One thing I learned in econ class in 11th grade was that government policy should be counter-cyclical (spending more in recessions and cutting back in boom times), but that there’s a lot of pressure to be pro-cyclical, which will tend to exacerbate business cycles. (Except I suppose they didn’t say “exacerbate” in 11th grade.) At a personal level, too, it’s natural to spend more when we have more and cut back when we aren’t doing so well. Every now and then you hear about a “rainy day fund” but my general impression is that these are never big enough to counter the business cycle.I'm stunned I never realized this so explicitly, but it's absolutely true. Read the rest.
Political parties seem to apply a similar pro-cyclical behavior in their congressional election campaigns....
A Potent Threat in Strait of Hormuz: Iran’s “Mosquito Fleet”
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Separate from the regular Iranian Navy, with boats that often go more than
115 miles per hour, it’s what a retired U.S. official calls a “disruptive
force.”
2 hours ago
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