggest oddity in this affair has been the