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Category: Law and Economics
Becker-Posner Blog - January 05, 2009
I agree with Becker that it would be a mistake to raise gasoline taxes. We're in the midst of a depression and threatened with deflation, which would be an especially ominous development. Deflation occurs when the price level falls, as can happen--as may be happening now--when demand falls so far
Becker-Posner Blog - January 05, 2009
When we blogged about gasoline taxes on July 21, 2008, the sharp rise in gasoline prices to over $4 a gallon reduced the gasoline consumption that contributes to global warming, local pollution, auto accidents, congestion, and other externalities from driving. I suggested that if it were d
Becker-Posner Blog - December 28, 2008
One of the reasons for the insolvency of the Detroit automakers (General Motors, Chrysler--and Ford, which appears to be insolvent too, despite its denials) is that their workers are paid higher wages, and receive much more generous benefits paid for by their employer, than the workers employed a
Becker-Posner Blog - December 28, 2008
Union members constitute a mere 7.5 percent of the private sector American labor force, only one third of its share 25 years ago. This is why the UAW is a dinosaur, a relic of times past when unions were much more important. The UAW 's membership has declined by more than one third since 1970, an
Becker-Posner Blog - December 21, 2008
The recently exposed Ponzi scheme by Bernard Madoff is named after Charles Ponzi, an immigrant to the United States, who ran his swindle in 1920, based supposedly on profits from postal reply coupons. He took in a great deal of money for those days that was partly spent on high living. Aft
Becker-Posner Blog - December 21, 2008
I must be cautious in discussing the Madoff scandal because as a judge I am forbidden to make a public comment on pending or impending litigation. Madoff himself of course has been arrested, and already lawsuits have been filed against some of the "funds of funds" that steered investors' money to
Becker-Posner Blog - December 14, 2008
Posner gives an excellent and skeptical discussion of the negotiations over terms of the auto bailout. I am in full agreement with him except on one crucial point: I believe, as I stated in my November 18 discussion, that the big three auto companies should be allowed to go bankrupt. This sharp r
Becker-Posner Blog - December 14, 2008
We blogged on November 18 about whether the government should provide money to the U.S. auto manufacturers to keep them alive. (I was for; Becker was against.) In the short period since then, there have been important developments bearing on the issue, culminating this past Friday in the blocking
Becker-Posner Blog - December 07, 2008
Macroeconomic Policy and the Current Depression—Posner
I am not a macroeconomist, but given the strange, perhaps embarrassed silence of so many macroeconomists, mentioned by Becker, I feel less daunted by my lack of expertise than I ordinarily would be.
As Becker explains, the f
Becker-Posner Blog - December 07, 2008
For many years economists and central bankers have congratulated themselves on the remarkable stability of US economy. Since the early 1980s, inflation has been under excellent control, and business cycle fluctuations in real GDP have been modest. For example, in no year since 1955 was US
Becker-Posner Blog - November 30, 2008
I will first make a couple of comments on the present situation. It is not yet obvious that the recent steps taken by the Fed and the Treasury have been "failures". One cannot make that determination when the $700 billion plan has not yet been tried, and the Treasury seems to be changing i
Becker-Posner Blog - November 30, 2008
When Becker and I blogged on the financial crisis last Sunday, the bailout had just been announced. The reaction of the stock markets and of senior government officials here and abroad suggests that the premise of the bailout--that the financial crisis is a liquidity crisis that can be resolved b
Becker-Posner Blog - November 30, 2008
I agree with Becker that the effect of the financial crisis on capitalism will depend on the severity of the crisis. Very few people are committed in an emotional sense to a free-market ideology; if the free market seems not to be working, the population and its political representatives will cas
Becker-Posner Blog - November 30, 2008
Will this financial crisis mark a substantial retreat from the world's movement during the past several decades toward a competitive market system? Many journalists and others have been suggesting that this crisis will lead to much more active government involvement in the economy, and even induc
Becker-Posner Blog - November 30, 2008
Not long after the death of Milton Friedman in the fall of 2006, the president of the University of Chicago, Robert Zimmer, formed a committee drawn from the Economics Department, the Graduate School of Business, and the Law School. He asked the committee, which has Lars Hansen as chair
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