Study of American Capitalism

Study of American Capitalism

Created in the wake of the 2008 financial crisis, and the government’s subsequent responses, the Project for the Study of American Capitalism at The Mercatus Center is a research program responding to the increased concern about the role of political favoritism in American business. The project explores the implications of this emerging character of the economy, examining the effects it has on the standard of living in the United States and public perceptions of the legitimacy of government and business. Does it make any difference to average Americans whether ours is a more or less free market? And what can policymakers do to ensure competition and to commit in a credible way to equality of opportunity?

Drawing on hundreds of academics from around the world, the Project for the Study of American Capitalism helps scholars and policymakers investigate the nature of these problems and identify real and sustainable solutions.

Research

Christopher Koopman, Thomas Stratmann | Mar 24, 2015
Thirty-six states and the District of Columbia currently limit entry or expansion of health care facilities through certificate-of-need (CON) programs. These programs prohibit health care providers from entering new markets or making changes to their existing capacity without first gaining the approval of state regulators.
Timothy Sandefur | Mar 24, 2015
In an article to be published in the Harvard Journal of Law & Public Policy in conjunction with the Mercatus Center at George Mason University, legal scholar Timothy Sandefur explores the history, theory, and operation of CPCN laws, also known as “Competitor Veto” laws, focusing on evidence uncovered as part of litigation challenging such laws in Missouri and Kentucky. The article concludes that because these laws are designed to protect incumbent businesses, there must be reforms on the federal level to abolish them. Several possible reforms are considered, along with objections.
Christopher Koopman, Thomas Stratmann | Mar 03, 2015
While CON programs were intended to limit the supply of health care services within a state, proponents claim that the limits were necessary to either control costs or increase the amount of charity care being provided. However, 40 years of evidence demonstrate that these programs do not achieve their intended outcomes but rather decrease the supply and availability of health care services by limiting entry and competition. For policymakers in Florida, this situation presents an opportunity to reverse course and open the market for greater entry, more competition, and ultimately more options for those seeking care.
Christopher Koopman | Feb 27, 2015
The real issues should not be lost in the noise. Are people sharing? Not always. But, then again, that really isn’t what the sharing economy is about. Instead, they are benefitting from mutually beneficial interactions that would not be possible without the sharing economy’s platforms.
Christopher Koopman, Thomas Stratmann | Feb 24, 2015
While CON programs were intended to limit the supply of health care services within a state, proponents claim that the limits were necessary to either control costs or increase the amount of charity care being provided. However, 40 years of evidence demonstrate that these programs do not achieve their intended outcomes, but rather decrease the supply and availability of health care services by limiting entry and competition.
Thomas Stratmann, Joshua Wojnilower | Feb 19, 2015
Using monthly US data on project-grant awards in 2009 and 2010, we study which objectives presidents pursue in distributing resources. We also address theoretical and empirical ambiguities regarding when and which congressional districts receive distributive benefits. Our results show that core constituencies of the president’s party receive more federal funding in both presidential and congressional elections.

Testimony & Comments

Veronique de Rugy | Mar 24, 2015
Policymakers who are interested in supporting the entrepreneurs and companies that will deliver the next generation of energy supplies and products should focus their attention on correcting the federal government’s hostile tax climate and dispense with the futile hopes of outsmarting the marketplace.
Veronique de Rugy | Jun 25, 2014
The Bank has long outlived its purpose and cannot manage to meet the standards of the new missions that have been developed to validate its existence. For policymakers who have the facts, the choice is clear: the Export-Import Bank must go.
Veronique de Rugy | Jul 18, 2012
The Department of Energy’s loan guarantee programs have been the focus of much public attention since energy companies Solyndra, Beacon Power, and Abound went bankrupt, leaving taxpayers to shoulder hundreds of mil- lions of dollars in loan guarantees. The evidence strongly suggests that these programs fall short of their stated goals of developing clean energy and creating jobs.
Todd Zywicki | Jul 10, 2012
Much of the government’s political intervention in the bankruptcy cases appears to have been motivated to benefit the UAW rather than the companies themselves over U.S. taxpayers, who put billions of dollars at risk to fund the bailouts.
Veronique de Rugy | Jun 19, 2012
For obvious reasons, more than any other recent events, the waste of taxpayers’ money due to Solyndra’s failure has attracted much attention. However, the problems with loan guarantees are much more fundamental than the cost of one or more failed projects.
| May 25, 2011
Anthony Sanders testified before the House Committee on Financial Services about steps to end the GSE bailout.

Speeches & Presentations

Expert Commentary

Mar 16, 2015

Without congressional reauthorization, the Export-Import Bank, which guarantees loans to the overseas customers of thousands of American companies, is slated to close this summer. The future of the institution is driving a wedge between free-market and pro-business Republican lawmakers. The New York Times Room for Debate recently posed this question: "Should Congress save the Export-Import Bank, or let it expire?"
Mar 15, 2015

Though the primary rationale for the Export-Import Bank is to extend cheap loan guarantees and direct loans to foreign companies to buy U.S goods under the pretense of boosting exports and creating jobs, economists have shown that these kinds of export credit subsidies will never raise the overall level of trade. The subsidies are also hurtful since they simply redistribute wealth away from unsubsidized American firms, employees, and consumers and direct it toward a tiny number of beneficiaries.
Feb 19, 2015

de Rugy responds to Rep. Fincher's latest claims about the Export-Import bank. She writes: "Sadly, the privileges Ex-Im extends to the few come at the expense of countless American firms and their workers. Unsubsidized firms may see reduced revenues—and their employees may see their hours cut, their salaries stagnate, or their jobs simply vanish because their employers cannot compete on the uneven playing field created by the federal government."
Feb 07, 2015

The Jan. 25 editorial “Save the Ex-Im Bank: A Frugal Congress Must Keep a Revenue Generator” claims that the Export-Import Bank is a good deal for taxpayers because it turns a profit every year. This is a misguided argument based on faulty accounting. In fact, the economists at the federal government’s nonpartisan Congressional Budget Office say it will yield $2 billion in losses for taxpayers in the next decade.
Feb 03, 2015

Ours is not a country where everyone plays by the same set of economic rules. Many longstanding federal and state policies privilege some businesses and not others. This tilted playing field isn’t just unfair; it’s grossly inefficient. It undermines competition, discourages innovation, and prompts businesses to expend billions of dollars in socially wasteful efforts to win the favor of politicians. But it need not be this way.
Jan 28, 2015

President Barack Obama recently extolled the virtues of what he called "middle-class economics" or "the idea that this country does best when everyone gets their fair shot, everyone does their fair share, and everyone plays by the same set of rules." The president is on to something.

Charts

The following charts are an update to my previous chart, which showed the top 10 foreign buyers of exports financed by the US Export-Import Bank from FY 2007 to FY 2013. That chart noted that foreign oil and airline companies dominated the list. The first new chart shows the top foreign oil companies that have purchased Ex-Im–financed exports during that time, based on the total amount of financing authorized. The second new chart provides the same information for foreign airline companies.

Experts

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. Her primary research interests include the US economy, the federal budget, homeland security, taxation, tax competition, and financial privacy. Her popular weekly charts, published by the Mercatus Center, address economic issues ranging from lessons on creating sustainable economic growth to the implications of government tax and fiscal policies. She has testified numerous times in front of Congress on the effects of fiscal stimulus, debt and deficits, and regulation on the economy.
Matthew Mitchell is a senior research fellow at the Mercatus Center at George Mason University, where he is the director for the Project for the Study of American Capitalism. He is also an adjunct professor of economics at Mason. In his writing and research, he specializes in economic freedom and economic growth, public-choice economics, and the economics of government favoritism toward particular businesses.
Eileen Norcross is a senior research fellow at the Mercatus Center at George Mason University. As director for the Mercatus Center’s State and Local Policy Project, she focuses on questions of public finance and how economic institutions support or hamper economic resiliency and civil society. She specializes in fiscal federalism and institutions, state and local governments and finance, pensions, public administration, and economic development.
Adam Thierer is a senior research fellow with the Technology Policy Program at the Mercatus Center at George Mason University. He specializes in technology, media, Internet, and free-speech policies, with a particular focus on online safety and digital privacy. His writings have appeared in the Wall Street Journal, the Economist, the Washington Post, the Atlantic, and Forbes, and he has appeared on national television and radio. Thierer is a frequent guest lecturer and has testified numerous times on Capitol Hill.

Podcasts

Dean Stansel | January 21, 2015
In a segment on Florida NPR, Dean Stansel discusses the economic impact of eminent domain laws, touching on Kelo v. City of New London.

Recent Events

Despite the ideological miles that separate them, activists in the Tea Party and Occupy Wall Street movements agree on one thing: both condemn the recent bailouts of wealthy and well-connected banks. But when it comes to government-granted privileges to particular firms or industries the bailouts were just the tip of the iceberg.

Books

Media Clippings

Adam Thierer, Christopher Koopman | Jan 25, 2015
This excerpt originally appeared in Wall Street Journal.
Veronique de Rugy | Aug 24, 2014
This excerpt originally appeared in Wall Street Journal.
Veronique de Rugy | Jun 25, 2014
This excerpt originally appeared in The Washington Post.
| Jun 15, 2014
This excerpt originally appeared in The Wall Street Journal.
Veronique de Rugy | Jun 08, 2014
This excerpt originally appeared in The Wall Street Journal.
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