Richard W. Rahn

Cryptocurrencies likely to evolve into useful money substitutes

Why do people want "money?" Obviously, so they can buy goods and services now or in the future. But, in actuality, it is not money people want, but purchasing power. Is it necessary to have a stock of money to have purchasing power? Well no, provided people have credit or wealth that can be turned into a transferable unit of account in close to real time.

May 21, 2018

A bet on economic pygmies

The GDP of North Korea is less than half that of Fairfax County, Virginia, and only a little more than half of Vermont's, which has less than 3 percent of the population of North Korea. Honduras is the second-poorest county in the Americas but it has a larger GDP than North Korea, despite having only one-third the population and more than three-and-a-half times the per capita income.

May 14, 2018

Conspiracy or incompetence

Many apparent Washington conspiracies are nothing more than sheer incompetence — or a combination of attempted conspiracy coupled with a high degree of incompetence. The investigation into the alleged interference by the Russians into the 2016 election is looking more like a farce than an unbiased, competent, serious undertaking.

May 7, 2018

Allocating global capital

People are more careful in spending their own money than they are in spending other people's.

April 30, 2018

Abolishing campaign contribution limits

President Trump and Amazon's Jeff Bezos dislike each other. The Washington Post, owned by Mr. Bezos, runs many stories each day attacking the president. Some are fair and about real issues. But many are petty or just plain wrong. Even The Post's alleged "conservative" writers appear to have a weekly quota of "why Donald Trump is awful" stories.

April 23, 2018

Problems in protecting intellectual property rights

Prague is a glorious city with many beautiful and historic buildings going back nearly a thousand years. It managed to escape almost all bombing during WWII, and thus was able to preserve the best of its past -- to the delight of both citizens and tourists. I am here at the European Resource Bank for a discussion of the problems in protecting intellectual property (more on that below).

April 16, 2018

Capital gains must be protected from inflation

If your employer gives you a 2 percent wage increase, and inflation is 3 percent, has your real income increased or decreased? Assume you bought a horse barn and 40 acres of land for $200,000 in 1988 for a riding school you operated. You have just retired from your business and sold the land and barn for $360,000. In the 30 years from the time you originally bought the property, the value of the dollar has fallen by about one-half due to inflation — so, rather than having a $160,000 gain from the sale of your property — in real (inflation-adjusted) dollars, you suffered a $40,000 loss.

April 9, 2018

Most everything is better than you think

In 1914, just over a century ago, the average worker had to work about three hours to buy a bushel of wheat. Today it takes five minutes for the average American worker to buy that same bushel of wheat. The real (inflation-adjusted) price of aluminum is now about one-fifth of what it was in 1914. These ongoing, real price declines are characteristic of almost every agricultural and industrial commodity.

April 2, 2018

Destructive information

There is some information that the government should never publish because it is so little understood by the political class and the media. A prime example is the trade deficit number. The trade deficit is of little importance, but as we now see, a focus on that number is causing the president and others to impose destructive tariffs and other harmful trade restrictions. The trade deficit, which is officially known as the "current account balance," is merely the residual of many other policies by both the U.S. and foreign governments.

March 26, 2018

Who is corrupt?

Is the just-fired Andrew McCabe (former number two and, at one point, acting director of the FBI) corrupt? I would argue yes, even though we do not know the full extent of his alleged transgressions.

March 19, 2018

People have the right not to be surveilled by government unless they have committed a crime

"Name the person and I will find the crime" is a statement attributed to Lavrentiy Beria, Stalin's head of the Soviet secret police. There are more than 4,000 federal felonies on the books of the U.S. government, not counting all of the felonies created by regulatory agencies and state and local governments. Few Americans or citizens of other countries now go for appreciable periods of time without committing a felony, most often without intent or knowledge.

March 12, 2018

With his tariff proposals, Trump misses the trade basics

Why does Virginia import oranges from Florida rather than grow its own? Why does the U.S. import almost all of its coffee and cocoa beans from countries in tropical climates rather than grow its own? Why does the U.S. import most of its primary aluminum rather than produce its own?

March 5, 2018

Fact-free zones in the public square

Fuzzy and fact-free thinking are too kind as definitions for much of what has passed as public policy analysis this past week. The discussions regarding the Parkland school shooting, the Russian political investigation and the immigration debate illustrate the problem.

February 26, 2018

Accountability and willful blindness

Those who serve in the military know they will be held accountable when they are irresponsible or reckless because the lives of their fellow warriors are at stake. In contrast, there is often little accountability in much of non-military government civil service, which often results in sloppy work practices.

February 19, 2018

Tax and financial sharing among governments

Should one democracy have the right to impose its tax laws on another? With which countries, if any, should the U.S. government share your tax and other financial information?

February 12, 2018

The Venezuelans are corrupt socialists, while the Norwegians maintain free markets

This past week, the "dean of the Venezuelan resistance," Enrique Aristeguieta Gramcko, was arrested for publishing a video accusing the Maduro government of leading a "narco-tyranny." There is a normal human tendency to try to shut down opposition when the facts are not on your side. The communists, fascists, and other assorted statists invariably go after those who do not support the party line.

February 5, 2018

Freedom implies that individuals have the right to lead the lives they wish as long as they respect

Do you think you live in a free country? How do you define "free"? To help answer these questions, the new "Human Freedom Index" (HFI) has just been released. The report is published by the Cato Institute, the Fraser Institute and the Liberales Institut at the Friedrich Naumann Foundation for Freedom and authored by Ian Vasquez and Tanja Porcnik. It is the most globally comprehensive set of third-party data for 159 countries, and uses 79 data streams from a multitude of sources in order to reflect a broad perspective.

January 29, 2018

No one knows how the economy will grow, but anything will be an improvement over recent years

How rapidly will the U.S. economy grow in 2018? How about the world economy? There is a growing consensus that the world economy might grow a little more than 3.5 percent and the U.S. economy a little less than that, which would be a great improvement over recent years.

January 22, 2018

Immigration and ‘rathole’ countries

Many people in poor places try to migrate to richer places — and so it has always been. But some poor places become rich places and immigration flows change as a result. There are many examples of "rathole" countries changing policies and becoming rich, and relatively rich countries becoming ratholes as a result of corruption and/or socialism (e.g., Venezuela).

January 15, 2018

In a civil society institutions matter, and so does due process

Are you aware that the White House, congressional offices and most major media employ "fact checkers"? Given the amount of misinformation these organizations spew, a reasonable conclusion is that the fact checkers are often biased, ignorant, or ignored.

January 8, 2018