Bryan Caplan and David Henderson

September 2011

A Monthly Archive (116 entries)

Single Motherhood and Poverty: A Few More Replies

Economic Philosophy
Bryan Caplan
Lots of good comments on my critique of Marsh.  Some quick replies:PrometheeFeu: A lot of women either do not know about birth-control or more commonly do not know how to obtain or use it. Also, some disastrous education policies have... MORE

When to Wash Your Hands

Economic Philosophy
Bryan Caplan
John Marsh replies to my critique of his most outrageous passage:Bryan thinks single-motherhood is a choice, I think it is more or less a given. In other words, if, like me, you wanted to reduce levels of poverty in the... MORE

Venture Capital and Loan Guarantees

Business Economics
Arnold Kling
It is important to understand the difference. Megan McArdle writes, A lot of Solyndra's defenders have been arguing that if the government is going to play venture capitalist, this is simply what's going to happen: venture capitalists accept that a... MORE

As the World Ages

Growth: Consequences
Arnold Kling
Phillip Longman writes, Because of the phenomenon of hyper-aging in the developing world, another great variable is already changing as well: migration. In Mexico, for example, the population of children age 4 and under was 434,000 less in 2010 than... MORE

Quotable

Labor Market
Arnold Kling
From the WSJ blog: Since the recession ended, businesses had increased their real spending on equipment and software by a strong 26%, while they have added almost nothing to their payrolls. The post's title also is eloquent.... MORE

Marsh vs. A Simple, Effective Way to Avoid Poverty

Income Distribution
Bryan Caplan
I genuinely like John Marsh's Class Dismissed.  But now it's time to attack the most outrageous passage in the entire book.  Here's Marsh's take on the view that "increased poverty rates owe to an increase in single-parent homes":Nearly two-thirds of... MORE

You Should Be Nodding Your Head

Economic Methods
Bryan Caplan
Eliezer Yudkowsky:There are large numbers of embarrassing people who believe in flying saucers, but this cannot possibly be Bayesian evidence against the presence of aliens, unless you believe that aliens would suppress flying-saucer cults, so that we are less likely... MORE

More on the Myth of the Macroeconomy

Macroeconomics
Arnold Kling
From a speech by Electronic Arts CEO John Riccitiello, reported by Andy Katkin. I see an unfortunate gap between the economic performance of key parts of the tech sector, and the rest of our economy. I see two economies on... MORE

What Got Us Out of the Great Depression?

Monetary Policy
David Henderson
UCLA vs. UCLA UCLA economics professor Lee Ohanian and co-author Harold Cole of the University of Pennsylvania had a piece in the Wall Street Journal this week, "Stimulus and the Great Depression: The Untold Story." There's a lot of good... MORE

Three Quotes from the Kindergarten Paper

Economics of Education
Bryan Caplan
I'm finally reading the much-acclaimed "How Does Your Kindergarten Classroom Affect Your Earnings?"  There's no denying that it's an extremely impressive piece.  And unlike many of their fans, the authors are very careful.  Note well: Project STAR was designed to... MORE

Pay for Performance

Behavioral Economics and Rationality
Arnold Kling
Bruno S. Frey and Margit Osterloh give a number of reasons to question the effectiveness of performance-based compensation systems. One of the reasons should be familiar to readers of this blog. It would be naïve to assume that the persons... MORE

Jackals in Retirement

Behavioral Economics and Rationality
Bryan Caplan
Democracy is also a form of religion.  It is the worship of jackals by jackasses. - MenckenAlmost everyone likes to make fun of politicians.  But Don Boudreaux has an amazingly clear argument confirming that politicians deserve our derision.  Consider, Don... MORE

Is the United States a Police State?

Regulation
David Henderson
In an article today, Lew Rockwell answers yes. See what he has to say. I'm organizing a session on this at the Association for Private Enterprise Education (APEE) meetings in Las Vegas in April and I've asked people who I... MORE

Class Dismissed and Signaling

Books: Reviews and Suggested Readings
Bryan Caplan
In Class Dismissed: Why We Cannot Teach or Learn Our Way Out of Inequality, John Marsh argues that education is overrated.  Unions and redistribution, not education, are the best remedy for poverty and inequality.  I'm clearly not Marsh's intended audience. ... MORE

Unz on Immigration: A Bizarrely Mixed Bag

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Tyler Cowen pointed me to "Immigration, the Republicans, and the End of White America by Ron Unz.  It's one of most bizarrely mixed bags I've ever read.  The piece combines...1. Wise long-run political advice for Republicans:In states or regions experiencing... MORE

Mike Stroup on Tax Progressivity

Taxation
David Henderson
Mike Stroup, who used to be my colleague at the Naval Postgraduate School and who is now at Stephen F. Austin State University in Nacogdoches, Texas, has done a pithy 2-pager for the National Center for Policy Analysis. It's titled,... MORE

My wife and I are basketball fans, in particular, fans of the home team, the Golden State Warrriors. OK, get over all the laughs and derisive sneers: I'm about to make an important point. We've been following news about whether... MORE

The Myth of the Macroeconomy

Macroeconomics
Arnold Kling
Does that sound like a good book title? The theme would be that treating the economy as if it were a single individual that sometimes spends less and works less is a simplification that does more harm than good. This... MORE

How Lazy Is the Professoriat?

Behavioral Economics and Rationality
Bryan Caplan
In my view, low conscientiousness is a major cause of poverty.  Laziness and impulsiveness lead to low marginal productivity.  Sooner or later the market notices and gives you your just deserts.  A smug, self-satisfied view, I know, but I'm only... MORE

The Best and the Brightest

Political Economy
Arnold Kling
Megan McArdle writes, The administration was supposed to have the economic dream team. Couldn't they have spared a moment to sit down with the folks at DOE and explain the concept of sunk costs? This is why everyone has to... MORE

Moneyball and Randomness

sports economics
David Henderson
Earlier this year, I posted about sports and randomness. I noted that many people fail to account for the role of randomness in sports. I also noted that Billy Beane, the general manager of the Oakland A's, gets randomness and... MORE

From National Affairs

Monetary Policy
Arnold Kling
The current issue (fall 2011) looks quite interesting. Some of the pieces you can now access on line: 1. On means testing for entitlements, Andrew Biggs writes, There is an alternative approach -- one that achieves many of the ends... MORE

I Don't Get This

Economics of Education
Arnold Kling
Nancy Folbre writes, Indeed, research by the economists Eric Hanushek and Steven Rifkin -- both advocates of school reform -- indicates that neither teachers' own test scores when they were students nor their educational credentials explain much of the variation... MORE

Billy Beane Arbitrage

Business Economics
David Henderson
Byran posted this morning on Moneyball. Here's what Charley Hooper and I wrote on it in our 2006 book (we probably wrote this segment in 2004), Making Great Decisions in Business and Life. Billy Beane Baseball One of the most... MORE

I'm no sports fan, but as a betting man, Moneyball intrigued me.  I thought the ending dragged, but the peaks were high.  My favorite (from the shooting script, so the final scene may be a little different):BILLY:Grady, you don't have... MORE

Basel III's Deadly Cocktail

Finance
David Henderson
The global sovereign debt crises, and the Greek fiscal crisis, are bad enough on their own. Basel III is just making things worse. If I may summarize past comments, under the purview of Basel III banks in the United States... MORE

Russ Roberts vs. the Great Whatever

Income Distribution
Arnold Kling
He writes. So my challenge to Tyler is to tell me what he thinks the stagnation in median income signifies. Has there been a change in the returns to education or creativity? Or is it mostly a statistical artifact? Whichever... MORE

Andrew Biggs on Means Testing

Social Security
David Henderson
While Heritage cites the current taxation of Social Security benefits and progressive Medicare parts B and D premiums in defense of its reforms, the effects of its proposed means tests would be more than an order of magnitude larger. Even... MORE

The Great Factor-Price Equalization, Two Views

Cross-country Comparisons
Arnold Kling
Timothy Taylor writes, The African Development Bank reports: "Recent estimates put the size of the middle class in the region in the neighborhood of 300 to 500 million people, representing the population that is between Africa's vast poor and the... MORE

Larry Summers on the European Situation

Optimum Currency Areas
Arnold Kling
He writes, At every stage of this process, from the first signs of trouble in Greece, to the spread of problems to Portugal and Ireland, to the recognition of Greece's inability to pay its debts in full, to the rise... MORE

Monetary Contraction Update

Monetary Policy
Arnold Kling
The WSJ blog writes, Since the start of September, the greenback is up 19% against the Brazilian real, 18% against the South African rand and nearly 9% against the Korean won. It's up more than 7.5% against the Indian rupee.... MORE

Openness in the Gilded Age

Economic History
Bryan Caplan
A great debating point by Don Boudreaux:[Pat Buchanan] frequently asserts that 19th-century America's policy of relatively high tariffs, along with its impressive economic growth, proves that protectionism promotes prosperity.  End of story; full stop; no further analysis is necessary.  Fact... MORE

Supplemental Pessimism

Economics and Culture
Bryan Caplan
More things I'm pessimistic about:1. I think First World happiness is basically maxed out.  In rich countries, your happiness depends on your personality, not your situation.  And personality is really hard to change.  Tyler says he's a "revenue pessimist but... MORE

Obama's Weird Tax Plan

Taxation
David Henderson
According to the Sept. 19 White House fact sheet, "The President calls on [the super committee] to undertake comprehensive tax reform, and lays out five principles for it to follow: 1) lower tax rates; 2) cut wasteful loopholes and tax... MORE

My Thoughts on Monetary Policy

Monetary Policy
Arnold Kling
1. If you believe that aggregate demand matters, then monetary policy is too tight. 2. We won't know whether or not to believe that aggregate demand matters until we see higher inflation. If we see 3 percent inflation or more... MORE

What is Fiscal Profligacy?

Fiscal Policy
Arnold Kling
Tyler Cowen writes, In bad times, and when accounting gimmicks are rampant, a government's fiscal policy is best understood as a portfolio of options positions, not in terms of a static balance sheet. Read the whole post. There is much,... MORE

Who Said It?

Central Planning vs. Local Knowledge
David Henderson
The abolition of consumers' choice in favor of universal rationing is a typical product of that onslaught, sometimes called Bolshevism. This was written by an economist in 1940 to oppose rationing during World War II. Who was the economist? You... MORE

Ethnic Diversity and the Size of Government: A Belated Reply to Sanandaji

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
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Megan McArdle on the "Buffett Rule"

Taxation
David Henderson
Megan McArdle has an excellent post today on the so-called Buffett tax rule. That's the idea that high-income people should pay some minimum percent of their income in federal taxes. After demolishing the case, pointing out that to trap every... MORE

Opportunity Cost and the Public: A Sliver of Hope

Economic Education
David Henderson
I'm one of those people who, on a flight, after doing the crossword puzzle and the medium sudoku, occasionally looks at the articles. I do it mainly to get a feel for what writers trained in the medium think Americans... MORE

Political Cynicism

Politics and Economics
Arnold Kling
From Russ Roberts. And the next president, Republican or Democrat, will spend less than we've been spending. But not a lot less. So those Tea Partiers are in for disappointment. Oh, we might go back to the level of government... MORE

About What Am I Optimistic and Pessimistic?

Economics and Culture
Bryan Caplan
Here's Tyler's list.  Here's mine:1. I am a pessimist about the likelihood of making democracy work better than it does.  We can push the world in a better direction (as Bob Tollison says, "We're all part of the equilibrium"), but... MORE

The Decline in U.S. Economic Freedom: The Movie

Politics and Economics
David Henderson
Matt Mitchell, a sharp young economist at the Mercatus Center, has come up with a 14 second video that shows the rise and fall of economic freedom over the last 4 decades. Note that the decline was precipitous under Bush... MORE

More on the Economic Freedom Indexes

Cross-country Comparisons
Arnold Kling
David has posted on this already. But I want to quote from the Executive Summary. Hong Kong retains the highest rating for economic freedom, 9.01 out of 10. The other nations among the top 10 are: Singapore (8.68); New Zealand... MORE

We're Number 10! We're Number 10!

Cross-country Comparisons
David Henderson
The latest issue of Economic Freedom of the World, written by James Gwartney, Robert Lawson, and Joshua Hall, was released this week. You can find the whole thing here. The United States has slipped from #6 last year to #10... MORE

Obama's Budgetary Sleight of Hand

Fiscal Policy
David Henderson
President Obama Double Counts Now, I'm proposing real, serious cuts in spending. When you include the $1 trillion in cuts I've already signed into law, these would be among the biggest cuts in spending in our history. But they've got... MORE

Corn, God, and Smith

Behavioral Economics and Rationality
Bryan Caplan
From The Wealth of Nations, via Dan Klein:The laws concerning corn* may every-where be compared to the laws concerning religion. The people feel themselves so much interested in what relates either of their subsistence in this life, or to their... MORE

Cynical about Confidence

Behavioral Economics and Rationality
Arnold Kling
1. Mike Munger. The problem is that our last two Presidents, first GWB and now BHO, are freakishly overconfident even by the standards of human males. Neither is capable of imagining that anyone actually disagrees with them, unless the disagreer... MORE

Why the Confident Don't Bet

Economic Methods
Bryan Caplan
The world is full of confident people.  Despite their confidence, it's usually hard to make them bet on their beliefs - and even harder to make them bet at worse-than-even odds.  In one of my all-time-favorite posts by Robin Hanson,... MORE

Ron Paul and Austin Frakt Agree

Economics of Health Care
David Henderson
Background: There's been a lot of discussion on the blogosphere about Ron Paul's answer to a question about health care from Wolf Blitzer: was it a softball, how should Ron Paul have answered, etc. (For a post that links to... MORE

On Macroeconometric Models

Economic Methods
Arnold Kling
My latest essay. the Congressional Budget Office can reasonably estimate the effect of economic and policy scenarios on components of the government's budget, including taxes and spending. However, it cannot reasonably estimate the effect of tax and spending changes on... MORE

School Reform Successes

Economics of Education
Arnold Kling
The Economist touts some. four important themes emerge: decentralisation (handing power back to schools); a focus on underachieving pupils; a choice of different sorts of schools; and high standards for teachers. Pointer from Tyler Cowen. I am skeptical. I think... MORE

The Bizarro Blitzer Interview

Economic Philosophy
Bryan Caplan
Since you're nerdy enough to read EconLog, I assume you're familiar with Bizarro World, Bizarro Superman, and Bizarro Jerry.  Now imagine adding a new figure to this mythology: Bizarrro Wolf Blitzer.*  In Bizarro World, the masses and the mainstream media... MORE

This Should Not be News

Business Economics
Arnold Kling
Tyler Cowen quotes from a paper by Erik Hurst and Benjamin Wild Pugsley: most small businesses have little desire to grow big or to innovate in any observable way. We show that such behavior is consistent with the industry characteristics... MORE

Philosopher Rod Long's gotten a lot of attention for his recent post on Bleeding Heart Libertarians, and it's easy to see why.  Rod leads with Wolf Blitzer's "gotcha" for Ron Paul:Wolf Blitzer: You're a physician, Ron Paul, so you're a... MORE

Robin Hanson on Libertarian Basics

Political Economy
Arnold Kling
He writes, So everyone agrees that we heroically help some, and leave others to die. We only disagree on who falls into which category. What most non-libertarians favor is some form of collectivist policy at a national level. National socialism,... MORE

Who Said It?

Economic History
David Henderson
In his letter, he described Keynes as "the one really great man I ever knew, and for whom I had unbounded admiration. The world will be a very much poorer place without him." This is quoted in a book that... MORE

David Autor on the Job Market(s)

Labor Market
Arnold Kling
I felt a little guilty about my Job-seeker's Paradox post, knowing that I was channeling David Autor. So let me relieve my conscience by quoting at length from a paper that Autor wrote in April of 2010. Routine tasks as... MORE

Two Questions for People Who Respect the Law

Economic Philosophy
Bryan Caplan
I don't respect the law.  If my conscience says one thing, and the law says another, I often follow the law to avoid punishment.  But in my eyes, legality per se has zero moral weight.My position is admittedly controversial.  As... MORE

Toward a World Central Bank?

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
A Committee of economists proposes, the creation of an International Monetary Policy Committee composed of representatives of major central banks that will report regularly to world leaders on the aggregate consequences of individual central bank policies. In other words, more... MORE

The Best Thing I've Read Recently

Political Economy
Arnold Kling
It's the essay "Capitalism and the Jewish Intellectuals," by Jeffrey and Shterna Friedman. It's in the same issue of Critical Review as my essay "Macroeconometrics: The Science of Hubris." I recommend subscribing to Critical Review, even though the publisher maintains... MORE

How Open Is the U.S. Border?

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
How open is the U.S. border?  There are many measures, but my favorite is: How many months' wages do immigrants pay smugglers ("coyotes") to get them across the border?Coyotes' current price is about $3000 per person.I can't find good recent... MORE

More on Social Security and Ponzi

Social Security
David Henderson
In his comment on my previous post on Paul Krugman and whether Social Security is a Ponzi scheme, "wintercow20" writes: Would it not have made sense from the outset to argue something like, "Professor Krugman also recognizes the problems with... MORE

Willpower

Books: Reviews and Suggested Readings
Arnold Kling
That is the title of a new would-be hit pop-sci book by Roy F. Baumeister and John Tierney. I liked it better than Freakonomics, which is faint praise. It probably deserves more praise than that. Definitely worth reading, but then... MORE

Universal Social Programs vs. Cost-Benefit Analysis

Cost-benefit Analysis
Bryan Caplan
Economists habitually mock protectionism for its high cost-benefit ratio.  "$265,000 per job saved!  How ridiculous."  But when you propose means-testing Social Security and Medicare benefits, these same economists usually protest, "A program for the poor will always be a poor... MORE

Krugman on Ponzi: I Was Being Cute

Taxation
David Henderson
Many people have quoted an article Paul Krugman wrote 15 years ago in which he said that Social Security has a "Ponzi game aspect." So how does Krugman respond? He now claims that he said it because Paul Samuelson had... MORE

30 Million Non-Poor Americans Have Been Mislaid

Income Distribution
David Henderson
Because, today, we are no longer counting those who are in poverty after we've helped them. Today we are counting the number who are in poverty before we've helped them. Tim Worstall explains the weird way in which the federal... MORE

They [the Department of Transportation and the Environmental Protection Agency] will swoop in with turgid - and then threatening - demands that you sell no cars to the public (no matter how much the public may want those cars) until... MORE

The Irony of the Irony of The Onion

Growth: Consequences
Bryan Caplan
Yesterday's Onion reads:In a moving and beautiful ceremony held atop Lower Manhattan's gleaming, 120-story-tall Freedom Tower, the nation commemorated the 10th anniversary of the 9/11 attacks by raising a glass to the stable democracy of Afghanistan and to a decade... MORE

The Political Externalities of Immigration: Two Graphs to Ponder

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Lately I've been delving more deeply into the empirical evidence on the political externalities of immigration.  Two striking graphs from Alesina, Glaeser, and Sacerdote's "Why Doesn't the United States Have a European-Style Welfare State?" (BPEA 2001):1. Internationally, racially diverse societies... MORE

Jim Follain on Macro

Macroeconomics
Arnold Kling
He writes, First, let's do more research to help reduce the uncertainty regarding the fiscal situation we face and the new, modern and more complex economy in which we live. This step will involve de-emphasizing a number of metrics underlying... MORE

The Job-Seeker's Paradox

Labor Market
Arnold Kling
Phil Bowermaster writes, Increasingly, perhaps, a job is something that we each have to create. We can't count on someone else to create one for us. That model is disappearing. We have to carve something out for ourselves, something that... MORE

David Friedman on Global Warming

Cost-benefit Analysis
David Henderson
After about a 3-week hiatus, David Friedman is blogging again. And the first one he did after starting is excellent. It's on global warming. Here's the opening paragraph: The argument for large and expensive efforts to prevent or reduce global... MORE

A Lesson in Mainstream Macro

Macroeconomics
Arnold Kling
From Narayana Kocherlakota, The impact of any macroeconomic shock can be divided into two components. One component is the effect of the natural demand and supply adjustments that would occur if prices and their expectations were to adjust continuously. Monetary... MORE

Onward towards Snow Crash

Institutional Economics
Arnold Kling
Alex Tabarrok reports, Private cities are happening now for a reason. Africa, India, and China are urbanizing more rapidly than has ever occurred in human history. In Africa, the number of urban dwellers is projected to increase by nearly 400... MORE

The Economics of Judicial Conflict of Interest

Politics and Economics
David Henderson
Jeffrey Toobin Implicitly Makes a Strong Case that May Surprise His Fans There has been a lot of discussion, especially on the left, about whether Supreme Court Justice Clarence Thomas should recuse himself when that court gets to decide on... MORE

Some Macro to read and to think about

Economic History
Arnold Kling
1. Doug Irwin offers a monetarist explanation of the 1937 recession, based on gold sterilization. Scott Sumner is no doubt pumping his fist in the air. 2. Daniel Little on the Great Factor-Price Equalization. 3. Here is a thought I... MORE

Making Astrology Look Respectable

Economic Methods
Arnold Kling
On the Internet, it is easy to find the John Kenneth Galbraith quip, "The only function of economic forecasting is to make astrology look respectable." Does anyone have a genuine citation for it? A page number somewhere? Anyway, they're back... MORE

Cesar Chavez on Immigration

Labor Mobility, Immigration, Outsourcing
David Henderson
Bryan Caplan writes: The children of the foreign-born go far beyond this. Immigrants hurt them the most, but they oppose immigration the least. How is this possible? The best explanation is that the children of the foreign-born, like many other... MORE

Immigration vs. the Self-Interested Voter Hypothesis

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Who loses the most from additional immigration?  The data is clear: The biggest losers are immigrants who are already here.  This is hardly surprising: recent and new arrivals are in close competition because they supply nearly identical skills.  Ottaviano and... MORE

Credentials and Teacher Quality

Economics of Education
Arnold Kling
According to Marcus Winter, they are not highly correlated.... MORE

Is Media Bias a Market Failure?

Behavioral Economics and Rationality
Arnold Kling
A couple of readers have raised this issue. If news media are so biased, why does the market not correct this? My first thought is that there probably is no market for unbiased media. There is definitely a market for... MORE

Indicators of the New Financial Crisis

Finance: stocks, options, etc.
Arnold Kling
1. Risk spreads are elevated again. 2. Correlations are elevated again. Pointer from Tyler Cowen. In the end, I think this will have a bigger effect than any stimulus package.... MORE

An Education Gap?

Labor Market
Arnold Kling
Jonathan Rothwell and Alan Berube write, At the height of the recession in 2009, the average U.S. job required 13.54 years of education, up from 13.37 in 2005. The increase reflected layoffs in less-education intensive industries such as construction and... MORE

The Stupidest Most Annoying Argument for Stimulus

Economics of Education
Arnold Kling
Mark Thoma recycles a chart from the Center for Budget and Policy Priorities showing cuts in employment in education. Ergo, we need to send stimulus money to state and local governments. I don't mean to single out Mark. Every Democrat... MORE

Question for Fans of Universal College Attendance

Economics of Education
Bryan Caplan
Question for people who think that (almost) everyone should go to college:Do you also think that (almost) everyone should major in high-paid technical fields like engineering, medicine, and computer science?If not, why not?  If the college premium is an overpowering... MORE

My NPR Non-Appearance

Politics and Economics
Arnold Kling
Earlier today, I got an email from someone at NPR asking if I was available to comment on the President's speech afterward. I replied with my phone number, and the woman called me (not an on-air personality. I will withhold... MORE

Don't Just Sit There: Undo Something

Economic Education
David Henderson
That's the title of my piece that I wrote for the McClatchy newspaper chain. It ran in multiple McClatchy papers. Here's the one in the Fort Worth Star-Telegram. Here's one excerpt: First, distinguish between bad jobs and good jobs. An... MORE

Old-time Religion?

Macroeconomics
Arnold Kling
Paul Krugman writes, You often hear people saying that the crisis has revealed the need for new economic thinking, for new ideas about macroeconomics. Yet the first priority seems to be to resuscitate old ideas. Brad DeLong describes an interview... MORE

My Jobs Speech

Labor Market
Arnold Kling
I figured I would talk before the President does. Here goes. Let me know what you think.... MORE

Wages, Welfare, and Elderly Immigration

Behavioral Economics and Rationality
Bryan Caplan
Two of the most popular complaints about immigrants:1. They take our jobs.2. They're all on welfare.There's a major tension between the two complaints: Are the immigrants stealing jobs, or loafing?  Contradictions aside, though, you have to wonder: Which complaint do... MORE

Gold and Treasuries

Finance: stocks, options, etc.
Arnold Kling
Paul Krugman writes, What effect should a lower real interest rate have on the Hotelling path? The answer is that it should get flatter: investors need less price appreciation to have an incentive to hold gold. Yesterday, in my high... MORE

Warren Buffett--or Howard Buffett?

Fiscal Policy
David Henderson
A non-libertarian economist colleague recommended Warren Buffett's recent op/ed, "Stop Coddling the Rich," to me and I decided to read it for myself. I came away unimpressed. I won't do a full analysis, but I will point out a few... MORE

The noble Michael Clemens is taking the efficient, egalitarian, libertarian, utilitarian way to double world GDP to the masses.  But one passage made me furrow my brow:All the economic and social arguments against immigrant entry to the workforce could be... MORE

Economics Everywhere

Business Economics
David Henderson
The resourcefulness of free markets. Most mornings I go to the Starbuck's at the local Safeway to buy coffee for my wife. When I went this morning, I pulled up beside an unoccupied Sara Lee truck delivering bread. Outside the... MORE

David Gordon Responds

Economic Philosophy
David Henderson
In a comment on my recent post on the debate between Nick Gillespie/Matt Welch and David Gordon, I challenged David Gordon to give instances where Gillespie and Welch have claimed that one must have certain tastes or attitudes in order... MORE

Reflections on The Name of the Game

Family Economics
Bryan Caplan
Will Eisner might be the most influential graphic novelist of the 20th century.  Contrary to some, he didn't "invent the graphic novel," but his ouvre is awesome nonetheless.  Although I'm a big fan, I only recently discovered what might be... MORE

Is Russia a "Thug State?"

Institutional Economics
David Henderson
Although the KGB was abolished in 1991 after its chairman, Vladimir Kryuchhov, participated in the failed coup d'etat against USSR president Mikhail Gorbachev, the KGB mentality still thrives. Russian is run by former KGB officials and Kremlin-friendly oligarchs. They control... MORE

My Speech at Western Kentucky University

Upcoming Events
David Henderson
On Monday, September 12, I'll be giving a speech at Western Kentucky University in Bowling Green, Kentucky. The public is welcome. My speech is titled, "Lessons Not Learned from 9/11: An Economic, Numerate, Constitutional Perspective." It will go from 8:00... MORE

The Great AI Shift?

Growth: Consequences
Arnold Kling
Jaron Lanier says, If you had talked to anyone involved in it twenty years ago, everyone would have said that the ability for people to inexpensively have access to a tremendous global computation and networking facility ought to create wealth.... MORE

Live and Let Live

Economic Philosophy
Bryan Caplan
David (Henderson, not Gordon) writes:Nowhere in the definition of "tolerate" is there the idea of embracing or liking a particular group, practice, race, type of music, etc. "Tolerance," in short, seems to mean the belief in the idea of "live... MORE

Do Nick Gillespie/Matt Welch and David Gordon Disagree?

Economics and Culture
David Henderson
I have a different take from Bryan Caplan's on the debate between Nick Gillespie and Matt Welch, on the one hand, and David Gordon, on the other. My take is informed by the further discussion that Bryan doesn't mention: Welch's... MORE

Tolerance and the Libertarian Penumbra

Economic Philosophy
Bryan Caplan
A while back I wrote of the "libertarian penumbra":Libertarians are famous for their internal disagreements, but they have far more beliefs in common than their core position requires.  For starters, even non-consequentialist libertarians generally believe that libertarian policies have good... MORE

Adaptation

Business Economics
Arnold Kling
This official Google blog post says, Over the next few months we'll be shutting down a number of products and merging others into existing products as features. The list is below. This will make things much simpler for our users,... MORE

Capital Mis-Regulation

Finance: stocks, options, etc.
Arnold Kling
Kevin Dowd and others have written a lengthy, important paper on the flaws in the Basel capital regulations. They write, The Basel system provides a textbook example of the dangers of regulatory empire building and regulatory capture, and the underlying... MORE

Good News from Amitai Etzioni

Fiscal Policy
David Henderson
A well-known sociologist shares information about a prominent Democratic Senator that made him despair--and gave me hope. For some reason, I'm on what is probably a very large e-mail list from Amitai Etzioni, the left-wing sociology professor at George Washington... MORE

Medical Skepticism: Children's Classics Edition

Behavioral Economics and Rationality
Bryan Caplan
The original Pinnochio's take on medicine is amusingly Hansonian: One after another the doctors came, a Crow, and Owl, and a Talking Cricket. "I should like to know, signori," said the Fairy, turning to the three doctors gathered about Pinocchio's... MORE

The Outlook for Social Security

Social Security
Arnold Kling
Charles Blahous writes, population aging will remain a bigger financial challenge even than health cost inflation for decades to come. The vast majority of long-term cost growth in Social Security and Medicare, for example, is projected to take place by... MORE

Beautiful Discussion on the Web

Cost-benefit Analysis
David Henderson
Bryan Caplan has already blogged about the debate between Paul Krugman and Steve Landsburg. I have nothing to add to the substantive issue debated. But I do have four things to add: 1. Notice that Krugman, in a later post,... MORE

AT&T/T-Mobile Merger is Pro-Consumer

Business Economics
David Henderson
The share prices of AT&T and T-Mobile parent Deutsche Telekom AG fell sharply, while shares of No. 3 cellphone company Sprint Nextel Corp., seen as the biggest loser if the proposed merger goes through, were up nearly 6%. This is... MORE

Me on KQED FM on Friday

Business Economics
David Henderson
I'll be on KQED-FM (San Francisco) on Friday, September 2 sometime between 9:00 and 10:00 a.m. (PDT). The topic? Solyndra, the welfare-receiving corporation that suspended operations yesterday and plans to declare bankruptcy. UPDATE: Well, when it came to policy, it... MORE

Keynesianism vs. Pump Priming

Macroeconomics
Bryan Caplan
Keynesianism is widely seen as a "pump priming" rationale for government intervention.  The government sees the economy in the doldrums, gives it a much-needed jolt, and then the private economy gets back on feet - with no need for further... MORE

Political Freedom and Economic Freedom

Political Economy
Arnold Kling
I have seen some discussion of the issue of the extent to which libertarians would trade off political freedom for economic freedom. I think some of the pieces were written by trolls, so I will not reward them with links.... MORE

Further Adventures with Econ Videos

Economic Education
Arnold Kling
I posted four new videos on the topic of outsourcing. They are numbers 9-12 in my AP Economics lecture series. Feedback on any of them would be appreciated. With number 12, I sort of dance around the idea of PSST.... MORE

The Rabbit Hole of Behavioral Economics

Behavioral Economics and Rationality
Arnold Kling
Frances Woolley writes, Once you fall down the rabbit hole, you just have to keep on going. If people's choices are not a reliable guide to their well-being, you have to turn to something else. Ask people how happy they... MORE

One Gritty Piece of Academic Reality

Economics of Education
David Henderson
"Howdy from that college kid." That's the subject line of an e-mail I received about a year ago from a local college student who, at the time, was attending Monterey Peninsula College, the local 2-year community college in Monterey. The... MORE

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