Taxing Regulatory Failure
Last month, the IRS and the US Treasury Department issued proposed rules to implement a new tax on health insurance providers and self-insured groups. The tax is part of the Patient Protection and Affordable Care Act (ACA) and will be used to help fund the new Patient-Centered Outcomes Research Institute (PCORI), which will conduct research ... Taxing Regulatory Failure
More Bailout Fallout: Non-buyer’s Remorse
An interesting story in the WSJ Online today about American International Group (AIG)’s use of a standard tax write-off and the political firestorm it is creating…all because the Washington establishment thought it could hide behind semantics during the bailout era. The benefits at issue were accrued by AIG as it amassed record losses amid the ... More Bailout Fallout: Non-buyer’s Remorse
A Tale of Two Subsidies
Last week’s business news highlighted two tremendous subsidy programs. In one case, the company received no direct payment for product development. None of its suppliers received targeted subsidies to produce parts. But consumers were subsidized to encourage them to buy the product. In the other case, the company received direct payments to underwrite the cost ... A Tale of Two Subsidies
The Magical World of Mandates
It seems President Obama has discovered a magical cure for his contraception controversy: simply force insurance companies to provide free coverage for contraceptive services, but only for women who work for organizations that qualify for exemption from the original mandate that requires contraceptive coverage be part of any respectable (i.e., Obama-approved) health plan. Never mind ... The Magical World of Mandates
Collective Moral Hazard, Maturity Mismatch, and Systemic Bailouts
That’s the title of an interesting article by Emmanuel Farhi and Jean Tirole in the current issue of the American Economic Review. Here’s the abstract (emphasis added): The article shows that time-consistent, imperfectly targeted support to distressed institutions makes private leverage choices strategic complements. When everyone engages in maturity mismatch, authorities have little choice but ... Collective Moral Hazard, Maturity Mismatch, and Systemic Bailouts
Options Have Value, Even If DOT Doesn’t Get It
Last week Thom posted about the government’s attempt to hide the cost of taxes and regulatory fees in commercial airfares. Apparently Spirit Airlines is highlighting another government-imposed cost of doing business by advertising a new $2/ticket fee that the airline has imposed. According a CNN report yesterday: Spirit Airlines says a new federal regulation aimed ... Options Have Value, Even If DOT Doesn’t Get It
Municipal extortion and full employment for lawyers
Consider this a venting, especially as one of the few non-lawyers in our blogging group. Recently one of my lawyer friends posted a Facebook status as “Amending moving violations and saving clients on their insurance” at the local municipal court. This post reminded me of one of my less-than-enjoyable encounters with the Missouri traffic court ... Municipal extortion and full employment for lawyers
Opening the US securities markets
Larry makes a strong argument below for why the proposed SEC rules changes reported today in the WSJ should not be heralded as some great opening up of US securities markets, but that the changes are little more than political posturing to prevent addressing the real problem of the costs imposed by securities regulation more ... Opening the US securities markets
Small Business Financing Post-Crisis
Tomorrow I will be attending a symposium on small business financing sponsored by the Entrepreneurial Business Law Journal‘s at the Moritz College of Law at the Ohio State University. I’m on a panel entitled “Recessionary Impacts on Equity Capital,” which is a bit misleading–or at least a bit different that the topic I offered to ... Small Business Financing Post-Crisis
Congratulations…but let’s not over do it
I was waiting to write something about today’s announcement of the Nobel Memorial Prize in Economics being awarded to Diamond, Mortensen, and Pissarides. Josh has already provided his thoughts and provided links to comments by Ed Glaeser and Steve Levitt, respectively. As they describe it, the honorees’ research provides a theory of unemployment, explaining why ... Congratulations…but let’s not over do it
Elgar Companion to Transaction Cost Economics
Peter Klein (over at Organizations and Markets) and I recently edited a volume for the Elgar Companion series titled The Elgar Companion to Transaction Cost Economics. At long last, the volume will be available in the US in November, 2010; in plenty of time for spring semester classes that might want to incorporate some or ... Elgar Companion to Transaction Cost Economics
The Complexity of Simple Economics
That’s the title of Steve Horwitz’s blog post reflecting on a recent celebration honoring the lifetime contributions of 1986 economics Nobel Prize winner James Buchanan. (HT: Art Cardin for pointing it out on FB) Horwitz describes Bachanan’s comments about how “the most basic insight of economics is fairly simple: the spontaneous order of the market.” ... The Complexity of Simple Economics
