Interesting blog bits

1. Roger Kerr point out that Protectionism Never Completely Dies

   Remember the days of Fortress New Zealand when tight import licensing and high tariffs allowed domestic producers to sell goods at far above the price of competing foreign goods?

2. Gary Becker on “Capture” of Regulators by Fannie Mae and Freddie Mac-Becker

   Political economists describe the process whereby government officials end up being the servants rather than the masters of the firms they are regulating as the “capture” by the industry of their regulators. When regulators are captured, much of what they do is motivated, consciously or not, by a desire to help the companies they are regulating, even when the social goals that the regulators should pursue are very different.

3. Jean-Pierre Chauffour on Development as freedom: New empirical evidence (1975-2007)

   The Arab Spring is again raising fundamental questions about the place of freedom and entitlement in economic development. Reviewing the performance of more than 100 countries over the past 30 years, this column finds evidence that economic freedom and civil and political liberties are the root causes of why certain countries achieve and sustain better economic outcomes than others.

4. Alessandra Bonfiglioli and Gino Gancia ask Why are reforms so politically difficult?

   Most economists agree that the global crisis has exposed the need for economies to reform, particularly those along Europe’s periphery. The problem is making these reforms politically viable. This column notes that many governments fear electoral defeat if they enforce unpopular policies. But it also argues the risk of punishment in the polls is the lowest in times of crisis.

5. Eric Crampton on Alcohol minimum pricing

   The Australians are considering imposing alcohol minimum price regulation to reduce alcohol's social costs. Oh dear.

6. Lynne Kiesling notes that They can’t even pull off the ethanol subsidy repeal

   Although the federal government is actually in a budget crisis and our elected so-called representatives claim to be dealing with it, they are acting rather like they are in denial, or still embroiled in such petty partisan bickering that they refuse to make difficult choices with short-run costs and long-run benefits.

7. Lynne Kiesling on the Distortionary effects of three-tier liquor regulation, Wisconsin edition

   As Jonathan Adler notes at the Volokh Conspiracy, the Wisconsin legislature is considering a piece of legislation that would change the regulations governing the production, wholesale distribution, and retail sale of beer in Wisconsin. The controversial provision in this legislation is one that prevents brewers from owning wholesale distributors, and the controversy arises primarily because of the possible effects on small craft brewers of a piece of legislation that is intended to blunt the market power of Anheuser-Busch.

8. George Selgin on Capital and Cash Reserves

   I promise to make this my last post for a while concerning the matter of 100-percent versus fractional-reserve banking. However, in addressing some comments on my recent posts it occurred to me that some very serious misunderstanding is at play concerning the difference between a bank's capital and its cash reserves. The distinction between these is important, because in an important sense, and particularly with respect to comparisons of fractional and 100-percent reserve institutions, the two are substitutes.

9. Mark Perry points out that Our Trade With Rest of World is Always Balanced

   Or in other words, our balance of payments is zero.