Free Market

The Free Market 19, no. 11 (November 2001)

Everyone complains about bad service. From the airlines to telecommunications, we hear of the increasing number of consumer complaints. Diane Brady, a writer for Business Week, believes that she has the answer to why some of us might believe service is bad. Last year, she informed BW's readers that, once again, capitalism is running amok and now needs the hand of government more than ever to force businesses to properly serve their customers. "Why Service Stinks" told of unfairness abounding as firms go overboard to keep "good" customers and do everything they can to get rid of "bad" ones.

One of Franklin Roosevelt's many schemes to "save capitalism from itself" in the 1930s was the creation of the Federal National Mortgage Association, known today as Fannie Mae. Created in 1938 as part of the Reconstruction Finance Corporation, Fannie Mae's original mandate was to purchase Federal Housing Administration loans.

The Free Market 19, no. 10 (October 2001)

One of many pastimes of government bureaucrats is forcing foreign banks to cough up tax information on US citizens. This is a disaster for the cause of privacy, the right of contract, and freedom itself. If the campaign, which has been going on for years, finally succeeds, it will mean the end of bank privacy for Americans. It will also devastate foreign economies that see a comparative advantage in offering secure banking to people from around the world.

By the standards of the Left, Adolf Hitler would have been deemed a "great statesman," had he died before he started the war (or if he had won it). That's because the left tends to measure greatness by the amount of land and number of people under one man's thumb. By that standard, Hitler was a great socialist-which is precisely what he and his part aspired to become.

Widespread panic set in this summer when the party of King Simeon II won a majority in Bulgaria's recent elections. There were ominous warnings about this being the first East European state to take a step toward restoring monarchical figures to power. So many people associate democracy with freedom and monarchy with tyranny that any attempt to revisit pre-democratic systems of government is regarded as evil.

British economist A.C. Pigou was instrumental in developing the theory of externalities. The theory examines cases where some of the costs or benefits of activities "spill over" onto third parties. When it is a cost that is imposed on third parties, it is called a negative externality. When third parties benefit from an activity in which they are not directly involved, the benefit is called a positive externality. The study of such situations, a part of welfare economics, has been an active area of research since Pigou's efforts early in the twentieth century.

On May 29, the commencement exercises at Estero High School in Fort Myers, Florida, took place without eighteen-year-old honor student Lindsay Brown. The reason? A school official saw a kitchen knife with a five-inch blade on the floor of her car in the school parking lot and reported it to the local sheriff. Lindsay was suspended for five days, arrested on a felony charge, and spent part of May 21 in jail. Miss Brown, who accidentally left the knife in the car while moving some belongings over the previous weekend, is one of the more recent victims of the "zero-tolerance" policies most public schools have adopted toward prohibited items.

One thing that has achieved Holy Writ with economists and politicians is the Consumer Price Index, or the CPI. Each month, people from Alan Greenspan to traders at the New York Stock Exchange to the economist in the Economics 101 prison await the latest announcement from the US Department of Labor that tells us the change in "consumer prices" from the previous month.