Bryan Caplan and David Henderson

July 2009

A Monthly Archive (115 entries)

The Late Great George Walsh

Books: Reviews and Suggested Readings
Bryan Caplan
This has been a week of nostalgia.  As I moved from 8 Carow Hall to 11 Carow Hall, I learned two things:1. Progress has turned the bulk of my possessions (especially hard copies of articles) into trash. 2. Time has... MORE

John Goodman on the Lottery

Income Distribution
David Henderson
I was waiting for others to take up John Goodman's June 12 challenge, but I think I've waited long enough. Goodman mentioned Neil Wanless, who won a $200+-million jackpot in a lottery. Statists, both economists and non-economists, often argue against... MORE

Sorel on Totalitarian Political Entrepreneurs

Behavioral Economics and Rationality
Bryan Caplan
Years ago, I thought about writing a piece called "Totalitarian Political Entrepreneurship."  The premise: While guys like Lenin, Hitler, and Mao were hopelessly deluded about many things, their beliefs about how to win and hold power were probably correct.  After... MORE

The Home as ATM

Finance: stocks, options, etc.
Arnold Kling
From Mark Thoma, who in turn saw it on Richard Green, a study by Michael Lacour-Little, Eric Rosenblatt, and Vincent Yao. Here we use public record data to study Southern California borrowers facing foreclosure in late 2006 and 2007. We... MORE

For Business, Against Capitalism

Political Economy
Arnold Kling
Derek Thompson writes, I get the distinct sense from the transcript that [President Obama is] a bit miffed by the accusations that he's anti-business. He emphasizes (possibly even exaggerates) the "great political expense" with which he bailed out the banks.... MORE

Mass Sterilization, Reconsidered

Economics and Culture
Bryan Caplan
Last week Tyler entertained this hypothetical: "A freak solar event 'sterilizes' the half of the planet (people, animals, etc) facing the sun. What happens?"  His answer:I would predict the collapse of many fiat currencies and the immediate insolvency of most... MORE

I'm on Vacation

David Henderson
From July 30 to August 16, I'll be on vacation at my summer cottage in Minaki, Ontario, Canada. My grandfather, born in 1855, built the cottage in 1921 or 1922. I've scheduled a few posts in advance, but I'll probably... MORE

Only the Libertarian Fringe Offers Real Health Care Reform

Economics of Health Care
Arnold Kling
Ronald Bailey writes, The health care "reform" currently being hammered out by the Democratic leadership of the House of Representatives already clocks in at $1 trillion and 1,000 pages--and it's nowhere near done. But one thing is clear: the legislation... MORE

Wesley Mouch watch

Political Economy
Arnold Kling
He is going to take care of executive pay. Also, He is going to clamp down on oil speculators. After all, we would not want the private sector to cause energy prices to rise and to promote conservation. Only Wesley... MORE

Me on KQED-FM

Macroeconomics
David Henderson
I'll be talking about the economy on KQED-FM, 88.5 in San Francisco at 9:05 a.m. You can listen live. Update: BTW, this is PDT. Goes to 10:00 a.m. PDT. Can call in at 866-733-6786.... MORE

Government Health Insurance and Pseudocertainty

Economics of Health Care
Bryan Caplan
One of the most appealing arguments for government health insurance is the perception that it's "a sure thing."  No matter how powerful reputational incentives are, a private health insurance might go out of business, or fall into the hands of... MORE

Not long ago, Krugman chided economists like Mankiw for overlooking moral hazard and adverse selection, the supposedly insuperable textbook barriers to free-market health insurance.  I objected:As long as rates are legally allowed to reflect risk, there is a lot of... MORE

Arlo Guthrie Says TANSTAAFL

Economic Education
David Henderson
New York Times interviewer: You're giving a free evening concert in New York this Thursday, July 30, at Battery Park. Arlo Guthrie: Free to the public. It doesn't mean I'm doing it for free. In almost every economics course I... MORE

Why Liberals Needn't Fear Republican-Run Welfare States

Behavioral Economics and Rationality
Bryan Caplan
Mankiw riddles Krugman this:Over the past eight years, Paul has tried to convince his readers that Republicans are stupid and venal. History suggests that Republicans will run the government about half the time. Does he really want to turn control... MORE

Krugman on Canadian Health Care

Economics of Health Care
David Henderson
"Bad move on my part" In a September 2008 debate on health care, Paul Krugman asks a question of the audience and gets a surprising answer. I won't ruin the suspense. Just watch this 30-second segment. Given my experience with... MORE

Health Insurance and Reputation

Economics of Health Care
Bryan Caplan
Here's an argument even I've found seductively appealing:The problem with free-market health insurance is that if a customer develops a truly serious health problem, his insurance company will try very hard to weasel out of the contract.  At best they'll... MORE

Lie to Me, 2

Energy, Environment, Resources
David Henderson
Back in February, I posted an enthusiastic entry on the TV show, "Lie to Me." I enjoy the show, although I'm not sure how scientific the basis is for detecting whether a person's lying based on movements of eyes, mouth,... MORE

Creative Destruction: What's Next?

Microeconomics
Bryan Caplan
Everywhere I look, firms are going out of business.  The recession is obviously the proximate cause.  On closer look, however, the recession is just stepping up the bankruptcy time table for firms that were already on their way out.  In... MORE

Seinfeld, Costanza, and the Minimum Wage

Labor Market
David Henderson
In response to yesterday's post about the minimum wage, Bruce Bartlett mentioned an episode of Seinfeld. That, plus the comment after Bruce's, made me think of a different Seinfeld episode. One of the major points I made in yesterday's post... MORE

Violence, Anarchy, and the State

Political Economy
Arnold Kling
Steven Pinker writes the 17th-century philosopher Thomas Hobbes got it right. Life in a state of nature is nasty, brutish, and short--not because of a primal thirst for blood but because of the inescapable logic of anarchy. Any beings with... MORE

This Should be Good

Monetary Policy
Arnold Kling
A Debate Between Scott Sumner and John Cochrane. Sumner thinks that the Fed can hit a nominal GDP target if it wants to. When I heard Cochrane a while back, he was talking about the high rate of substitutability of... MORE

Four Year From Now Plans

Behavioral Economics and Rationality
Bryan Caplan
In the thirties, governments had Four Year Plans.  Today, they have Four Year from Now Plans - big policies that basically don't kick in until the next election.  Waxman-Markey lets emissions grow normally until 2012.  When I criticized the House's... MORE

Using the Minimum Wage to Hamper Your Rivals

Labor Market
David Henderson
In my 2001 book, The Joy of Freedom: An Economist's Odyssey, I told of how unions have pushed for minimum wage laws to hamper low-wage competition (traditionally much of that competition came from black workers) and how some firms have... MORE

The Financial Crisis: A Different Approach

Finance: stocks, options, etc.
Arnold Kling
I was asked to give a presentation on the financial crisis. I didn't want to just do the same old song and dance, so I came up with....... MORE

What Should Mortgage Finance Look Like?

Finance: stocks, options, etc.
Arnold Kling
Mark Thoma writes, John Taylor and Kenneth Scott argue that "sheer complexity" is at the heart of the financial crisis: We believe their sheer complexity is the core problem and that only increased transparency will unleash the market mechanisms needed... MORE

Centralizing Medicare Even Further

Economics of Health Care
David Henderson
Somehow I missed this when it came out Monday. Here's what James C. Capretta reported about Obama's amazing power grab: Today, the Obama administration delivered one of the more remarkable presidential power grabs seen in recent memory (the transmittal letter... MORE

Cruel Caring in Breaking Bad

Economics of Health Care
Bryan Caplan
Breaking Bad is a show about a terminally ill high school chemistry teacher who starts cooking meth to build up a bequest for his family.  You see a lot about the economics of drug prohibition in the show, but you're... MORE

The Economy and the News Cycle

Macroeconomics
Arnold Kling
Friends of mine have asked me lately how badly President Obama's economic policies are working. My reply is that it is way too soon to tell. I would expect that by now, the effect of Obama Administration policies on unemployment... MORE

Whenever someone appeals to my charity, four questions pop into my head:1. Aren't you at least partly to blame for your problems?2. Can't someone closer to you help?3. Isn't there someone else in the world more deserving of my help?4.... MORE

Medical Liability and Tort Reform

Economics of Health Care
David Henderson
I received an e-mail from a student of mine and thought it would be worth answering for others as well as him. He wrote: Here are the two sides that I see on tort reform. 1. It is an attempt... MORE

What Makes Health Care Different?

Economics of Health Care
Arnold Kling
First, read Robin and Bryan on the issue. My thoughts: 1. I do not think that the economic differences between health care and other goods are as fundamental as the difference between the believers in Expertism and the believers in... MORE

What I Told the Liberaltarians

Economic Philosophy
Bryan Caplan
I went to my first Liberaltarian Roundtable dinner last night to see Robin Hanson debate Ezra Klein on health care.  My favorite observation came from Brink Lindsey.  He approximately said:There are two health policies that liberals and libertarians would both... MORE

Are Libertarians Especially Predictable?

Economic Philosophy
Bryan Caplan
I'm grateful for the Wall St. Journal's coverage of EconLog, even if they can't spell my name correctly.  I was struck, though, by its "quibble": The blog's libertarian viewpoint means that you can almost always guess the punch line.Counter-quibbles:1.  The... MORE

The Insider Narrative

Books: Reviews and Suggested Readings
Arnold Kling
Michiko Kakitani reviews David Wessel's new book, In Fed We Trust. She likes it more than I do. I think it is too much of an insider's narrative. There are two dimensions on which people differ about the financial crisis.... MORE

Neil Barofsky's Dog Whistle

Fiscal Policy
Arnold Kling
Apparently, humans cannot hear what the TARP whistleblower is saying, which is that the government bailouts could wind up costing taxpayers $23.7 trillion. Barofsky's estimates include $2.3 trillion in programs offered by the Federal Deposit Insurance Corp., $7.4 trillion in... MORE

Why I am Not a Republican

Economics of Health Care
Arnold Kling
Dana Milbank thinks that he has found a "ventriloquist" providing GOP talking points on health care. Castellanos used the word "experiment" six times to criticize Obama's plan; Steele, the eager pupil, used it 30. Only one thing would have made... MORE

Should the Fed be Audited?

Finance: stocks, options, etc.
Arnold Kling
I want to make a few comments on this issue, which David has touched on On balance, I think I would support auditing the Fed. 1. The conservative case against auditing the Fed is that it will reduce the Fed's... MORE

Balan-Caplan Debate: Suggested Topics?

Economic Methods
Bryan Caplan
Not only do I look down on thinkers who won't bet; I also look down on thinkers who won't debate.  The flip side is that I particularly admire thinkers who propose bets and debates.  I'm pleased to report, then, that... MORE

Hayek at a Rock Concert

Central Planning vs. Local Knowledge
David Henderson
My all-time favorite article by Hayek is his 1945 classic, "The Use of Knowledge in Society." Although he doesn't mention the term "local knowledge" in that article, that is the term we Hayekians have adopted to refer to his "knowledge... MORE

Adverse Hazard, Moral Selection, Whatever

Economics of Health Care
Bryan Caplan
As far as I can tell, economists are even more sympathetic to socialized medicine than laymen.  The question that sticks in my mind is: Why?  Economists are normally calm and analytical.  When it comes to government provision of health care,... MORE

Auditing the Fed: Reply to Bob Murphy

Monetary Policy
David Henderson
In his comment on my previous post about auditing the Fed, Bob Murphy stated that he shared my concerns about the audit movement because he, like me, distrusts Congress. He criticized my view, though, that the Fed is actually more... MORE

Reactions to the Treasury Financial Reform Proposals

Finance: stocks, options, etc.
Arnold Kling
Four of us give our reactions: Robert Litan Lawrence J. White Richard Posner and yours truly. I offer eight "audit findings" on the report, including 1. The Report does not offer a comprehensive analysis of the causes of the financial... MORE

Sumner's One-Sentence Class Autobiography

Economic Philosophy
Bryan Caplan
Three years ago I asked economists to share their class autobiographies.  Yesterday Scott Sumner boiled his down to one sentence:At various times in my life I have been in all 5 quintiles of family income distribution, and yet I have... MORE

Mainstream Marketing vs. the Central Six

Microeconomics
Bryan Caplan
After faulting economists for ignoring marketing, Geoffrey Miller harshly attacks mainstream marketing for ignoring what he calls the "Central Six" - IQ plus the Big Five personality traits.  At first, you might think he's merely telling marketers, "Here's something useful... MORE

Audit the Fed, or End It?

Book Club
David Henderson
The Congressman I admire most, Ron Paul, is advocating that the Federal Reserve Bank be audited. Is this a good idea? I think there's one obvious plus and there are two less-obvious minuses. The obvious plus is that an organization... MORE

Massachusetts Health Reform, Version 2.0?

Economics of Health Care
Arnold Kling
From the Boston Globe. The 10-member commission, which includes key legislators and members of Governor Deval Patrick's administration, voted unanimously to largely scrap the current system, in which insurers typically pay doctors and hospitals a negotiated fee for each individual... MORE

One of the best passages in Geoffrey Miller's Spent shows economists at our worst:My crisis point came at a 1999 conference that I organized in London on the origin of people's economic preferences.  We psychologists thought that economists would enjoy... MORE

Econlog Makes WSJ's Top 25

Economic Education
David Henderson
Econlog is in the top 25 economics blogs, as chosen by the Wall Street Journal. I've waited for my co-bloggers to crow about this, since I'm the newcomer (I started in October 2008), but because they haven't, I will. Of... MORE

I recently pointed out that back in the good old days, Krugman would have graciously granted that a payroll tax hike is an especially bad idea when unemployment is high.  In response, Kevin Drum notes that the tax hike doesn't... MORE

Day Break as Social Experiment

Economics and Culture
Bryan Caplan
I highly recommend the one-season wonder Day Break to fans of social science.  It starts as a standard crime conspiracy: A cop framed for murder tries to clear his name.  Then we get the twist: He's in a time loop. ... MORE

Taking Ezra Klein's Health Care Challenge,

Economics of Health Care
Arnold Kling
He writes that in order to cite the CBO criticism of the Democrats' health care reform proposals, one must do some combination of the following: a) Support, as the CBO says you should, the eradication of the tax exclusion that... MORE

Impossible Mission Commission

Finance: stocks, options, etc.
Arnold Kling
Keith Hennessey writes Yesterday Senate Minority Leader Mitch McConnell (R-KY) appointed me to be a member of a new Financial Crisis Inquiry Commission...The purpose of the Commission is "to examine the causes, domestic and global, of the current financial and... MORE

The Worst Solution to the Financial Crisis

Finance: stocks, options, etc.
Arnold Kling
Daniel Indiviglio reports on a chart from the Wall Street Journal that shows more than one quarter of mortgage loan modifications are redefaulting. He comments, Re-default is a huge problem, because it means those homes should have just undergone foreclosure... MORE

Unbent and Unbowed

Economics of Health Care
Arnold Kling
Doug Elmendorf tries to speak truth to power Instead of saving the federal government from fiscal catastrophe, the health reform measures being drafted by congressional Democrats would increase rather than reduce public spending on health care, potentially worsening an already... MORE

Unchecked and Unbalanced Watch

Books: Reviews and Suggested Readings
Arnold Kling
Will Chamberlain writes (Will, not Wilt), Romer, clearly having been influenced by our ideas about bloodless instability, argues that we need to be able to create new countries, without the use of military force, in order to gain access to... MORE

Relative to what a consensus forecast might have predicted last October, it appears that: --Banks are doing somewhat better than expected --GDP has fallen about as far as expected --employment has fallen more than expected If this is a fair... MORE

The Lens of Hypergamy: An Application

Family Economics
Bryan Caplan
Last year, Tyler named "hypergamy" his word of the day.  He called the source "evil," but the Evil One's explanation is admirably elegant:It is sometimes said that men are polygamous and women monogamous...It would be more accurate to say that... MORE

Madrick's Case for Big Government

Regulation
David Henderson
In the latest issue of Regulation, my review [.pdf] of Jeff Madrick's The Case for Big Government appears. One of my favorite grafs: If economic freedom works, he argues, our economy should be doing very well because we have had... MORE

Percent or Percentage Points?

Fiscal Policy
David Henderson
After reading news stories today about the House Democrats' plan for levying higher taxes on higher-income people, I found myself confused. It took some digging to end the confusion. No, I'm not talking about almost all reporters' insistence on confusing... MORE

From Poverty to Prosperity Watch

Political Economy
Arnold Kling
I should hold off on plugging the book until it's closer to publication date, but reading it over gets me really excited. We include interviews with a number of famous economists, and there are little nuggets of insight buried in... MORE

Dan Seligman, RIP

Revealed Preference
David Henderson
I know this is a little late, but I was just surfing the web and found out that my mentor at Fortune magazine, Dan Seligman, died in January. I'm usually better than this at keeping in touch with friends who... MORE

The Krugman we've got is sold on the House health bill.  But the Krugman we had, the thoughtful economist who wrote The Accidental Theorist, would have responded differently.  Krugman Past, unlike Krugman Present, would have pointed out that when the... MORE

How I'd Sell Civilization to Cavemen

Growth: Consequences
Bryan Caplan
Geoffrey Miller's Spent begins with an imaginary dialog between a modern man (You), and a couple of cavemen (Gerard and Giselle).  You're trying to sell them on modern civilization, but you're thwarted at every turn.First, you fail to sell Gerard:Gerard:... MORE

From Poverty to Prosperity Watch

Books: Reviews and Suggested Readings
Arnold Kling
Alex Tabarrok looks at a study showing the increasing churn in the U.S. economy. The topple rate is a measure of how the rank of large firms on return of assets changes over time. The topple rate has increased by... MORE

What Caused the Panic?

Macroeconomics
David Henderson
In one of his posts today, Bryan asks us to consider Scott Sumner's thoughts in response to an earlier post by Bryan. (BTW, like many of the other bloggers, I'm now hooked on reading Sumner's thoughts. He has that perfect... MORE

Will Wilkinson on Inequality

Income Distribution
Arnold Kling
As part of a long, interesting essay, He writes, You can see leveling in quality across the price scale in almost every kind of consumer good.19 At the turn of the 20th century, only the mega-rich had refrigerators or cars.... MORE

Return to Panic

Finance: stocks, options, etc.
Bryan Caplan
Scott Sumner just replied to a piece I wrote back in April on the crash of 2008.  Having lived through the crash - and lost a ton of money - it seems like a big part of the explanation has... MORE

One-Party State Watch

Political Economy
Arnold Kling
Simon Johnson thinks that CIT, a troubled lender, will not be bailed out. Traditionally, CIT provided vanilla loans to small and medium-sized business. "But under its current chief executive, Jeffrey M. Peek, a well-liked Wall Street veteran who lost out... MORE

What the Veterinary Medicine Piece Really Said

Economics of Health Care
Bryan Caplan
Both Tyler and Megan are excited by a recent piece by Andrew Biggs that supposedly "seriously undercuts one of the major conservative arguments about health care:  that the main problem is consumers who don't bear their own costs."  Biggs' shows... MORE

The Financial Crisis: A Matrix

Finance: stocks, options, etc.
Arnold Kling
Nassim Nicholas Taleb and Mark Spitznagel write, The core of the problem, the unavoidable truth, is that our economic system is laden with debt, about triple the amount relative to gross domestic product that we had in the 1980s. This... MORE

Shorter Scott Sumner

Monetary Policy
Arnold Kling
Bryan points to a Scott Sumner's monetarist credo. Think of it as a simplification of the Taylor rule. The Sumner Rule is, if the consensus forecast of nominal GDP growth is below 5 percent, then loosen up. Presumably, if the... MORE

Bruce Charlton on IQ, Education, and Signaling

Economics of Education
Arnold Kling
He writes, ...modern societies are currently vastly over-provided with formal education, and this education has the wrong emphasis. In particular, the job of sorting people by their general aptitude could be done more accurately, cheaply and quickly by using psychometrics... MORE

Pet Health Care Theories

Economics of Health Care
Arnold Kling
Andrew Biggs writes, The chart below shows spending on veterinary care, which I pulled from the Consumer Expenditure Survey, and national health expenditures (for people) from the National Income and Product Accounts. Two things are interesting here: first, the rate... MORE

Sumner's FAQ

Macroeconomics
Bryan Caplan
Every economist alive should read Scott Sumner's FAQ on macroeconomics.  You give him ten minutes; he'll give you a fresh, incisive perspective on the world.  Highlights:6.  Isn't the real problem . . . ?No, the real problem right now is... MORE

The Shadow Banking System

Finance: stocks, options, etc.
Arnold Kling
Perry Mehrling says, The idea of the shadow banking system was in some way, not only tolerated by regulators, but encouraged by regulators. They thought, "Let's get some of these risks off the balance sheet of the traditional banking system.... MORE

Ed Glaeser on New York

Growth: Causal Factors
Arnold Kling
He sounds like Richard Florida. New York has bright, creative people, yada-yada. I think that most of the cyclical movement in the economy comes in businesses that are not all that creative--manufacturing, construction, and strip-mall businesses. Folks in Washington have... MORE

Justin Fox on Efficient Financial Markets

Finance: stocks, options, etc.
Arnold Kling
Russ Roberts interviews Justin Fox. Fox became an expert in the process of writing a book on the history of modern financial theory.... MORE

America vs. Japan: Where Is It Better for Kids?

Economic Philosophy
Bryan Caplan
In the U.S., 40% of babies are now born out of wedlock.  In Japan, only 2% are.  Clearly, then, it's better to be a baby in Japan than America, right?  For all my skepticism about nurture effects, I'm tempted to... MORE

Brooks's Hit on Capitalism

Economics and Culture
David Henderson
In a widely cited column last week, New York Times columnist David Brooks put capitalism as the first cause of the lack of dignity in modern American society. He wrote: First, there is capitalism. We are all encouraged to become... MORE

What's Wrong With Realism? What's Right With It? Part 2

Behavioral Economics and Rationality
Bryan Caplan
(Go here for the intro to this series on the realist theory of international relations). The behavior of individual voters is far from selfish.  The main reason, I've often argued, is that voting against your objective self-interest is practically free,... MORE

Obama to Africa: Don't Imitate Me

Cross-country Comparisons
David Henderson
In his speech yesterday in Ghana, President Obama said, among other things: No business wants to invest in a place where the government skims 20 percent off the top. and But what America will do is increase assistance for responsible... MORE

Cowen on Vaticanomics

Economic Philosophy
David Henderson
In today's Wall Street Journal, Tyler Cowen has a piece, "Vaticanomics," in which he analyzes pieces of the Pope's latest encyclical letter, "Caritas in Veritate." He finds it less anti-market than many other commentators have. He doesn't provide enough detail... MORE

"Canadafornia" Medical Care

Economics of Health Care
David Henderson
Here's an excerpt from my chapter, "Free and Healthy at Half the Cost," in The Joy of Freedom: An Economist's Odyssey. I was writing about the single-payer health care system in my native Canada. It's hard to say that the... MORE

Henry Waxman Wants Less Regulation?

Regulation
David Henderson
To save money for consumers, Waxman is willing to allow certain drugs, called biologic drugs, to enter the market without clinical testing that proves their efficacy. He realizes that requiring clinical testing for efficacy will slow things down and needlessly... MORE

Michael Lewis on AIG

Finance: stocks, options, etc.
Arnold Kling
Compelling, as usual. I'll post some excerpts below the fold, but I recommend reading Lewis' whole piece. Lewis writes it very much as a suits-vs.-geeks story. He portrays the head of AIG financial products, Joseph Cassano, as a suit who... MORE

Why Are the Neurotic Anti-Market?

Politics and Economics
Bryan Caplan
The man in Roomette 3, Car No. 11, was a sniveling little neurotic who wrote cheap little plays into which, as a social message, he inserted cowardly little obscenities to the effect that all businessmen were scoundrels.               -Ayn Rand,... MORE

In the Press

Economics of Health Care
Arnold Kling
David Leonhardt talks about the real issue in health care spending (it's not administrative costs). Tyler Cowen calls the column "superb." I would give it no more than a B, because the question is posed in terms of which centralized... MORE

Thoughts on Administrative Costs in Health Care

Economics of Health Care
Arnold Kling
Do we want to eliminate the middle man in the health care industry? I do, but what I want to see is consumers pay providers directly. More thoughts: [UPDATE: see also Ezra Klein, who agrees with me that a lot... MORE

Strands of Libertarianism

Political Economy
Arnold Kling
Tyler Cowen lists five major strands, taking a swipe at one. 3. Mises Institute nationalism. Gold standard, a priori reasoning, monetary apocalypse, and suspicious of immigration because maybe private landowners would not have let those people into their living rooms.... MORE

Statistical Significance, Again

Economic Methods
Arnold Kling
Science, Ziliak and McCloskey say, needs to learn both whether and how much. But the putatively common practice of ending the empirical analysis by checking whether a calculated test statistic does or doesn't reject the null hypothesis according to... MORE

Why Are the Agreeable Anti-Market?

Politics and Economics
Bryan Caplan
Once you grant that personality has an important effect on ideology, it's only natural to wonder why.  Gerber et al propose what they describe as "two tentative and equally plausible possibilities here, one focused on other regarding judgments and the... MORE

Robert McNamara

Political Economy
Arnold Kling
Today's Washington Post has six op-ed pieces. Three are on Sarah Palin, who resigned as governor of Alaska the other day. The other three are on Robert McNamara, who died yesterday. Palin is known for hunting moose. McNamara is known... MORE

The Economist's blogger (the magazine has a policy against signed articles, and they have stupidly decided that the same policy has to apply to their blog) writes, there is every indication that recovery from this recession, when it arrives, will... MORE

Using a standard cost/benefit approach, the policy recommendations generated by stipulating unacceptable "tipping points" appear very inefficient. For example, the current Waxman-Markey bill pending in Congress requires an 83-percent reduction in U.S. emissions (relative to the 2005 base level) by... MORE

Caplan vs. Sowell

Books: Reviews and Suggested Readings
Arnold Kling
A commenter points to Bryan's critique of A Conflict of Visions, which makes a number of good points. Bryan concludes, What really puzzles me is why Sowell did not try a much simpler typology. Why not simply distinguish between advocates... MORE

Flags, Free Speech, and Property Rights

Economic Philosophy
David Henderson
Law professor Eugene Volokh has a recent piece in the Wall Street Journal defending the right to burn the American flag as an exercise of free speech. It's good reasoning, and there's nothing in it that I disagree with. But... MORE

Personality and Ideology: Compared to What?

Politics and Economics
Bryan Caplan
Arnold makes a fair point about the size of the effect of personality on ideology.  Why then am I so impressed?  Because compared to most conventional predictors of ideology, the personality variables do well.  I've spent many hours looking at... MORE

Hope His Top Advisor Sort of Believes In

Behavioral Economics and Rationality
Bryan Caplan
Is it just me, or does Larry Summers damn his boss with faint praise?"When I've heard him talk about economic issues--with the exception of NAFTA, where I just hope he doesn't believe what he says--he seems intelligent and serious. I... MORE

New Commanding Heights Watch

Growth: Consequences
Arnold Kling
Tyler Cowen says, An ever-larger share of our personal satisfaction will come from free or near-free sectors of the economy, as I explain in my new book "Create Your Own Economy". But those same sectors won't comprise such a large... MORE

Sowell's A Conflict of Visions

Books: Reviews and Suggested Readings
Arnold Kling
My excuse for not reading A Conflict of Visions by Thomas Sowell was that I had already read a fair amount of his other work, and how much new could he have to say? But John Baden pressed me to... MORE

Personality and Ideology: A Quick Rejoinder

Economic Methods
Arnold Kling
Bryan writes, Suppose someone had the personality least favorable to economic conservatism: a 0 on Extraversion, 1 on Agreeableness, 0 on Conscientiousness, 0 on Stability, and 1 on Openness. According to the same regression referenced earlier, this person is expected... MORE

How Much Does Personality Affect Ideology?

Economic Methods
Bryan Caplan
Arnold raises an important challenge to my last post:In measuring the importance of personality traits in predicting political ideology, I would ask how much of political ideology can be explained by personality. The answer, if you look at the R2... MORE

CAFE Kills (GM)

International Trade
David Henderson
General Motors does produce competitive cars and trucks, but not one of them is small. Consumer Reports recommends three GM cars and three GM trucks. The recommended cars are the Chevy Malibu (the unrecommended hybrid has been dropped), the large... MORE

The Indispensable Mark Thoma

Economic Education
Arnold Kling
is profiled by David Warsh.... MORE

Statistical vs. Material Significance

Economic Methods
Arnold Kling
I appreciate Bryan's pointer to an article by Alan Gerber and others on personality and ideology. However, the article illustrates what I consider to be a methodological error. That error is to use statistical significance as a metric. Statistical significance... MORE

Left-right ideology is the single most powerful determinant of party identification and issue positions, but ideology itself is almost impossible to predict.  It does have a few mild correlates - for example, the well-educated are a little more liberal, the... MORE

Idolatry in a Free Society

Economics and Culture
Bryan Caplan
I've spent several days reflecting on my chairman's reaction to public grief over Michael Jackson's death:I, for one, am no more touched by Mr. Jackson's death than I am by the death of any of the thousands of other Americans... MORE

Favorite Economics Dialogues in Movies

Economics and Culture
David Henderson
Here's one of mine, from Alfred Hitchcock's Rear Window. It's about one of the most important things economics deals with--incentives. Lisa (played by Grace Kelly) and Jeff (played by Jimmy Stewart), are listening to a man in another apartment play... MORE

Social Science and Public Policy

Political Economy
Arnold Kling
How do economists and other social scientists influence public policy? Yesterday, I recommended Jeffrey Friedman's article on the financial crisis. Its theme is regulatory hubris, and Friedman disparages "economism," which might be described as a belief that wise economists can... MORE

Like some commenters, I found Bryan Caplan's post on health care today to be one of his best. And he's already set a high bar. But, believe it or not, given that Bryan is a more-radical libertarian than I am,... MORE

Jeffrey Friedman on the Financial Crisis

Finance: stocks, options, etc.
Arnold Kling
Critical Review is publishing a special issue on the financial crisis. I have uploaded Jeffrey Friedman's introduction. I strongly recommend the entire issue. The paper by Acharya and Richardson is the one that most closely reflects my own views. Friedman's... MORE

Great Questions, Matt

Economics of Health Care
Bryan Caplan
Over at U.S. News and World Report, Matt Bandyk has a follow-up question for my last post on mandatory insurance and adverse selection:Here's my question to Dr. Caplan: But far from being populist anti-intellectualism, isn't the objection that "poor people... MORE

Virtual Secession

Political Economy
Arnold Kling
Patri Friedman launches secession week, a discussion of secession. In one of my forthcoming books, Unchecked and Unbalanced, I discuss a number of mechanisms for limiting the power of government. You can think of these as mechanisms for achieving virtual... MORE

A Closer Look at Adverse Selection and Mandatory Insurance

Information Goods, Intellectual Property
Bryan Caplan
If an economist wants to ward off the spirit of laissez-faire insurance policy, all he has to do is repeatedly chant "moral hazard and adverse selection."  The funny thing about this two-part mantra, though, is that the "moral hazard" part... MORE

Casnocha on Tyler's Next Book

Books: Reviews and Suggested Readings
Arnold Kling
Reviewing Tyler Cowen's Create Your Own Economy, Ben Casnocha writes, when culture is free and a click away, as it is on blogs and Twitter and the broader Internet, we sample broadly and consume it in smaller chunks: "When access... MORE

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