A recession is a terrible time to make major changes in the economic rules of the game. . . .

Capitalism has been wounded by the global recession, which unfortunately will get worse before it gets better...

How much will the stimulus package moving in Congress really stimulate the economy?...

In the current economic environment, mortgage legislation should be judged by two criteria...

In order to promote a much smoother functioning of the financial system, it is paramount to distinguish between the immediate steps needed to cope with the present crisis and the long-run reforms needed to reduce the likelihood of future crises...

Hardly a day goes by during this housing crisis that the media does not report on families in foreclosure proceedings, or in arrears in repayment on mortgages that had close to zero down payment requirements and low "teaser" interest rates....

The strong bipartisan support for increasing the federal minimum wage to $7.25 an hour from the current $5.15 -- a 40% increase -- is a sad example of how interest-group politics and the public's ignorance of economics can combine to give us laws that manage to be both inefficient and inegalitarian...

The 20th century was the one with the greatest decline in death rates not only in rich countries but also throughout the world...

After many decades of hopelessness, there are finally grounds for believing that sub-Saharan Africa may be close to taking off toward sustained economic growth...

Both Europe’s short-term and long-term economic futures do not look bright. The need to bail out Greece, and possibly also Spain, Portugal, and Italy is the immediate problem, but the fundamental problems go much deeper...

I have little doubt that central banks should have considerable independence Yet complete central bank independence from politicians does not seem desirable since banks also can abuse their powers...

Bubbles in prices of stocks, houses, or other assets are usually defined to mean sizable and somewhat prolonged deviations in these prices from the fundamental determinants of the prices...

The April US employment report gave mixed signals. The good news is that employment grew by 300,000, and the employment gain in March was revised upwards from 160,00 to 230,000. But...

[I]t is important to continue to emphasize that speculation serves a useful social purpose, especially when the speculators are making profits...

Given the current and projected large scale budget deficits of the United States, many people are advocating that the US follow the example of Europe and many other countries, and introduce a value added tax (VAT)...

While median family income in the United States fell for over a decade prior to the beginning of the recession that started in late 2007, per capita incomes continued to grow during that time period.

The entitlement fiscal burden from projected spending increases on retirement benefits and health care during the next couple of decades is scary for Western Europe, Japan, The United States, and other rich nations.

Marriage emerged as the most popular institution throughout history primarily because it was an effective arrangement to improve the care and upbringing of children. Marriage is not necessary to have children, but it has been of enormous importance in the rearing of children.

Studies show that men and women place a high value on even small decreases in their probability of dying at different ages. . . .

When the euro was launched on January 1, 1999, I was skeptical about its long run viability primarily for two reasons. . . .

Greater unemployment is a casualty of every recession, and the so-called Great Recession is clearly no exception. . . .

Although the American Constitution does not provide for the filibuster, the founders of this country were very much concerned about protecting the rights of minorities . . . .

The over $800 billion American fiscal stimulus package is enormously unpopular in many quarters. . . .

In economies that have full employment except during recessions, which describes the American economy, increased exports do not create jobs, any more than building football stadiums creates jobs. . . .

I do believe that e-readers foretell an enormous change in the book publishing industry. . . .

I believe that a Consumer Financial Protection Agency will hurt rather than help consumers. . . .

President Obama, in his State of the Union Address last week, indicated that he would assist small business, particularly to encourage their hiring of additional workers. . . .

The purpose of terrorism, wherever it occurs, is to create fear that is disproportionate to the size of any terrorist risk. . . .

The Internet and wireless transmission has not only vastly extended the ease of communicating quickly, but also provides quick access to information on a scale far surpassing anything available before. . . .

Research on happiness entered the economics literature about 40 years ago, and the number of articles and books on this subject by economists has exploded during the past 15 years. . . .

The current issue of the Economist recognizes that the dramatic change in labor force participation of women is one of the most important transformations in the economic and social worlds during the past generation. . . .

Relative to initial expectations, and given that the heads of almost all leading nations attended, the recently concluded United Nations climate change summit in Copenhagen was an embarrassing failure. . . .

In determining whether governments should use their monopsony power-defined well by Posner- to reduce drug prices, it is essential to distinguish between generics and drugs that are still protected by patents. . . .

The justification economists give for concepts of national income, such as Gross Domestic Product (GDP) and Net Domestic Product (NDP). . . .

Neither former Fed Chairman Alan Greenspan nor the present Chairman Ben Bernanke anticipated the financial crisis that erupted in 2008. . . .

During this "Great Recession", unemployment has risen from under 5% at the beginning of the recession in December of 2007 to more than double that rate to reach its highest level so far in October of 10.2%. . . .

By all accounts, President Obama's visit to China last week was pretty much a failure on all the major issues, which include China's contributions to climate change, nuclear weapons, and various aspects of the world economy. . . .

The ratio of federal government spending to American GDP was quite stable at about 20% for about 40 decades, but this ratio has been rising rapidly during the past year, and it is beginning to approach 30%. . . .

Last week two pieces of news about the American economy were disclosed, with important implications for where the economy is going. . . .

The government's preliminary estimate of the growth in American GDP during the third quarter of 2009 is an impressive annual rate of 3.5%...

I sympathize with all the people who are upset by the very large bonuses, stock options, and other compensation received by heads of some financial institutions that ran their companies into the ground through bad investments...

Oliver Williamson's influential contributions to the theory of firms were the stimulus for our discussion topic this week of the analysis of organizations...

The worldwide recession has slowed the growth in the demand for cereals and other foods as many countries have experienced stagnation or contraction in their GDPs...

The Swiss health care system has several important properties that I (and many others) have been advocating should be incorporated into any reform of the US health care system...

The major American trade unions, including the United Automobile Workers, the United Steelworkers, and the Service Employees International Union, went all out in their support of Barack Obama during the past presidential election...

Deficits arise when government spending exceeds the revenues raised from various taxes...

On October 7, 2008 I wrote an op-ed piece for the Wall Street Journal ("We're Not Headed for a Depression") in which I said there would not be a depression, certainly nothing at all resembling the Great Depression of the 1930s...

No doubt many consumers made mistakes in their credit decisions during the past few years, perhaps especially in the mortgages they chose...

The cash-for-clunkers program of the federal government began in late July, and will end this evening...

In a recent post (see my discussion on July 28) I explained why the American health delivery system is superior in some important dimensions to health care in most other advanced countries...

The latest output and unemployment figures for the United States indicate that the recession in this country is very probably finally over, given the usual definitions of the turning points of recessions...

This is the fourth in a series of interviews with Chicago School economists. . . .

The ”Chicago school” of free market-centric economics, highly influential in forming laisser faire policies, has faced fierce criticism in the wake of the financial crisis...

The weight of the average male and female began to grow sharply around 1980 not only in the United States but also in all other developed countries...

Many Democratic Congressmen, members of the Obama administration, and others writing about American health care envy the “European” health delivery system...

The values of most university endowments have taken large hits during this financial crisis...

In late June the House of Representatives approved The American Clean Energy and Security Act...

The United States, as the name indicates, was formed as a confederation of independent states-initially only 13, but since expanded to 50.

Since the document laying out the President's financial reform package is 88 pages, I will concentrate my evaluation on a few basic issues.

According to data compiled by my colleagues Matt Gentzkow and Jesse Shapiro, the number of daily newspapers in the United States has been declining for more than 90 years, from a peak of about 2200 to its present level of about 1400...

This week the Obama administration, acting through Secretary of the Treasury Geithner, appointed a pay czar to review, reject, and possibly set the pay of companies that received large amounts of federal assistance during the financial crisis...

The best way to evaluate America's expensive health care system would be to estimate the effects of different kinds of healthcare on the quality and quantity of health for individuals of various ages, incomes, races, and other categories...

The short answer is "yes", although not immediately, and not inevitably...

The number of overweight children and adults has grown sharply since 1980...

Posner and I decided to post again this week on the conservative movement because of the great interest in our discussion last week...

The roots of conservatism go back to philosophers of the 17 and 18th centuries, such as John Locke, David Hume, and Adam Smith...

Every century or so, a major flu pandemic (an epidemic with a global impact) occurs...

Most richer nations nowadays, and many developing nations, have "independent" central banks, such as the European Central Bank and the Federal Reserve Bank...

Six months ago essentially all large American banks and many smaller ones received loans from the federal government to help shore up their capital base as they tried to weather the financial storm...

It is very difficult for either amateur investors or even professional money managers to do better picking their own stocks than the performance of the major stock indexes, such as the US Dow Jones Industrial Average (DJIA) or the Japanese Nikkei Index...

The widespread and sharp rise in housing prices during the early part of this decade in the United States and many other countries is said to have contributed to the worldwide economic boom through wealth effects that induced greater consumption...

In my post on Sunday I gave an example to illustrate the Treasury's plan to buy the "toxic" assets of banks...

One good aspect of the Treasury's plan to enlist the private sector in buying mortgage-backed and other bank assets is that it reduces the uncertainty-if it is implemented! - about what the government plans to do further in aiding banks...

The Internet has produced revolutions in many kinds of behavior, such as greatly reducing the advantages from reading newspapers, but one of the most important is in providing easy access to various kinds of social interactions...

"What can we do that would be beneficial?...

Pressures for both increased government and private assistance to poorer nations may well result from this recession because some nations that can least afford a setback may suffer the most due to reduced demand for their exports of commodities and other goods...

The severity of this recession has stimulated calls for greatly increased regulation of the financial sector, and for changes in some of the present regulations...

The housing market is in shambles as home prices continue to fall-so far the average house has fallen over 25 percent in value from its peak...

During his confirmation hearing before the United States Senate toward the end of January, Secretary of the Treasury Timothy Geithner accused China of "manipulating" its currency...

Several big banks and other companies have badly fumbled their public relations during these difficult times, such as the big three auto makers who took their private jets to Washington to beg Congress for a bailout, or the board and CEO of Merrill Lynch that granted generous bonuses to their executives just as the company was avoiding bankruptcy through being taken over by Bank of America...

Every recession, including those milder than the current recession, leads to pressure to reduce spending on foreign goods by raising tariffs and other import restrictions...

In 2007, the House of Representatives passed the Employee Free Choice Act, a law to promote unionism...

Last week we blogged on how much stimulus to GDP and employment might be expected from a version of the Obama fiscal stimulus plan...

If the government increased its spending on infrastructure when the economy has full employment, its main impact would likely be to draw labor, capital, and raw materials away from various other activities...

When we blogged about gasoline taxes on July 21, 2008, the sharp rise in gasoline prices to over $4 a gallon...

Union members constitute a mere 7.5 percent of the private sector American labor force, only one third of its share 25 years ago...

Posner gives an excellent and skeptical discussion of the negotiations over terms of the auto bailout...

For many years economists and central bankers have congratulated themselves on the remarkable stability of US economy...

I agree with Posner that the future of free market policies in the United States has been damaged by the financial crisis, and by the continuing rise in unemployment and slowdown of the American (and world) economy...

The big three American auto producers General Motors, Ford, and Chrysler, are in terrible financial shape...

Some older theories of business cycles-usually associated with the "Austrian" school of economics- claimed that recessions and depressions were useful in helping to remove the poison from an economy that builds up during good times...

The title of this discussion is taken from a question put by the John Templeton Foundation to leading scientists, scholars, and public figures...

Not long after the death of Milton Friedman in the fall of 2006, the president of the University of Chicago, Robert Zimmer, formed a committee drawn from the Economics Department, the Graduate School of Business, and the Law School...

Will this financial crisis mark a substantial retreat from the world's movement during the past several decades toward a competitive market system?...

I will first make a couple of comments on the present situation...

The Federal government of the United States has seldom taken an equity interest in private companies, although this has been proposed sometimes, especially as a way to get higher returns on social security assets...

In considering what needs to be done to improve the functioning of the financial system, it is necessary to distinguish steps to avoid a major depression in the near term from long run reforms of the financial system...

On Sunday of this past week Merrill Lynch agreed to sell itself to Bank America, on Monday Lehman Brothers, a venerable major Wall Street investment bank, went into the largest bankruptcy in American history..

Prediction markets are pervasive in finance, especially in modern derivative markets...

An eye-opening article in the New York Times on August 29th discusses the effects of India's economic reforms and subsequent economic growth on the poverty and progress of the untouchables...

For every Ronald Reagan Arnold Schwarzenegger, Jon Voight, Charlton Heston, and a few other prominent conservative Hollywood stars, there are probably more than 50 strongly liberal actors, directors, producers, and other "above the line" categories of filmmakers...

Hundreds of millions of men and women all over the world have been tuned to their television sets and clued to their computer screens as they followed the Olympic extravaganza in Beijing...

Many gay couples want to be allowed to call their union "marriage" mainly because they believe this will give their relation a degree of acceptance that is closer to that given to heterosexual unions...

Articles about whether America is in decline is a cyclical industry that rises and falls over about a twenty-year cycle...

New York City's ban on the use of trans fats in restaurants is the first of many efforts to restrict not only trans fats, but also the whole fast food industry...

Gasoline prices have increased rapidly during the past several years, pushed up mainly by the sharply rising price of oil...

Leona Helmsley's bequests of $12 million to her dog, and several billion dollars to the welfare of dogs in general, are highly unusual, eccentric, and strange...

A recent New York Times article indicated that the fraction of full-time faculty members in the United States older than age 50 more than doubled between 1969 and 2005, increasing from 23 percent to over 50 percent...

The number of general-purpose newspapers has been declining in cities ever since the growth of television, and the decline accelerated after the Internet was developed...

Increases in energy prices sharply accelerated during the past year, as the price of oil more than doubled, and gasoline prices in United States rose by 25 percent...

The types of loans available to consumers have grown at unprecedented rates during the past 40 years...

The worldwide boom in college education during past several decades has been as remarkable as it was unexpected...

Time is the most precious resource of men and women, and even older children...

In the mid-1990's Mexico started an anti-poverty program, called Progressa, that revolutionized the way low income countries try to reduce child labor and the school dropout rate...

The consumer protection issue has been thrust into public attention by the housing debacle because many families have had lenders foreclose on their homes, while other home owners are in serious arrears on their mortgage payments...

The run-up in the world price of oil during the past several years, and especially the rapid climb during the last few weeks to over $120 per barrel, has fueled predictions that the price will reach $200 a barrel in the rather near future...

Posner presents evidence on the sizable subsidies received by American farmers from the federal government of the United States...

The major deregulation movement of the past 100 years started with the Ford and Carter administrations in the 1970s, and continued through the Reagan years...

The increase in flight delays is just one aspect of a general decline in airline service...

It was an oversight that I did not discuss explicitly long term prospects for food price increases...

The World Bank's index of food prices increases by 140 percent from January 2002 to the beginning of 2008, and a full 75 percent just since September 2006...

It used to be thought more widely than it is now that in a competitive market, the compensation of workers, on the assumption that it is left to the market, will be efficient...

Becker makes the ingenious suggestion that the effect of adding drug coverage to the Medicare program is to prevent spending on drugs from growing as rapidly as the number of persons covered by Medicare....

"Sports doping"--the use of anabolic steroids and other drugs to increase athletic performance, as Barry Bonds, Roger Clemens, and other prominent professional athletes have been accused of doing--is intensely controversial....

Hardly a day goes by during this housing crisis that the media does not report on families in foreclosure proceedings, or in arrears in repayment on mortgages that had close to zero down payment requirements and low “teaser “ interest rates...

I agree with Posner that Buckley was not a major originator of ideas...

Until the mid 1960's, female high school graduates were less likely than male graduates to go to college, and female college students were far more likely to drop out than were male students...

The agitation about the fraction of endowment that colleges spend is driven in large measure by the rapid rise in tuition since the late 1970's...

The shooting recently of 10 innocent persons at a retail store and a university in Illinois has highlighted once again the issue of gun control in the United States...

In the past few decades, economists have analyzed the competition from companies motivated solely by the desire for profits against companies truly motivated in part by other considerations...

No one knows for sure how many illegal immigrants are in the United States, Europe, and other countries, but there are surely many millions...

The burden of taxes to a country depends not only on the fraction of its gross domestic product GDP that are collected as tax revenue –the data shown in Posner's chart- but on many other factors as well...

Black Americans have made considerable progress during the past two decades in reaching top positions in government, business, and the military...

Face-to-face interviews of an apparently random sample of the Pakistani population were conducted in August 2007 for Terror Free Tomorrow, a non-partisan Washington policy organization (www. TerrorFreeTomorrow.org)...

Modern national income accounts developed about 75 years...

The growth of large government managed funds during the past few years has been spectacular...

Posner's discussion of carbon offsets is thorough, so I will concentrate on only a few issues...

All the rich countries are successful in raising sizable amounts of revenue from taxes with only a rather little tax evasion...

Michael Greenstone of MIT had the excellent idea of using financial data to provide information on what global investors believe about the viability of this government...

The wealth of some individuals is so staggering that it is hard for the rest of us to fathom...

Malthus and the many neo-Malthusians of modern times assume that the threat from world overpopulation would show up first in rising food prices...

I agree with Posner that third party liability is desirable in some cases, but that class is narrow...

A report to be issued this coming week by the IMF (the technical analysis was released early) shows that greater globalization during the past two decades contributed significantly to rising inequality during this period in most developing as well as developed countries...

The recent two-day strike by the United Automobile Workers (UAW) against General Motors (GM) illustrates clearly the steep decline of the importance of unions in the United States economy...

Universal service usually means that young persons, say 18 year olds, can either be drafted into military service for a specified period, say a year or two, or instead they can work for a similar period in one among a number of qualifying occupations...

There is tremendous speculation about how much, if at all, the Fed will reduce the federal funds rate at its meeting next week on Sept. 18th...

It is more or less inevitable that China's economy will spew out a lot of pollution, given its extraordinary rate of growth for over 20 years, and the abundant supplies of coal that fuel its power generation...

Much has been written about the rejection of socialism by major powers like China and the former Soviet Union...

For at least the past three decades the media and others have been concerned about the "crumbling infrastructure" of the U.S. highways, including the roads and bridges...

The past few years, and especially this summer, has seen loud and frequent complaints against American airlines because of flight delays, canceled flights, lost baggage, poor on-board service, overbooking, and other problems...

Obesity is defined usually as a body-mass index of 30 or greater, where the body-mass index adjusts weight for height by dividing weight in kilograms by the square of height in meters...

Costs are usually easier to measure in modern wars than benefits...

Individuals and groups support government regulation of energy use either because they are concerned about the negative effects of oil, gas, and other fossil fuels on the environment, or about the impact of demand for these fuels on national security...

Most people do not object if others make a fortune producing tangible products, such as Bill Gates' wealth from Microsoft, or the wealth Bill Marriott received from his hotel chain...

Estimates suggest that intangible capital, which is mainly skilled employees, constitutes 70 per cent of the total capital of large American companies...

During the past couple of week, the U.S. housing market has had a record number of home foreclosures, a rise in delinquency rates on mortgage loans, and further declines in housing starts...

Economists have been emphasizing in recent years that that while cognitive abilities of individuals certainly raise their education and earnings, many non-cognitive skills are often more significant...

With Hillary Clinton a very serious candidate for the U.S. Presidency, Angela Merkel as Chancellor of Germany, and Segolene Royal who almost became president of France, women have clearly arrived as political leaders in Europe and the United States...

Posner raises an important issue: why do Americans (and persons of other nationalities) grieve so much when American military personnel (or the military personnel of these nations) are killed during military actions, even when those killed had volunteered for military service?

After extensive debate, the United States Senate last week passed a comprehensive immigration bill...

The market for corporate control is sometimes claimed to be more effective at replacing inefficient management when a relatively small number of shareholders-members of particular families in the cases of the Wall Street Journal and New York Times – cannot maintain control over management because their shares have much greater voting rights than shares owned by others...

Even though official crime statistics are often suspect, there is no doubt that crime rates vary enormously from country to country.,,

To me, the absence of a military draft is the most important factor behind the minimal number of violent protests against the increasingly unpopular war in Iraq...

I will make three points: the United States system of health care may not be the most efficient but people here get good value for their large spending on health care, employer-based health insurance has the frequently overlooked major advantage of providing long term insurance, and catastrophic health coverage probably should be made compulsory...

Recently Sam Zell, a leading Chicago businessman, arranged to buy the Tribune company, owner of the Chicago Tribune, Los Angeles Times, other newspapers, and many TV and radio stations...

Posner 's criticisms of Jackpot Justice are right on the mark, as the authors of the study considerably exaggerate the cost of the tort system...

Posner shows that salaries of federal judges are low compared to those of lawyers in private practice or academia, and judges' salaries have declined substantially over time relative to earnings of practitioners and law professors...

David Cameron, the leader of the Conservative Party, set off a considerable debate in Great Britain on marriage when he recently claimed "Families come in all shapes and sizes and they all need support [because]…married couples stay together longer..."

Genetic testing offers great hope for future progress in treating diseases since individuals can in many instances reduce the consequences of genetic defects if they find out about them sufficiently early...

In China in 2005, 118 boys were born for every 100 girls born.

Under present scientific calculations, environmental damage from global warming at current rates of CO2 emissions will be large, especially during the latter half of this century and throughout the next few centuries...

Health care reform in the United States is receiving lots of attention recently from politicians and the media, and major changes in federal as well as state health law are likely...

Libertarians believe that individuals should be allowed to pursue their own interests, unless their behavior impacts the interests of others, especially if it negatively impacts others...

As Posner's data indicate, the world AIDS problem is now largely concentrated in Sub-Saharan Africa...

The United States gives more generous tax deductions when individuals set up charitable trusts than do many other countries in Europe, Latin America, and elsewhere...

One of the most disturbing aspects of the holiday season is the sharp rise in automobile fatalities, in part due to drunk driving from overdrinking at parties and other celebrations...

A recent UN report on world inequality of wealth attracted widespread media coverage...

Some members of the new Congress are claiming that the debt of students to finance their college education is too high, and that more generous federally funded student grants should be available...

An increase in the minimum wage has several distinctive negative effects on the economy...

Milton Friedman died this past week...

I do not believe the election proves much other than that corruption scandals and the Iraq war hurt Republicans...

Chicago, where I have lived for the past 35 years, is not the safest city, but it seems like a paradise of safety compared to Mexico City, where I just spent a few days...

For a long time I have found the practice of polygamy intriguing, and have wondered why opposition to this form of marriage is so strong in the United States and most of the world –see my A Treatise on the Family, 1981,1993, Harvard University Press…

Posner makes excellent points, so I will fill in at a few places...

Russ Roberts interviews Gary Becker on the challenges of being an intellectual maverick, the economic approach to human behavior, the influences of Adam Smith and Alfred Marshall on Becker's work and Becker's optimism for the future of economics…