Today in Nebraska we are enduring a winter storm, with near blizzard conditions in many areas. This kind of weather tests our coping abilities. Visit a grocery store and you will find depleted inventory, as people stock up for what is likely to be a day or two of isolation. This kind of weather reveals the malleability of human preferences in the face of potential scarcity. What a great country where we ordinarily get so many choices!
These formidable challenges of living in a temperate climate may also produce higher economic output and development as compared with easier climates – at least in the case of our ancestors. Thomas Sowell outlines some of these advantages in his latest book, Wealth, Poverty, and Politics (Basic Books 2015).
Dr. Sowell explains how geography affects Continue reading Temperate Climates and Human Capital Development
Institute scholar Ernie Goss posted an interesting piece at the Economic Trends blog, which can be found here http://www.economictrends.blogspot.com/. In this post, “Taxing Rich More Heavily Gets Votes, But Ineffective in Reducing Inequality”, Dr. Goss discusses data involving the share of federal income taxes born by the top 10 percent of earners. It may not surprise you that the relative tax burden (measured by the share of income tax collections) born by that group has increased over time, while the share born by the bottom 50% has gone down. As Dr. Goss reports, many in the bottom 50% have negative tax rates, due to the Earned Income Credit and other refundable credits that function as transfer payments from the government.
Looking at the IRS Statistics of Income, it appears Continue reading The Elusive Quest for Income Equality
Earlier this month, the Treasury Department announced the withdrawal of proposed regulations dealing with the substantiation of charitable gifts of more than $250. Before you yawn and move on to the next topic, please stay tuned. This provides a valuable object lesson about the value of information in the hands of rulemakers — and its conspicuous absence in some cases.
Unlike the “Galaxy Far, Far, Away” that was the subject of my last post, people in the real world are in the process of getting materials together to complete their federal income tax returns. Charitable organizations are working to ensure that their donors receive appropriate receipts for their donations, which are required in order to claim itemized deductions on their tax returns. Those deductions Continue reading The Value of Information in Rulemaking
This past week, my sons and I ventured out to see Star Wars: The Force Awakens. We saw the 3-D version, which requires wearing those fashionable glasses and delivers the added benefit of seeing fellow humans wearing the same eyewear. Shared cultural experience is all too rare in the isolating world of entertainment on demand — we should value it whenever it occurs.
My oldest son, who remembered prior installments from his youth, observed that the new film has the same look and feel as the early ones. We agreed that the film has the capacity to reawaken that sense of wonder and amazement about this imagined world. Nostalgia was stoked by appearances from original cast members, including Harrison Ford and his sidekick, Chewbacca, who are still up to their usual hijinks. (I hope that someday there is a spinoff featuring Wookie culture — but the dialogue might become tiresome.)
I have not come to praise the film, but instead to ponder the economic premises underlying the story. Continue reading The Economics of Star Wars
It is the week before Christmas, and many are engaged in Christmas shopping and other preparations for holiday celebrations. Few are probably reading blogs about economics. For those real fans of free markets, limited government, innovative ideas, and the strength of the human spirit, read on. I think I may have something you can use here. As discussed below, sometimes the most important gift you can receive may be the gifts you don’t receive.
As noted in my last blog, the Midwest is populated with innovators. Small businesses and manufacturing firms are spread throughout the country to address the needs of the marketplace. Many of their goods and services are directed toward solving needs of production agriculture. Careful study of the hard-working people engaged in that activity, as well as listening to their needs and ideas, has often led to innovation, followed by significant economic development. Continue reading More on Innovation in Rural America: A Christmas Story
Last week I made my annual trek to Sioux Falls, South Dakota to present a continuing education program in taxation for members of the South Dakota bar. Unlike other professional organizations that impose continuing education requirements as a condition for licensure, South Dakota remains a voluntary state. Thus, the members who come typically want to be there to learn about tax law so that they can better serve their clients. I respect that dedication, and I would guess that their clients do, too.
For those who have not visited Sioux Falls, I suggest you make the trip. This is a vibrant community in the far eastern part of the state, right across the border from my home state of Iowa. It has a beautiful downtown with some classic architecture, wonderful shops and restaurants, and hard-working people. Continue reading Markets and Specialization in Rural America
Following up on my prior post concerning Governor Ricketts, I want to highlight some very interesting materials by Nick Niemann and his partner Matt Ottemann, who are accomplished business lawyers here in Omaha. Nick presents an annual program at the Great Plains Tax Institute concerning important developments at the state level affecting Iowa and Nebraska businesses.
Site selection and relocation decisions for businesses are made by humans. That means they are not always rational and sensible. (OK, I’m being coy. But you know which one I mean.) But since humans are often rational and sensible creatures, it makes sense to pay attention to the considerations that appeal to reason. Continue reading Red States/Blue States: Some Insights on Economic Development
Last Friday, Governor Pete Ricketts spoke to the Great Plains Tax Institute, a private institution going back 53 years for the purpose of educating lawyers, accountants, and insurance professionals on the intricacies of tax law. (I have been on the GPTI faculty for the past decade.) Governor Ricketts was highly supportive of this endeavor: professional advisors provide an indispensible foundation for operating in a complex world, in which government efforts toward regulation and taxation find their way into so many dimensions of our business and personal lives. Continue reading Governor Pete Ricketts: Growth and Savings in Nebraska
Welcome to our blog. You have found your way to the website of Creighton University’s Institute for Economic Inquiry. I hope that you find the term “inquiry” to evoke positive sentiments. It suggests curiosity and investigation, wanting to know and understand the true nature of things. Economics, which ultimately depends on human behavior, provides an infinitely complex and variegated subject for this inquiry.
Economic thought resembles other disciplines in the development of conflicting paradigms to understand the world. Empirical evidence is often contestable, given the difficulty of extracting and isolating the precise behavior being measured from the larger milieu. And then we have the matter of normative commitments, which emerge whenever human actions are directed toward a putative good. These conflicts particularly emerge whenever we move from mere description to prescription of policies and laws. Getting the economics right greatly affects human flourishing, although of course it is not the only consideration. Continue reading Welcome to our Blog!
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