The Economist reports: “Venture capital in Europe has delivered returns of just 2.1% a year since 1990, according to Thomson Reuters, making it perhaps the worst investment class outside Japan (American VC managed around 13%).” The article suggests that overfunding by European governments has driven down returns, but indicates this didn’t occur until after 2007, which would not account for near-zero returns stretching back to 1990. A more precise argument would ... Read More
Interest-Rate Policy and Economic Growth
Floyd Norris, in The New York Times, reports that construction is primarily responsible for slow employment growth. Meanwhile, Craig Torres and Ilan Kolet report in Bloomberg that “investment in software is up 19 percent since the 2007 business-cycle peak, while…investment in non-residential structures…is down 18 percent since the fourth quarter of 2007. Spending on equipment…is up just 2.2 percent, according to data from the Bureau of Economic Analysis. Spending on ... Read More
The Goal of Tax Policy
People often view debates over economic policy as debates between selfish libertarians, who seek to keep what they earn, and generous communitarians seeking to help the poor. Communitarians recognize that talent is randomly distributed among mankind and that humanity and not individuals are the rightful owners of that talent. Talented individuals have a moral obligation to the community to utilize their talents fully to improve mankind’s standard of living. They have ... Read More
