Feeling Alright

The primary economic consequence of establishing a government policy of Prohibition is to drive the prohibited market underground. The primary political and social consequence is the creation of a criminal element in the market, which then spawns corruption of politicians. Note that the market does not disappear. There are numerous secondary and tertiary consequences of Prohibition. (I am using the term “Prohibition” to refer to any government policy of banning market activity.) We can look to the notorious example of alcohol Prohibition in the United States from 1920 to 1933 for instructive guidance, but the failure of attempts at Prohibition … Continue reading Feeling Alright

The Greek Experiment

According to New York Times reporting concurrent with the bailout of Greece, the President of the United States advised leaders of Germany and France relative to the European Union/International Monetary Fund (IMF) decision. The Times cited unnamed senior Administration officials who stated that President Obama’s “experience” in brokering big deals was brought to bear (i.e. through his involvement in various U.S. economic stimulus packages and corporate bailouts); Obama’s encouragement to “think big ideas” allegedly helped lead to the trillion dollar deal via a “special purpose vehicle” (essentially a form of Eurobond issue). The end result of the weekend negotiations was … Continue reading The Greek Experiment

The More Things…

From the Associated Press today: Tens of thousands of workers marched in cities from Hong Kong to Istanbul Saturday to mark international worker’s day, demanding more jobs, better work conditions and higher wages. A year ago today, I published a comment on “May Day” observations. Although “workers” in Greece and elsewhere may have their own spin on how to resolve the crisis of their country’s insolvency in the latest economic manifestation of the consequences of collectivism, nothing has fundamentally changed for the better in my view. “Better” would be a trend away from collectivism and toward individualism as a basic … Continue reading The More Things…