Bryan Caplan and David Henderson

December 2006

A Monthly Archive (62 entries)

Nobel Prize Trends

Economics of Education
Arnold Kling
Tyler Cowen points to a paper by Bruce G. Charlton which uses Nobel Prizes as an indicator of trends in research quality. Cowen picks out the fact that the Western U.S. has been gaining at the expense of Europe and... MORE

Notes on Critical Review's Converse issue

Political Economy
Arnold Kling
I recommend the "triple issue" of Critical Review, entitled Is Democratic Competence Possible?. Its starting point is a 40-year-old essay by public opinion researcher Philip Converse called "The Nature of Belief Systems in Mass publics." I am using this post... MORE

According to an engrossing biography of a Saudi princess I was reading, the Saudi government has imposed price controls on dowries. In the Saudi context, this means that the amount of money that men pay the family of the bride... MORE

Political Beliefs and Self-Deception

Political Economy
Arnold Kling
Tyler Cowen wrote, Just about everyone thinks that their political views are better than the views of smarter or better trained others. On economic issues, few voters defer to the opinions of economists. Nor does this appear to be a... MORE

Energy Economics and Politics

Energy, Environment, Resources
Arnold Kling
James Surowiecki writes, Unfortunately, the ethanol produced in the U.S. comes from a less-than-ideal source: corn. Corn ethanol’s “net energy balance”—the amount of energy it yields in proportion to how much energy goes into its production—is significantly lower than that... MORE

Universal Savings Accounts

Income Distribution
Arnold Kling
Tyler Cowen endorses the idea, with a twist. Just as the earned-income tax credit pays poor people to work, the universal 401(k) would pay poor people to save... There is an obvious way to pay for a universal 401(k) plan.... MORE

Another Story to Watch

Growth: Consequences
Arnold Kling
Bill Gates writes, How soon will robots become part of our day-to-day lives? According to the International Federation of Robotics, about two million personal robots were in use around the world in 2004, and another seven million will be installed... MORE

The Sixth Warmest Year

Energy, Environment, Resources
Arnold Kling
A major news story is that 2006 is likely to be the sixth warmest year on record. Lubos Motl says that it also is likely to be the coldest year since 2002. I'm not sure what the right unit of... MORE

John Locke's Wager

Institutional Economics
Arnold Kling
David Brin writes, the quasi-Confucian social pattern that is being pursued by the formerly Communist rulers of China seems to be an assertive, bold and innovative approach to updating authoritarian rule, incorporating many of the efficiencies of both capitalism and... MORE

Quote of the Day

Institutional Economics
Arnold Kling
People have often been willing to give up personal identity and join into a collective. Historically, that propensity has usually been very bad news. Collectives tend to be mean, to designate official enemies, to be violent, and to discourage... MORE

Major Economic Stories, Updated

Growth: Consequences
Arnold Kling
A year ago, I listed five stories to follow on a long-term basis. Now for an update.... MORE

Hal Varian on the Stern Report

Energy, Environment, Resources
Arnold Kling
He wrote, According to [William] Nordhaus, the assumptions used in the Stern Review imply that per capita yearly consumption in 2200 will be $94,000 as compared with $7,000 today. So, is it really ethical to transfer wealth from someone making... MORE

Collegiate Writing

Economics of Education
Arnold Kling
George Leef writes, On October 2, The Conference Board, an organization of American businesses, released a survey entitled “Are They Really Ready for Work?” The report, which was based on responses from 431 employers, hardly gives a ringing endorsement of... MORE

Testing the Freedom to Choose

Economic Philosophy
Bryan Caplan
Jane Galt relays a challenge to believers in free will (myself among them) from Scott Adams: It seems to me that free will can be easily tested. The next time someone is getting brain surgery, just take a few minutes... MORE

Krugman Overcomes Pessimistic Bias

Fiscal Policy
Bryan Caplan
Krugman no longer seems very worried about the deficit, but why? Inquiring minds want to know...... MORE

Anti-Foreign Car Guys to Japan: Thanks!

International Trade
Bryan Caplan
The most vociferous bearer of anti-foreign bias that I know is also a life-long car afficionado. (He and his buddies call themselves "car guys.") A couple of days ago he was telling me about the low level of quality control... MORE

Real Caricature

Labor Market
Bryan Caplan
For me, one of the funnest parts of teaching undergraduate labor is when I lecture on why "the standard history of labor is wrong." I begin with a quick summary of what I take the standard view to be: Most... MORE

At Least They Beat Christmas Carols

Economics of Education
Bryan Caplan
Mankiw's got a good econo-parody here. I wrote this and this back in grad school, for a Christmas skit that never was.... MORE

Teaching Bias

Behavioral Economics and Rationality
Bryan Caplan
David Balan has joined the august bloggers at Overcoming Bias. Let me tell you about this guy. A couple months ago, he came to GMU to deliver a paper. A crew of GMU profs took him out to lunch beforehand,... MORE

Mmm... Immigration Doughnuts

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Before blogging, there were listservs. I ran one for Armchair Economists. (Technically, it's still up, but competition from blogging has all but killed it. That's Creative Destruction for you...) One of our liveliest debates revolved around the doughnut industry. In... MORE

Robin Hanson's Intelligence Continues to Amaze Me

Behavioral Economics and Rationality
Bryan Caplan
Well, it shouldn't, explains Robin. Consider the foolish way that the world reacts to new fossils: Fossil hunters have found a winning formula for getting media attention: pretend to believe behavior X appeared around the time of the earliest known... MORE

Another Puzzle from the Tower Bankruptcy Sale

Microeconomics
Bryan Caplan
I just made my life's final purchase from Tower Records. Perhaps it's insensitive to be pondering economic puzzles while my favorite store is on its deathbed, but I can't resist. Here goes: How come the prices for Rap/Hip-hop were slashed... MORE

I Wish I Wrote That

Economics and Culture
Bryan Caplan
No, it's not an article in a top econ journal, it's the season finale of Dexter. It's permeated by the best of economics, philosophy, and psychology, with plotting worthy of Victor Hugo. If Immanuel Kant came back from the dead,... MORE

How Egalitarianism Undermines the Study of Voter Competence

Behavioral Economics and Rationality
Bryan Caplan
The clever Arthur Lupia is launching a multi-pronged contrarian defense of the competence of the average voter. He's got a whole series of new papers (some co-authored) trying to debunk the broad consensus in political science that voters don't know... MORE

Jane Shrugged

Labor Market
Bryan Caplan
Here's the true story of Jane Galt, exploited PIRG employee who finally attained class consciousness. By way of contrast, every libertarian organization I ever gophered for treated me like family. I did however occasionally work extra hours off the books... MORE

A True Story of Efficient Regulation

Cost-benefit Analysis
Bryan Caplan
I'm a member of local Fairfax pool. I don't know exactly how this pool got started, but for about $400/year, my family was able to become a shareholder in this private non-profit. One nice thing about this pool is that... MORE

Mayor Bloomberg Misses the Problem

Economics of Education
Arnold Kling
He writes, we have built too many bureaucracies that lack clear lines of accountability, which means that mediocrity and failure are tolerated, and excellence goes unrewarded. We recruit a disproportionate share of teachers from among the bottom third of their... MORE

The latest news: Goldman Sachs has turned moneymaking into an art form...The bank will pay out almost $16.5bn in bonuses to its employees - up 40% increase on last year. With around 26,000 workers globally, each employee can expect an... MORE

More Hansonian Health Care

Economics of Health Care
Arnold Kling
David Leonhardt reports, People with a drug-coated stent seemed unusually vulnerable to blood clots in later years. The new stents solved one problem, but they may have created another. This supports Robin Hanson's view that beneficial medicine is offset by... MORE

Jefferson on the Indians

Economic History
Bryan Caplan
I was curious to read more about Jefferson's position on the Indians. Here's a nice set of quotations. It's full of high-minded rhetoric, like: Our system is to live in perpetual peace with the Indians, to cultivate an affectionate attachment... MORE

Baker vs. Reynolds

Income Distribution
Arnold Kling
In a comment on my earlier post, Dean Baker chided me for using anecdotes rather than data to make my claim that economic suffering is overstated in the media. Apparently, if I wanted to make my claim using data, I... MORE

New World Apocalypse

Economic History
Bryan Caplan
The most straightforward - if not the best - way to interpret the end of Apocalypto is that Christian Europeans finally arrived in the New World to put an end to monstrous pagan barbarism. Whether or not that was Gibson's... MORE

Why aren't there more investment bankers?

Income Distribution
Arnold Kling
David Leonhardt writes, From World War II through the 1970s, while most Americans were getting solid raises every year, the incomes of the richest 1 percent were doing only a little better than inflation. Since the 1980s, the two groups... MORE

Baker vs. Summers

Income Distribution
Arnold Kling
Dean Baker writes, Larry Summers got fired from his last job as president of Harvard. He doesn't seem to be doing much better at his current job, working as a columnist at the Financial Times. Today's column rightly notes the... MORE

What is Law. . .and what is a good blog?

Institutional Economics
Arnold Kling
Robin Hanson writes, law is there to make disputants shut up... If we expected jurors (or judges) to try their best to achieve social justice or economic efficiency, without substantial bias, we would have law, but not laws. That is,... MORE

Myth of the Rational Voter Update

Books: Reviews and Suggested Readings
Bryan Caplan
My book won't be out until April, but Princeton University Press has already put up a nifty promotional webpage for it. P.S. You can now pre-order my book from Amazon.... MORE

Disrupted Families

Income Distribution
Arnold Kling
I am reading Kay Hymowitz's book, Marriage and Caste in America. She was cited in the Wall Street Journal. Americans born into poverty have a long history of moving themselves, or their children, out of it. But the cycle of... MORE

The Ratios

Growth: Causal Factors
Bryan Caplan
Arnold writes: If you think that culture matters but institutions do not, look at North and South Korea. If you think that culture does not matter at all, look at differences among different ethnic groups within countries. South Korea/North Korea... MORE

Culture and Prosperity, Again

Institutional Economics
Arnold Kling
Pete Boettke chimes in, However advantageous a culture may be, it cannot overcome bad institutions. And however disadvantageous a culture may be, it will improve when people get to live under institutions of political and economic freedom. Culture can act... MORE

Clive Crook on Milton Friedman

Political Economy
Arnold Kling
he writes (link may expire soon), Much of what is wrong with popular attitudes to capitalism comes down to one thing: a lack of wonder at what uncoordinated markets can achieve. Going to a grocery store for the hundredth or... MORE

The Washington Post has another in a series that looks at our corrupt agriculture policies. A maverick dairyman named Hein Hettinga started bottling his own milk and selling it for as much as 20 cents a gallon less than the... MORE

"Jewish Media" Proves Extremely Fair

Economics and Culture
Bryan Caplan
Director Mel Gibson's infamous anti-semitic rant notwithstanding, Apocalypto has gotten stellar reviews. It's practically straight out of The Onion. P.S. Saw it last night. Amazing despite its simple linear plot. I think Mel's hate speech has cost him multiple Oscars.... MORE

Explaining the AMT spike

Tax Reform
Arnold Kling
Joe Kristan has the story. Congress has fought the arithmetic with "temporary" increases in the AMT exemption. The 2006 exemption is set at $62,550 for joint filers and $42,500 for single taxpayers. Without further legislation, the exemption reverts in 2007... MORE

TV alert

Books: Reviews and Suggested Readings
Arnold Kling
Monday, January 29, PBS will air a 90-minute documentary on Milton Friedman. These folks sent us a press release. Personally, I never check the TV listings. If it weren't for the fact that the Cardinals were in the World Series... MORE

A Kuranian Take on the Religious Gender Gap

Economics and Culture
Bryan Caplan
Last week I stumbled upon a little gem outside of Larry Iannaccone's office: a chapter by Rodney Stark and Alan Miller on the religious gender gap. Long story short: Women are more religious than men by virtually every measure in... MORE

Make Money Fast (no, really!)

Economic Education
Bryan Caplan
I've argued that student essay contests are a sweet deal. Here's another example: the Economic Communicators Contest, sponsored by the Association for Private Enterprise Education.... MORE

Alternative Minimum Tax Puzzle

Tax Reform
Arnold Kling
The graph in this Wall Street Journal piece shows a steep rise in the proportion of middle-income taxpayers who will be subject to the Alternative Minimum Tax. Greg Mankiw reproduces the graph. I could not think of a reason for... MORE

Podcasting: A New Experience

Labor Market
Bryan Caplan
I did the first podcast of my career on Friday - a chat with Russ Roberts about discrimination... which somehow morphed into my spiel about the relative wretchedness of the European standard of living. Overall, I had a swell time,... MORE

The Anti-Hack

Economic Education
Bryan Caplan
Jane Galt ably defends my co-blogger against the charge of hackdom, and raises an important challenge in the process:If the word "hack" has never come out of your lips (or keyboard) in public reference to someone on your own side,... MORE

Liberaltarians?

Politics and Economics
Arnold Kling
The Brink Lindsey essay that everyone is talking about is here. Allow me to hazard a few more specific suggestions about what a liberal-libertarian entente on economics might look like... Shift taxes away from things we want more of and... MORE

The Far-Seeing Arnold

Economics and Culture
Bryan Caplan
I just noticed that, four years ago, my co-blogger asked "Is blogging a fad?" Using a simple model, he stuck his neck out and said: No. Good call, Arnold!... MORE

Economists: The World's Got a Problem With Us

Economic Methods
Bryan Caplan
The smartest man I know is being savaged on the comments section of the Washington Monthly. Don't miss it!... MORE

Culture Matters

Growth: Causal Factors
Arnold Kling
Lawrence E. Harrison writes, the foregoing suggests the existence of a Universal Culture of Progress: the same Economic Behavior values, whatever their root, create prosperity in widely different geographic/climate, political, institutional, and indeed cultural settings. As far as we know,... MORE

The Culture of Growth

Growth: Causal Factors
Bryan Caplan
Lawrence Harrison makes the case for the economic importance of culture in the latest issue of Cato Unbound: How then would Easterly explain why, in multicultural countries where the economic opportunities and incentives are available to all, some ethnic or... MORE

Shifty Statistics

Income Distribution
Arnold Kling
Peter Orszag writes, According to Yale's Jacob Hacker, the average family had a 7 percent chance in the early 1970s of seeing its income drop by half or more. By 2002, that probability rose to nearly 17 percent. This statistic... MORE

A Middle-Class World

Books: Reviews and Suggested Readings
Arnold Kling
The above graph is lifted from a forthcoming book by Surjit S. Bhalla, called Second Among Equals: The Middle Class Kingdoms of India and China. It shows the share of the middle class in world population rising from 2... MORE

Can 600 Economists Be Wrong About the Minimum Wage?

Behavioral Economics and Rationality
Bryan Caplan
Gary Becker has some interesting thoughts about the economics profession's beliefs about the minimum wage: A recent petition by over 600 economists, including 5 Nobel Laureates in Economics, advocated a phased-in rise in the federal minimum wage to a much... MORE

Big finding as the Titanic goes down: The greater the demand for a CD at its regular price, the greater the elasticity of demand for that CD. When everything is 50% off, CDs that normally sell 1 per week may... MORE

DeLong, Dasgupta, and Stern

Energy, Environment, Resources
Arnold Kling
On the question of choosing a discount rate to determine the cost of global warming, Brad DeLong chimes in. A consumption-to-output ratio of 77.5% is far from absurd, and so Dasgupta's critique of Stern fails. His mistake is in failing... MORE

The Distribution of Consumer Spending

Income Distribution
Arnold Kling
Diana Furchtgott-Roth writes, Last year Americans in the lowest income quintile spent an average of $11,247 per person, according to the Bureau of Labor Statistics, compared with $15,843 for middle income quintiles, and $28,272 for the top quintile. The top... MORE

Hispanic Unwed Mothers

Income Distribution
Arnold Kling
Heather MacDonald writes Every 1,000 unmarried Hispanic women bore 92 children in 2003 (the latest year for which data exist), compared with 28 children for every 1,000 unmarried white women, 22 for every 1,000 unmarried Asian women, and 66 for... MORE

My Education Rant

Economics of Education
Arnold Kling
is here. I fear that many of the students who pass will go on to earn Wizard-of-Oz diplomas, which signify nothing. Students will claim to be educated, but employers will know otherwise. The phenomenon of the Wizard-of-Oz diploma has discredited... MORE

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