Bryan Caplan and David Henderson

May 2008

A Monthly Archive (84 entries)

Riptopia is Time is Money

Economics and Culture
Bryan Caplan
Heard of Riptopia? It's a CD-to-mp3 conversion service - just what every iPod junkie needs. Good news: I've tried it, and it works. Here's how: You buy it on Amazon, and they send you some CD spindles. You fill the... MORE

My Favorite Fifteen Minutes in Europe...

Cross-country Comparisons
Bryan Caplan
...was riding the Hasenhorn in the the Black Forest town of Todtnau. Fifteen minutes in a skilift to the top of a mighty mountain in the middle of nowhere, followed by a three kilometer toboggan track back down to the... MORE

Robin Hanson to Technophiles: Get Real

Growth: Consequences
Bryan Caplan
I've often heard Robin Hanson called a "space cadet" or even a "replicant." So it's pretty dramatic to see him throw cold water on his fellow cadets:Sigh. The US government spends more on space research than on NIH and NSF... MORE

Extending the Enlightened Preference Approach: Proceed With Caution

Behavioral Economics and Rationality
Bryan Caplan
How would people's preferences change if they knew more? Political scientists usually attack this question using the so-called "Enlightened Preference" method. (See Scott Althaus' Collective Preferences in Democratic Politics for a fantastic survey of this large literature). The gist of... MORE

Climate Change vs. Entitlements

Energy, Environment, Resources
Arnold Kling
Megan McArdle writes, Certainly, the long-term economic outlook is extremely uncertain, but I’m not sure what “who knows!” is a better answer to cumulatively worsening climate problems than to cumulatively worsening fiscal problems. Her point is that ignoring climate change... MORE

Meet Growthology

Growth: Consequences
Bryan Caplan
I like the first two weeks of Growthology, the new blog by Tim Kane and Bob Litan. Highlights from what is perhaps its best post so far:After 12 years, Peter Carlson is leaving his job as a journalist covering magazine... MORE

Meet the Rational Optimist

Economic Philosophy
Bryan Caplan
I like the first post on the new blog, The Rational Optimist:Some say we need pessimists, to see what’s wrong with how things are, and push for positive change. Yet pessimism and cynicism actually foster resignation, despair, and a sense... MORE

Immigrants and measured GDP per capita

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Reader Bruce Charlton points me to a post by Half Sigma. Unskilled low-IQ immigrants who come to the U.S. contribute slightly to higher total GDP, but they lower the GDP per capita. Letting in a low-skilled immigrant to mow my... MORE

Why You've Got to Read Gogol's Dead Souls

Books: Reviews and Suggested Readings
Bryan Caplan
I like to catch up on the classics on vacation. Tyler recommended Gogol's Dead Souls. I normally despise blogs with big block quotes, but for the best passage so far in this very very good work, I'll make an exception:Of... MORE

Real Change in Domestic Policy

Fiscal Policy
Arnold Kling
From a web site put together by Congressman Paul Ryan, It is a real plan, with real proposals, real numbers to back them, and real legislation to implement it. Based on the analysis of government actuaries, this plan is projected... MORE

Easterly and the Caplan-Cowen Debate

Institutional Economics
Arnold Kling
William Easterly writes, The end of the “development expert” paradigm does not mean the end of hope for development. Development is al­ready gradually ending poverty (global poverty rates have fallen by more than half in the past three decades) –... MORE

France Bet With Franck

Cross-country Comparisons
Bryan Caplan
Raphael Franck, a French Israeli professor, has been visting at the Public Choice Center for the last two years. He leaves for good on Saturday. And in the true GMU spirit, we've worked out a bet as a going-away present.... MORE

Persuading Tyler Cowen

Economic Methods
Bryan Caplan
Tyler's said this before, but it still flabbergasts me:It's funny how Bryan thinks he can cite my actions as evidence against the correct belief. That's absurd; for instance I also don't act as if determinism is true, but citing that... MORE

Did Japan's Gas Tax Holiday Work?

Energy, Environment, Resources
Bryan Caplan
A reader sent me a gated article claiming that Japan's version of the gax tax holiday passed roughly 100% of the savings on to consumers. But I can't find any confirmation on google. Does anyone know anything about this? Links?... MORE

The Ministry of Silly Hospitals

Economics of Health Care
Bryan Caplan
Check out these true Monty Python-esque dialogues between a series of hospitals and a guy who wants an affordable colonoscopy. First dialogue:Conversation with Stanford Hospital: Me: My wife needs a colonoscopy: Could you give me a price on it? Stanford... MORE

Are Charities Like Startups?

Business Economics
Arnold Kling
From Another Paul Graham essay: If you start from successful startups, you find they often behaved like nonprofits. And if you start from ideas for nonprofits, you find they'd often make good startups. In Under the Radar, where I argued... MORE

Paul Graham on Cities

Growth: Causal Factors
Arnold Kling
He writes, In DC the message seems to be that the most important thing is who you know. You want to be an insider. In practice this seems to work much as in LA. There's an A List and you... MORE

Discrimination or Ability?

Income Distribution
Arnold Kling
Anne Case, Christina Paxson, and Mahnaz Islam say that the wage premium reflects cognitive ability. [____] is significantly associated with greater educational attainment, and selection into higher skill occupations – both of which confer higher earnings capacity. They argue that... MORE

Public Service Signaling

Behavioral Economics and Rationality
Arnold Kling
David Boaz writes, Messrs. Obama and McCain are telling us Americans that our normal lives are not good enough, that pursuing our own happiness is "self-indulgence," that building a business is "chasing after our money culture," that working to provide... MORE

I gained five pounds in Europe. And it was optimal. Partly, that's just because the food was both good and different from what I can easily get in Virginia. The fundamental reason I gain weight on vacations, though, is that... MORE

Quality Health Care for Peanuts: How Singapore Does It

Economics of Health Care
Bryan Caplan
If Michael Moore really wanted to challenge our preconceptions about health care, Sicko would have been a documentary about health care in Singapore. Nick Schulz just pointed me to a very good summary of how the system works. It's not... MORE

How Different Are People? A Caplan-Cowen Dialogue

Economic Philosophy
Bryan Caplan
Here's a true conversation between me and Tyler Cowen, filtered through several years of memory:Tyler: People like to think they're special, but we're all pretty much the same. Me: No we're not. Some people are really great; others are simply... MORE

From the latest issue of Entertainment Weekly:[S]ome producers fear that a strike is inevitable - especially since an estimated 80 percent of SAG members are unemployed and thus have nothing to lose by walking out.This is a cute quip, but... MORE

Co-operative Signaling

Behavioral Economics and Rationality
Arnold Kling
One of the examples that comes up in the Robin Hanson podcast concerns dating. If the point is to signal to the person that you are healthy, wealthy, and intelligent, why not just bring your health records, your bank statement,... MORE

Comment Dialogs--take them off line

Econlog Administrative Issues
Arnold Kling
A sure sign that a comment thread is degenerating is when two commenters argue a point back and forth. From now on, before you enter a third comment that in such a sequence, I recommend taking the discussion off line.... MORE

Robin Hanson's View of the World

Behavioral Economics and Rationality
Arnold Kling
This podcast is typical Robin Hanson. You don't have time to absorb one of his ideas before he is on to the next. You probably need to listen two or three times.... MORE

Various Technology Readings

Energy, Environment, Resources
Arnold Kling
MIT professors on biosolar cells, life extension, and other hopeful technologies. The discussions are extremely terse, and for that reason somewhat unsatisfying. Freeman Dyson writes, in the context of a review of William Nordhaus' book on global warming, I consider... MORE

Reflections on the Evolution in France

Cross-country Comparisons
Bryan Caplan
I'm back from Europe. Though I'm still playing catch up, here are a couple of observations from my travels: 1. I've often heard people claim that "You can become American, but you can't become French." All my experience in France... MORE

Mencius Moldbug vs. Thomas P.M. Barnett

Books: Reviews and Suggested Readings
Arnold Kling
I'm Kindling The Pentagon's New Map, an infamous book from 2004 by Thomas P.M. Barnett. I liked this paragraph (on p. 129). A Chinese friend of mine who had been active in the democracy movement explained..."Before Tianenmen, we believed that... MORE

Charter Communities

Political Economy
Arnold Kling
Robert Nelson, a public policy professor at the University of Maryland, gave me a copy of an argument he submitted on behalf of a Montgomery County neighborhood (his) that was attempting to incorporate in order to have jurisdiction over some... MORE

A Reason to Teach Macro

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
David T. King writes, In Europe, the price of oil has risen by 50 euros in the past five-and-a-half years. It now stands at about 75 euros per barrel, three times what it was then. But in the U.S., the... MORE

Conservatives, Libertarians, and Big Ideas

Political Economy
Arnold Kling
Stephen Bainbridge writes, it is the Libertarians and the progressives who are Big Idea people. Despite their obvious differences in philosophy, they share the absurd belief that if only their big idea(s) came to pass, society would inexorably progress towards... MORE

Unchecked Government Marches On, II

Fiscal Policy
Arnold Kling
USA Today reports, Taxpayers are on the hook for a record $57.3 trillion in federal liabilities to cover the lifetime benefits of everyone eligible for Medicare, Social Security and other government programs, a USA TODAY analysis found. That's nearly $500,000... MORE

Unchecked Government Marches On

Regulation and Subsidies
Arnold Kling
Without irony, the Washington Post headline blares, FTC Wants to Know What Big Brother Knows About You The crime under investigation is targeted advertising on the Internet, where firms use databases to try to serve ads that are relevant to... MORE

Fixing Medicare with Vouchers

Economics of Health Care
Arnold Kling
Congressman Paul Ryan is the first politician I have seen with a plan that makes Medicare sustainable. The bill secures the existing Medicare program for those over 55 - so Americans can receive the benefits they planned for throughout most... MORE

Libertarians Living on Subsidies

Political Economy
Arnold Kling
Thomas Frank writes, Almost by definition, our young libertarian's job is to celebrate the profit motive from the offices of a not-for-profit organization. He is subsidized, in other words, to hymn the unsubsidized way of life. Rugged individualism may be... MORE

Cap and Trade: Be Afraid

Energy, Environment, Resources
Arnold Kling
Peter Orszag writes, because of the long-term nature of climate change, the key issue from an environmental perspective involves the long-term emissions and concentration paths of greenhouse gases, not the year-to-year fluctuations in emissions. The most cost-effective cap-and-trade design would... MORE

The Trouble with Macro

Economic Education
Arnold Kling
My earlier post suggesting a macro-less economics major drew some interesting comments. I agree with those who say that a student should choose courses on the basis of the professor rather than the topic--that was exactly the advice I gave... MORE

The Fiscal Outlook

Fiscal Policy
Arnold Kling
Peter Orszag writes, tax rates would have to be raised by substantial amounts to finance the level of spending projected for 2082 under CBO’s alternative fiscal scenario. Before any economic feedbacks are taken into account, and assuming that raising marginal... MORE

Forward prices and oil

Energy, Environment, Resources
Arnold Kling
Charles Engel writes, The amount of oil pumped out of the ground doesn’t just depend on the current price. If I don’t pump the oil today, I can pump it tomorrow. Tomorrow’s price matters, bubble or no bubble. Let’s start... MORE

What an Economics Major Should Take

Economic Education
Arnold Kling
My youngest daughter (who is not an economics major, but is likely to take more courses in econ) was concerned that a course in environmental economics would be too squishy. I assured her that this ought to be a rigorous... MORE

Consumer Protection

Regulation and Subsidies
Arnold Kling
Richard Posner and Gary Becker have a rare disagreement. Posner writes, There are three possible responses to the problem created by consumer information costs. The first is to require producers to provide more information; the second is to ban products... MORE

An Entrepreneurial Generation?

Business Economics
Arnold Kling
Michael Malone writes, Half of all new college graduates now believe that self-employment is more secure than a full-time job. Today, 80% of the colleges and universities in the U.S. now offer courses on entrepreneurship; 60% of Gen Y business... MORE

The News Business

Business Economics
Arnold Kling
Steve Boriss is not such a fan of the Associated Press. First, while its members’ businesses are shrinking, the AP has used their fees to mushroom into a huge, full-service news outlet with more than 4,000 employees working in more... MORE

Not on Fire for Kindle

Information Goods, Intellectual Property
Arnold Kling
[UPDATE: I found the web browser on the Kindle. You have to go to the Kindle home, select menu, then select "experimental." Of course, I am one of those troglodytes who uses a PC client for email. But once I... MORE

Ignorant Masses, Dogmatic Elites

Energy, Environment, Resources
Arnold Kling
Concerning polling results on the issue of global warmaing, Andrew Gelman writes, Among college grads, there is a big partisan divide between Democrats and Republicans. Among non-graduates, the differences are smaller. This is completely consistent with research that shows that... MORE

Bubbles vs. Non-Bubbles

Finance: stocks, options, etc.
Arnold Kling
From an interesting Wall Street Journal item: Bubbles emerge at times when investors profoundly disagree about the significance of a big economic development, such as the birth of the Internet. Because it's so much harder to bet on prices going... MORE

Oil: Where Krugman and I Disagree

Energy, Environment, Resources
Arnold Kling
As expected, Paul Krugman clarifies his thinking. there are only two things you can do with the world's oil production: consume it, or store it. If the price is above the level at which the demand from end-users is equal... MORE

Financial Flows and Regulation

Regulation and Subsidies
Arnold Kling
James Hamilton writes, Now, there is nothing inherently wrong in making financial investments in the form of derivative contracts rather than outright loans. You're doing something similar whenever you buy or sell an option rather than the stock itself. But,... MORE

Richard Florida on Location in Silicon Valley

Income Distribution
Arnold Kling
He speaks on this video. He is a very powerful speaker. One theme of the talk is the importance of really creative people to the economy. This may be a valid form of elitism, although I'd like to leaven his... MORE

The Best Things European

Cross-country Comparisons
Bryan Caplan
Tonight I'm headed to Europe for the first time since 2001. Unlike Tyler Cowen, I can't provide lists of the five best long-haired archaeologists from Monaco. So you'll have to settle for my list of the Best Things European. Here... MORE

The Under-Principled Life

Economic Philosophy
Bryan Caplan
I just finished re-watching The Bridge on the River Kwai. If you've never seen it, it's all about Colonel Nicholson (played by Alec Guinness), a British officer with Principles. Nicholson refuses to try to escape from his POW camp, because... MORE

My Model of the Oil Market

Finance: stocks, options, etc.
Arnold Kling
My model of the oil market does not predict a relationship between speculation and inventories. Paul Krugman must have a different model in mind. My guess is that it is a reasonable model, and that he will explain it at... MORE

Oil, Inventories, and Bubbles

Energy, Environment, Resources
Bryan Caplan
Krugman says that since we're not building up inventories, the high price of oil isn't a bubble:The only way speculation can have a persistent effect on oil prices, then, is if it leads to physical hoarding -- an increase in... MORE

Attending College != Graduating College

Economics of Education
Arnold Kling
In the June issue of The Atlantic, "Professor X" rants, Students routinely fail; some fail multiple times, and some will never pass, because they cannot write a coherent sentence Perhaps Tyler Cowen was implicitly referring to that article. In any... MORE

Chris Anderson Podcast on Economics of "Free"

Information Goods, Intellectual Property
Arnold Kling
There are several interesting topics covered in this podcast between Russ Roberts and Chris Anderson. The general topic is the disruptive impact of computers and communication technology, and in particular the tendency for prices to fall to zero for things... MORE

Robin Hanson Refutes Happiness Research

Behavioral Economics and Rationality
Arnold Kling
He writes, Me, I want to believe whatever is true even if that makes me unhappy. And with that attitude, I doubt attending church would make me happier. More generally, even if happiness researchers found that on average "People who... MORE

Our Imperfectly Evolved Brains

Books: Reviews and Suggested Readings
Arnold Kling
This review suggests a book that reminds me of Robin Hanson and Tyler Cowen. our brains didn't evolve in a way that allowed us to thoroughly evaluate how well our beliefs represent reality. ...Marcus does supply us with a whole... MORE

Brooks' Hidden Secrets of Happiness

Behavioral Economics and Rationality
Bryan Caplan
Arthur Brooks, of Gross National Happiness fame, is now guest blogging for Freakonomics. So this seems like the perfect time to disclose his hidden secrets of happiness - the "a-ha" surprises you'll find on a close reading of his book:... MORE

Obama thinks we can be perfect (?)

Politics and Economics
Arnold Kling
My guess is that Barack Obama just casually made this remark. I believe in our ability to perfect this union because it's the only reason I'm standing here today. I suppose that to most people, this is just another nice,... MORE

My Research Program for Ph.D Students

Austrian Economics
Arnold Kling
This weekend, I attended a Liberty Fund seminar on Austrian economics vs. neoclassical economics. One point that was made was that the important thing is to have a productive research agenda. In the past Austrians might have been accused of... MORE

Fiscal Desperation in Mass. and Md.

Public Choice Theory
Arnold Kling
The Boston Globe editorializes amendment to the House budget calls for a study of a 2.5 percent assessment each year on university endowments over $1 billion. The tax would affect nine of them, and in theory could generate an enormous... MORE

Good Question

Politics and Economics
Bryan Caplan
From Fatal Misconceptions:And why did organizations that proclaimed family planning as a human right fail to oppose increasingly coercive policies in India and China? Why, instead, did they provide friendly advice and support, and defend them to all the world?... MORE

Don't Call Me a Philistine

Economics and Culture
Bryan Caplan
Unlike the last French arthouse movie I saw, The Diving Bell and the Butterfly is excellent. If, like me, you find it hard to believe that the average quadriplegic is fairly happy, this movie will convince you. In fact, it... MORE

Listen to the Children

Family Economics
Bryan Caplan
Here's a deeply important passage from my favorite survey of the time diary literature:One of Galinsky's more surprising findings centered around a question she posed to both children and parents: "If you were granted one wish to change the way... MORE

Biggs on Bracket Creep

Tax Reform
Arnold Kling
Andrew Biggs writes, If the tax cuts expire, income-tax revenues by 2018 will rise to 10.8% of the total economy from 8.7% today – an increase of 24%. Compared to the average over the last 50 years, allowing the rates... MORE

Tradition of Liberty: Advanced Studies Seminar

Economic Philosophy
Bryan Caplan
There are actually a couple spots left at the IHS seminar I'll be doing this summer. Email John Thrasher (jthrashe at gmu.edu) directly if you want in. My topics:The Myth of the Rational VoterPublic Choice and Public GoodsThe Case Against... MORE

The Cynical Case for the Gas Tax Holiday: From EconLog to the NYT

Energy, Environment, Resources
Bryan Caplan
I've finally made the Gray Lady: Today's New York Times features my op-ed inspired by Sunday's post, "I'll Shill for Hillary." I hope critics don't misrepresent me as an economic apostate; I'm not dissenting from the standard analysis, just taking... MORE

How expensive will gasoline have to get before the federal government brings back price controls? My guess is $5.50. What's yours?... MORE

The Gasoline Market

Microeconomics
Arnold Kling
Megan McArdle likes to tell a story with charts. I like to tell it this way. There is a wholesale market for gasoline, and there is a retail market for gasoline. Gas stations buy in the wholesale market and sell... MORE

What I'm Going to Do on My Summer Vacation

Economic Education
Bryan Caplan
1. I'll be in Europe for the first time since 2001 for Jon Elster's conference on "Collective Wisdom: Principles and Mechanisms" at the Collège de France in Paris. (It's open to the public, but space is limited). My wife and... MORE

Why People Buy Insurance

Behavioral Economics and Rationality
Arnold Kling
John Tierney writes, We may not slaughter animals anymore to ward off a plague, but we think buying health insurance will keep us from getting sick. Our brains may understand meteorology, but in our guts we still think that not... MORE

The Right to Vote and the Right to Leave

Political Economy
Arnold Kling
Ibsen Martinez writes about the perception that Chile's economic success is tainted by its origins in the Pinochet regime. Sadly enough, many people in Latin America who believe in the virtues of free-market economies still argue that it takes a... MORE

The $.30 Question

Microeconomics
Bryan Caplan
Amazon has been charging $19.77 for my book for almost a year. But very recently, they cut the price to $19.47. Why $.30? Why now? Ideas? P.S. If someone who actually works for Amazon knows the answer, won't you please... MORE

Why Hillary's Harmless

Politics and Economics
Bryan Caplan
A while back I argued that trade policy would be better under Hillary than Obama:My assumption is that neither candidate would actively promote free trade, so the greater evil is the candidate who can "get things done." Given Obama's winning... MORE

A Basic Divide

Political Economy
Arnold Kling
Greg Mankiw writes, If you think it is the job of government to take from Peter to pay Paul, and if Peter can move around the globe, then you need international tax cooperation. Otherwise, some countries will become nations of... MORE

The Time Capsule from 1983

Economic Philosophy
Bryan Caplan
Here's Tyler:I ask Bryan: would he still take the advice that his 12-year-old self might have taped to a door?My answer: Definitely, especially if my time capsule from 1983 contained advice about how to treat kids. You can say "hindsight... MORE

Gender in EJW

Labor Market
Bryan Caplan
The latest issue of Dan Klein's Econ Journal Watch is out, featuring a brainy symposium on gender balance in the economics profession. (For my general view, see this). I particularly liked psychologist John Johnson's contribution. Highlights:The dominant model of vocational... MORE

Over the Sea: Patri's Dream

Politics and Economics
Bryan Caplan
One of my favorite footnotes in Brian Doherty's Radicals for Capitalism:Patri Friedman, grandson of Milton and son of anarcho-theorist David, is even today actively planning to launch artificial sea platform communities, which he's calling seasteads, currently hoping to start one... MORE

I'll Shill for Hillary

Political Economy
Bryan Caplan
Hillary's having trouble finding an economist to back her suspension of the gas tax. But she need look no further - I'll rise to the challenge. Here's my economic case for the tax cut: 1. The American people want to... MORE

A Woman of the People

Politics and Economics
Arnold Kling
According to Reuters, Democratic presidential candidate Hillary Clinton on Sunday dismissed the "elite opinion" of economists who criticized her gas tax proposal..."I'm not going to put my lot in with economists," Clinton said when asked to name an economist who... MORE

If Merle Kling Could Have Met Brian Doherty

Political Economy
Arnold Kling
Imagine in 1958 an innocent Associate Professor of Political Science spending a summer in Mexico and getting mixed up with these guys: A considerable number of the folletos, almost half, originally were prepared by foreign, non-Mexican authors...Fred Clark, of the... MORE

India, 1977: A Libertarian Populist Moment

Politics and Economics
Bryan Caplan
Matthew Connelly's outstanding Fatal Misconception: The Struggle to Control World Population nearly brought a pro-democratic tear to my elitist libertarian eye. Trotsky once wrote that:In a country where the sole employer is the state... [t]he old principle: who does not... MORE

Who Said It?

Economic Philosophy
Bryan Caplan
From Matthew Connelly's Fatal Misconceptions:X was asked whether this was fair to the poor. "Well, as you know," he replied, "there are many things in life that are not fair, that wealthy people can afford and poor people can't." But... MORE

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