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Total 259 results found since Jan 2013.

Alan Reynolds in 1997 on Exchange Rates and Trade
I stumbled on this 1997 talk abut NAFTA by my old friendRoberto Salinas-Leon, making a case for Hillary ’s Wikileak dream of Hemispheric free trade (but not for her other dream of “open borders” if that really meant unhindered migration).  I may be biased, but the following heretofore lost quote from me still seems relevant, but for the U.S. too, not just Mexico. Trump adviserPeter Navarro thinksthe dollar is 45% too strongagainst the Chinese yuan, which supposedly excuses Trump ’s threat of a 45% tariff.  (I’m more in the “strong dollar is good for America” camp, though strong doesn’t mean continually ri...
Source: Cato-at-liberty - October 13, 2016 Category: American Health Authors: Alan Reynolds Source Type: blogs

Imaginary Squabbles Part 4: Krugman and DeLong on the Top 1 Percent
Alan Reynolds In End This Depression Now! (pages 77-78) Paul Krugman offers the strangest arguments I have seen.   The story opens with familiar fulminations about the “top 1 percent” (those earning more than $366,623 in 2011).  As he put it in a 2011 column, “income inequality in America really is about oligarchs versus everyone else.” “Incomes of the rich,” his book claims, “are at the heart of what has been happening to America’s economy and society.”  Yet it apparently requires great bravery to even dare to mention “the rising incomes” of the top 1 percent or top 0.1 percent: ...
Source: Cato-at-liberty - May 27, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

Imaginary Squabbles Part 3: Krugman and DeLong’s Changing Theories and Missing Facts
Alan Reynolds Responding to a student question after a recent Kansas State debate with Brad DeLong I posed a conceptual puzzle.  I asked students to ponder why textbooks treat Treasury sales of government bonds as a “stimulus” to demand (nominal GDP) in the same sense as Federal Reserve purchases of such bonds.  “Those are very different polices,” I noted; “Why should they have the same effect?”   The remark was intended to encourage students to probe more deeply into what such metaphors as “stimulating” or “jump starting” really mean, not to accept as dogma that fiscal and monetary poli...
Source: Cato-at-liberty - May 24, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

Tax Reform Error #2: Phasing-in Lower Tax Rates
Alan Reynolds Since 1981, Republican legislators have shown a strong penchant for phasing-in tax rate reductions over several years.  That tradition is maintained in Ways and Means Committee Chair Dave Camp’s proposed 979-page “simplification” of the U.S. tax system.  The Camp draft retains a very high top tax rate of 38.8 percent on businesses that file under the individual income tax as partnerships, proprietorships, LLCs or Subchapter S corporations. For those choosing to file as C-corporations, by contrast, the Camp proposal would gradually reduce the corporate tax rate by two percentage points a ...
Source: Cato-at-liberty - March 9, 2014 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

Distinguishing Home ‐​Grown Inflation from Global Inflation
Alan ReynoldsEach country imagines inflation to be anational problem to be entirely blamed on national fiscal authorities or on each nation ' s central bank. Yet March CPI inflation averaged 8.8% for all 38 countries in theOECD, and 7.8% for the 27 EU countries.Economists at the Federal Reserve Bank of San Francisco, in theFRBSF Economic Letter, ask a narrower question: "Why is U.S. Inflation Higher Than in Other Countries?"  They first begin by acknowledging that there have been some uniquely huge global events driving world pricesdownin 2020 (COVID-19 lockdowns causing long-term loss of productive capacity) and other po...
Source: Cato-at-liberty - May 9, 2022 Category: American Health Authors: Alan Reynolds Source Type: blogs

Imaginary Squabbles Part 2: Krugman and DeLong on Ireland
Alan Reynolds A short 2010 article of mine in Politico, which still annoys Paul Krugman and Brad DeLong, dealt with Ireland’s brief effort to restrain spending, which (while it lasted) was smarter than imposing uncompetitive tax rates as Greece had done.  Krugman ridiculed my Politico article in at least four columns.  He imagines I predicted a “boom” in Ireland, because I wrote in June 2010 that, “the Irish economy is showing encouraging signs of recovery.”  That the Irish economy was turning up at the time is undeniable. Although I did not yet have the benefit of real GDP data, Ireland’s GDP w...
Source: Cato-at-liberty - May 23, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

Larry Summers Redefines Balanced Budgets as Stimulus and Big Deficits as Austerity
Alan Reynolds Former Treasury Secretary Larry Summers, in June 4 testimony before the Senate Budget Committee, offers a scatter diagram which allegedly shows “that countries that pursued harsher austerity policies in recent years also had lower real GDP growth.”  He acknowledges, but does not adequately explain, that the causality may well be backwards: Bond markets would not allow countries in severe economic distress (Portugal, Ireland, Greece and Spain) to continue financing deficits at the peak levels of 2010. Summers defines “austerity” as the three-year change (regardless of the level) from 2010 to 201...
Source: Cato-at-liberty - June 10, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

The Old Infrastructure Excuse for Bigger Deficits
Alan Reynolds Washington Post columnist/blogger Ezra Klein recently echoed the latest White House rationale for additional “stimulus” spending for 2013-15 and postponing spending restraint (including sequestration) until after the 2014 elections. Klein argues for “a 10- or 12-year deficit reduction plan that includes a substantial infrastructure investment in the next two or three years.” In other words, a “deficit-reduction plan” that increases deficits until the next presidential election year. Citing Larry Summers (who similarly promoted Obama’s 2009 stimulus plan while head of the National Economic Counc...
Source: Cato-at-liberty - June 16, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

Immigration Illusions Part One: “Average Wages” Severely Muddled
Alan Reynolds The Senate immigration bill would ease quotas on legal immigration (particularly for highly-skilled and farm workers), and also allow those now here unlawfully to apply for a green card after ten years if they pay a fine and back taxes.  In an effort to defend our current tight but leaky immigration quotas, a few legislators and commentators seized on the first half of a sentence in the Congressional Budget Office report on this bill:  “CBO’s central estimates also show that average wages for the entire labor force would be 0.1 percent lower in 2023… under the legislation than under curre...
Source: Cato-at-liberty - July 1, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

Immigration Illusions Part Two: Rector and Richwine Rediscover Budget Deficits
Alan Reynolds A recent paper by Robert Rector and Jason Richwine  (“The Fiscal Cost of Unlawful Immigrants and Amnesty to the U.S. Taxpayer”) went to a lot of unnecessary trouble to estimate that governments at all levels spent $54.5 billion more on services and benefits to households headed by unlawful immigrants (which includes children and spouses who are citizens) than was collected in taxes from them in 2010.   It is hardly shocking to learn that federal, state, and local governments spent more on unlawful immigrants than they received in taxes, since governments spent more on nearly everyone than they ...
Source: Cato-at-liberty - July 2, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

Imaginary Squabbles Part 5: Comparing Krugman’s 2005 Housing Bubble Forecasts to Mine
Alan Reynolds New York Times columnist Paul Krugman has recycled another phony argument about something I wrote many years ago.  He begins by citing Matt O’Brien who found that Fed governor Janet Yellen in October 2005 was predicting there would be no great impact on the economy “were the house-price bubble to deflate.” O’Brien concludes that, “Back in 2005, she didn’t appreciate how much shadow banks relied on AAA-rated mortgage-backed-securities (MBS) as collateral to fund their day-to-day operations—or how much even this supposedly high-quality collateral could go bust if housing did....
Source: Cato-at-liberty - August 9, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

The Reynolds Model of Stock Prices
Alan Reynolds Mark Hulbert’s latest Wall Street Journal column criticizes the so-called Fed Model, which holds that P/E ratios should rise as interest rates decline, and vice versa. The strategy got its name in 1997, following a reference in a Federal Reserve report to the tendency of the S&P 500’s earnings yield—the inverse of its P/E ratio—to rise and fall with long-term interest rates.  During the 15 years before the Fed made that observation, the U.S. stock market’s P/E ratio did indeed tend to be higher when interest rates were low, and vice versa, Mr. [Javier] Estrada concedes. But, he poi...
Source: Cato-at-liberty - September 14, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

Delaying the Individual Mandate Will Delay Political Backlash until after the Election
Alan Reynolds Republican Senators Ted Cruz (TX) and Mike Lee (UT) and a few others have proposed that all Obamacare funding be cut off by a legislative “rider,” ostensibly forbidding funding of the 2010 law. They argued that public opinion polls trump mere laws enacted by Congress and vetted by the Supreme Court–an idea that sounds more like populism than conservatism. Even if such “defunding” could have magically attracted the 67 Senate votes needed to override a veto, it would not have undone the mandate to buy insurance, premium subsidies through refundable tax credits, planned cuts in payments to Me...
Source: Cato-at-liberty - September 27, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

The Stock Market’s Embarrassing Fall after the Fed Reneged on the Taper
Alan Reynolds Unlike nearly everyone else, I have argued that the Fed’s latest round of “quantitative easing” is not why stock prices went up until recently, and that “tapering” Fed bond purchases would have had only a negligible effect on long-term interest rates.    This was a testable hypothesis. If I was wrong, the Fed’s unexpected decision to back away from its previously-expected tapering of bond purchases would have been greeted by a significant, sustained rally in stock and bond prices. That didn’t happen. Instead, stocks fell for at least five days in a row and bond yields barely budged un...
Source: Cato-at-liberty - September 26, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs

Lindbeck’s Law: The Self-Destructive Nature of Expanding Government Benefits
Alan Reynolds Relevant foresight from Swedish economist Assar Lindbeck, “Hazardous Welfare State Dynamics,” American Economic Review, May 1995: The basic dilemma of the welfare state …  is that the more generous the benefits, the greater will be not only the tax distortions but also, because of moral hazard and benefit cheating, the number of beneficiaries. This is a field where Say’s Law certainly holds in the long run: the supply of benefits creates its own demand… . Serious benefit-dependency, or ‘learned helplessness’, may … emerge only in a long-run perspective. Possible examples ...
Source: Cato-at-liberty - November 3, 2013 Category: Health Medicine and Bioethics Commentators Authors: Alan Reynolds Source Type: blogs