A group of distinguished economists, including Nobel prize winners and past Council of Economic Advisors members, recently supported a carbon tax. While the economic case for such a tax is strong, I nonetheless think the policy is ill-advised. Today let’s consider the economics of a carbon tax. A carbon tax would limit emissions of greenhouse […]

California Attorney General Xavier Becerra has suggested charging Pacific Gas & Electric (PG&E) with murder in connection with last November’s Camp Fire. The deadliest wildfire in California history, Camp killed 86 people and destroyed the town of Paradise. A cause has not been officially determined, but evidence suggests that PG&E electric transmission wires may have […]

Can the government lower the price of prescription drugs? The effects of price ceilings provide a cautionary warning, even though price controls appear to work in other countries. Unfettered competition generally provides a more effective way to keep prices in line with costs. Several government efforts seek to lower drug prices. The Trump Administration has […]

Highway fatalities have increased from under 33,000 in 2014 to 37,461 in 2016, before declining slightly in 2017. Many have speculated whether drivers distracted by smartphones have caused this increase. Before further restricting driving, we should examine the problem. The recent increase in fatalities is unsettling because driving has become safer over time. Fifty years […]

Inflation fears rose briefly during 2018, as the increase in the Consumer Price Index (CPI) approached three percent. In 1980, three percent annual inflation would have set off celebrations. Our success in reducing inflation provides a lesson about policy-making by elected officials. To avoid confusion we should be clear about the meaning of inflation. Americans […]

Is the Federal government spending us into financial ruin? The current numbers and budget projections suggest so. Yet I think that the scary numbers reflect an unresolved conflict over the role of government more than a threat of bankruptcy. The national debt of the United States, the accumulated borrowing since the Republic’s founding, stands at […]

The #metoo movement has brought renewed focus on gender equity questions. Economics examines the pay gap between men and women, and a recent analysis from the Federal Reserve Bank of St. Louis links this gap to marriage, creating a puzzle for economics. The gender pay gap is large: among workers with at least a high […]

Economic freedom means the ability of individuals and businesses to contract freely with each other. The Fraser Institute recently released its 2018 Economic Freedom of North America, which rates freedom in the states. Alabama’s economic freedom score remained virtually unchanged from 2017, ranking us 25th among the states. The state freedom rankings have three equally […]

Most Americans have to work for a living. We must trade for the goods and services we want to consume, and for most of us, we trade our labor. Conflict over two legal work classifications, employees and independent contractors, illustrate how government’s rules can imperil economic prosperity. People must work for a living, but people […]

Traditional social media have been criticized recently for purveying fake news. California may form a commission to investigate stemming fake news, while Congressional hearings have implored Facebook and Twitter to act. Is the news market failing? Classical liberals back to John Milton and John Stuart Mill have stressed freedom of speech and expression as crucial […]

Our school district does not provide school bus service, so parents must take their children to and from school each day. Waiting in line to pick up our children provides a first-hand lesson about an important category of economic contests. Troy Elementary School dismisses students at 3pm. I always want to be one of the […]

Rental bikes and scooters came to Troy University this fall, courtesy of the rental company Spin. Similar efforts by Spin, Bird, and Lime across the country, however, have been met with controversy. The so-called “Scooter Wars” reflect how government permission affects innovation and growth. Technology makes such rentals, long available in resort locales, economical. The […]

Some commentators and politicians have proposed regulating Facebook, Twitter and Google as public utilities. To make sense of this proposal, let’s consider the economic role of public utilities. Today’s social media giants might meet the popular definition of monopoly, namely having a very large market share. Economists, however, use a much stricter definition, and public […]

Four states have already legalized sports betting in the wake of last May’s Supreme Court decision. While many Alabamians have moral objections to gambling, economics also provides a reason not to bet on sports, namely that betting will prove unprofitable. And this illustrates an important aspect of financial markets in general. To understand the likely […]

The U.S. Supreme Court ruled last May that states could legalize sports betting. New Jersey, Delaware, West Virginia and Mississippi have joined Nevada in offering legal sports betting, and about twenty other states have taken steps toward legalization. Should Alabama join this crowd? The size of the sports betting market is one argument in the […]

United and Jet Blue recently increased their checked bag fee to $30. Nobody likes paying for things we didn’t pay for in the past, like checked luggage. A bill in the U.S. Senate would limit airlines’ checked bag and other fees, which topped $7 billion in 2016. But economics suggests that bag fees can make […]

The Green Bay Packers’ Aaron Rodgers just signed a contract extension making him the NFL’s highest-paid player. Can economics make sense of athletes’ enormous salaries? And are such salaries justified? Top athletes now make eight-figure salaries; Mr. Rodgers’ four-year contract extension will pay at least $134 million, including $67 million before the end of this […]

Like many cities, Troy is trying to figure out how Airbnb rentals fit into the existing legal and regulatory environment. Technology offers new ways to organize our economy to improve our lives. Hopefully, our laws and regulations will accommodate such new ventures. Airbnb is an online home-sharing platform launched in 2008. People can rent out […]

Several dozen Alabama school districts are offering free lunches to all students this year. Economists have long claimed that “There’s no such thing as a free lunch!” Although I don’t think that Alabama schools have proven economists wrong, this case illustrates a challenge of limiting government. School systems offering free lunches this year, according to […]

Last weekend was Alabama’s annual back-to-school sales tax holiday. If you have a child in school, I hope you were able to take advantage. Tax holidays provide an example of using tax policy to shape peoples’ decisions and raise questions about the role and even size of our government. Alabama was the first of sixteen […]

Troy’s fire department rating will improve this October, which should lower our insurance rates. Fire protection ratings show how markets can ensure the quality of our services. They also provide an example of value creation as opposed to compliance-driven documentation. The Insurance Services Office’s (ISO) Fire Suppression Rating Schedule dates back to 1909. Insurance companies […]

Millions of Americans engage in do it yourself (DIY) home improvements. Each summer I choose a project, and about half of the time I actually do it. This year’s project is painting our house’s exterior windows and trim. And yet DIY produces professional angst for me as an economist, because core economic principles imply that […]

Federal judge William Alsup recently dismissed a lawsuit by Oakland and San Francisco against oil companies for costs related to global warming. The decision is wise, regardless of whether global warming threatens humanity’s future. The lawsuit sought billions for the cities’ future costs from the use of fossil fuels, specifically infrastructure to protect against rising […]

Congress recently passed national “right to try” legislation giving terminally ill patients freedom to try experimental drugs. Perhaps this will inspire an overhaul of drug regulation to enhance patient freedom. The Food, Drug, and Cosmetic Act of 1938 gave the Food and Drug Administration (FDA) authority to ban unsafe medicines. The 1962 Kefauver-Harris Amendments added […]