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The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.

Contrary to conventional thinking about the purposes and effects of antitrust law enforcement, the personal fortune of John D. Rockefeller, Sr., tripled in the wake of the Supreme Court’s May 1911 order dissolving the Standard Oil trust. This paper summarizes alternative explanations for that unexpected outcome, tests them empirically and finds them deficient. Coupled with new evidence confirming that major events related to Rockefeller’s antitrust encounter did not produce statistically significant abnormal returns for the company’s stockholders, we conclude that the market failed to react to news of the trust’s dismantling because investors expected the government’s remedy to prove ineffective.

The relationship between the size of state audit budgets, audit responsibilities, professional characteristics of staff, risk, and tax and expenditure limitations is explored. Bivariate relationships are examined and then a model is estimated which controls for size, complexity, financial risk factors, and political risk factors. This provides a framework for considering the incremental influence of specialized audit inputs. Both "brand names" and size have been used in past research to proxy for quality dimensions intended to differentiate the audit product provided by different suppliers. This research extends such work by considering characteristics of the auditing services as reflected by specific inputs and by using cost data rather than audit fee data. The states are observed to differ in their responses to financial and political factors by spending resources on peer review, continuing professional education, certifications of professional staff, and expertise in both the computer science area and in law. A positive association of cost and auditor differentiation, implicit in past audit fee literature is corroborated.

The treatment of tax incidence in most principles textbooks is incomplete and misleading. This anomaly results from treating tax incidence as a short‐run phenomenon. This paper briefly reviews the theory regarding tax incidence and surveys the leading textbooks in regard to their treatment of this issue. A strong recommendation is made that tax incidence—if covered in a principles text—be treated only in a long‐run context.

One important discussion comes under Knight’s heading of “Social Control.” To appreciate his argument, one has to understand that Knight’s social theory is developed within a tension between: (1) his knowledge that social control is both inevitable and necessary; and (2) his correlative desire for individual autonomy. One could add to that a hatred of social control, some of which is relevant. But what Knight dislikes is, first, selective elements of existing social control and, second, change of social control, e.g. change of the law by law, except for those changes of the law that remove the selective elements he dislikes; Knight is not opposed to all change of social control. In any event, the problem of social control is also for Knight (as it was for Vilfredo Pareto) the problems of social change and of the status of the status quo as well as of hierarchy.

Can we model politics as exclusively based on self-interest, leaving virtue aside? How much romance is there in the study of politics? We show that James Buchanan, a founder of public choice and constitutional political economy, reintroduces a modicum of romance into politics, despite claiming that his work is the study of “politics without romance”: Buchanan’s model needs an ethical attitude to defend rules against rent-seeking.

We claim that Adam Smith, more than David Hume, should be considered one of the primary intellectual influences on Buchanan’s public choice and constitutional political economy. It is commonly believed that Hume assumes in politics every man ought to be considered a knave, making him an influence on Buchanan’s idea of politics without romance. Yet, it is Smith who, like Buchanan, describes rent-seeking and suggests that public virtues may be the remedy through which good rules maintaining liberty and prosperity can be generated and enforced. Smith, like Buchanan, rejects sole reliance on economic incentives: the study of politics needs some romance.

Despite balanced budget requirements, each year most states carry short term debt (STD) across fiscal years. Logit analysis results suggest structural fiscal stress causes states to carry STD across fiscal years. This strategy may not be rational, because STD is a tool for smoothing short-term shortfalls, and not for correcting structural fiscal stress. Cross sectional time series analysis results suggest both structural and cyclical factors influence the amount of year end STD. Findings suggest STD amounts fluctuate as a rational temporary replacement for long-term debt, growing when long term rates rise and decreasing when they fall.

In almost all aspects of social life government intervention seems much more pervasive and intrusive today than ever before – at least in many of the Western countries. Governments seem year by year to consume still more resources and to regulate the details of the actions and interactions of their citizens still further.

To date, Congressional ideology has been considered to be the portion of a roll call vote that could not be explained by self‐interested behavior. This paper suggests that the scope of what is considered self‐interested behavior must be expanded. We find evidence that Congressmen may be the agent in a principal agent relationship, not only to voters and PACs as commonly thought, but also to industries that may offer Congressmen employment when they leave the House.