Bryan Caplan and David Henderson

November 2011

A Monthly Archive (109 entries)

A Surprise OWSer

Monetary Policy
Arnold Kling
I write, Are the Fed's actions in the interest of the 99 percent of us who do not own many shares of European banks? Overall, my comments stressed style over substance. This was for the NYT Room for Debate feature.... MORE

Sociologists on Signaling

Economics of Education
Bryan Caplan
From educational sociologist David Labaree's foreward to David Brown's Degrees of Control: A Sociology of Educational Expansion and Occupational Credentialism:[C]redentialism is astonishingly inefficient.  Education is the largest single public investment made by most modern societies, and this is justified on... MORE

Nick Rowe Asks About Debt Growth

Finance: stocks, options, etc.
Arnold Kling
He writes, I'm talking about the debt of households and firms. And I'm talking long run, not just the last few years. Over the last several decades, the ratio of debt to GDP has increased a lot. Not just in... MORE

Simon Johnson on Econtalk

Finance: stocks, options, etc.
Arnold Kling
Self-recommending, as Tyler would say. The lawyer-blogger at Capitalism without Failure comments, Prof. Johnson says he is a follower of George Stigler, who made the point that when you regulate industry, industry will attempt to capture the regulators. Bankers are... MORE

Usage-Based Pricing for Books

Information Goods, Intellectual Property
Arnold Kling
Joshua Gans suggests the model. How would this occur? I imagine that there is a vast exchange available -- maybe we could call it a library -- where all books ever written are available. Publishers nominate reading prices for their... MORE

Two Long Reads

Politics and Economics
Arnold Kling
1. Bloomberg discloses information it obtained on banks receiving loans from the Fed. The Bagehot adage is "lend freely, at a penalty rate." The Fed got the first part. 2. Lee Ohanian argues against the excesses of public sector unions.... MORE

Two Mock Interviews

Labor Market
Bryan Caplan
Imagine interviewing the following two job applicants.Applicant #1: Currently unemployed.Applicant #2: Currently employed.Question: For each applicant, would you expect him to be (a) more productive than the average currently employed worker, (b) less productive, or (c) as productive?  Why?... MORE

Timothy Taylor writes, Veron emphasizes that it may be most useful to require those issuing securities, and asking to have them rated, "to disclose more standardized and audited information about their risk factors and financial exposures." This new regulatory rule... MORE

Bill Keller's Slip

Monetary Policy
David Henderson
In an editorial in yesterday's New York Times, Bill Keller decries the competition that newspapers get from independent sources on the web. That's not how he poses it, of course. No. What he sees is a lot of loud, outlandish... MORE

More Evidence for ZMP

Labor Market
Arnold Kling
I assume that David's title was partly tongue-in-cheek. Anyway, consider what Kay Hymowitz writes. Between 1950 and 1980, Brooklyn lost half a million residents. And the blue-collar decline continues in the new millennium, with the borough losing more than 9,000... MORE

Markets for Everything: Managing Worms Edition

Labor Market
David Henderson
More evidence against Zero Marginal Product (ZMP) "Manage our worm bin!" That was the help-wanted note new mom Rachel Christenson posted a few weeks ago at online marketplace TaskRabbit Inc. Neither she nor her husband wanted the "gross" job of... MORE

Bryan Caplan is Not Like Warren Buffett

Economics of Education
David Henderson
In his critique of education--I have been urging Bryan to call it schooling, but have had no apparent effect on his wording--Bryan Caplan lays out how government pays him to school people and how what he teaches them has little... MORE

The Magic of Education

Economics of Education
Bryan Caplan
I've been in school for the last 35 years - 21 years as a student, the rest as a professor.  As a result, the Real World is almost completely foreign to me.  I don't know how to do much of... MORE

Kevin Drum vs. Priceless Economics

Labor Market
Arnold Kling
He writes, So here's the story. Union Pacific is offering $48,000 per year for skilled, highly specialized, journeyman work that's physically grueling and requires workers to be away from home about half of each month. The competition is offering 50%... MORE

A Sentence that I Doubt

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
from Timothy Garton Ash: The passive consensus in favor of Europe is bigger than it appears in Great Britain. If I were to draw this as a cartoon, he would be the pet shop owner in the famous Monty Python... MORE

A Fable of Two Countries

Fiscal Policy
Arnold Kling
Once, there were two countries, I and U. Each had GDP of $100. Each had nominal GDP growth of 4 percent. Country I was a good country, with government debt of only $60, taxes of $20, and spending on everything... MORE

Bias Against Speculation?

Behavioral Economics and Rationality
Bryan Caplan
Robin Hanson recently discussed research finding that atheists are widely disliked because people see them as less trustworthy.  He then posed a logical followup question: "So are atheists actually less trustworthy?" and offered a tentative answer: "I'd guess that they are, but... MORE

Me on Fox News Channel Tonight

Upcoming Events
David Henderson
John Stossel's special on government budgets, "The Money Hole," will be replayed on Fox News Channel tonight. It's at midnight EST and 9:00 p.m. PST. In one of the segments in that show, John Stossel interviews me on my Mercatus... MORE

Dostoyevsky on Gratitude

Economic Philosophy
Bryan Caplan
Only two days after Thanksgiving did I remember this wonderful passage on gratitude from The Brothers Karamozov:This legend is about Paradise. There was, they say, here on earth a thinker and philosopher. He rejected everything, 'laws, conscience, faith,' and, above... MORE

Robin Wells on the Mankiw Walkout

Economic Education
David Henderson
In a post on November 20, economics professor Robin Wells weighs in on the students who walked out of Greg Mankiw's class. I had previously blogged about this here. I particularly like the tone of Professor Wells's comments. This surprised... MORE

Italy's Black Friday Sale

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
Selling bonds at a discount. "The pricing is awful," said Padhraic Garvey, rate strategist with Dutch bank ING in Amsterdam. "The object of the exercise this morning was to get the job done and they've done that, but that's about... MORE

Why is it Life Insurance?

Finance: stocks, options, etc.
Arnold Kling
I claimed that if an event is very likely to happen, then it is not insurable. Some commenters responded that we have life insurance, and yet everybody dies. The reason that we can have life insurance is that the timing... MORE

Outsourcing our Carbon Emissions

Energy, Environment, Resources
Arnold Kling
The blogger at The Oil Drum writes: We are dealing with a large number of countries with very different energy intensities. The big issue would seem to be outsourcing of heavy manufacturing. This makes the energy intensity of the country... MORE

What Happened to State and Local Governments?

Macroeconomics
Arnold Kling
Michael Mandel writes, real state and local government output, as measured by the BEA, has been effectively flat since 2001. To put it a different way, the stagnation at the state and local government level started way before the 2007... MORE

Me on Middle-Class Jobs

Labor Market
Arnold Kling
Interviewed by Phil Bowermaster here. I elaborate on my thesis that the Great Depression was a major transition and that we currently are undergoing another major transition.... MORE

Long-term Care Insurance

Economics of Health Care
Arnold Kling
Jeffrey R. Brown and Amy Finkelstein write, Between 35 and 50 percent of 65 year-olds will use a nursing home at some point in their remaining lives. Pointer from Timothy Taylor. My take on this is that when something has... MORE

A Puzzle for Human Capital Extremists

Economics of Education
Bryan Caplan
Suppose you believe whole-heartedly in the human capital theory of schooling.  Appearances notwithstanding, everything that students study gives them additional marketable skills - at least probabilistically.  I have a question for adherents of this position: Why do students rejoice whenever... MORE

Gun Control: Things I Didn't Know

Regulation
David Henderson
The Ku Klux Klan, Ronald Reagan, and, for most of its history, the NRA all worked to control guns. The Founding Fathers? They required gun ownership--and regulated it. And no group has more fiercely advocated the right to bear loaded... MORE

More on ZMP

Labor Market
Arnold Kling
Tyler Cowen comments, drawing a response from Bryan. I just don't think that the fraction of the healthy adult population with ZMP has risen much since the last time unemployment was 5%. Here is where the term sustainable in patterns... MORE

Final Points on ZMP

Labor Market
Bryan Caplan
Tyler makes some thoughtful points on ZMP.  Replies:1. There has been plenty of evidence for "labor hoarding"; oddly, once the ZMP workers start actually being fired, the concept suddenly becomes controversial.  The simple insight is that firms don't hoard so... MORE

A Pithy Sentence

Income Distribution
Arnold Kling
from Larry Summers. A general posture for government of standing up for capitalism rather than particular well-connected capitalists would also serve to mitigate inequality. Pointer from Mark Thoma.... MORE

European Banks

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
Hyun Song Shin writes, The permissive bank risk management practices epitomized in the Basel II proposals were already widely practised within Europe as banks became more adept at circumventing the spirit of the initial 1988 Basel I Accord. Basel II... MORE

The Moral Case for Allowing Kidney Sales

Economics of Health Care
David Henderson
This is just out. I like the point Professor Taylor makes near the end about how virtually everyone involved in the transplanting of a kidney from one person to another is paid except the person who gives up a... MORE

Your Thoughts on the Eurasian Union

Cross-country Comparisons
Bryan Caplan
Three days ago Russian, Kazakhstan, and Belarus formed the Eurasian Union, designed to do for the former Soviet bloc what the EU did for Europe:[E]xperts stated that apart from post-Soviet states, membership to the Eurasian Union could be expanded to... MORE

Dinner with Tim Congdon

Politics and Economics
Arnold Kling
The other night, RealClearPolitics hosted a dinner with Tim Congdon, the author of Money in a Free Society. Congdon is a British disciple of Milton Friedman. Scott Sumner knows who he is, but not vice-versa. Unlike Sumner, Congdon uses a... MORE

Blame Everyone

Economic Philosophy
Bryan Caplan
Scott Sumner says much I agree with about nature, nurture, and behavior.  When Ronald Green argues that obesity is caused by genes rather than laziness and lack of self-discipline, Scott retorts:Do you see the problem with Green's assertion?  He asks... MORE

The Folly of Fools

Books: Reviews and Suggested Readings
Arnold Kling
That is the title of a new book by Robert Trivers. Tyler Cowen thought it was worthwhile. Not me. The book is supposed to be about deception and self-deception, but that seems to be an excuse for Trivers to opine... MORE

Arnold's Clarification

Labor Market
David Henderson
I'm glad Arnold clarified his thinking in his latest post. He had written, as recently as two days ago: But until the project manager comes up with a new plan, the other workers are all ZMP [capable of producing zero... MORE

The Truck Driver Puzzle

Labor Market
Arnold Kling
An economist who attended a business conference told me that the trucking industry is doing well (probably a sign that the economy overall is improving). However, industry experts foresee a shortage of drivers next year. How is that? Some possibilities:... MORE

The Debt Story: AD or PSST?

Macroeconomics
Arnold Kling
Atif Mian and Amir Sufi write, If weak household balance sheets are responsible for a large share of job cuts, we expected losses in non-tradable industries to be much larger in U.S. counties with weak household balance sheets. That is... MORE

Best Economics Books of the Year

Books: Reviews and Suggested Readings
Arnold Kling
Tyler Cowen has a good list. He can be trusted to be unbiased on books written by authors with no GMU connection: Kahneman, Brynjolffson and McAfee, and Field. I would add Friedman and Kraus, Engineering the Financial Crisis, to the... MORE

Response to Arnold on Zero Marginal Product

Labor Market
David Henderson
In his latest response to co-blogger Bryan Caplan on ZMP, co-blogger Arnold Kling writes: The point that third-world workers are employed refutes the Z in "zero marginal product." I would agree that American workers could compete for jobs at third-world... MORE

Youth Unemployment, Continued

Labor Market
Arnold Kling
Federal Reserve economist Christopher L. Smith has a good paper on the topic. Since the start of the most recent recession, the employment‐population rate for high school‐age youth (16 and 17 year olds) has fallen from around 23 percent to... MORE

TGS and RATM

Economics of Education
Arnold Kling
That is, "The Great Stagnation" and "Race Against the Machine." Tyler Cowen writes, I understand how the TGS argument fits into the cyclical story of 2007-2011 (excess confidence and overextension, Minsky moment, AD contraction, AS problems slow down the recovery),... MORE

Response to Bryan on ZMP

Labor Market
Arnold Kling
His post is here. I would say that there is a decent probability that he is correct. However, below are some potential counter-arguments. I will also address Don Boudreaux. On the point that past forecasts of technological unemployment have been... MORE

How Elite Firms Hire: The Inside Story

Labor Market
Bryan Caplan
I highly recommend Lauren Rivera's "Ivies, Extracurriculars, and Exclusion" (Research in Social Stratification and Mobility 2011).  Not only is the piece careful, edifying, and interesting; it's even emotionally affecting.  Learning more about elite hiring actually replaced my apathy toward elite... MORE

Will Only the Criminals Have Tans?

Regulation
David Henderson
My friend, Ted Levy, MD, sent me the following. It was so good that I couldn't figure out a way to cut it down or choose only a few paragraphs. So here's the whole thing. In the 19th century, one... MORE

Do AS and AD Intersect in a Recession?

Macroeconomics
Arnold Kling
As you may know, I have been recording chalk-talks for my high school economics class. I did macro first, and now I am working on micro (I am now quite a few lectures ahead of where we are currently in... MORE

Daniel Hamermesh has presented data showing that, all else equal, ugly people do worse economically and are less happy than the non-ugly. The Daily Show sent one of its crack interviewers to interview him. The result--this 5-minute video--is highly entertaining.... MORE

From the Chronicle of Higher Education:The discovery that the Dutch researcher Diederik A. Stapel made up the data for dozens of research papers has shaken up the field of social psychology, fueling a discussion not just about outright fraud, but... MORE

The Reasons for My Hostility to ZMP

Labor Market
Bryan Caplan
My brilliant former student Eli Dourado wonders why I'm so hostile to the Zero Marginal Productivity (ZMP) theory of high unemployment:It is hard to think of another idea that is more Caplanian. This is after all the man who pointed... MORE

Video of the Year

Growth: Consequences
Arnold Kling
In my opinion, it is this debate between Tyler Cowen and Erik Brynjolffson. The speakers, the moderator, and the audience questions were all top form. Remind me never to get into a live debate with Tyler. I thought he was... MORE

One Scenario for Sovereign Debt

Politics and Economics
Arnold Kling
Robert Samuelson writes, as economist Arvind Subramanian of the Peterson Institute makes clear in an open letter to IMF Managing Director Christine Lagarde. What the IMF should do is organize a huge rescue fund -- at least $1 trillion to... MORE

David Sedaris on TSA

Regulation
David Henderson
As regular readers of my posts know (see here, here, here, and here, for example), I think the TSA is one of the most anti-liberty, intrusive government organizations in America. So I follow the culture to see what people are... MORE

My Back-Up Plan

Labor Market
Bryan Caplan
Today at lunch we were discussing the predictability of career outcomes.  How often do small chance events make or break a person's success?  Eventually someone brought the case down to earth: What would have happened to me, Bryan Caplan, if... MORE

How Sticky Are Nominal Wages?

Labor Market
Arnold Kling
The broadest measure of employee compensation is called the employment cost index. It includes the cost of benefits, such as health insurance. It is available quarterly, starting in the first quarter of 2001. I used the private sector worker ECI.... MORE

My Talk at Berkeley

Central Planning vs. Local Knowledge
David Henderson
One enterprising student, Scott Gibb, recorded all but the first two minutes of the talk I gave at Berkeley earlier this month. The sound quality is quite high. My talk is titled, "The Case For a Non-Interventionist Foreign Policy." It's... MORE

Measurement Problems: House Price Inflation

Macroeconomics
Arnold Kling
A while back, Scott Sumner wrote, The BLS doesn't claim housing prices fell 7.7% since mid-2006, they claim they rose by 7.7%. Just a minor 39.3% discrepancy with C-S. BLS is the Bureau of Labor Statistics, the custodians of the... MORE

In my last reply to Arnold, I asked for a "Guide to Discontinuity/ZMP for Skeptics."  Arnold's response:The main evidence that I cite against the AD/AS story is the length of unemployment spells and the large number of workers who are... MORE

Youth Unemployment: A Puzzle for Any Story

Labor Market
Arnold Kling
Mike Konczal writes, Every age group has seen a substantial drop in the employment-population ratio during this Lesser Depression, but no other group I've seen comes close to this plummet. For the first time in half a century, a majority... MORE

Evidence for PSST: A Rejoinder

Labor Market
Arnold Kling
Bryan writes, What's the best available "Guide to Discontinuity/ZMP for Skeptics"? Non-economists have always been quick to believe stories about technological unemployment. Economists have been ridiculing this popular fear for centuries. What happened in the last three years that ought... MORE

Reply to Arnold on PSST

Labor Market
Bryan Caplan
My last post critiqued Arnold's PSST ("patterns of sustainable specialization and trade") alternative to the conventional aggregate supply/aggregate demand model:In Arnold's story, firms and workers violate the First Law of Wing Walking: Never let hold of what you've got until... MORE

Is There an Asymmetry in Benefits from Trade?

International Trade
David Henderson
Don Boudreaux has written one of those rare letters that I don't quickly agree with. He writes: Discussing expanded American trade with the Chinese, President Obama told a business group in Honolulu "those are potential customers for us in the... MORE

One Cause of the STEM Shortfall

Economics of Education
Arnold Kling
According to Timothy Taylor, grade inflation in the humanities has been contributing to college students moving away from science, technology, engineering, and math fields, as well as economics, for the last half century. This comes at the end of an... MORE

Discontinuities

Labor Market
Arnold Kling
Bryan writes then when technological change occurs, we should observe Cut wages in existing industries drastically enough to keep firms afloat and workers fully employed. That is true for small changes. Mathematically, it assumes continuous functions. It may not be... MORE

PSST vs. the First Law of Wing-Walking

Labor Market
Bryan Caplan
For the last couple of years, Arnold has been energetically promoting a macroeconomic alternative to the standard AS-AD model.  He calls it PSST - "patterns of sustainable specialization and trade": I focus on patterns of trade to try to avoid... MORE

Shorter Diamond Age

Income Distribution
Arnold Kling
That is how I would describe Tyler Cowen's latest column. higher income inequality will increase the appeal of traditional mores -- of discipline and hard work -- because they bolster one's chances of advancing economically Reading that, I could not... MORE

My First Austrian Moment?

Austrian Economics
Arnold Kling
In January of 2001, I wrote, You no longer need to plan and manage large capital expenditures, so you do not need a large bureaucracy. What I expect the Internet to generate is an increase in the number of small... MORE

That's the gist of what Lorri Marquez Chapman of West Hartford, Connecticut wrote in a letter to the Wall Street Journal today. She was responding to a modest proposal by Sally Satel for people to be able to donate their... MORE

A Pessimistic Prediction

Politics and Economics
David Henderson
In which the author predicts an attack in or near Las Vegas. A few weeks ago I made a few optimistic predictions and a few pessimistic ones. My optimistic ones tend to be about how even semi-free markets will solve... MORE

The Great Books of Liberalism and Conservatism

Political Economy
Arnold Kling
Tyler Cowen finds the most interesting part of the analysis of Carl T. Bogus (whose name reminds me of the old commercial, "with a name like Smucker's, it has to be good"). Conservatives have big appetites for ideology; liberals don't.... MORE

Have a Nice Day, Mario Draghi

Politics and Economics
Arnold Kling
It turns out that the new head of the European Central Bank is another alumnus of the MIT economics department. However, since he got his Ph.D in 1976, he and I did not overlap. The friend who pointed this out... MORE

My lecture "Immigration Restrictions: A Solution in Search of a Problem" begins with the following hypothetical:Moved by the plight of Haitian earthquake victims, you go to Haiti to aid in the relief efforts.  After two weeks, you're ready to go... MORE

Have a Nice Day

Optimum Currency Areas
Arnold Kling
That is about all that is left to say about the European situation. Clive Crook writes, the only sane choice is to accept the logic of the currency union they created and the obligations that go with it. In the... MORE

In a blog post today, Mark Thoma shows a graph giving the poverty rate with and without "the safety net," the euphemism for government welfare programs. It is from the Center on Budget and Policy Priorities. The Center looks at... MORE

What Greg Mankiw's Defenders Missed

Economic Education
David Henderson
News Flash: Harvard Has no Access to the Web and No Libraries Last Wednesday, Greg Mankiw blogged about the students who walked out of his Ec10 class. They have various complaints about it that you can read here. One student,... MORE

Is the Government an Efficient Charity?

Income Distribution
Arnold Kling
Tyler Cowen agrees with me that the most interesting sentence in Shikha Dalmia's essay is in 1979, households in the bottom quintile received more than 50 percent of all transfer payments. In 2007, similar households received about 35 percent of... MORE

Identity and Misanthropy

Economic Philosophy
Bryan Caplan
Paul Kelleher's critique of my recent post on mobility and misanthropy is a rare pleasure.  He begins by carefully explaining and defending a position on personal identity that I've repeatedly championed.  Kelleher:  The following claims seem true: I could have... MORE

The Paltry Effect of Political Correctness

Economics and Culture
Bryan Caplan
Sure, colleges are full of politically correct indoctrination.  But how well does the indoctrination actually work?  Poorly.  How College Affects Students reviews the whole literature and finds that:Net of the attitudes and other characteristics students bring with them to college, the... MORE

Choosing a College Major

Economics of Education
Arnold Kling
Fabio Rojas writes, using a yearly survey of freshmen, that college students are becoming more interested in making money. In 1971, about 50% went to college to make money. In the 1990s, it's about 70%. Similarly, modern college students are... MORE

Krugman and Bastiat: Confusing the Centuries

Economic Education
David Henderson
In a post yesterday, I asked readers to say who they thought is the modern counterpart of Bastiat. I should have specified that I meant someone who's still alive; otherwise, I think libfree's, Michael J. Green's, Will Ruger's, and Daniel... MORE

Mobility and Marriage

Income Distribution
Arnold Kling
Bryan picked up on the fact that what we call intergenerational "economic mobility" (or lack thereof) is very much a cultural phenomenon. I would like to add that marriage patterns play a role, too. If economic classes become more endogamous... MORE

From Mobility to Misanthropy

Economic Philosophy
Bryan Caplan
Scott Winship's written a good piece on ingenerational income mobility... with one highly objectionable passage.  Ponder the underlying philosophy here:[R]educing the number of unplanned pregnancies would unquestionably reduce the number of children experiencing divorce and other disadvantages. Since it is... MORE

The Modern Bastiat

Economic Education
David Henderson
If you have never read Frederic Bastiat, you're missing a real treat. He was the French economic journalist who wrote a spate of articles in his 40s, before dying in 1850, laying out economics in a very clear way. When... MORE

Solar Power

Energy, Environment, Resources
Arnold Kling
Joshua Gans writes, What interested me more was the growing evidence that solar energy might be subject to a Moore's Law rate of improvement. According to Ramez Naam in Scientific American, the cost of solar photovoltaic models has been falling... MORE

Immigration Restrictions as Affirmative Action

Economic Philosophy
Bryan Caplan
One of my closest conservative friends is chronically angry about (a) immigration and (b) affirmative action.  The irony is that the immigration restrictions he so passionately favors are affirmative action - for native-born workers.Advocates of standard affirmative action see the... MORE

Stop, Drop, and Roll

Labor Market
David Henderson
Many cities across the country subscribe to the concept of "public safety pay parity." From Atlanta to Dallas to New York City and San Francisco (and many cities in between), firefighters have effectively lobbied city and state governments to pay... MORE

How Government Intervention Helped Start the 1967 Detroit Riot Here's the [Kerner Commission] report's first paragraph on Detroit: "On Saturday evening, July 22, the Detroit Police Department raided five 'blind pigs.' The blind pigs had their origin in prohibition days,... MORE

In Time

Economics and Culture
Bryan Caplan
[Warning: spoilers]Sci-fi thriller In Time has a simple premise: In the future, people become immortal as long as they don't run out of the crucial tradable commodity: time.  Everyone is born with 26 years of life; to live longer, they... MORE

Tom Sargent on How the Vietnam War Made Him Skeptical of Government

Central Planning vs. Local Knowledge
David Henderson
One of the things I find most fascinating is how various people came to their political views. Most people are not particular conscious of how, but some people are. I remember interviewing James Buchanan in 1997 and asking him if... MORE

Nice Sentence

Macroeconomics
Arnold Kling
From Ed Glaeser. Unemployment represents a crisis of imagination, a failure to figure out how to make potential workers productive in the modern economy. That might be a one-sentence articulation of PSST. The challenge is to find the comparative advantage... MORE

Libertarianism...and its Discontents

Economic Philosophy
Arnold Kling
Three items crossed my computer screen recently: --the launch of Libertarianism.org by the folks at Cato. It looks like a nice web site, one that invites exploration. --Tyler Cowen's link to a piece by Will Wilkinson. --two older pieces by... MORE

Lifted from the Comments

Economics of Education
Arnold Kling
Foobarista writes on this post: There used to be an idea that degrees are either academic or professional. The rise of "studies" degrees (and stuff like them such as "sustainability") are what I'd call "aspirational". If there's an employment market... MORE

Alex Tabarrok Explains College Wage Stagnation

Economics of Education
Arnold Kling
He writes, Over the past 25 years the total number of students in college has increased by about 50 percent. But the number of students graduating with degrees in science, technology, engineering and math (the so-called STEM fields) has remained... MORE

My Talk at Berkeley and My MSNBC Appearance

Upcoming Events
David Henderson
I'm giving a speech tomorrow at U.C. Berkeley that I should have advertised here earlier. Title: The Case for a Non-Interventionist Foreign Policy Time: 3:00 p.m. to 3:50 p.m. Place: East Pauley Ballroom of the Martin Luther King Jr. Student... MORE

Moral Theory & Voluntary Overpayment of Taxes

Economic Philosophy
Bryan Caplan
Tyler, responding to Karl Smith, responding to Steve Landsburg, asks:[I]f government action to redistribute income is morally required, in the meantime is not greater private charity morally required too?Tyler's not impressed with Karl's position.  Karl:If we want to be truly... MORE

Bet on Oil Prices

Energy, Environment, Resources
David Henderson
In my executive MBA class yesterday, the one I do by video teleconference, I covered Bob Murphy's piece on oil prices as an application of some of the economics of futures markets. One part of Murphy's article that I highlighted... MORE

A Quote I Will Use Often

Behavioral Economics and Rationality
Arnold Kling
Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance. That is from Daniel Kahneman, Thinking Fast and Slow, p. 201. The chapter is called "The illusion of... MORE

Euro-TARP

Politics and Economics
Arnold Kling
I am making the mistake of reacting to the latest twists in the saga of Greece and other European countries. I started by reading this: Britain is poised to provide billions of pounds for a new global economic rescue package,... MORE

The Roaring Thirties

Growth: Causal Factors
David Henderson
That's the title of my review, in the latest issue of Policy Review, of Alexander J. Field's A Great Leap Forward: 1930s Depression and U.S. Economic Growth. Here's an excerpt of my review: The decade that took the biggest strides... MORE

Sentences I do not Understand

Growth: Causal Factors
Arnold Kling
From a McKinsey report, A detailed analysis of the French economy, for example, showed that while the Internet is reported to have destroyed 500,000 jobs over the past 15 years, it created 1.2 million new ones. From a PSST perspective,... MORE

The Signal of Protest

Information Goods, Intellectual Property
Bryan Caplan
If you were an employer, would you want to hire an Occupy Wall Street protester?  Probably not.  In fact, it's hard to imagine an employer seeing a protester on TV, then thinking, "I've got to hire him!"  Protesters are arguably... MORE

My Version of Race Against the Machine

Growth: Consequences
Arnold Kling
I wrote mine first, but it came out today (and at the last minute I inserted a reference to the Brynjofsson-McAfee e-book). Anyway, I write, In a hyper-Schumpeterian economy, the main work consists of destroying someone else's job. Garett Jones... MORE

Politically Correct Employment

Income Distribution
Arnold Kling
Kenneth Anderson writes, Even more frightening is the young woman who graduated from UC Berkeley, wanting to work in "sustainable conservation." She is now raising chickens at home, dying wool and knitting knick-knacks to sell at craft fairs. Her husband... MORE

My confidence in the empirical importance of the signaling model of education generates a lot of pushback from my fellow economists.  For starters, see my arguments with Bill Dickens, Tyler Cowen, Karl Smith, and Arnold.  Which got me wondering: How... MORE

A High-Yielding Investment?

Finance: stocks, options, etc.
Arnold Kling
A real estate agent told a young couple that I know that their house could sell for about $100,000 in today's market, even though it could rent for about $1500 a month. That would make the annual rent equal to... MORE

The Balanced-Budget Multiplier

Fiscal Policy
David Henderson
In the "Letters" section of the Wall Street Journal today, Ball State University economics professor T. Norman Van Cott, in praising a recent WSJ critique of Keynesian economics by Allan H. Meltzer, adds to the critique, writing: Particularly egregious is... MORE

Poverty, Conscientiousness, and Broken Families

Behavioral Economics and Rationality
Bryan Caplan
Right-wingers should spend a lot more time reading left-wing ethnography of the poor.  It may seem strange, but when leftist social scientists actually talk to and observe the poor, they confirm the stereotypes of the harshest Victorian.  Poverty isn't about... MORE

A Conversation with Jeffrey Friedman

Political Economy
Arnold Kling
Although I missed his appearances at AEI and Cato (videos here and here, respectively), I talked with Jeffrey and his wife, Shterna, in a coffee shop. I did not take any notes. He was in town to talk about his... MORE

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