Bryan Caplan and David Henderson

March 2010

A Monthly Archive (136 entries)

Greg Mankiw on Fiscal Policy

Economic Education
Arnold Kling
He writes, One of the classic hypothetical questions economists ask when referring to healthcare costs is, "Would you rather go back to 1950s medical care and 1950s prices?" If that option were offered at your place of work, my guess... MORE

Mish Bet Redux

Labor Market
Bryan Caplan
Here's Mish's take on our unemployment bet.  Frankly, he's got a pretty funny model of the economy.  When Mish writes...There is always a chance that some new technological revolution will happen to undermine my pessimistic scenario. Certainly a development in... MORE

Balan and the Deserving Poor

Economic Philosophy
Bryan Caplan
In last week's debate, David Balan surprisingly endorsed the old-fashioned view that only the "deserving" poor are entitled to taxpayer assistance.  As the debate proceeded, however, he admitted that in the real world, a lot of undeserving poor would receive... MORE

Relieving the Extreme Tension in Caplanian Thought

Economic Philosophy
Bryan Caplan
Tyler Cowen says he's found "the extreme tension in Caplanian thought":Bryan loves to stress the heritability of intelligence, income, and even life expectancy, among other variables.  But how can your parents be your fault?  This is a fundamental tension in... MORE

Alan Reynolds on Top Tax Rates

Supply-side Economics
David Henderson
In today's Wall Street Journal, Alan Reynolds has an excellent piece on how much revenue can be expected from the Obama tax rate increases to pay for Obamacare. Bottom line: much less than Obama estimates. Reason: elasticity of taxable income... MORE

Biggest Flaw in Labor Theory of Value

Political Economy
David Henderson
On his blog today, Tyler Cowen responds to the question, "What is the biggest flaw in the labor theory of value?" Tyler does list some sophisticated flaws that have to do with capital and other inputs, but here's my candidate:... MORE

Health Care Costs and Bankruptcy

Economics of Health Care
Arnold Kling
I wrote on the famous study when it first came out. You should read that article. I have to say that I cannot think of any other study that has had such a high ratio of political impact to substantive... MORE

My Alternate Opening Statement

Economics of Health Care
Bryan Caplan
After I wrote my opening statement for my debate with David Balan, I was suddenly tempted to start over.  My thinking: Since the resolution is, "Significant governmental involvement in health care is both economically sensible and morally just," maybe I... MORE

The Plight of the Unskilled College Grad

Economics of Education
Arnold Kling
I am just beginning to explore the issue of sorting out the economic value of college at the margin, rather than on average. One aspect of this is to distinguish between college graduates with skills and college graduates without skills,... MORE

Average Prices, AS and AD

Macroeconomics
Arnold Kling
Scott Sumner writes, The recession was caused by a severe AD shock, i.e. falling NGDP. If it had been caused by an AS shock then the recession would have been accompanied by higher inflation. It would really help if people... MORE

Response on Means Testing

Fiscal Policy
David Henderson
Bryan writes: I'm a big fan of means-testing the welfare state, but many of my favorite people disagree. I've got a challenge for these hold-outs. Here goes: Right now we already means-test a lot of programs, such as Medicaid, food... MORE

Means-Testing and Status Quo Bias

Behavioral Economics and Rationality
Bryan Caplan
I'm a big fan of means-testing the welfare state, but many of my favorite people disagree.  I've got a challenge for these hold-outs.  Here goes:Right now we already means-test a lot of programs, such as Medicaid, food stamps, and housing... MORE

Bad Predictions, Durant Edition

Family Economics
Bryan Caplan
As Niels Bohr remarked, "Prediction is very difficult, especially about the future."  Here's a 1968 howler from the Durants' The Lessons of History:In the United States the lower birth rate of the Anglo-Saxons has lessened their economic and political power;... MORE

Gary Becker Interview

Economics of Health Care
David Henderson
In today's Wall Street Journal, Hoover's Peter Robinson reports on an interview with Gary Becker. Becker is not only one of the world's finest economist, but also one of nicest people I've ever gotten to know. His warmth and benevolence... MORE

What Do We Owe the Deserving Sick?

Economic Philosophy
Bryan Caplan
The main recurring question in the comments on the Separation of Health and State Debate: What do we owe the deserving sick?Garett Harmon writes:Specifically, I feel like you sort of sidestepped the issue of what to do about people that... MORE

Friday's Rant

Politics and Economics
Arnold Kling
I need to stop this. I don't want to turn into the Paul Krugman of the right.... MORE

Question for Brad DeLong

Politics and Economics
Arnold Kling
You objected, reasonably, to my attempt to characterize what you might have said about a hypothetical debt-reduction thesis issued by a Republican. Could you state your position on my substantive point, which I will repeat here: Relative to current law,... MORE

Preventing Foreclosures

Finance: stocks, options, etc.
Arnold Kling
I have written, As difficult and painful it may seem in the short run, it probably would be better to work through the foreclosure process and let prices adjust to levels that bring supply and demand into balance in the... MORE

Health Care: Finally Some Good News

Economics of Health Care
David Henderson
Ben Stein writes: But among the glorying, there was little or no mention of my former boss, Richard M. Nixon, and this was a monstrous wrong, one of an innumerable number of wrongs directed at Mr. Nixon. The flat truth... MORE

Time Consistency in Bank Regulation

Finance: stocks, options, etc.
Arnold Kling
David Leonhardt writes By definition, the next period of financial excess will appear to have recent history on its side. Asset prices will have been rising, and whatever new financial instrument that comes along will look as if it is... MORE

The Light of Day?

Politics and Economics
Arnold Kling
Not exactly. My op-ed was placed here, where it probably will get fewer readers than this blog post. The public probably does not understand this budgetary legerdemain, but their instinct is to distrust Congress. In this case, the populist instinct... MORE

Great Moments in Property Rights

Property Rights
David Henderson
My back yard is empty, but that does not give Netanyahu the right to put up an apartment complex on it. This is from Juan Cole's article, "Top Ten Reasons East Jerusalem does not belong to Jewish-Israelis." The whole thing... MORE

If a Libertarian Gave a Sermon for Passover

Political Economy
Arnold Kling
As we approach Passover in 2010, many people are unemployed. But in a free society, government does not create jobs. Pharoah created jobs for us. Moses led us away from those jobs. Even though those jobs helped to complete public... MORE

Miscellaneous

Political Economy
Arnold Kling
My talk in North Carolina. During the Q&A, I get attacked from the right. Michael Elsby, Bart Hobijn, and Ayseful Sahin discuss what is happening the labor market in the current recession. Recommended. Anne Applebaum argues that now that health... MORE

Debate Reactions?

Economics of Health Care
Bryan Caplan
I had a blast at the Separation of Health and State Debate.  If you didn't attend, video will be posted in the near future.  If you did attend, I'd like to hear your reactions - and the best questions that... MORE

Jonah Goldberg on the Tea Party

Politics and Economics
Arnold Kling
I enjoyed this dialog between Glenn Reynolds and Jonah Goldberg. Goldberg argues that conservatives are legitimately skeptical of mass movements, but that as things have evolved, the tea party is looking better and better. This echoes my own evolution. I... MORE

John Dingell's Mask Slips

Politics and Economics
David Henderson
On March 22, on a radio talk show, Detroit-area Congressman John Dingell stated that it would take a long time to get the regulations together to implement Obamacare because, in his words, "it takes a long time to do the... MORE

Incentives vs. Intentions

Economics of Health Care
Arnold Kling
As Bryan points out, the incentives in the new health care legislation should discourage people from getting health insurance and discourage employers from providing health insurance. The intent of the legislation is to reduce the number of people who are... MORE

Varadarajan on Frum

Politics and Economics
David Henderson
Tyler Cowen cited David Frum's analysis of the Congressional Republicans' "mistakes" in the recent health care debate, saying he was "right on the mark." I occasionally like to beat on Republicans too. They aren't called the "stupid party" for nothing.... MORE

This paper by Jagadeesh Gokhale, which I blogged about when it first came out last year, argued that the European welfare states were not sustainable. He wrote, Generally speaking, older members of the European Union -- including Germany, France, Italy,... MORE

How Many Employers Will Stop Providing Health Insurance?

Economics of Health Care
Bryan Caplan
Why is employer-provided health insurance so prevalent?  Economists usually point to the tax code.  Cash is taxed; health benefits aren't.  One interesting side effect of Obamacare is that it's going to put the standard view to the test.How so?  If... MORE

My Opening Statement

Economics of Health Care
Bryan Caplan
Here's my opening statement for today's Separation of Health and State Debate.  Hope to see you there! Why We Should Separate Health and State Government already plays such a large role in health care that it may be hard to... MORE

Do All Libertarians Sound Alike?

Politics and Economics
Bryan Caplan
An old cliche tell us that "All the music you don't like sounds alike."  Does the same hold in politics?  Does everyone on "the other side" sound the same?They don't to me.  Krugman, Rawls, Marx, and Lenin are all left-wing... MORE

What I'm Reading

Books: Reviews and Suggested Readings
Arnold Kling
Social Security, by Jagadeesh Gokhale. He gave me a copy when we had lunch today, so I'm just getting started. I'll write more when I've read more. Meanwhile, we can deem it self-recommending for someone who wants to be conversant... MORE

What I'm Writing

Finance: stocks, options, etc.
Arnold Kling
I have an article in National Review (April 5 edition) on financial regulation. Notwithstanding the good intentions of policymakers, who no doubt plan to create a stronger regulatory apparatus going forward, large banks will inevitably have too much power for... MORE

Michael Cannon's Brave Bet

Economic Philosophy
Bryan Caplan
I'm impressed: Cato's Michael Cannon bet Karen Davenport, and let her adjudicate the outcome:I bet Davenport $20 that I could convince her that the following two claims are true:We agreed on three rules.  First, there would be no splitting the difference or... MORE

David Balan's Opening Statement

Economics of Health Care
Bryan Caplan
David Balan asked me to post his opening statement for tomorrow's Separation of Health and State Debate.  Enjoy!  I'll post mine at midnight tonight. Thanks to Bryan for agreeing to this debate, and for letting me post my opening statement... MORE

Obama's and Kucinich's Conversation

Economics of Health Care
David Henderson
I think Bryan has done an admirable job of explaining how the immediate ban on pricing for pre-existing conditions will cause major adverse selection and will break down health insurance as insurance. Arnold says that Tyler Cowen believes the Republicans... MORE

Explaining our new Health Care System

Economics of Health Care
Arnold Kling
1. The intent was to leave Medicare and employer-provided health care largely intact. The main effects are supposed to be on the health insurance market for individuals. 2. A major goal is to enable people with pre-existing conditions who fall... MORE

Irrational Partisans

Behavioral Economics and Rationality
Bryan Caplan
I just came across another fine essay by Brink Lindsey.  Highlight:First, partisanship undermines clear thinking. Second, it undermines moral integrity. In both cases, the root cause is the same: the conflation of friend and foe with right and wrong. Consider... MORE

Obamacare: What the Future Holds

Economics of Health Care
Bryan Caplan
The "Affordable Health Care for America" timeline that Arnold shared is... interesting.  Assuming that its seven pages accurately summarize the multi-kilopage bill (a big if), four measures stand out.1. It provides "immediate access to insurance for uninsured individuals with a... MORE

Question for Left-Libertarians

Microeconomics
Bryan Caplan
Obamacare penalizes firms that don't provide health insurance.  If a firm has fewer than 50 employees, however, it's exempt:Requires employers with 50 or more employees who do not offer coverage to their employees to pay $2,000 annually for each fullā€time... MORE

How the Health Care Legislation Will Affect Me

Economics of Health Care
Arnold Kling
My joke has been that what bothers me the most about the fact that health care legislation passed is that now when I give talks on health care I will be expected to be familiar with what is in the... MORE

What I'm Reading

Austrian Economics
Arnold Kling
Macroeconomic Theory and its Failings, edited by Steven Kates. The publisher, Edward Elgar, prices its hardbacks out of reach for ordinary readers. I assume that their target buyers are libraries. I received a review copy. The book consists of essays... MORE

Big Shakeouts

Growth: Consequences
Arnold Kling
Robert J. Gordon writes, by far the most rapid MFP growth in U. S. history occurred in 1928-50, a phenomenon that I have previously dubbed the "one big wave." MFP = multifactor productivity. Note that the Great Depression takes up... MORE

Hard-core libertarians often describe themselves as "isolationists."  As Murray Rothbard argued:Pending the dissolution of States, libertarians desire to limit, to whittle down, the area of government power in all directions and as much as possible... In foreign affairs, the goal... MORE

Banks and Modigliani-Miller

Finance: stocks, options, etc.
Arnold Kling
Greg Mankiw writes, What about the Modigliani-Miller Theorem? Recall that this famous theorem says that a firm's value as a business enterprise is independent of how it is financed. The debt-equity ratio determines how the risky cash flow from operations... MORE

Mish Bet

Labor Market
Bryan Caplan
I'm back from the Kansas City econobloggers' conference.  My personal highlight: I managed to extract a bet from Mike Shedlock, a.k.a. Mish.  On the fiscal crisis panel, Mish predicted high unemployment for the next ten years.  This provoked a lot... MORE

Walter Block on Capitalism

Economic Philosophy
David Henderson
Walter writes: I readily admit that "capitalism" has a bad press, and its historical use is none too salutary either. But, the enemies of libertarianism are always trying to take words away from us. They have already long ago stolen... MORE

David Brooks Provokes

Finance: stocks, options, etc.
Arnold Kling
with this: The free-market revolution didn't create the pluralistic decentralized economy. It created a centralized financial monoculture, which requires a gigantic government to audit its activities. Yesterday, during my talk at Campbell University, I also used the term monoculture to... MORE

The controversy of the moment is the procedural precedent in the health care bill. No comment on that. What troubles me is the substantive precedent of using future cuts in Medicare benefits as a funding source. This is really weird,... MORE

Health Insurance: What Krugman Didn't Say

Economics of Health Care
David Henderson
Stop Us Before We Cheat Again In his pitch for the Obama health care restructuring, Paul Krugman quotes a Reuters story about a young man who was denied benefits for a pre-existing condition even though he didn't have such a... MORE

My Top Books

Books: Reviews and Suggested Readings
David Henderson
Tyler Cowen led the way by listing the ten books that influenced his worldview most strongly. Then co-bloggers Arnold and Bryan followed. Here are my seventeen, not in order of importance, but in chronological order (the chronology being, of course,... MORE

The Case for Competitive Government

Political Economy
Arnold Kling
Tim Harford writes, What is missing is the political demand for tests of what really works. Too many policies on education, welfare and criminal justice are just so much homeopathy: cute-sounding stories about what works leaning more on faith than... MORE

Obamacare Market

Economics of Health Care
Bryan Caplan
Can anyone explain what happened in the Obamacare betting market over the past 24 hours?  Why did it fall from near 70, close at 35.1, then rebound to 65.1?... MORE

My Book List

Books: Reviews and Suggested Readings
Bryan Caplan
The fifteen books that influenced my thinking the most, in chronological order:1. Friedrich Nietzsche, Thus Spoke Zarathustra.  While I ultimately didn't learn much of substance, this book got me very excited about about ideas.  Nietzsche's vision of discovering the truth,... MORE

The Spread of Szaszian Economics

Behavioral Economics and Rationality
Bryan Caplan
I was thrilled to publish "The Economics of Szasz" in Rationality and Society, and even more thrilled to win a Szasz Prize as a result.  But I can't say the paper had much influence on the economics profession.  I'm very... MORE

Influential Books

Books: Reviews and Suggested Readings
Arnold Kling
Recently, Tyler Cowen listed the ten books that have influenced him the most. I have a much harder time coming up with such a long list. I am more inclined to list people (Tyler among them). But here goes:... MORE

Oops. My Mistake

Central Planning vs. Local Knowledge
David Henderson
Commenters on my post last night pointed out something I had not been aware of: the special treatment local governments give Bass Pro Shops to set up. It turns out that the store I went to in Manteca last night... MORE

I Love Capitalism, Again

Growth: Consequences
David Henderson
Driving home from skiing today--it was a gorgeous day in California, by the way--I saw a Bass Pro Shops in a city called Manteca. I had only seen it advertised on TV, but had never seen a real one. On... MORE

"Everyone" Does Not Equal "Most Everyone"

Cost-benefit Analysis
Bryan Caplan
Robin replies to my recent post on Hanson's Fallacy:Few deals can guarantee to get everyone more of what they want, but by encouraging and enabling more better wider deals, the use of efficiency analysis sure seems to me to tend... MORE

Haidt Responds

Economic Philosophy
Bryan Caplan
Don't miss Jon Haidt's response to my questions.  It's in the comments, but I reproduce it here in its entirety. Dear Bryan, and other commentators: The question you ask is one of the most important ones we've been trying to... MORE

Markets vs. Government

Upcoming Events
Arnold Kling
Again, this will be the subject of my talk on Thursday evening March 18 at Campbell University. It is also the subject of this podcast featuring Don Boudreaux and Russ Roberts. Boudreaux says that he does not vote, which I... MORE

Public Sector Unions vs. Taxpayers

Politics and Economics
Arnold Kling
The Washington Post reports on cuts proposed in the budget in Montgomery County, Maryland. The proposed budget cuts in Montgomery, which require county approval, reflect not just the recession but also decisions made by officials over many years. Salaries and... MORE

Accounting Standards

Finance: stocks, options, etc.
Arnold Kling
I have been following, but not writing about the Lehman accounting scandal. Simon Johnson brings up a past scandal (Enron) and a future scandal (Greece). He points out the role of investment banks in designing and/or executing transactions that are... MORE

Hanson's Fallacy

Cost-benefit Analysis
Bryan Caplan
Robin Hanson is probably the most logical mind I know, so it pains me when he keeps insisting that:As an analysis tool, economic efficiency is designed and well-suited to finding win-win deals that get us all more of what we... MORE

Kauffman Economics Bloggers Forum

Economic Education
Bryan Caplan
I'll be attending the Kauffman Economics Bloggers Forum in Kansas City on Friday.  You can watch the whole conference here.  I'm not on any of the panels, but I expect I'll be raising my hand quite a bit. :-)... MORE

The Social Security "Trust Fund"

Social Security
David Henderson
The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration. It's time to start cashing them in.... MORE

I recommend Bloom and van Reenen's 2010 JEP piece on "Why Do Management Practices Differ Across Firms and Countries?"  The paper is mis-titled, but excellent nonetheless.  Its main mission is to measure management practices, then describe how they vary -... MORE

A Betting Arena

Growth: Consequences
Arnold Kling
Since Bryan is impressed with people who bet on their ideas, I thought I would remind folks about longbets, a site that encourages exactly that, focused on long-term predictions. For example, Kevin Kelly writes, The biggest driver of the shift... MORE

Tyler Cowen on the Future of Health Policy

Economics of Health Care
Arnold Kling
He sees a future of managed care, funded or subsidized by vouchers. He elaborates here. Few people would think that a ne'er do well brother would be justified into taking $50,000 from you to prolong his life (with p =... MORE

Haidt's Bet

Economic Philosophy
Bryan Caplan
I'm impressed to learn that Haidt backed up his Five Foundations theory with his own cash.  The offer expired on August 1, 2009, but it ran for two years:IF ANYONE CAN DEMONSTRATE THE EXISTENCE OF AN ADDITIONAL FOUNDATION, OR SHOW... MORE

Liberal Puritanism

Economic Philosophy
Bryan Caplan
In the comments, Jason Malloy points out that Jon Haidt recently added a battery of questions to test liberal puritanism.  Here's Haidt's explanation:At Yourmorals.org we have always found that scores on the Purity/sanctity foundation are higher on the political right... MORE

Does Schooling Create Positive Externalities?

Economics of Education
David Henderson
Last night, I was a guest of San Jose State University's economics department on a bus ride through Pebble Beach, complete with drinks and hors d'oeuvres. The reason for the event: the annual Public Choice meetings are being held in... MORE

Your Public Education at Work

Economics of Education
Arnold Kling
From an extremely interesting report by Adam Schaeffer: the Los Angeles metro area comes in third place for average real spending in our study.23 The average real per-pupil spending figure of $19,000 is a stunning 90 percent higher than the... MORE

Will's latest blogging on Jonathan Haidt's "five foundations" theory of morals inspires me to publicly ask Haidt a question that's been bugging me: How hard did you try to include items about Ingroup/Loyalty, Authority/Respect, and Purity/Sanctity that would specifically appeal... MORE

Liberals and Markets

Political Economy
Arnold Kling
Will Wilkinson writes, libertarians are liberals who like markets. This is a succinct way of suggesting that libertarians and liberals share similar personalities and outlooks. There is just an intellectual difference concerning markets and government. I will be speaking on... MORE

Cognitive Dissonance on Vehicle Safety

Regulation
David Henderson
In this morning's Monterey Herald are two articles from the Associated Press, the first co-authored by Ken Thomas and Natasha Metzler and the second co-authored by Ken Thomas and Natasha Metzler. First article headline: Roadway deaths fall to lowest level... MORE

The Consumer Satisfaction Standard

Behavioral Economics and Rationality
Bryan Caplan
For the past few years, social scientists have been arguing over the One True Measure of consumer welfare.  Most economists still cling to the Demonstrated Preference Standard: If A buys X, then X makes A better off by definition.  Psychologists... MORE

Confusing Health Care and Health Insurance

Economics of Health Care
David Henderson
President Obama Walks Into His Own Trap And the insurance companies continue to ration health care based on who's sick and who's healthy; on who can pay and who can't pay. The above is from President Obama's speech in Pennsylvania... MORE

Baseline Scenario: The Book

Books: Reviews and Suggested Readings
Arnold Kling
Simon Johnson and James Kwak call it 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown. It is one of the most valuable contributions to the literature on the financial crisis. Of all the economists, journalists, and pundits... MORE

Socrates Meets Deficit Neutrality

Fiscal Policy
Bryan Caplan
Mankiw tries his hand at Socratic dialog.  It begins:Friend: I am going to take off a few days from work and fly down to Bermuda for a quick vacation.You: But isn't that expensive?  Won't that just add to your growing... MORE

We Smell a Rat

Economics of Health Care
David Henderson
Which group should the U.S. Food and Drug Administration care about more: humans or rats? That's not a trick question. The FDA's recent decision to reject the drug Horizant suggests that, at least in this case, it cares more about... MORE

Two Questions for Orszag

Labor Market
Bryan Caplan
I've got two questions for Peter Orszag:1.  You claim that education and age differences explain the entire difference in average pay between federal employers and other workers.  Does "average pay" include benefits?  The salary gap reported in USA Today was... MORE

How to Evaluate Government Pay

Labor Market
Arnold Kling
Budget Director Peter Orszag writes, So the bottom line is: when education and age are held constant, the entire difference in average pay between the federal and private sectors disappears. Let me suggest a different indicator: How far could you... MORE

Taxation of Unemployment Benefits

Labor Market
David Henderson
On the comments yesterday on my post on the effect of unemployment benefits on unemployment, Noah Yetter wrote: You have to pay taxes on unemployement benefits? Am I the only one who finds this to be unalloyed lunacy? I actually... MORE

Separation of Health and State Debate

Economics of Health Care
Bryan Caplan
David Balan and I are going to debate "the Separation of Health and State" before the GMU Econ Society.  The time: Wednesday, March 24, at 5 PM.  The place: Fairfax campus of GMU, Enterprise 80.  The resolution:Significant governmental involvement in... MORE

The App Most Likely to Make Me Get an iPhone

Behavioral Economics and Rationality
Bryan Caplan
Time/happiness diaries just got a lot easier: There's now a Track Your Happiness app for the iPhone.  How does it work? Answer a few questions First we'll ask you some questions for statistical purposes. This will take about 10 minutes.... MORE

John Nye on Economic History

Economic History
Arnold Kling
He writes, The greatest achievement of early modern economic growth was not the Industrial Revolution itself, but the way in which the leading Western economies began to move away from highly parochial, narrow networks of personal exchange and came to... MORE

Great Minds Think...Somewhat Differently

Political Economy
Arnold Kling
Ethan Porter writes, Staunch environmentalist? Send some money to the EPA. Believe we need an infrastructure upgrade? Direct your funds to the Department of Transportation. Think we need to ramp up our national defense? Send extra tax dollars to the... MORE

Richter Contra "New Socialist Man"

Central Planning vs. Local Knowledge
Bryan Caplan
The classic argument against socialism is that it gives people bad incentives.  What's the point of working, conserving, saving, quality control, and/or taking out the garbage if they don't pay?  The classic socialist reply is that capitalism creates the selfishness... MORE

My Letter on California Student Protests

Economics of Education
David Henderson
The following by me was the lead letter in my local newspaper, the Monterey County Herald, this morning: Professors went too far In a story Friday about the student protests of budget cuts, The Herald reported, "Some professors took students... MORE

Does standard microeconomics fail when there's a recession? Last week, I addressed the issue of how much of the current unemployment is due to the many extensions of unemployment benefits. In some states you can now receive benefits for as... MORE

Working: The Graphic Novel

Labor Market
Bryan Caplan
Readers familiar with my fondness for graphic novels will know that when I recommend the graphic novelization of Studs Terkel's Working, it's no snub.  In the original book, first published in 1972, Terkel interviewed people in a wide variety of... MORE

Did the Financial Crisis Matter?

Finance: stocks, options, etc.
Arnold Kling
Dean Baker says no. Spain is noteworthy because it now has an unemployment rate of more than 19%, the highest rate in any of the wealthy countries. Spain did not have a financial crisis. In fact, its well-regulated financial system... MORE

Fannie and Freddie and Friends

Finance: stocks, options, etc.
Arnold Kling
Mark Thoma points to a series of presentations from the Roosevelt Institute, a left-oriented think tank. What struck me was Raj Date arguing for the elimination of Freddie Mac and Fannie Mae. He is quite firm on the point. He... MORE

Performance Enhancers in Sports

Labor Market
David Henderson
Belsky starts by asking, "Where do you draw the line where enhancement is acceptable?" Verstegen begins by taking about technology is producing better equipment, better technology and specifically discusses how the swimsuit used by athletes in Beijing allowed swimmers to... MORE

But Voters Might Run With Their Feet

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
I'm convinced that in case of fiscal crisis, voters will indeed "sit on their hands."  I'm willing to believe, however, that voters might still run with their feet.  As Tim Kane puts it, "What if they had a fiscal crisis,... MORE

Keynesians vs. Rogoffians

Economics of Health Care
Arnold Kling
A letter in the London Times, signed by Ken Rogoff, among others: in order to be credible, the government's goal should be to eliminate the structural current budget deficit over the course of a parliament, and there is a compelling... MORE

More on Callahan

Economics of Health Care
David Henderson
Arnold called for a real health care debate between him and Daniel Callahan and quoted from his book. Actually, some of that debate has already happened in my review of Callahan's book. Here's what I wrote on one of the... MORE

The Real Health Care Debate

Economics of Health Care
Arnold Kling
If you ever want to see a real debate on health care policy, schedule an event featuring Daniel Callahan and me. Callahan is very anti-market, but he and I start from a baseline level of agreement about what the health... MORE

More Evidence for Block

Cross-country Comparisons
David Henderson
Bryan, in his earlier post today, refers to an excellent quote from Walter Block that I hadn't been aware of. I have some striking evidence for it that suggests that Walter actually understated the case. Here's the story. In about... MORE

Sumner Gets Blockian

Cross-country Comparisons
Bryan Caplan
Walter Block on measuring economic freedom:[I]t has long been my experience that whenever any person reasonably but not fully sophisticated in economics sees the findings of these studies [of economic freedom], he invariably objects on the ground that his own... MORE

Life Without Lies

Information Goods, Intellectual Property
Bryan Caplan
[Warning: Invention of Lying spoilers!]The supposed premise of The Invention of Lying is that human beings never evolved the ability to lie.  While I greatly enjoyed the movie - it's the best cinematic critique of religion since Life of Brian... MORE

How Many Times Must We Bury Behaviorism?

Economic Methods
Bryan Caplan
I noticed continued resistance to survey evidence in the comments.  Frankly, it's hard to believe there's anyone left in social science who doesn't take surveys seriously.  Friedman's original arguments against survey evidence were half-baked, and no one's come up with... MORE

Sanctions and Game Theory

Game Theory
David Henderson
Jacob Hornberger had an insightful blog post on Friday in which he applied basic game theory to the issue of sanctions. He didn't use the term "game theory," but he did the key thing that game theorists do: in thinking... MORE

Yes, Voters Will Sit on Their Hands

Social Security
Bryan Caplan
David quotes my long-time friend Veronique de Rugy:Unless we believe that younger voters will sit on their hands while their future payouts are slashed and their taxes are hiked to pay for the benefits of current retirees, then entitlements will... MORE

De Rugy on VAT

Fiscal Policy
David Henderson
Veronique de Rugy recently published an excellent article on the perils of a value-added tax (VAT). She gives a nice history of the VAT along the way. Great paragraph: The first thing to note is that Greece collapsed in spite... MORE

The Sixties and the Tea Party

Politics and Economics
Arnold Kling
David Brooks sees similarities, while Jonah Goldberg sees differences. The similarity between today and the 1960's is that our country seems highly polarized. On the other hand, I think there is one enormous difference between the 1960's and today. In... MORE

Sloppy Reporting on Greece

Fiscal Policy
David Henderson
Demonstrators and police clash Friday near the Greek parliament in Athens. Greece has frozen pensions and increased taxes to cut spending by 4.8 billion Euros in a bid to persuade the EU it can avoid default. See A10. So reads... MORE

Another Network Lie about Vehicles

Business Economics
David Henderson
As I wrote here, in the early 1990s, NBC was caught lying about trucks produced by General Motors. I wrote: NBC tried to stage an accident in which a collision would cause an explosion. It didn't work. So NBC rigged... MORE

Though participants agreed there was considerable slack in resource utilization, their judgments about the degree of slack varied. The several extensions of emergency unemployment insurance benefits appeared to have raised the measured unemployment rate, relative to levels recorded in past... MORE

Boudreaux's Bet

Economics of Health Care
Bryan Caplan
My colleague Don Boudreaux has proposed a clever bet on health care spending with Peter Orszag and Nancy-Ann DeParle:If the House passes a health-reform bill this year and the Senate adopts that bill through reconciliation, pick any year in the... MORE

From Poverty to Prosperity Watch

Economic History
Arnold Kling
I am interviewed on Australian radio. Also, Don Boudreaux recommends this talk by Stephen Davies. I assume that the "surprising prediction" to which Don refers is that young people today will live hundreds of years. I have been making that... MORE

How the Hive Mind Works

IQ in Economics
Bryan Caplan
My colleague Garett Jones is working on a book called Hive Mind: Why Your Nation's IQ Matters So Much More Than Your Own.  I thought about his project while reading Robert Gordon's article "Everyday Life as an Intelligence Test."  One... MORE

From the Vault: My 1983 Piece on Market for Kidneys

Economics of Health Care
David Henderson
I came across this memorandum I wrote while I was the senior economist for health policy with the Council of Economic Advisers. MEMORANDUM COUNCIL OF ECONOMIC ADVISERS December 29, 1983 TO: Bill Poole Geoff Carliner FROM: David Henderson SUBJECT: More... MORE

Robin Hanson on Long-term Growth

Growth: Causal Factors
Arnold Kling
Those of us who know him are familiar with his outlook for a sudden transition to what would seem to us like hyper-growth. The rest of you will find this talk new and mind-blowing.... MORE

Forecast for a Minsky-Jones Economy

Macroeconomics
Arnold Kling
The Wall Street Journal reports: The Monster Employment Index surged in February, with increases across a range of geographies and job categories, suggesting that employers are starting to emerge from a long hibernation. The Index, compiled by online job service... MORE

I could be wrong, but it seems like one of left-libertarians' main goals is to salvage populism.  Most libertarians condemn the public's anti-market reflexes.  Left-libertarians reply, in essence, is: "It's only natural for the public to condemn the unholy alliance... MORE

Kahneman on Happiness

Behavioral Economics and Rationality
Arnold Kling
He speaks here. He raises a number of issues with self-reported happiness. An example he gives is someone moving to California because he thinks he will be happier there. If you ask him if he is happier in California, he... MORE

John Goodman on ObamaCare

Economics of Health Care
David Henderson
John Goodman writes: The two most serious defects of ObamaCare were never discussed at the Health Care Summit or in the President's speech this afternoon. I blame the Republicans for that. As a result, things have gotten worse for the... MORE

Logic: Denying the Antecedent

Economic Methods
David Henderson
My favorite part of the introductory philosophy course I took at the University of Winnipeg was the segment on logic, especially on logical fallacies. One of the most common logical fallacies is "denying the antecedent." Here's the example used in... MORE

Opting for Enslavement

Political Economy
Arnold Kling
One of the intriguing short chapters in Africa: A Biography of the Continent is called, with irony, "Merrie Africa." It discusses the issue of slavery within Africa. A history of slavery in Africa claims that between 30 and 60 percent... MORE

The W.D. Ross Club?

Economic Philosophy
Bryan Caplan
Mankiw's latest paper takes the ethical significance of merit (or, as he calls it, "Just Deserts") seriously.  I'm tempted to propose that the two of us become the founding members of a W.D. Ross Club.  Its purpose: to promote the... MORE

Richman Link

Politics and Economics
Bryan Caplan
FYI: Sheldon Richman's talk is up.... MORE

My Anti-Globalization Stereotype

Politics and Economics
Bryan Caplan
I thought this comment was interesting:Bryan Caplan's rejection is based entirely on his own stereotype of 'anti-globalization types.' The fact is that many of the college-age students who join such rallies and events are there because they perceive big business... MORE

What I'm Reading

Books: Reviews and Suggested Readings
Arnold Kling
Africa: A Biography of the Continent, by John Reader. An excerpt (p. 306): Six terms referring to horn shape, and "not fewer" than seventeen cattle colour terms were coined between AD 800 and 1450 in...[southern Africa]...So much linguistic innovation over... MORE

Should Libertarians Oppose "Capitalism"?

Politics and Economics
Bryan Caplan
Yesterday my long-time friend Sheldon Richman spoke before the GMU Econ Society on "Capitalism versus the Free Market."  (The video was streamed here, but it doesn't seem to be archived anywhere; if you've got a link, please let us know). ... MORE

From Poverty to Prosperity Watch

Business Economics
Arnold Kling
Nicholas Bloom and John Van Reenen write management practices vary tremendously across firms and countries. Most of the difference in the average management score of a country is due to the size of the "long tail" of very badly managed... MORE

In Defense of Cato

Economic History
David Henderson
Nathan Smith, a commenter on Arnold's recent post, stated: Cato libertarians are ferociously ignorant about all things foreign-policy-related, ignorant not in the sense of being unaware of facts but of refusing to be influenced by them, and their views are... MORE

sentences to ponder

Political Economy
Arnold Kling
Will Wilkinson writes, Average self-reported life satisfaction rose with GDP per capita over the last several decades in almost all wealthy liberal democracies, but not so much in the U.S. The idea that the unusual composition of U.S. government spending... MORE

The Road to Health Care Serfdom

Economics of Health Care
Arnold Kling
If Massachusetts is any indication, we are on it if we adopt reforms similar to theirs. Last month, Democratic Governor Deval Patrick landed a neutron bomb, proposing hard price controls across almost all Massachusetts health care... average Massachusetts insurance premiums... MORE

Canada Wins

Finance: stocks, options, etc.
Arnold Kling
According to Mark Perry, this recent financial crisis isn't the first time that Canada's banking system showed greater signs of stability and less exposure to stress than U.S. banks. In the 1930s, when 9,000 U.S. banks failed during the Great... MORE

Reflections on The Baader-Meinhof Complex

Politics and Economics
Bryan Caplan
Normally I dislike movies based on true stories, but The Baader-Meinhof Complex was fascinating.  It's a history of the Baader-Meinhof gang, also known as the Red Army Faction - and as far as I can tell, the movie sticks very... MORE

GDP Fetishism

Macroeconomics
David Henderson
Econlib's featured article this month is GDP Fetishism by me. Opening graf: When economics professors teach the basics of Gross Domestic Product (GDP), we usually caution our students that it is not a good measure of welfare. Unfortunately, many economists... MORE

African Poverty Declines

Growth: Consequences
Arnold Kling
Xavier Sala-i-Martin and Maxim Pinkovskiy write, The poverty rate in 1970 was 0.398. That is, close to 40% of the entire population lived with less than one dollar a day in Africa in 1970. After a small decline during the... MORE

Return to top