Before he passed away last month, Milton Friedman had the satisfaction of seeing many of his free‐market policy ideas and economic insights vindicated by real‐world events.
A story in today’s Financial Times from London offers a clear, yet tragic, illustration of Friedman’s famous maxim: “Inflation is everywhere and always a monetary phenomenon.”
Zimbabwe’s erratic and despotic President Robert Mugabe has wrecked the country’s economy during his quarter‐century in power by flouting virtually every free‐market idea Milton Friedman advocated, including sound monetary policy. One result has been rampant inflation. According to the FT, Zimbabwe’s finance minister “admitted that inflation — 1,070 percent in the year to October — was excessive, blaming money supply expansion of more than 1,000 percent.”
Just as Professor Friedman would have predicted!
The president of Toyoto operations in North America, Jim Press, thinks that his giant auto company deserves U.S. taxpayer handouts.
Actually, that's not quite right. Toyota is already getting hefty subsidies from U.S. taxpayers courtesy of federal tax credits (up to $3,600) afforded to buyers of hybrid powered cars. The 2005 Energy Policy Act, however, limits the number of car buyers who can take advantage of the tax credit to 60,000. The act also cut back on the size of the credit for the Prius from $3,150 to $1,575 as of October 1. Other Toyota hybrids — such as the Camry — have seen tax credits reduced to $775–$1,300.
Mr. Press said in a speech this week to the Electric Drive Transportation Association that it's time for Uncle Sam's stinginess to come to an end. "By encouraging consumer support for a promising new technology, our government is supporting innovation and investing in our nation's future."
Well, that's one way of putting it. Another might be: "By subsidizing people who buy Toyota products — products manufactured by one of the largest privately held corporations in the world — our taxpayers are supporting Toyota employees and stockholders at a time when GM and Ford are on economic life support. Thank you America!"
I confess: I’m a big fan of J.K. Rowlings’ Harry Potter series. One of the reasons (OK, not one of the bigger reasons, but still one of the reasons) is the books’ wonderful cynicism about government and politics.
Consider Rowlings’ most recent update of her website, in which she announces the December “Wizard of the Month”:
1947 – present
Celebrated breeder and racer of winged horses. Has campaigned for tighter restrictions on broomstick use.
Yesterday, NYT columnist Bob Herbert observed (subscr. required) that the cops involved in the shooting death of Sean Bell have still not been questioned by internal affairs detectives. Compare that situation with a John Q. Citizen who claims to have shot someone in self‐defense. The cops want to question John Q. as soon as possible — especially before he “lawyers up,” as they say on TV. By the same logic, internal affairs investigators should want to quickly question cops who are involved in questionable shootings.
The rules vary from one jurisdiction to the next, but police unions push to postpone the hour in which an officer‐suspect must meet with detectives after a shooting. In Maryland, there is an incredible 10‐day rule in effect.
My former Cato colleague Radley Balko has been all over the Atlanta shooting. He makes some related points about investigation double standards here. I’ll add another: In Georgia, the police are accorded special rights during grand jury investigations — rights that are not available to ordinary citizens. First, an officer can attend grand jury proceedings. Second, an officer can bring his lawyer into the grand jury room. Third, the officer’s lawyer can cross‐examine the state’s witnesses. Fourth, an officer can make a “statement” to the grand jurors after the prosecutor has finished presenting his/her case. (See Title 45−11−4 of the Georgia Code).
A case can be made that those special procedures can help a bad cop avoid an indictment or conviction. On the other hand, a case can be made that prosecutors have too much influence over grand jurors and that those procedures simply make the process more fair and balanced. Whatever the merits of those arguments, the double standard is inexcusable. If anything, the police should be held to a higher standard than John Q. Citizen.
If policymakers are not ready to end the drug war, they should at least scale back the SWAT raids and no‐knock warrants, videotape the raids that do occur, and abolish the double standards that are in place when the police themselves are being investigated for illegal conduct.
In this month’s issue of the Economists’ Voice, Robert Whaples, chair of the economics department at Wake Forest, reports on a survey he recently conducted in which he sent questionnaires to 210 Ph.D. economists randomly selected from the American Economic Association. His charge: to find out how much disagreement there is within the profession and a number of high profile public policy issues.
What did his respondents have to say about the impact that global warming will have on the economy?
- 19.6% agreed with the Stern Review on the Economics of Climate Change, that is, that U.S. GDP per capita would be reduced by 5% or more by the end of the 21st century if the world did nothing to address industrial greenhouse gas emissions;
- 35.7% believed that warming would reduce U.S. GDP by less than 1% and may even increase it up to 1%!;
- 21.4% agreed with Yale economist William Nordhaus in that U.S. GDP losses would be somewhere between 1 – 5%;
- 16.1% believed that U.S. GDP would increase by 1 – 5% as a consequence of warming; and
- 7.1% though U.S. GDP would increase by more than 5% because of warming!
In short, the number of economists who thought global warming would improve the U.S. economy outnumbered the number of economists who thought that global warming would harm the economy to the extent feared by the Stern Review.
Will those who demand that we bow down to the consensus of scientific opinion likewise demand the same regarding the consensus of economic opinion? Not bloody likely.
What if journalist Seymour Hersh, former CIA agent Valerie Plame Wilson, and former vice president Al Gore were poisoned within rapid succession of one another and strong circumstantial evidence suggested that President Bush was behind all three murders? Do you think the European political class would react a bit more intensely than they have been reacting to President Putin’s recent impersonation of Tony Soprano?
- Local police killed Sal Culosi by accident. The police union is now howling over mild discipline.
- Federal police pay restitution to Brandon Mayfield after telling the world he was a terrorist. Taxpayers foot the bill. No mention of agents disciplined. But unspecified “reforms” are now in place at the FBI “to avoid a similar mistake in the future.” Similar assurances followed the Richard Jewell case, but that was then.
- On the intelligence side, federal agents are fighting the Al‐Masri case. Al‐Masri says the CIA mistook him for a terrorist and had him “rendered” to Afghanistan, where he was imprisoned for months, abused and mistreated. When Al‐Masri filed a civil suit against federal officials, the government’s response was that if this lawsuit were to proceed, government secrets would be revealed. This case is “developing,” as they say …