The Economist Next Door

What Really Broke the Financial System?

*]:pointer-events-auto scroll-mt-[calc(var(--header-height)+min(200px,max(70px,20svh)))]" dir="auto" data-turn-id= "request-WEB:b70595c4-ead3-4e9e-b84f-33d4452cbec2-9" data-testid= "conversation-turn-20" data-scroll-anchor="true" data-turn= "assistant"> In this episode of The Economist Next Door, host Paul Mueller is joined by AIER colleagues Lydia Mashburn Newman and Pete Earle to discuss the 2008 financial crisis, from the collapse of Bear Stearns to the failure of Lehman Brothers and the emergency response to AIG. They examine how shifting government actions created uncertainty during the crisis, and how the Federal Reserve's response—near-zero interest rates, liquidity facilities, and large-scale asset purchases—transformed monetary policy and reshaped financial markets for the next decade. How do these monetary decisions and decimal points affect the everyday lives of Americans? Listen and find out!

Sex, Marriage, and Markets: What's Driving the Baby Bust?

*]:pointer-events-auto scroll-mt-[calc(var(--header-height)+min(200px,max(70px,20svh)))]" dir="auto" data-turn-id= "request-WEB:87289791-0d59-467b-8082-9e30cfe415ff-5" data-testid= "conversation-turn-12" data-scroll-anchor="true" data-turn= "assistant"> In this episode of The Economist Next Door, host Paul Mueller speaks with Jeff Degner and Aidan Grogan about the global fertility crisis and the sharp decline in family formation across advanced economies. Are falling birth rates primarily an affordability problem—or the result of deeper cultural changes? The conversation connects inflation, housing costs, and economic uncertainty with delayed marriage, shifting fertility preferences, and the emergence of dating apps as large-scale matching platforms that alter incentives, selection, and relationship formation. The discussion also introduces the concept of an "inflation culture" and its potential effects on time preference, planning horizons, and family decisions. The episode closes by examining what population decline means for economic growth, social cohesion, and the future of government.

Nobel Prize Insights: Lessons From Vernon Smith on Markets, Morality, and Learning

In this episode of The Economist Next Door, host Paul Mueller sits down with Nobel Prize–winning economist Vernon Smith to explore how markets actually work—and how people really behave within them. Smith, who received the Nobel Prize in Economics in 2002 for pioneering experimental economics, explains how simple market experiments reveal powerful truths: prices emerge from decentralized interactions, markets converge toward equilibrium even with limited information, and people learn quickly through exchange and experience. The conversation goes beyond economics into philosophy, drawing on Adam Smith's The Theory of Moral Sentiments and The Wealth of Nations. Smith argues that economic order is rooted in moral psychology, social norms, and bottom-up rules formed through everyday human interaction. From asset bubbles to spontaneous order, this episode offers a deeper look at markets not just as engines of wealth, but as systems of discovery, learning, and human cooperation. SHOW NOTES WN - An Inquiry into the Nature and Causes of the Wealth of Nations [Cannan Edition (Vol. 1 & 2)](https://oll.libertyfund.org/titles/smith-an-inquiry-into-the-nature-and-causes-of-the-wealth-of-nations-cannan-ed-in-2-vols [https://oll.libertyfund.org/titles/smith-an-inquiry-into-the-nature-and-causes-of-the-wealth-of-nations-cannan-ed-in-2-vols] TMS - https://www.econlib.org/library/Smith/smMS.html [https://www.econlib.org/library/Smith/smMS.html] Nobel lecture - https://digitalcommons.chapman.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1061&context=esi_pubs [https://digitalcommons.chapman.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1061&context=esi_pubs] Bubbles, Crashes, and Endogenous Expectations in Experimental Spot Asset Markets - https://www.academia.edu/17750757/Bubbles_Crashes_and_Endogenous_Expectations_in_Experimental_Spot_Asset_Markets [https://www.academia.edu/17750757/Bubbles_Crashes_and_Endogenous_Expectations_in_Experimental_Spot_Asset_Markets] Asset Bubbles, Learning and Information - https://www.academia.edu/17767320/Stock_market_bubbles_in_the_laboratory [https://www.academia.edu/17767320/Stock_market_bubbles_in_the_laboratory]

The Secret Life of the US Energy Grid

In this episode of The Economist Next Door, Paul Mueller is joined by AIER colleagues Julia Cartwright and Ryan Yonk for a wide-ranging conversation on the past, present, and future of American energy. They explore how energy is produced in the United States, why the diversity of U.S. energy sources makes the system unusually robust, and how regulation and subsidies can undermine that strength. The trio compares US and Chinese energy systems, unpacks the politics of "green" mandates and subsidies, and explains why nuclear power—especially advanced and small modular reactors—may be essential for both reliability and decarbonization. Along the way, they discuss the Trump administration's recent energy moves, the backlog of projects waiting to connect to the grid, and why letting markets—not politicians—pick winners is crucial for innovation and affordability. Key Topics * Why energy is central to prosperity, productivity, and everyday life * How the US generates its electricity today (natural gas, nuclear, coal, wind, solar, hydro) * What makes the US energy system unusually robust compared with other countries * How global shocks (like conflict near Iran and the Strait of Hormuz) affect US prices * US vs. China: production numbers, reliability, central planning, and data skepticism * Why regulatory layering, permitting delays, and interconnection bottlenecks stall new projects * The mixed legacy of subsidies and mandates for wind, solar, and other favored technologies * The role of utilities, "natural monopolies," and why customers often lack real choice * How deregulation and competition in some gas and power markets have benefited consumers * Nuclear power's promise, the rise of advanced and small modular reactors, and why the US risks falling behind * The Trump administration's recent actions on drilling permits, nuclear, and renewable subsidies * Why technology-neutral, market-driven policy is better than "energy favoritism" Key Takeaways * The United States has a broad, diverse mix of energy sources, which provides resilience even when global markets are disrupted. * Heavy regulatory layering, slow permitting, and grid interconnection hurdles have created a large backlog of viable projects that could otherwise expand capacity and lower prices. * Subsidies and mandates—whether for fossil fuels, wind, solar, or nuclear—distort markets, pick winners and losers, and often raise costs for consumers while reducing innovation. * Comparisons to China's headline energy statistics can be misleading; central planning, unreliable rural grids, and questionable data all complicate the picture. * Nuclear energy, especially advanced and small modular designs, is a promising path for abundant, low-carbon power, but US policy on fuel, safety rules, and subsidies heavily shapes what gets built. * Long-run energy reliability and affordability are best served by open markets, clear and limited safety regulation, and allowing entrepreneurs and consumers—not bureaucrats—to decide the energy mix. Featured Guests Julia Cartwright – Senior Fellow at AIER, specializing in energy policy and technology-neutral regulation. She has recently written on ending "energy favoritism" and the risks of US policy falling behind China in advanced nuclear. * Ryan Yonk – Senior Fellow at AIER and director of student programs, working in the public-choice tradition with a focus on energy and environmental regulation. He is coauthor of The Reality of American Energy: The Hidden Costs of Electricity Policy. Resources & Links Mentioned * Ryan Yonk, The Reality of American Energy: The Hidden Costs of Electricity Policy * Julia R. Cartwright, "Ending the Era of Energy Favoritism: How Technology-Neutral Policy Can Unlock the US Power Grid," American Institute for Economic Research * Julia R. Cartwright, "America Risks Losing the Advanced Nuclear Race to China," AZ Free News • Ryan Yonk, The Reality of American Energy: The Hidden Costs of Electricity Policy https://www.leslibraires.ca/livres/the-reality-of-american-energy-the-hidden-costs-of-electricity-policy-9781440853913 [https://www.leslibraires.ca/livres/the-reality-of-american-energy-the-hidden-costs-of-electricity-policy-9781440853913] * Julia R. Cartwright, "Ending the Era of Energy Favoritism: How Technology-Neutral Policy Can Unlock the US Power Grid," American Institute for Economic Research, 2026.https://aier.org/article/ending-the-era-of-energy-favoritism-how-technology-neutral-policy-can-unlock-the-us-power-grid/ [https://aier.org/article/ending-the-era-of-energy-favoritism-how-technology-neutral-policy-can-unlock-the-us-power-grid/] * Julia R. Cartwright, "America Risks Losing the Advanced Nuclear Race to China," AZ Free News, January 19, 2026. https://azfreenews.com/2026/01/julia-cartwright-america-risks-losing-the-advanced-nuclear-race-to-china/ [https://azfreenews.com/2026/01/julia-cartwright-america-risks-losing-the-advanced-nuclear-race-to-china/]

Taxing Wealth: What Could Go Wrong?

In this episode of The Economist Next Door, host Paul Mueller is joined by AIER research fellows Thomas Savidge and Julia Cartwright to examine the push for wealth taxes in the United States and around the world. They explain how wealth taxes differ from traditional taxes on income and consumption, and what history reveals about their real-world effects. Drawing on examples from California, New York, and Europe, the discussion highlights capital flight, revenue volatility, and the unintended consequences of taxing accumulated wealth. The episode also tackles common claims about billionaires "not paying their fair share," unpacks the complexity of the tax code, and explains why taxes aimed at the ultra-wealthy rarely stay confined to their original targets. From the Smaug fallacy to the Tiebout Effect, the conversation introduces listeners to the economic ideas behind the debate—and shows how a seemingly "common sense" policy can carry serious consequences for growth, investment, and living standards.