Monthly Archives: June 2014

Revolutionary divides

It is in the nature of successful revolutions (successful in the sense of imposing a new political order which persists) to divide their society. They represent a political bargain implemented by force. Those against whom such force was applied are not participants in the revolutionary bargain, they have it imposed on them. The Glorious Revolution, the American […]

Memories of Ray Evans (1935-2014)

I was greatly saddened to learn, via email, of the death of Ray Evans.  I first met Ray sometime in the 1980s, when he was an indefatigable fighter for labour market reform. The attempt by the new Hawke Government, via the Hancock Report, to expand even further the legal privileges of the union movement inspired him to co-found the H […]

Why monetarist victory is necessary: so central banks cannot hide

A guest post at Marcus Nunes’s blog Historinhas (sans graphs). In the debate about how to think about the Great Inflation of the 1970s, Milton Friedman‘s policy advice–constant growth in a targeted monetary aggregate–turned out to be misplaced. Indeed, the failure of the Thatcher Government‘s monetary aggregate targeting led to the popularisation of Goodhart’s Law: Any observed statistical regularity will tend to collapse […]

Hard money is not the same as sound money

A post by Jonathan Finegold on sound money pointed me towards how to express an important distinction–that hard money is not the same as sound money. JF defines sound money thusly: a monetary system that best promotes coordination between market agents. Unsurprisingly, a somewhat “Austrian” definition, but clear enough. I would go with the money that maximises its transaction […]

Too big not to fail: the rise and fall of Fannie Mae

The debate over the role (if any) of the Community Reinvestment Act (CRA) in the sub-prime crisis, and thus the Global Financial Crisis (GFC), often seems to be a stand-in for other issues. In particular, to what extent was either financial meltdown the consequences of government regulation (or the lack thereof). The answer to the former question is: almost entirely, […]

The ECB’s dismal performance and the European elections

These two graphs, taken from here, express vividly how much worse the performance of the European Central Bank (ECB) has been compared to the US Federal Reserve (the Fed). Between the two of them, they caused the Great Recession, but the Fed has done much better since. The ECB’s dismal performance also helps explain the recent […]

Small-yet-broad is beautiful (or why it is good to have been British)

The central purpose of Calomiris & Haber’s Fragile by Design: the Political Origins of Banking Crises is to explain to Americans why their banking system does not perform as well as other countries–particularly compared to that of their neighbour, Canada. In chapter 14, the authors put the matter quite starkly: … if a highly stable banking system […]