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Wednesday, June 16, 2021

Hayek’s Tiger

Local News

College Station Bans Traditional Pet Shops

At Thursday's meeting, the College Station city council passed an ordinance that prohibits the sale of non-rescue dogs and cats in pet...

College Station to Vote on ROO in Special Meeting Today

The College Station City Council meets Monday at 4 p.m. at city hall to consider a Restricted Occupancy Overlay (ROO). The ordinance would allow single-family...

College Station Plans on Borrowing Additional $62 Million Without Taxpayer Vote

The College Station City Council voted to begin the process of issuing $62 million in certificates of obligations for capital projects. The...

Brazos Valley Hospitalizations Continue to Decline After Mask Order Rescinded

Texas Governor Greg Abbott issued Executive Order GA-34 on March 2, 2021, and the order went into effect on March 10, 2021....

The Chief Economist of the Bank of England, Andy Haldane, listens from the audience at an event at the Bank of England in the City of London, Britain, April 27, 2018. (Toby Melville/Reuters)

Welcome to the Capital Note, a newsletter about business, finance, and economics. On the menu today: inflation, corporatism, risk and space flight, billionaires and value creation. To sign up for the Capital Note, follow this link.

News and Views

Inflation
Well, you didn’t think that topic wouldn’t rate a mention . . .

From the U.K.’s New Statesman, an article by the Bank of England’s chief economist, Andy Haldane. Much of this, unsurprisingly, is focused on the U.K., although much will also strike a note with American readers, not least this comparison between the policy responses to the financial crisis and the arrival of COVID-19 (my emphasis added):

During the Covid crisis, central banks have ­followed the same playbook as after the global financial crisis: a large and rapid crisis was met with a large and rapid monetary policy response. But after the global financial crisis, the economy recovered slowly so monetary policy was normalised slowly.

This time is very different. The economy is rebounding rapidly. Yet the guidance issued by central banks implies a path for ­policy normalisation every bit as sedate as after the global financial crisis. Having ­followed the global financial crisis playbook on the way in – rightly – there is a risk central banks also follow it on the way out. This would be a bad mistake. If realised, this risk would show up in monetary policy acting too late.

Friedrich Hayek once referred to inflation as the tiger whose tail central banks hold, usually with trepidation and ideally from a safe distance. If central bankers wait to see the whites of this tiger’s eyes before acting, they risk having to run like the wind to avoid being eaten. Waiting too long risks interest rate rises that are larger and faster than anyone would expect or want. It runs the risk of the brakes needing to

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State News

Autopsy Report: Taxpayers to Reluctantly Continue to Fund Lobbyists

The 87th legislative session has reached its conclusion and though several bills were filed to ban the practice of taxpayer-funded lobbying, ultimately none of...

After Legislature Leaves, Abbott Announces Plan for Texas Border Wall

After hinting at an upcoming announcement last week amid the growing border crisis, Gov. Greg Abbott officially announced a plan for the state of...

Austinites Continue Fight Against Democrat-Run City Hall Over Homeless Hotels

AUSTIN — Amid a tumultuous two-year public safety disaster in Texas’ capital city, citizens continue to resist harmful decisions by their city officials—and are...

Have Texas’ Power Problems Been Fixed?

Despite Gov. Greg Abbott signing legislation in response to the February blackouts, concerns have emerged about Texas’ power grid this summer. Texas Scorecard spoke...

Gov. Abbott Asked to Ban Employer Vaccination Mandates

Despite Gov. Greg Abbott’s claim that vaccine passports are prohibited in Texas, employees at a Houston Hospital are having to fight their employers’ mandate...

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