With political shocks in Europe, burdensome new regulations at home, and a presidential campaign unlike anything we have ever seen, the year in economics has been quite an interesting one. Take a look back at E21’s most-read commentaries of 2016.
1. Italexit Could Make Brexit Look Like a Picnic, by Desmond Lachman (December 2, 2016)
Italian Prime Minister Matteo Renzi lost his proposed constitutional reforms—and his job—in a referendum earlier this month. That has darkened the storm clouds over the Italian economy, which has not recovered fully from the Great Recession and struggles with an unemployment rate of 11 percent. The Italian economy, which is too large to bail out, might have to leave the Euro. As Italy is the currency area’s third-largest economy, it is hard to imagine the Euro surviving an “Italexit.”
2. Sorry, Elizabeth Warren, Women Already Have Equal Pay, by Diana Furchtgott-Roth (July 27, 2016)
Senator Elizabeth Warren’s speech at the Democratic National Convention resurrected an old myth: women are paid less than men for the same work. However, the so-called “wage gap” virtually disappears after researchers control for other factors such as skills and hours worked. Indeed, young, childless women actually earn more than their male counterparts. Yet Democrats have nevertheless insisted on burdensome regulation to address the issue: a solution in search of a problem.
3. UnitedHealthcare’s Exit Augurs Badly for Obamacare, by Diana Furchtgott-Roth (April 19, 2016)
UnitedHealthcare, the nation’s largest health insurer, announced this year that it would withdraw from most of the Affordable Care Act (ACA) exchanges. The ACA was written so that young, healthy people would have to pay heavy premiums for health insurance in order to subsidize everyone else. So many young people simply did not sign up—leading to an older, sicker pool of enrollees that are far more expensive to insure. Many insurance companies have simply pulled out of the market, proving that you cannot run one-sixth of the American economy by regulatory fiat.
4. What the New York Times Isn’t Telling You About Social Security, by Charles Blahous (January 18, 2016)
The New York Times and other liberals have argued that Social Security is in no need of reform to reduce costs, and actually merits a benefit increase. But Social Security costs are unsustainable due to an aging population and a slow-growing tax base. Increasing taxes would hurt young and low-income people the most. While reducing the rate Social Security benefit growth is not a politically popular position, it is necessary to safeguard America’s fiscal future.
5. One Big Downside to Universal Basic Income, by Preston Cooper (April 28, 2016)
Universal basic income—getting a check from the government every month in lieu of all other welfare programs—is gaining popularity as an idea. But Social Security and Medicare provide a cautionary tale: universal programs, with hundreds of millions of beneficiaries, are quite difficult to reform. No one, especially not the government, gets it right the first time. If policymakers design basic income wrong, they may face insurmountable political barriers to changing it later on.
6. California’s Suicidal House Policies, by Allie Howell (October 10, 2016)
Silicon Valley earned the dubious distinction earlier this year of a median home price above $1 million. Environmental regulations and density restrictions have hampered construction in California, leading to sky-high property prices and rents. Affordable housing initiatives, too, have the perverse effect of driving developers away, which actually increases housing costs. While California is a desirable place to live, the state’s regulators seem to be doing everything they can to drive people away.
7. FDA’s New E-Cigarette Regulations Will Kill, by Jared Meyer (May 5, 2016)
The FDA made quite the power grab when it decided to regulate e-cigarettes like tobacco products, despite their complete lack of tobacco. The new regulations will subject e-cigarette companies to millions of dollars in fees and thousands of hours in compliance times to bring their products to the market, a burden which could kill off up to 99 percent of the nascent industry. Despite a Royal College of Physicians finding that e-cigarettes are 95 percent safer than traditional cigarettes, the FDA went ahead with its regulatory crusade anyways—a move that will almost certainly cost smokers’ lives.
Interested in real economic insights? Want to stay ahead of the competition? Each weekday morning, E21 delivers a short email that includes E21 exclusive commentaries and the latest market news and updates from Washington. Sign up for the E21 Morning Ebrief.