- Better payday lending through deregulation? Sounds plausible.
A recent paper from Robert DeYoung and Ronnie Phillips at the Kansas City Fed provides some cautionary results about potential negative side effects of increasing regulation, and suggests possible positive impacts of deregulation. What they find is that more competition among payday lenders can decrease the exorbitant interest rates on payday loans. Increasing competition decreases prices; this is not so surprising.
- From 1984.
These studies suggest it’s oddly comforting to have someone, or something, you can point to as the source of your sorrows. This helps explain why Americans inevitably find an outside enemy to focus on, be it the Soviets, the Muslims or the Chinese. Given that society pays an obvious price for such illusions, how might we go about reducing the need for “enemyship?”
- Social technologies that engender trust are very important to economic development. What does this say about how we administer foreign aid?
[T]he idea of impersonal social trust was the most dramatic accomplishment of industrial civilization’s rise from the 18th to the early 20th century. The greatest achievement of early modern economic growth was not the Industrial Revolution itself, but the way in which the leading Western economies began to move away from highly parochial, narrow networks of personal exchange and came to rest instead on increasingly complex national and international commercial networks of impersonal exchange.
- An interesting case study in labor market rigidity?
According to today’s BLS report, total employment in Texas (data) increased for the eighth straight month in January. The gain of more than than 35,000 jobs was the largest monthly increase in almost ten years, and brings total employment in Texas to a record high level of 11,094,500 in January (see graph above).
In contrast, California (data) started the year with another monthly loss of 17,500 jobs in January, marking the 24th straight months of job losses going back to February 2008. From the January 2008 peak, California has shed 1,222,192 jobs over the last two years, and now has the lowest employment level (15.85 million) since December 1999, more than ten year ago.
- “Economic nationalism is the last last refuge of incompetent managers.”
Probably the biggest losers are the former Canadian managers, who will be either pushed aside or down the ladder as the new owners install their people. Indeed, it is presumably the case that their justification for paying top dollar for those assets is that they can manage them better than the previous Canadian managers could. And they’re probably right.
- Federal empoyees: older, and more educated than private sector employees. Exactly what you would expect from a unionized workforce. As I have noted, illuminating pay differentials is usually not very helpful.
So the bottom line is: when education and age are held constant, the entire difference in average pay between the federal and private sectors disappears.