TCF fellow Mark Thoma outlines the pros and cons of living in a government regulated economy, explaining that competitive markets to not always equate to free markets. He concludes in saying that, either way, the government must intervene in some capacity in order to regulate goods and services and have consumers make good choices.
To begin, there must be numerous participants on both sides of the market. When, for example, there are only a small number of sellers the price will be too high and the quantity too low relative to the competitive outcome. If the good is a necessity – suppose a single firm has a monopoly on the supply of water – the price could be very high indeed. To combat this problem, the government tries to prevent firms from pursuing strategies to monopolize markets, and regulators break up markets that become monopolized anyway.
Read Thoma's full article from The Fiscal Times.
Care work is undervalued in America. Policy associate Clio Chang discusses why it's time to recognize care's true worth.READ MORE
The rate of inflation is calculated in a host of different ways, but one of the most common is the Consumer Price Index (CPI), which tracks the prices in a "basket" of goods which represents the consumption of an average household. However, the amount of inflation felt by any individual household can diverge significantly from that of the average household. TCF fellow Mark Thoma discusses myCPI, a tool developed by the Atlanta Fed allowing users to tailor a basket across several demographic factors.
For example, the national CPI rose at an annual rate of 1.2 percent in April. However, if you're "a male, under 35 years old, married, and without a college degree, but you own your home and make more than $70,000 annually," then your CPI "was virtually flat in April. In addition, people matching your description have seen their cost of living decline by 1.0 percent over the past year."
Thoma's full column is available here.
Writing for the CFA Institute, Matthew Gelfand reviews TCF fellow Edward Kleinbard's We Are Better Than This: How Government Should Spend Our Money. Gelfand discusses the significance of Kleinbard's book for the financial industry.
"Kleinbard has written two books in one. The first is a philosophical road map of the progressive case for economic policies on income distribution, infrastructure spending, and social insurance, among others. This discussion is of less utility to financial analysts but—despite Kleinbard’s clear philosophical leanings—is worth mentioning here because his comments on the topic establish that he is a nonideological student of fiscal policy."
"The second book-within-a-book will be of interest to financial analysts who want to understand the mechanics of fiscal policy. It is an informed instruction manual that draws on a large body of data and insightful analysis yet drives forward in layman’s terms rather than economic jargon."
The rest of Gelfand's review is available here.
We Are Better Than This: How Government Should Spend Our Money is the latest book from TCF fellow Edward Kleinbard. It borrows heavily from the theology of Adam Smith, an 18th century Scot who is credited with inventing modern economics and credits the "invisible hand of God" as a viable source for directing economic policy. We Are Better Than This is heralded for inserting moral values back into modern economoics.
Hence Kleinbard opens each of his chapters with quotes from the real Adam Smith - the one who understood both the values and the limits of the market. Smith believed in a God who cared about the practical welfare of people, a God whose will was followed by those who put the good of all above the selfish interests of individuals.
Read the review of Kleinbard's book, featured in Huffington Post.
TCF fellow Edward Kleinbard's latest book, We Are Better Than This, calls for an even more aggressive tax policy on our already highly progressive system.READ MORE
In recent decades, and especially since 2000, the richest Americans have enjoyed soaring income and wealth while the rest of the population's living standards have stagnated. The Century Foundation was one of the first institutions to raise serious concerns about these trends and propose ideas for improving economic conditions for all Americans- not just the fortunate few.
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