Five years ago, in November 2005, the Federal Reserve announced that it would no longer be tracking the aggregate money supply. It issued a terse, cryptic 143-word press release entitled the “Discontinuance of M3.” M3 was the broadest member of the big 4 of monetary aggregates published by the Fed — M0, M1, M2, and M3 that the Fed had compiled monthly since 1959.
This topic needs no introduction. We hear discussions in the national media weekly about the possible threat an economically resurgent China poses to the United States — and even to other countries. So how concerned should we really be about China’s economic and military might? Answer: China’s economic development itself is not in any way harmful to us; ultimately, the only threats that exist as a result of its success come from potential actions taken by politicians as a response to its development.
Sunday’s New York Times carries an article titled “The Blur Between Spending and Taxes.” The author is Harvard Professor N. Gregory Mankiw.1 The essential theme of the article is that the government is spending when it decides to forgo tax revenue that it otherwise could have collected.
As many readers doubtless already know, David Nolan, a founder of the Libertarian Party, died yesterday in Tucson, Arizona. He was on the side of the angels, so to speak, on the issues so many of us care about. He was also a model of civility: he could disagree with others without purging or smearing them — a vanishing quality in our world. I’ve been pleased to see so many tributes (particularly on Facebook) by young people who were inspired by him.
NPR echos a sense reported everywhere: people have changed travel plans in light of the TSA’s ghastly attacks on airline customers. We’ll know more next week but the result could be financially disastrous for airlines (and then comes nationalization and then etc.).
In his interview with the CNBC on November 9, 2010, a highly regarded Wall Street economist, Nouriel Roubini, the cofounder and chairman of Roubini Global Economics, said that a gold standard is unlikely to stabilize the financial system. On the contrary, holds Roubini, such a standard can only make things much worse.
For instance, argues Roubini, an economy that is growing quickly would tend to overheat and this in turn is likely to lead to a higher inflation and asset bubbles.
Randall G. Holcombe is DeVoe Moore Professor of Economics at Florida State University. He received his Ph.D. in economics from Virginia Tech, and taught at Texas A&M University and at Auburn University prior to coming to Florida State in 1988. Dr. Holcombe is also Senior Fellow at the James Madison Institute, a Tallahassee-based think tank that specializes in issues facing state governments.
Robert F. Mulligan is from Westbury, New York, and studied civil engineering at the Illinois Institute of Technology in Chicago, receiving a BSCE degree in 1983. He served in the U.S. Air Force and then did his graduate studies at SUNY Binghamton, receiving his Ph.D. in economics in 1993. He was a visiting assistant professor at Clarkson University from 1993-1994. He then completed the Advanced Studies Program at the Kiel Institute of World Economics in Germany, receiving the Advanced Studies Certificate in International Economic Policy Research in 1995.
