Richard J Grant

In an amusing modern twist on mercantilism, India has actually been trying to discourage gold imports. Last month, the Indian government increased its import tariffs on gold, silver, and platinum bullion imports to 10%. It also banned the import of coins and medallions in the hope that it might help stop the slide in the value of the rupee, which continued to fall to a record low last week. Consistent with the old mercantilists, India already has rules requiring that 20% of imported gold be used in exported products, such as jewelry. Last month, the government expanded the categories of gold to be subjected to this restriction. The stated objective for all this is to reduce India’s current-account deficit, which hit record levels this year. It is hard to believe that they expect this to encourage capital inflows, but apparently they do. India is not a gold producer, but even in South Africa (which is a major producer) some politici...

by  Richard J. Grant   Mark Shuttleworth is a South Africa born tech entrepreneur and venture capitalist who is perhaps best known in the rest of the world for being the second “space tourist” to spend time living and helping with experiments on the International Space Station. After a year of training and reportedly paying about US$20 million, in early 2002 Shuttleworth rode on Soyuz spacecraft to spend about eight days on the space station. Shuttleworth had the wherewithal to buy his space ride since 1999, when he sold his four-year-old Internet security company to VeriSign for about US$570 million. Since then, he has used his wealth to finance and build new companies as well as to fund charitable ventures. But living in South Africa, with its restrictions on capital movements, created problems for Shuttleworth’s international operations. This soon prompted him to take advantage ... Continue reading at FORBES   http://www.forbes.com/sites/richa...

Published in The Tennessean , Sunday, June 9, 2013 Bigger government tends to corrupt. Or, Who has the greater electoral need to hide the truth? by Richard J. Grant Link : http://www.tennessean.com/article/20130609/COLUMNIST0110/306090064/1007/OPINION?nclick_check=1 For other articles see also Forbes :   http://www.forbes.com/sites/richardgrant/

When Public Choice Trumps Public Finance by Richard J. Grant Published at FORBES, Sunday, May 26, 2013 with archives . Link :  http://www.forbes.com/sites/richardgrant/2013/05/26/when-public-choice-trumps-public-finance/

Published at FORBES with archives . A shortened version was published in The Tennessean , Sunday, May 12, 2013 . by Richard J. Grant When our political leaders tell us lies, we can forgive them when they do so for clear national security reasons. That is, when they lie to protect us, not merely to protect themselves. We can also forgive error when it is not due to negligence or incompetence. Uncertainty dogs our decisions at the best of times, but during an emergency requiring immediate action the uncertainty can bite hard. The official immediate response (or lack of response) to the September 11, 2012 attack on the U.S. consulate in Benghazi might have been explained away retrospectively as an attempt to minimize losses. It might be argued that fewer Americans would have died in the attacks had everyone obeyed orders to stand down. A decision based on this belief would be forgivable, unless those in charge should have made a better assessment of the full context and had a bet...

Published in The Tennessean , Sunday, April 28, 2013 and at FORBES with archives . by  Richard J. Grant In scientific controversies, as in political contests, the people most ignored are those who would prefer to vote for “none of the above.” In political contests, we must often take sides between the two remaining “most electable” candidates in order to minimize the damage that will ensue. But in scientific controversies we are not so constrained. That is why this column never endorsed the 2010 study by economists Carmen Reinhart and Kenneth Rogoff that purported to find a sudden increase in “debt intolerance” in countries whose national debt levels exceeded 90 percent of GDP. The problem was not with the concept of debt intolerance, but rather with the portrayal of the 90 percent level as some sort of natural threshold beyond which economic growth rates would be severely curtailed. Even before reading their article, it could be guessed (correctly, as it tu...

Published in The Tennessean , Sunday, April 14, 2013 and at FORBES with archives . by  Richard J. Grant Throughout history, inflation’s advocates always found some reason for governments to create new money. We receive most of our incomes as money and we calculate our wealth in terms of money. When any one of us receives more money, that person rightly feels wealthier. But it does not follow that the existence of more money in general would make us all wealthier. It is true that as we have grown wealthier, historically the quantity of money has tended to grow along with that wealth. The biggest deviations from this tendency have occurred during periods of fiat-money inflation or debasement of the coinage. In each case, the consequent monetary depreciation resulted from government officials trying to get something for nothing. The newly printed money, or the new coins minted from diluted alloy, was directed toward the special purposes of the government officials and their su...

Published in The Tennessean , Sunday, March 31, 2013 and the full version at FORBES with archives . Richard J. Grant A reader writes, “The Center for Economic Policy and Research found that the minimum wage would be $21.72 an hour if it kept pace with increases in worker productivity.” Touting data from the same study, in a U.S. Senate committee hearing last week Sen. Elizabeth Warren (D., Mass.) noted that the current federal minimum wage of $7.25 falls short of the productivity indexed estimate of “about $22 an hour.” She asked, “What happened to the other $14.75? It sure didn’t go to the worker.” Sen. Warren’s question is absurd for the same reason that it would be wrong to assume that all senators share her economic illiteracy. Just as not all senators are equal, not all workers are equal. Each worker’s productivity level differs from others depending on attitudes, skill levels, and the types of tools available to the worker. Productivity is generally higher in...

Published in The Tennessean, Sunday, March 17, 2013 and the full version at  FORBES with archives. Richard J. Grant In how many states have the governors or legislators claimed that their state would be a net beneficiary of federal spending for Medicaid expansion? There are supporters of Medicaid expansion in all 50 states who do make such claims. But not everyone can be a net beneficiary of subsidization. When redistribution is the game, someone must be a net contributor. What becomes important here is that the burdens borne by such contributors are not necessarily relevant to the decision process. The question of whether Medicaid expansion brings net benefits to a state is a less-useful predictor of a state politician’s actions than is the expected effect of that expansion on the politician’s reelection chances. ... READ THE FULL ARTICLE Richard J. Grant is a Professor of Finance and Economics at Lipscomb University and a Senior Fellow at the Beacon Center of...

Published in The Tennessean , Sunday, March 3, 2013 and the full version at FORBES with archives . Richard J. Grant In the coming weeks, several state governors will attempt to increase low-income citizens’ access to medical services by expanding a state-federal program that, on average, pays doctors 40 percent less than private insurers pay. How wise is this? When you pay less, eventually you’ll discover that you are getting less. In the case of Medicaid programs, we found that out pretty quickly. Medicaid has created a class of medical consumers that do not have either the incentive or ability to consider the cost of the services they consume. As with any third-party payment system, which gives the illusion of someone else paying, patients tend to demand far more medical services than they would if they believed they could spend any savings on something else. In this regard, Medicaid works less well than food stamps. Whatever the flaws of the food stamp progr...

Published in The Tennessean , Sunday, February 17, 2013 and at FORBES with archives . Richard J. Grant We see three different countries with three apparently different problems. But their problems have the same root. The Argentine government has announced a two-month price freeze on supermarket products and is reportedly trying to limit union wage increases to no more than 20 percent. Given forecasters’ predictions that Argentine price inflation will approach 30 percent this year, one wonders how politicians can expect to hold wages and other prices down without causing shortages and an expansion of the underground economy. This is what happens when policymakers treat symptoms rather than causes, but Argentina is way ahead of Japan in this regard. Japan is still trying to push up its inflation rate. Japanese Prime Minister Shinzo Abe became famous for the lengths to which he was willing to go to weaken his national currency, the yen. So far, the Bank of Japan has pumpe...

Published in The Tennessean , Sunday, February 6, 2013 and at FORBES with archives . Richard J. Grant President Barack Obama has already ensured that legitimate immigration reform is practically impossible during his reign. But this should be no surprise: he has made many things impossible. The president’s track record of disregarding, or failing to enforce, laws that he doesn’t happen to like give us anything but assurance that he or his successors would enforce the border security provisions that would be a necessary part of any immigration deal. He exemplifies the morally consistent progressive who studies the Constitution with the same detachment as the activist who studies the obstacles around which he wishes to maneuver. Skirting a mere statute is, comparatively speaking, a cakewalk. The president has not only refrained from enforcing the politically inconvenient aspects of immigration laws, but has obstructed their enforcement by other levels of government. O...

Published in The Tennessean , Sunday, January 27, 2013 and at FORBES with archives . Richard J. Grant There is an obvious reason why Republicans, despite holding a majority in the U.S. House of Representatives, keep appearing to lose their fiscal standoffs against the Democrats who control the White House and the Senate. In both of the post-election fiscal fights, first over the “fiscal cliff” and then the “debt ceiling” standoff, standing fast would trigger consequences that most Americans would find undesirable. The party to flinch first would be the one that is less certain of its esteem in the eyes of the electorate. On the fiscal cliff, Republicans accepted a compromise on tax rates in order to avoid an automatic increase in all income tax rates. Few doubted that such across-the-board tax-rate increases would further depress the economy, so Republicans gave the president his more-modest requested tax increases in the forlorn hope that the electorate would exhibit the ...

James M. Buchanan: Economist, Philosopher, and Teacher. Requiescat In Pace. Link to my Forbes article

Published in The Tennessean , Sunday, January 6, 2013 and at FORBES with archives . Richard J. Grant Although nature presents us with an adequate array of obstacles, many of society’s most formidable ills are self-inflicted, most potently through the ballot box. The framers of the U.S. Constitution were rightly wary of the dangers of unfettered democracy. They understood that most parts of our lives should be set apart, protected from the reach of voters. Over two centuries later, voters seem no more reliable. They can find all sorts of reasons to meddle in other people’s lives through the magic of government. They seem more able to imagine the wonderful things that governments might do than they are able to imagine the costs. Imagination is often untethered to education. Those who would wish the government more tax revenue, would also have us believe that taxes are benign in their impact on business. After all, in the past century we have had some of the highest corporate a...