The Hoover Institution’s Melvyn Krauss, in an op-ed in today’s Wall Street Journal ($),notes some recent events that indicate that markets are no longer buying Greenspan’s messages on the economy.  For instance,

From Foreign Affairs   comes a review by Sheri Berman of Jerry Z. Muller’s The Mind and the Market (Knopf, 2002): “Indeed, perhaps the only defender of capitalism whom Muller finds largely unmoved by the critiques is the twentieth-century Austrian liberal Friedrich Hayek (which undoubtedly explains a large part of his contemporary appeal).

I appreciate the attention William L. Anderson has given my recent syndicated column, Jobless in the USA. In his analysis he does not present the gist of my argument or concern, perhaps because my argument is new and he mistakes it as an argument for protectionism against free trade.

The critics of free trade persist in their insistence that permitting individuals in this country the freedom to invest where they please undermines the effectiveness of the U.S. economy and ultimately leads to a lower standard of living. The implication: Americans are better off only if everyone else in the world is poor. This flies in the face of sound economics.

You have achieved a level of notoriety in economics when a line or law is named after you. Say what you want to say about Say’s Law, but most of us at least know the pithy five-word version, “Supply creates its own demand”—which constitutes a considerable abridgment from J.B. Say’s original exposition, which turned 200 years old this year.

• Boom or Mirage? (CNN.com)
• The Problem of Junk Economics (NationalPost)
• Pfizer Moves to Stem Canadian Drug Imports (NYTimes)
• Rate Spike Threatens Housing Industry (WashTimes)

The European Union is giving Microsoft a “last chance” to defend itself against anti-trust charges before it is slapped with a fine of up to $3.2 billion.  Microsoft may have to disclose how its PC and server operating systems communicate with each other, and offer a stripped-down version of Windows, to help its competitors, writes  Deutsche Welle.

The New York Times has a story today based on a leak from a former employee of Fannie Mae, alleging that Fannie Mae’s risk of loss due to to interest rate movements is larger than they had previously admitted.  Fannie and Freddi are “Government Sponsored Enterprises”, large quasi-public entities that issue large amounts of debt and use the money to purchase or insure mortgages. 

• Economics Can’t Solve Everything, Can It? (NYT): “Rarely have the limits of economics been more clearly delineated than in last week’s reports of a proposed futures market for terrorism. The Pentagon has been trying to find ways to know the unknowable. Where are terrorists likely to attack? When, and how? Not surprisingly for an administration with such professed trust in the power of markets, the experts came up with the notion of an open exchange.