Bryan Caplan and David Henderson

October 2010

A Monthly Archive (107 entries)

Big Business and Regulatory Double Standards

Economic Philosophy
Bryan Caplan
Robin Hanson points out yet another way that, contra left-libertarians, big business faces exceptionally and unreasonably harsh regulation:Many of our regulations apply to big firms more strongly than small firms, and and even less to homes. For example, many regulations... MORE

By Request: Monetarism and the Great Depression

Economic History
Arnold Kling
The request is for my reaction to the way that economies in the Great Depression seemed to do better after going off the gold standard. Does this provide evidence that monetary easing would help today? In general, macroeconomic data are... MORE

Numbers to Ponder

Macroeconomics
Arnold Kling
From the WSJ Real Time Economics blog, here and here. 1. Banks have an inventory of about 1 million foreclosed homes, plus another 5 million homes where the loans are badly nonperforming. Any way you look at it, that is... MORE

Taylor-Cogan vs....well, Everybody

Fiscal Policy
Arnold Kling
John F. Cogan and John B. Taylor write, Our main finding is that the increase in government purchases due to the ARRA has been remarkably small, especially when compared to the large size of the overall ARRA package. In fact,... MORE

Abolition of the Corporate Income Tax

Taxation
David Henderson
Megan McArdle has a good post on her case for abolishing the corporate income tax. I say "good," not "excellent," because, in the midst of a comprehensive though succinct analysis, she doesn't get the issue of incidence correctly. She starts... MORE

Requests

Politics and Economics
Arnold Kling
A reader requests that I update the One-Party State Watch. This story about the success of Google's $1.8 million political fundraising dinner serves the purpose. Another reader asks me what my benchmarks would be for taking the Tea Party seriously.... MORE

Hitler's War Aims: Bloodlands Edition

Economic History
Bryan Caplan
Bloodlands' take on Hitler's war aims fits neatly with my earlier exegesis of Mein Kampf:...Stalin had an economic revolution to defend, whereas Hitler needed a war for his economic transformation.  Whereas Stalin had his "socialism in one country," Hitler had... MORE

Blameworthy: How Party Loyalty Corrupts Voter Judgment

Behavioral Economics and Rationality
Bryan Caplan
Michael Marsh and James Tilley's "The Attribution of Credit and Blame to Governments and Its Impact on Vote Choice" (British Journal of Political Science 2009) has two exceptionally compelling figures.  The first is for Britain voters, the second for Irish... MORE

Of Infants and Immigrants

Family Economics
Bryan Caplan
If an additional infant born in America has positive externalities, asks Adam Ozimek, shouldn't an additional immigrant who moves to America have positive externalities, too?Since the average immigrant age is around 30, that means when they've arrived they are already... MORE

Reading, Not Recommended

Books: Reviews and Suggested Readings
Arnold Kling
I received review copies of: 1. Economic Lives, a collection of previously published papers by economic sociologist Viviana A. Zelizer. It is so repetitive that one is tempted to give it less credit than it deserves. She talks about the... MORE

Recalculation Watch: Unemployed Law School Graduates

Economics of Education
Arnold Kling
Annie Lowrey reports, The job market for lawyers is terrible, full stop--and that hits young lawyers, without professional track records and in need of training, worst. Though the National Association for Law Placement, an industry nonprofit group, reports that employment... MORE

Soviet Poland, 1939-41

Economic History
Bryan Caplan
Timothy Snyder's Bloodlands is the best history I've read in five years: important, careful, beautifully written, and morally wise.  Many excellent books explore the parallels between Nazism and Communism, between Hitler and Stalin.  But Snyder almost makes you feel like... MORE

Killing Off Halloween

Cost-benefit Analysis
David Henderson
We can kill off Halloween, or we can accept that it isn't dangerous and give it back to the kids. Then maybe we can start giving them back the rest of their childhoods, too. This is from Lenore Skenazy, "'Stranger... MORE

Primer on Austrian Economics

Austrian Economics
Arnold Kling
Eamonn Butler, who wrote the much under-appreciated Best Book on the Market, has a new project, a primer on Austrian ecoomics. Once again, I think he has done an outstanding job. In light of our discussion of Arrow, I note... MORE

Good Baby

Family Economics
Bryan Caplan
The Kauffman Foundation's Tim Kane generously included one of my questions on the latest quarterly econ blogger's survey:The net externality of the birth of an additional child in the United States is... [POSITIVE, ZERO, or NEGATIVE]Survey says: I suspect that... MORE

The Colbert Effect

Taxation
David Henderson
On his blog yesterday, Mankiw has a great humorous YouTube done by, presumably, students at Harvard. Mankiw himself has a starring role and plays it beautifully. The video is professionally done also and even, in the midst of humor, shows... MORE

Morning Commentary

Politics and Economics
Arnold Kling
First, on the political situation. This poll claims that Back in 1974 - shortly after Richard Nixon's resignation in the Watergate scandal - 55 percent of Americans were optimistic about "our system of government and how well it works." Today,... MORE

Technocratic Overconfidence

Behavioral Economics and Rationality
Arnold Kling
Matt Ridley discusses a paper that uses "behavioral economics" to assess regulators. The paper is by Slavisa Tasic, and I believe that it can be found here. Tasic writes, In the context of political economy, overconfidence takes the form of... MORE

What did Arrow Prove?

Economic Education
Arnold Kling
Among those trying to popularize the Arrow Impossibility Theorem are Steven Landsburg, Tyler Cowen, and Alex Tabarrok. Alex writes, More generally, what Arrow showed is that group choice (aggregation) is not like individual choice... Arrow showed that when a group... MORE

Political Predictions

Politics and Economics
David Henderson
I think, after having paid medium attention to the House of Representatives races, that the Republicans will have a net gain of 52 seats in the November elections. I realize that this is not analysis--it's based on some data and... MORE

Election Pre-Mortem

Politics and Economics
Arnold Kling
I made a bet with Bryan that seems increasingly dubious. I took the view that the demographic trends favor Democrats. More of the population is non-white, born after 1980, and located in large metro areas. So, how are the Republicans... MORE

Economic Ideas Not Well Popularized

Economic Education
Arnold Kling
Tyler Cowen asks which economic ideas are most difficult to popularize. This could mean (a) that there is nowhere to go to read a definitive popular version or (b) that people can read a definitive popular treatment and yet walk... MORE

Common Sense and the Marginal Student

Economics of Education
Bryan Caplan
Common sense says that marginal consumer of a product - the person who say "Eh, why not?" before he buys - benefits less from his purchase than the product's average consumer.  This is clearly true for consumption decisions: The typical... MORE

Christina Romer's Contradiction

Fiscal Policy
David Henderson
Here's a paragraph from Christina Romer's op/ed in the New York Times: Now is not the time [to cut the deficit]. Unemployment is still near 10 percent in the United States and in Europe. Tax cuts and spending increases stimulate... MORE

What is Wrong with the New Elite?

Political Economy
Arnold Kling
Charles Murray writes, Far from spending their college years in a meritocratic melting pot, the New Elite spend school with people who are mostly just like them -- which might not be so bad, except that so many of them... MORE

Predicting Success in Entrepreneurs

Business Economics
Arnold Kling
Via various people, Paul Graham identifies characteristics of successful business founders. First is "determination." I have a cousin who got into a business in which he had to make 150 cold calls a day, and if he was lucky he... MORE

The Supremacy Clause

Politics and Economics
David Henderson
In which our economist attempts legal scholarship Some opponents of California's Proposition 19, which I posted about earlier, claim that if it passes, California's state law will conflict with federal law on marijuana. Then, they argue, because of the supremacy... MORE

Scary Paragraph

Finance: stocks, options, etc.
Arnold Kling
Business Week reports, Laurie Goodman, a mortgage analyst at Amherst Securities Group, said in an Oct. 1 report that if government doesn't step up its intervention, over 11 million borrowers are in danger of losing their homes. That's one in... MORE

Bloodlands

Books: Reviews and Suggested Readings
Bryan Caplan
I haven't finished the first chapter of Timothy Snyder's Bloodlands: Europe Between Hitler and Stalin, but I'm ready to highly recommend the book.  Just one great passage:As Stalin interpreted the disaster of collectivization in the last weeks of 1932, he... MORE

Pop Answer

Microeconomics
Bryan Caplan
There's much disagreement in the comments, but I side firmly with everyone who said that the answer is indeterminate because the income and substitution effects work in opposite directions.  Your unexpectedly high grade is evidence that you earn more points... MORE

California's Proposition 19

Labor Market
David Henderson
A commenter on my post yesterday asked me what I thought about California's Proposition 19, which would relax state and local government restrictions on marijuana. I voted for it because I want the government to let people do, in the... MORE

Pop Quiz

Microeconomics
Bryan Caplan
Suppose you get your midterm back, and discover that you've scored considerably higher than you expected.  According to basic micro, how will you adjust your study effort in response to this pleasant surprise?... MORE

Baby Fever

Family Economics
Bryan Caplan
According to conventional wisdom, women want kids more than men.  But when you start looking at the data, conventional wisdom doesn't seem to check out.  Country by country, men and women desire almost exactly the same number of kids.  Kids... MORE

Mead's Asymmetric Treatment of Illegal Drugs

Economics of Crime
David Henderson
In today's Wall Street Journal appears a "Notable and Quotable" from Walter Russell Mead. It's from a longer post he did about the drug war. Mead's contribution to the discussion is to point out that we should, as a way... MORE

A Snark on Health Care Cost Reduction

Economics of Health Care
Arnold Kling
David Leonhardt writes, The debate over the health law showed that there is deep political opposition to Medicare cuts -- even if such cuts are the single most important step toward bringing down the country's long-term deficit. In theory, many... MORE

Time to Re-think Securitization?

Finance: stocks, options, etc.
Arnold Kling
The New York Times reports, On Wall Street and in bank boardrooms, the question of whether investors can force banks to buy back, or "put-back," the bad mortgages to the banks that sold them is dominating the debate and worrying... MORE

Why is College Expensive?

Economics of Education
Arnold Kling
Robert B. Archibald and David H. Feldman write, First, higher education is a service industry. From 1947 to 2009 the average annual price increase for services was 4.0 percent, while for goods the average annual price increase was only 2.4... MORE

Thiel's Priceless Publicity

Economics of Education
Bryan Caplan
I hereby nominate Peter Thiel as the world's most creative philanthropist.  After lending his name and money to seasteading, he's now trying to reform education by discouraging it:Thiel is starting a new initiative that will offer grants of up to... MORE

Where's the State of the Free?

Politics and Economics
Bryan Caplan
In Montreal, I met William Ruger and Jason Sorens, creators of the Freedom in the 50 States index.  It's a neat project, no doubt partly driven by Sorens' leading role in the Free State Project.  Competing indices exist, but the... MORE

Bob Hall on Quantitative Easing

Monetary Policy
Arnold Kling
He was giving a talk on unemployment. Along the way, he said that with quantitative easing, the Fed borrows short and lends long. So the Treasury could do the same thing by issuing less long-term debt and more short-term debt.... MORE

Health Care Costs and Wages

Economics of Health Care
Arnold Kling
John Goodman writes, In four years' time, the minimum cost of labor will be a $7.25 cash minimum wage and a $5.89 health minimum wage (family), for a total of $13.14 an hour or about $27,331 a year. (I think... MORE

Obama's Almost Contradiction

Public Choice Theory
David Henderson
Here's an excerpt from Peter Baker's piece in the New York Times last week on Obama: He realized too late that "there's no such thing as shovel-ready projects" when it comes to public works. Now here's the start of the... MORE

I've been telling EconLog readers about my article with Steve Miller on intelligence and economic beliefs for years.  Now our piece has finally been published in Intelligence.  Quick version of the paper:Adding a measure of intelligence to the list of... MORE

Lionel McKenzie, RIP

Economics and Culture
David Henderson
Lionel McKenzie, the man who started the University of Rochester's Ph.D. program in the 1950s, died last week. He was one of the heavy-hitting contributors to general equilibrium theory. That was never my cup of tea, but when I was... MORE

The Flexibility of Identity

Behavioral Economics and Rationality
Bryan Caplan
I just returned from a Liberty Fund conference on nationalism.  The point I kept returning to: Even non-human primates have group identities.  Chimps clearly identify with their small bands, showing in-group amity and out-group enmity.  What's amazing about humans, however,... MORE

Inspiration from Will Smith

Growth: Causal Factors
David Henderson
Here's a 10-minute collage of excerpts from various interviews with actor Will Smith. It's highly inspirational and the the whole thing is worth watching. You are unlikely to be bored because he covers a lot of ground. My favorite two... MORE

Hummel vs. Bernanke

Monetary Policy
Arnold Kling
Jeffrey Rogers Hummel explains the Bernanke view of financial intermediation but raises a critical question about its policy implications. what distinguishes banks from other financial intermediaries is not merely that deposits are used as money but also that banks, in... MORE

MIT Economists in the New York Times

Economics of Health Care
Arnold Kling
1. Twenty years ago, Peter Diamond wrote, suppose individuals could be grouped independent of their health needs and work status. What if government simply assigned people to groups, ranging in size from 10,000 to 100,000, based solely on where they... MORE

Karma

Politics and Economics
Arnold Kling
Jonathan Haidt writes, For the tea partiers, federal activism has become a moral insult. They believe that, over time, the government has made a concerted effort to subvert the law of karma. Read the entire essay. My comments could go... MORE

Me on Obamacare

Economics of Health Care
David Henderson
I recorded a segment of the John Batchelor show, a syndicated radio show, on Friday, October 8. It played on Thursday, October 14. It's here. When you click on the link, go to about the 28:00 point and the interview... MORE

Peter Diamond on Social Security

Social Security
David Henderson
In 1977, President Carter proposed that Social Security benefits be indexed, not to the price level as had been the case, but to wages. Because real wages tend to rise, this wage indexing would be expected to cause Social Security... MORE

The Scientific Process

Economic Methods
Arnold Kling
David Freedman in The Atlantic writes, We think of the scientific process as being objective, rigorous, and even ruthless in separating out what is true from what we merely wish to be true, but in fact it's easy to manipulate... MORE

Foreclosure "scandal" again

Finance: stocks, options, etc.
Arnold Kling
I am starting to get angry with some of the pundits. I probably should just chill for a few days. A few random points. 1. I opposed TARP from day one. I wanted to see the insolvent banks put into... MORE

Idea Rents

Information Goods, Intellectual Property
Arnold Kling
Tyler Cowen writes, What if ideas rather than land are the fixed factor? Wages and profits stagnate. Some "idea landlords" receive enormous pecuniary returns, while others do not. I think that the standard estimate is that innovators earn less than... MORE

Thoughts on Unemployment

Labor Market
Arnold Kling
Alex Tabarrok writes, The first puzzle about unemployment when thought about from within the search-matching framework is that unemployment rates are highest among the least skilled, i.e. among those worker/jobs with the easiest matches. It's hard to believe that it... MORE

David Ignatius, Court Reporter

Politics and Economics
David Henderson
Co-blogger Arnold has an excellent post this morning on Washington Post columnist's David Ignatius's piece on the rage against Washington. Ignatius asks why there is so much rage against the federal government given how good policy from Washington has been.... MORE

More Praise for TARP

Politics and Economics
Arnold Kling
David Ignatius writes that the bailouts almost surely saved the country from another Great Depression. You might expect that the rest of the essay would explain why we should believe this. Instead, he goes on to ask, What accounts for... MORE

Trade War: Boudreaux's Case for Pacifism

International Trade
Bryan Caplan
Last week, Don Boudreaux praised my attempt to re-explain the Law of Comparative Advantage, but his latest post on the same theme puts mine to shame:If governments fought real wars like they fight trade wars, here's how the transcript of... MORE

A Few More Thoughts on the Foreclosure Scandal

Finance: stocks, options, etc.
Arnold Kling
I am not a lawyer, so treat the following as an amateur's view. When you obtain a mortgage on a home, two documents get recorded. One is a mortgage, which as I understand it is just a piece of paper... MORE

Doug North Eats Crow

Economic Education
David Henderson
I'm always impressed when someone admits an error, and especially impressed when he admits an error brought to his attention by an undergrad in an introductory economics course. I just happened to read Douglass North's graceful tribute to the late... MORE

Cato Unbound, Self-Recommending Edition

Growth: Causal Factors
Arnold Kling
Deirdre McCloskey, Gregory Clark, and Matt Ridley debate the cause(s) of the industrial revolution. McCloskey writes, contrary to the usual declarations of the economists since Adam Smith or Karl Marx, the Biggest Economic Story was not caused by trade or... MORE

Full Robin Hanson

Growth: Consequences
Arnold Kling
Maybe this isn't Robin Hanson's greatest hits, but it's a start. Listen when you have an hour and a half. I'll refund your money if you're not satisfied.... MORE

The Real Heroes of Western Civ

Economic History
Bryan Caplan
I was too sick yesterday to invoke my annual curse on Columbus.  But in my fever, I still wondered: How did this awful conqueror and slaver ever become an icon of "Western civilization"?  Every society has such men to offer.  ... MORE

My Essay on the Foreclosure Scandal

Finance: stocks, options, etc.
Arnold Kling
In The Washington Times. What has emerged in recent weeks as "the foreclosure scandal" represents the collision of this 21st-century computerized, global financial system with an 18th-century legal process for obtaining ownership rights to buildings and land. Indeed, the United... MORE

How an Irrational Fad Became Entrenched

Economic Methods
Arnold Kling
Scott Sumner asks, How was it that just a few years later it was almost impossible to get anything published without assuming rational expectations, efficient markets, etc. Let me tell you. For a period of about 5 to 10 years,... MORE

Austerity Within Reason

Fiscal Policy
Arnold Kling
This month's issue of Reason has an article about fiscal tightening moves that did not cause macroeconomic disaster. I discuss the demobilization after World War II. Maurice McTigue discusses New Zealand 25 years ago. David Henderson talks about Canada 15... MORE

Work Choices, Money, and Status

Income Distribution
Arnold Kling
If Greg Mankiw did not know that his latest column on the incentive effects (on Greg) of higher marginal tax rats would be ill-received, then he is somewhere along the autism spectrum. Tyler Cowen tries to return the discussion to... MORE

The Latest Economics Nobel

Macroeconomics
Arnold Kling
As Tyler reports, it goes to Peter A. Diamond (unqualified to be a Fed governor, according to some self-styled experts), Date T. Mortensen, and Christopher A. Pissarides. A few comments. 1. This appears to be for theories of labor matching.... MORE

My Response to Karier's Criticism

Central Planning vs. Local Knowledge
David Henderson
In 9 of the last 14 years, I have written the Wall Street Journal article that appears the day after the Nobel prize in economics is awarded. I missed 1999, 2000, and 2002 because I was in Europe and not... MORE

Don't Miss The Invisible Gorilla

Books: Reviews and Suggested Readings
Bryan Caplan
The Invisible Gorilla: And Other Ways Our Intuitions Deceive Us by Christopher Chabris and Daniel Simons is the latest attempt to popularize academic cognitive psychology - and probably the best book of its type.  The title comes from a cute... MORE

When Is It Safe to Thumb Your Nose?

Economics and Culture
Bryan Caplan
A challenge from Robin Hanson:Bryan commented: Modern parents' depend primarily on the market, not other parents - to meet their needs - and parent-on-parent sanctions are small and sporadic in any case. How far Bryan will take this argument?  What... MORE

If Merit Did Not Exist

Labor Market
Bryan Caplan
The most strident objection to merit pay is that "merit" is utterly subjective.  It's an interesting claim.  But it's hardly an argument for basing pay on seniority.  The natural implication of the unreality of merit, rather, is that we should... MORE

Why TARP was wrong

Finance: stocks, options, etc.
Arnold Kling
Timothy Geithner defends TARP. Financial crises matter not because they hurt banks and bankers. They matter because they kill jobs, businesses and the value of retirement savings. To protect Main Street from the damage caused by a financial crisis, you... MORE

How Cool!

Economics and Culture
David Henderson
Right now I'm on a flight from Dallas to LAX. This is the first time I've been on-line in mid-air. It's fantastic. If you want to see a great 4-minute riff by Louisck that puts everything in perspective, check the... MORE

Notes for a Talk

Political Economy
Arnold Kling
I am having trouble putting this together. It is supposed to be based on U and U, for an audience that I expect to lean neocon, and to go for about 20 minutes, followed by Q&A. I would rather provoke... MORE

Employment: A New Trough

Labor Market
Arnold Kling
The employment situation reported today showed a decline in nonfarm payroll employment. That means that my favorite indicator, labor capacity utilization, is at its lowest level since the recession began. The National Bureau of Economic Research, which uses spending as... MORE

The Real Foreclosure Scandal

Finance: stocks, options, etc.
Arnold Kling
The Washington Post is filled with the story again. Once again, they get it wrong, in my opinion. If mortgage servicers were foreclosing on the wrong borrowers, that would be a scandal. That would be if they send the foreclosure... MORE

Why Do Unions Oppose Merit Pay?

Labor Market
Bryan Caplan
Gary Becker off-handedly remarks:Not surprisingly, teachers unions fight hardest against reforms that change the way teachers are paid, especially when they introduce incentives for teachers to perform more effectively.I don't doubt that unions tend to oppose merit pay, but the... MORE

History of Fire Protection

Microeconomics
Arnold Kling
William Polley recommended a paper by Annelise Graebner Anderson. Russ Roberts recommended an essay by Fred S. McChesney. The point is that fire-fighting began as a private function. Largely volunteer in the U.S. In London, fire brigades were hired by... MORE

The Economics of Fire Protection

Microeconomics
Arnold Kling
Surely, someone has done this? I assume that fire-fighting is an industry with declining average costs. Suppose that it takes $1 million in fixed costs per year to maintain the fire department (that includes normal profit, aka opportunity cost), the... MORE

My Speech in Dallas

Economics of Health Care
David Henderson
I'll be speaking tomorrow at a conference at Southern Methodist University in Dallas. My topic: Obamacare: The Nightmare in Our Future. I normally announce these things about a week in advance, but I've been on the road a lot and... MORE

Bill Gates on Education and Philanthropy

Economics of Health Care
David Henderson
I was impressed by the latest "60 Minutes" report on Bill and Melinda Gates and many of their choices about what to spend their fortunes on. One main choice is their large spending on producing a vaccine against malaria. Here's... MORE

Morning Links

Politics and Economics
Arnold Kling
E. J. Dionne hearts Rep. Tom Perriello. Perriello was one of the participants in the panel on the future of the middle class where I felt out of place. He was not the Congressman who threw down his pen. But... MORE

Krugman, Tennessee Fires, and Health Care

Economics of Health Care
David Henderson
After I posted Tuesday about the Tennessee fire, I saw that Paul Krugman had posted about it also. About the Tennessee fire department that refused to put out a fire for someone who had refused to pay $75 a year... MORE

Parents and Peer Pressure Revisited

Family Economics
Bryan Caplan
About a year ago, Robin and I disagreed about the importance of parental peer pressure.  I said:Robin's functionalist account: It assumes that other parents care about your parenting far more than they actually do.  In reality, most parents are too... MORE

Return to Solipsism

Microeconomics
Bryan Caplan
In my "Solipsist's Guide to Comparative Advantage," I showed how, for all practical purposes, trade actually raises worker productivity.  Notice, though, that my example shows the productivity effects of trade if you and I have different absolute advantages: you're a... MORE

Workers Usurp the Means of Production

Economics of Education
Arnold Kling
The New York Times reports, Today, Mr. Lee and five other teachers -- all veterans of Teach for America, a corps of college graduates who undergo five weeks of training and make a two-year commitment to teaching -- are running... MORE

Answer to Trivia Question

Public Choice Theory
David Henderson
Last night, I asked: Who was the first economist to win the Nobel prize? It's not as obvious as you might think. A hint (it's a very subtle hint) is in the category in which I listed this post. Commenters... MORE

Fundamentalism

Political Economy
Arnold Kling
David complained about an article in which the author blamed libertarians for the refusal of a fire department to put out a fire because the homeowner had not paid for fire protection. David's point is that it was a government... MORE

Trivia Question

International Trade
David Henderson
Who was the first economist to win the Nobel prize? It's not as obvious as you might think. A hint (it's a very subtle hint) is in the category in which I listed this post.... MORE

Some Trends of Interest

Labor Market
Arnold Kling
1. Menzie Chinn offers charts that demonstrate that unemployment is highest in 2010 among those who had the lowest income in 2008. Does that mean that they have the stickiest wages? Just kidding. I think the one thing we could... MORE

A Solipsist's Guide to Comparative Advantage

Microeconomics
Bryan Caplan
According to extreme solipsism, you're the only person who really exists.  Suppose this strange position were true.  What would it imply for the Law of Comparative Advantage?Consider a standard textbook problem with two agents: you and me.  By hypothesis, I'm... MORE

Bizarre Salon Attack on Libertarians

Political Economy
David Henderson
Alex Pareene, at Salon, has a bizarre attack on libertarians. He titles it "For-Pay Fire Department Lets Man's House Burn." He refers to a story about a man who failed to pay an annual fee for fire protection and then,... MORE

I Wasn't Invited

Politics and Economics
Arnold Kling
Matt Welch writes, There you have it. The 47 smartest economists around the president of the United States agree that the best way to solve the "untenable fiscal situation" is to boost education spending, weatherize homes, throw more bad money... MORE

150 Years Ago

Books: Reviews and Suggested Readings
Arnold Kling
James M. McPherson writes, This pre-industrial world could not survive the transportation revolution, which made possible a division of labor and specialization of production for ever larger and more distant markets. The transportation revolution includes canals, steamboats, and railroads. It... MORE

Twenty-One Years Ago

Business Economics
Arnold Kling
Below is a random post.... MORE

Legally Recalculating

Macroeconomics
Arnold Kling
Larry Ribstein writes, I have been insisting for awhile now that the economy was only the trigger of permanent decline in the demand for Big Law's services. Indeed, the factors cited in the Hildebrandt analysis support this: outsourcing and other... MORE

A Noble Nobel for Medicine

Economic Philosophy
Bryan Caplan
Robert Edwards, IVF/"test-tube baby" pioneer, has won the Nobel Prize in Medicine.  From the official press release:As early as the 1950s, Edwards had the vision that IVF could be useful as a treatment for infertility. He worked systematically to realize... MORE

My Immigration Podcast

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
My EconTalk podcast inspired by my recent GMU talk is now up.  As usual, Russ Roberts was an incredibly engaging interviewer.  The main novelty: We're such good friends that we decided to make the interview a little more argumentative than... MORE

ABC vs. Recalculation

Austrian Economics
Arnold Kling
A reader asks me to explain the difference. Answer below the fold.... MORE

Murphy on the Stock Market

Finance: stocks, options, etc.
David Henderson
In this month's Econlib Feature Article, which posted a few minutes ago, Robert Murphy lays out the basics of the stock market. A key paragraph: Despite its importance, the stock market remains a bit of a mystery, even to many... MORE

Morning Recommendations

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Russ Roberts interviews Bryan Caplan on the case for open borders. The challenge with making that case is that anything other than xenophobia is counterintuitive. Thorfinn suggests that if the U.S. overspends on health care, it also overspends on education.... MORE

Immigration and Wages: A Socratic Dialogue

Labor Market
Bryan Caplan
Glaucon: You're an economist, right?Socrates: Yes, I was recently promoted from philosopher to philosopher-economist.Glaucon: You agree, then, that increasing supply reduces prices.Socrates: All else equal, yes.Glaucon: Well, I've heard some "economists" claim that immigration might actually increase native wages.  ... MORE

John Quiggin's new book

Books: Reviews and Suggested Readings
Arnold Kling
It is called Zombie Economics. It is a polemic against conservative and libertarian economics. I agree with some of it, which might be considered a rave review. But really, I am still waiting for a book that attacks us without... MORE

Vamoose!

Business Economics
David Henderson
I was out for a pre-dinner walk near my hotel in Rosslyn this evening and I saw a beautiful new bus and next to it a line of people waiting. The suitcases indicated relatively long-distance travelers rather than commuters. I... MORE

Finance, TARP, and the Great Recession

Finance: stocks, options, etc.
Arnold Kling
At the unpleasant session yesterday, I did learn something interesting from Doyne Farmer of the Santa Fe Institute, while he was ranting against the state of the art in macroeconomic models. He said that in 2006, the Fed simulated a... MORE

The Keynesian Attraction

Macroeconomics
Bryan Caplan
Keynesians have been a smug bunch from their earliest days.  Here's how Keynes once replied to Hayek:Thus those who are sufficiently steeped in the old point of view simply cannot bring themselves to believe that I am asking them to... MORE

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