Ivan Jankovic

“The demand for action creates the pressure to avoid being perceived as weak and indecisive on the part of politicians, while the information asymmetry between the visible, concentrated and identifiable benefits of “action” and delayed, speculative and more distributed costs of action, makes irrational and ineffective but ritualistic policies much more likely. Policies adopted to deal with the Covid-19 pandemic illustrate very painfully these truths.” ~ Ivan Jankovic

Over the last couple of weeks, a breathless chorus of Keynes adherents in the media have been sounding the alarm from the rooftops about economic “overheating.” 

Federal grants and transfers are the techniques of choice used by socialist regulators in all federal countries, because in such countries it’s difficult to impose one-size-fits-all national schemes from the top down. Hence, federal spending power greases the wheels of reform by bribing the population and docile politicians and blackmailing and boxing in politicians skeptical of federal meddling.

A common misconception is that the only problem with current money is the central bank, and that once we abolish government control everything is going to be fine. However, a sound-money regime has to provide for the consistent time structure of property rights in money.

In the 19th century liberalism was used to describe the people who believed in liberty, a creed unifying the belief in free markets with the beliefs in freedom of speech and the press.

We should not delude ourselves with notions that our small enclaves of devotees of this or that new technological miracle will make us invulnerable to government coercion. They will not. 

When Arthur Laffer drew this famous picture on a napkin to Donald Rumsfeld and Dick Cheney during a lunch in 1974, the reaction was ecstatic: that’s exactly what they needed, some justification for doing what politicians are best at doing anyway: giving away the goodies that don’t cost anything. The best of both worlds!

The Trump administration is now moving to dismantle the whole Clean Power Plan boondoggle, and environmentalist crusaders are not happy. We hear every day that this is “genocide,” “raping the planet,” and the whole predictable litany of apocalyptic quasi-religious fear-mongering.

Those cranks and crackpots are now at the commanding heights of academia, preaching the same old Gospel of destructionism and irrationalism, dressed up as “modern macroeconomics.”

These lofty heights reflect easy money and a bubble just waiting to pop.