Bryan Caplan and David Henderson

February 2005

A Monthly Archive (48 entries)

Layard and Happiness

Behavioral Economics and Rationality
Arnold Kling
Richard Layard, the king of "happiness research" is back, and I am not happy. He writes, Divorce and broken homes are ever more common. Research shows that the children of broken homes are more prone to depression in adulthood. To... MORE

Learning from Lomborg

Energy, Environment, Resources
Bryan Caplan
There's a reason why Bjorn Lomborg has been rewarded for writing The Skeptical Environmentalist with a pie in the face. The book's good, very good - and that's bound to anger the touchy, gloomy Greens he's debunking. The book has... MORE

Ayn Rand, Economic/Political General Equilibrium Theorist

Politics and Economics
Bryan Caplan
To finish off my celebration of Ayn Rand's 100th birthday (see also here and here) now let me turn to her contribution to social science. I remember that a critic of Murray Rothbard's work in economics, history, and philosophy quipped... MORE

Provider-Driven Health Care Regulation

Economics of Health Care
Arnold Kling
Henry E. Jones, MD, writes, in the late 1990s HMOs throughout the State panicked at the prospect of losing their patients to Internet physicians. Pharmacists panicked at the prospect of Internet pharmacies taking their business. So the Medical Board of... MORE

How to Keep Up with So Many Blogs

Econlog Administrative Issues
Arnold Kling
William Parke has created The Economics Roundtable, which aggregates the posts from several dozen economics blogs. I suppose that one could do this oneself with an RSS aggregator, but I like having Professor Parke do it for me.... MORE

Who Needs Health Insurance?

Economics of Health Care
Arnold Kling
The self-employed are less likely to have health insurance than ordinary wage-earners. This may not be the bad thing that most Washington wonks assume it to be, according to a paper by Craig William Perry and Harvey Rosen. Perry and... MORE

Actuarial Scoring Errors

Social Security
Arnold Kling
In this essay, I take off on "actuarial scoring" of Social Security plans. In fact, at a 3 percent real interest rate, it would be irrational for me to switch to using personal accounts! I have some of my portfolio... MORE

Medicaid and Nursing Homes

Economics of Health Care
Arnold Kling
The Wall Street Journal describes what people will do in order to have Medicaid pay for nursing home care. Anyone can give away most of his assets and three years later become eligible for Medicaid with no questions asked. Or,... MORE

Economics of Movies

Economic Education
Arnold Kling
One of my favorite examples to use in a first-year economics class is the movie business. For one thing, it's easy to explain adjusting for inflation when you talk about comparing the box office receipts of movies of different eras.... MORE

Yesterday's Washington Post had a fascinating history of proposals for Social Security privatization. Admittedly, it's probably more fascinating to me than to most people, because I know most of the people mentioned in the article! Some highlights: Twenty-five years ago,... MORE

So Many Blogs

Macroeconomics
Arnold Kling
There are a lot of great economics blogs that are not on our blogroll. For example, there is David Altig's Macroblog, which I had not heard of until today, when Altig was paired with Alex Tabarrok (of Marginal Revolution in... MORE

True Scarcity?

Economic Education
Arnold Kling
Apparently, there is a scarcity of economics professors. According to the Wall Street Journal, According to the Bureau of Labor Statistics, salaries for economics teachers, a category that includes professors, averaged nearly $140,000 a year -- based on a 52-week... MORE

Third-party Payments and Vioxx

Economics of Health Care
Arnold Kling
Holman W. Jenkins writes, a University of Maryland study found that the more generous a patient's insurance, the more likely he was to be taking a Cox-2 -- and the less likely he was to need it. For the patients... MORE

Pragmatism, continued

Politics and Economics
Arnold Kling
In this essay, I discuss the recent piece by Jonathan Chait, who argues that liberals are pragmatic and conservatives are ideological. I write, The market solution for health insurance is something that has never been tried. I believe that it... MORE

The Summers Flap, Continued

Economics of Education
Arnold Kling
In this essay, I use the Lawrence Summers controversy as a jumping-off point for some idle speculation about gender differences in the world of academics and business. My experience is that in male-dominated organizational groups...Guys tend to flatter the boss... MORE

Regulation and House Prices

Regulation and Subsidies
Arnold Kling
Edward L. Glaeser, Joseph Gyourko, and Raven E. Saks write, the evidence points toward a man-made scarcity of housing in the sense that the housing supply has been constrained by government regulation as opposed to fundamental geographic limitations. The growing... MORE

In a classic episode of Seinfeld, George Costanza realized that his instincts were fundamentally wrong, and vowed to "do the opposite": George: Elaine, bald men, with no jobs, and no money, who live with their parents, don't approach strange women.... MORE

Death of Newspapers

Information Goods, Intellectual Property
Arnold Kling
The Washington Post reports that newspapers are struggling. "Print is dead," Sports Illustrated President John Squires told a room full of newspaper and magazine circulation executives at a conference in Toronto in November. His advice? "Get over it," meaning publishers... MORE

Pete Boettke often says that I believe that we get the government we deserve. My usual retort is "No, they get the government they deserve, and unfortunately I get the government they deserve too." But in essence he correctly describes... MORE

Who are the Empiricists?

Politics and Economics
Arnold Kling
Jonathan Chait devotes a long article to arguing that liberals are pragmatic and empirical. The contrast between economic liberalism and economic conservatism, then, ultimately lies not only in different values or preferences but in different epistemologies. Liberalism is a more... MORE

Thrift vs. Paternalism

Politics and Economics
Arnold Kling
In this essay, I argue that For those of us who value self-reliance and thrift, the economic trends suggest a need to increase saving and to invest heavily in human capital. For those who value paternalism and redistribution, those trends... MORE

The Summers Speech

Economics of Education
Arnold Kling
There has been a lot of controversy over Harvard President Lawrence Summers' talk at an NBER conference about gender differences in faculty in science and engineering. Harvard has posted a transcript of the talk. One excerpt: The second problem is... MORE

Redistribution vs. Paternalism

Income Distribution
Arnold Kling
Tim Worstall argues that big government is not compatible with only taxing the rich. For the fact is that the rich don't have enough money to pay for all of the things that are being demanded from the State. We... MORE

Giles and Stereotype Accuracy

Information Goods, Intellectual Property
Bryan Caplan
The weakest part of Martin Giles' Why Americans Hate Welfare is his dismissive treatment of stereotypes. He cites a number of psychological experiments on the emergence of baseless stereotypes. But he at best downplays the growing literature on stereotype accuracy.... MORE

Capital vs. Institutions

Growth: Causal Factors
Arnold Kling
Stephen Daley and Brian Hooks write, The reason some of the poorest countries in the world need microfinance is because deep-rooted institutional problems make the general financial sector unworkable. And until these problems are addressed, we are reduced to celebrating... MORE

Social Security Political Economy

Social Security
Arnold Kling
Tyler Cowen writes, Why might you think that the elderly deserve a greater share of resources in society? Here are some options... 2. The relevant political alternative is lower marginal tax rates for the well-to-do. Transfer resources to anyone but... MORE

Evolutionary Psychology and Economic Behavior

Economic Philosophy
Arnold Kling
Will Wilkinson writes, What evolutionary psychology really helps us to appreciate is just what an unlikely achievement complex, liberal, market-based societies really are. It helps us to get a better grip on why relatively free and fabulously wealthy societies like... MORE

Eastern European Economic Statistics Made Fun (Really!)

Growth: Causal Factors
Bryan Caplan
Tim Worstall provides some entertaining insight into the neverland of Communist and post-Communist economic statistics. It's gotten rather trendy to say that former Communist countries are worse off than they were in 1989 or 1991. The main problem with these... MORE

Economists have a favorite cynical explanation for the slow-growth movement: Property owners are trying to raise real estate prices by restricting supply. I'm no mind-reader, but I doubt that's the real motive of most opponents of further development. But in... MORE

Euro-America

Arnold Kling
Joel Kotkin's catch-phrase for summarizing America's older cities is Euro-America Like many of their European counterparts, many, if not most, major American urban centers are at best demographically stagnant or even losing population, which is also the case in Paris,... MORE

Real Health Insurance

Economics of Health Care
Arnold Kling
Extending the remarks I made earlier, in my latest essay I look at a recent study of medical-related bankruptcies and conclude that cost-reimbursement health insurance is ineffective and should be replaced by event-based insurance. Event-based insurance means receiving a lump-sum... MORE

Becker and Posner vs. Medicare

Economics of Health Care
Arnold Kling
Richard Posner writes, As a matter of economic principle (and I think social justice as well), Medicare should be abolished. Then the principal government medical-payment program would be Medicaid, a means-based system of social insurance that is part of the... MORE

See Saw

Game Theory
Bryan Caplan
The excellent Saw comes out on DVD this Tuesday. If you've got a cast-iron stomach, there is no better fictional exploration of the Prisoners' Dilemma available. (If you don't have a cast-iron stomach, may I suggest Pooh's Heffalump Movie?) The... MORE

Why I Don't Hate Why Americans Hate Welfare

Politics and Economics
Bryan Caplan
I suspect a lot of my friends would hate Martin Gilens' Why Americans Hate Welfare. Gilens takes a stab at the question: Why doesn't the United States have a European-style welfare state? And his answer, to put it crudely, is... MORE

Mail Un-Rebates Revisited

Business Economics
Arnold Kling
I hope this got it out of my system. If mail-in rebates went away, then retailers would still have to earn their profits somehow. Either other shady sales practices would expand, or the retailers would have to raise prices. In... MORE

Conservatives and the Bush Budget

Fiscal Policy
Arnold Kling
David Corn writes, What I wonder about is the absence of conservative outrage over Bush's budget numbers. Alex Tabarrok wrote, My prediction is that it will be easier to add $540 billion in Medicare spending than it will be to... MORE

Health Care Celebrity Death-Match

Economics of Health Care
Arnold Kling
The latest Wall Street Journal blogger celebrity death-match features Russ Roberts and John Irons on health care. Here's Russ: Because of various government subsidies, out-of-pocket spending is a little more than 10% of total health spending (thanks to Alex Tabarrok... MORE

Social Security Risk

Social Security
Arnold Kling
I did not take away much from the first day of Cato's Social Security Bash. I guess my views on the subject are pretty well settled, so that for me the session served to illuminate what other folks are worried... MORE

News of an Israeli-Palestinian cease fire reminds me of Tyler's Cowen's excellent game theoretic exploration of their long struggle. This essay is worth a thousand news stories on the subject, but I still think that Tyler misses the simplest explanation... MORE

The Price System

Economic Philosophy
Arnold Kling
Russ Roberts writes Over the next five or ten years, hundreds of millions of Chinese are expected to leave the Chinese countryside and move to the city. This extraordinary migration will require millions of adjustments to take place to make... MORE

Random Punishment

Microeconomics
Bryan Caplan
"People with kids care more about the future than people without kids." Who could take offense at this truism? "Gays are substantially less likely to have kids than straights." Angry yet? "Gays probably care less about the future than straights."... MORE

Ayn Rand, Wise Philosopher Despite Some Bad Arguments

Economics and Culture
Bryan Caplan
Ayn Rand has some lame philosophical arguments, including a tortured "proof" that "life is the standard of value" and an odd effort to base individual rights on ethical egoism. So how can I maintain that Rand the philosopher is worth... MORE

The Three Percent Solution?

Social Security
Arnold Kling
This briefing on the Administration's proposals for Social Security personal accounts cleared up a number of issues, such as the way that accounts would be administered and the type of investment options available. In both cases, the Federal Employees' Thrift... MORE

Energy Conservation

International Trade
Arnold Kling
In this essay, I argue that energy conservation is not a useful tool of foreign policy. In my view, the worst policy option of all is to subsidize the use of alternative forms of energy. If other forms of energy... MORE

Ayn Rand, the Russian-American Victor Hugo

Economics and Culture
Bryan Caplan
Ayn Rand's novels blend two distinct genres. She fits squarely into the tradition of the Russian philosophical novelists like Tolstoy and Dostoyevsky. But she is also a plot-rich Romantic in the tradition of Victor Hugo. Some standard features of the... MORE

A Swindle, not a Joke

Business Economics
Arnold Kling
In this post, I joked about the complexity of mail-in rebate forms. It turns out that this is not a joke. It is in fact a deliberate swindle, which I am now quite sorry that I fell for. Ed Foster... MORE

Value and Exchange

Austrian Economics
Arnold Kling
Peter Gordon points to an interesting article by Meir Kohn in the Cato Journal The exchange paradigm has a very different theory of growth. Growth does not mean movement along an equilibrium path but rather the unfolding of a complex... MORE

Join the Party: Why You Should Celebrate Rand's 100th

Books: Reviews and Suggested Readings
Bryan Caplan
Today is Ayn Rand's one hundredth birthday, and I want to party down. I probably wouldn't be a professor if it weren't for her, and even if I were, I doubt I would be having a fraction of the fun.... MORE

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