Friday Roundup, January 25th

  • So who, exactly, are the Founding Fathers? A new book by Mark David Hall on Roger Sherman makes a significant case that the sage from Connecticut should be on the list. Don’t miss Jay Bruce’s review of it in our Books section, “Roger Sherman’s Reformed Founding“.
  • Garett Jones at Econ Log blogs about 2 new papers finding BIG, really BIG multipliers (1.5 on average) from stimulus spending within the states of a currency union. Jones’ summary:

My view: 1.5 and 1.4 are not big multipliers.  If a dollar of government spending or tax cuts genuinely boosted the short run economy by two or three dollars, I’d call that big: At that point, even if the government spending was purely wasteful, you’d be substantially growing the private sector in a big, obvious way.

 A prominent freshman economics textbook by Case/Fair/Oster says that “in reality, the multiplier is about 2,” but reality has been disagreeing with that assessment lately.

 A multiplier of 1.5 or 1.4 is unimpressive as a grand argument for stimulus.  Three reasons:

1.  Deadweight loss of future taxation. We’ve gotta pay for this stuff someday, and actually-existing taxes distort.

2.  Hurried stimulus is bad stimulus.  Don’t forget the tiny tiles.

 3.  The flypaper effect and other public choice-style distortions caused by stimulus. (True confession: I would’ve rooted for ARRA had it included a permanent moon base.)

And a meta-reason for seeing 1.5 and 1.4 as “not big”: Both of these studies are based on crisis and post-crisis time periods—precisely when Keynesian spending multipliers are supposed to be at their biggest.  If these are the big numbers….

  • In “Obama’s Regulatory Rampage” sometime contributor Adam White writes eloquently about the challenges to limited government posed by an increasingly lawless administrative state.

…. statutes enacted in the president’s first term have left the administration with myriad regulatory obligations to fulfill in the second term. Again, Dodd-Frank and Obamacare are the starkest examples. Dodd-Frank requires federal agencies to undertake 398 rulemakings, according to the widely followed Davis Polk Dodd-Frank Progress Report; of those, only 136 have been finalized, and rules have been proposed for another 133. So regulators owe at least 129 more rulemaking proposals and 262 more final rules. Similarly, the Congressional Research Service identified more than 40 Obamacare provisions that permit or require the issuance of regulations.

  • Are you interested in entering the legal academy? Then get your application in pronto to the Olin-Searle-Smith Fellows program at the Federalist Society.