Today, David Henderson summarizes the scholarly contributions of this year’s Nobel Prize winners in economics; John Cochrane presents economic statistics to show why Americans are upset about the prices of many goods and services today; and Chester Finn discusses the motivation behind the development of Hoover’s Civic Profile tool.
Economics
At The Wall Street Journal, Research Fellow David R. Henderson reviews the historic contributions to economics of this year’s Nobel Prize winners in the field, Senior Fellow, Emeritus Robert E. Hall and Columbia professor Michael Woodford. “The work of both Messrs. Hall and Woodford shows how government policy, especially monetary policy, has at times erred and caused instability,” Henderson writes. Henderson also notes that despite the Nobel committee’s saying the prize recognizes the winners’ contributions to Keynesian “stabilization policy,” in reality “Mr. Hall’s work on consumption shows that using Keynesian fiscal policy wouldn’t work.” Henderson interprets the prize award as a departure from the Nobel committee’s tendency “to attribute implicitly almost all problems of unstable economies to the economies themselves and almost none of the problems to bad government policy.” Read more here.
“[America’s] standard of living is greater than [that of] any large country,” Senior Fellow John Cochrane writes at his Grumpy Economist Substack. “We earn on average 40% more than Europeans, British, Japanese, and Canadians,” with inequality and poverty falling. So why are Americans upset about “affordability”? Cochrane explains that “the level of prices, as measured by the consumer price index, is [27%] higher than it was just before inflation hit in January 2021, and 14% higher than it would have been had inflation been 2% that whole time.” Workers whose pay did not rise to reflect the new price level, as well as those on fixed incomes, have lost out, and as Cochrane writes, “People hate inflation.” With voters “really mad about the level of prices,” the economist suggests that Congress and the Fed should both consider how they can restore price stability. Read more here.
Revitalizing American Institutions
“A team of scholars at Stanford’s Hoover Institution has developed one way to help Americans across the political spectrum relate to each other: the Civic Profile, a free online tool that helps people understand their civic identity,” writes the Stanford Report. The tool, developed within Hoover’s Center for Revitalizing American Institutions, measures civic values, knowledge, and engagement, and seeks to capture the variety of ways Americans practice citizenship. “A good citizen isn’t just somebody who votes,” explains Finn. “It’s also somebody who shovels their neighbor’s walk when it snows, goes to the school board meeting, or takes an interest in the safety of their community.” The article goes on to explain how professors and programs across Stanford have begun to use the tool. Read more here.
California Decides
Proposition 43 would raise the vote threshold for one specific path to a new local tax in California. Today, when a city council or county board of supervisors asks voters to approve a tax earmarked for a specific purpose, that tax needs a two-thirds vote to pass. But when voters themselves place a special tax on the ballot through the citizen initiative, that tax can pass with a simple majority. Proposition 43 would close that gap. Should it pass, beginning January 1, 2027, a voter-initiated local special tax would need the same two-thirds vote as a government-sponsored one. As this explainer notes, by raising the bar for special taxes, Prop 43 would make it harder for local governments to raise certain revenues, so local tax collections could be lower in the future than they otherwise would be. Read more here.
International Affairs
This Hoover Institution Press essay from the Global Policy and Strategy Initiative explores Southeast Asian perspectives on Quad-driven maritime security cooperation in the Indo-Pacific. (The Quad is a security forum among the United States, India, Australia, and Japan.) Through expert analyses from Indonesia, Singapore, and Vietnam, this paper evaluates regional perceptions of Quad initiatives based on three primary variables: initiative leadership, the character of the activity, and geographic location. It emphasizes the importance of balancing distinct national interests with Association of Southeast Asian Nations (ASEAN) alignment. The essay concludes that Quad policymakers should continue to engage with, and solicit the perspectives of, other potential security partner states in the Indo-Pacific. Read more here.
Related Commentary