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The author John H. Cochrane
John H. Cochrane
In real life I'm a Senior Fellow of the Hoover Institution at Stanford. I was formerly a professor at the University of Chicago Booth School of Business. I'm also an adjunct scholar of the Cato Institute. I'm not really grumpy by the way!

John Cochrane – Grumpy Economist

John Cochrane, Senior Fellow of the Hoover Institution at Stanford, is The Grumpy Economist. But he claims to not actually be grumpy. On this blog, he provides detailed commentary backed with data and exceptional reasoning on current economic news, finance and policy policy.

Ferguson and the billionaires at Davos

In my last post, I commented on Joe Stiglitz view, heading to Davos, that billionaires and corporate leaders are anxious to pollute the air.  In my wealth tax series I reported on the popular view on the Warren Sanders Saez Zucman view that corporate leaders and billionaires represent a regressive right wing political force, that must be stopped by any means including expropriation of their wealth, even if that means destroying the businesses that make them rich.My colleague Niall...

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The best of times, or the worst of times?

So how is the economy doing? A good friend passed along for comment a recent project syndicate essay by Nobel Prize winning economist Joe Stiglitz. For an alternative view, I found interesting commentary on the CEA website,  "The Impact of the Trump Labor market on historically disadvantaged Americans" and "The blue-collar boom reduces inequality"A fact that cannot be missed is that overall GDP is growing. In terms of the overall economy, 2019 was the best year in all of human history....

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Goodman on health insurance

John Goodman and Devon Herrick have a good essay on where we are with health insurance.The central impetus of Obamacare was not to insure more people....About 95% of those who vote already have insurance, Schumer noted. So Obamacare was promising to spend a great deal of money on people who don’t vote.Instead, their message focused on protecting sick people from abuses by insurance companies. More often than not, that meant protecting people who migrated from an employer plan to the...

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Great Society Review

I just finished Amity Shlaes' Great Society. It's a great book. I warmly recommend it.The US is debating a fourth great wave of US government expansion. Theodore Roosevelt to Wilson the original progressive era and WWI; Frankin Roosevelt's new deal; and the Kennedy-Johnson-Nixon "great society" of this book came before us.Plus ça change, plus c'est la même chose, is in many ways the theme of the book. The Great Society offers lots of parallels to our time, and a cautionary tale that it...

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Housing hope

There is a tendency in grumpy land to view the world as heading in the wrong direction. But a believer in our system must be optimistic that it is eventually capable of reform, that we will do the right thing in the end if only after we try everything else, as the saying goes.This thought comes to mind in reading the Horrible Housing blunder in the Economist. The Economist calls housing "The west's biggest policy mistake." And, the ray of hope, even the progressive left in California is...

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A chilly Chilean lesson

I have been interested in following the news from Chile.Most recently, I found this very interesting essay by Avel Kaiser in the Jan 1 Wall Street Journal. An excerpt:Latin America’s freest, most stable and richest nation—is in free fall. Public order has collapsed, violence is rampant, and populism is the new creed of the political class. There is a recession, characterized by capital flight and rising unemployment...It took a mere 40 days for the Latin American “oasis”—as...

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Wealth and taxes — Overview

I thought that "wealth and taxes" would be a short blog post. It turned in to a 5 part series. Here's an overview, or table of contents in case the whole thing looks a bit indimidating. The most important one, really I think is Part V, "it's all political." The others build bit by bit, well, this can't be the answer and that can't be the answer, so what is the answer, and Part V finds it.In Part I we met the fact that "wealth" is measured as "capitalized income," Y/r. But only some...

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Wealth and Taxes, Part V

Wealth and Taxes Part V -- it's all about politicsSo what is the question to which measuring wealth distributions and a wealth tax are the answer?To briefly review, in Part I we met the fact that "wealth is measured as "capitalized income," Y/r. But only some kinds of income and with r choices that blew up measured wealth inequality.  In Part II we learned that a big reason wealth inequality widened is that interest rates fell. If r falls, Y/r rises, but it's the same Y.  In...

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Wealth and Taxes, Part IV

This post continues from Part IIIThe Wealth Tax.So, if arguing about the ill-defined and ill-measured distribution of wealth lies in service of the wealth tax, what is the question to which the wealth tax is an answer?Revenue and Redistribution -- good and bad taxesPreamble: Economists have no real professional expertise to object to redistribution, or argue for it. Swallow hard, you may not like it for political, moral or other reasons -- or you may be all for it for those reasons -- but...

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Dudley on reserves

Bill Dudley, ex President of the New York Fed, has an excellent Bloomberg editorial on reserves.Reserves are accounts that banks hold at the Fed. The Fed used to pay no interest on these accounts. Accordingly, banks held very small quantities, as little as $10 billion in all, and they managed that quantity very carefully against legal reserve requirements, and having just enough around to make payments. To control interest rates, the Fed used to change the supply of reserves, and then watch...

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