Markets are only efficient when they are close to perfect competition, and if they are efficient there should not be shortages and surpluses. However, there are persistently large surpluses and shortages in the book publishing industry. There is a particularly…
Blog Archives
Innovative societies must have equality of opportunity
The current tax bill is largely motivated by the theory that if you give tax cuts to successful rich people, even though it increases inequality, it will be worth it because these elites will create jobs through innovation with the…
Posted in Inequality, Public Finance
Monopoly power at the emergency room
There is a lot of monopoly power in healthcare in the US, and it has been driving up prices by decreasing competition. Research shows that greater consolidation in the hospital industry causes higher prices, but it is hard to explain…
Posted in Health, Public Finance
Antitrust Regulation
Monopoly power (aka “market power” or “pricing power”) is simply the ability to raise prices without losing all customers. The US economy is increasingly dominated by large firms and all medium-to-large firms have some monopoly power. That is one of…
Posted in Public Finance
Trickle-down vs. flood-down
Thomas Sowell wrote a 20-page book called “Trickle Down Theory” and “Tax Cuts for the Rich” that he is selling on Amazon for $5, but you can download it for free on his website. In it, he argues in favor…
Posted in Public Finance
The worst drug epidemics in American history
The New York Times said “The current opioid epidemic is the deadliest drug crisis in American history.” Last August, Donald Trump declared, “The opioid crisis is an emergency, and I’m saying officially right now it is an emergency… It’s a national emergency.…
Posted in Labor, Public Finance
What is imputed rent?
Suppose you own a house worth $240,000, but your job forces you to move to Chicago for two years where you will have to pay $12,000 ($1,000/month) to rent another house with nearly identical characteristics. Fortunately, you can rent out…
Posted in Public Finance
Medianism 