Bryan Caplan and David Henderson

March 2012

A Monthly Archive (113 entries)

Fukuyama on Acemoglu/Robinson

Books: Reviews and Suggested Readings
Arnold Kling
He writes, They are making almost the identical point to the one made in the 2009 book Violence and Social Orders by Douglass North, John Wallis, and Barry Weingast (NWW), who argue that most underdeveloped societies are what they term... MORE

Free for Now

Macroeconomics
Arnold Kling
Recent issues of some journals from de Gruyter publishers, including Capitalism and Society, which published a paper of mine on PSST.... MORE

My Review of Bruce Bartlett

Taxation
David Henderson
My review of Bruce Bartlett's latest book, The Benefit and the Burden: Tax Reform -- Why We Need It and What It Will Take is on-line. Two paragraphs from early in my review: Bartlett's bitterness about his firing has turned... MORE

Planning for the Unpleasant Future: Private vs. Public

Behavioral Economics and Rationality
Bryan Caplan
Thinking about being old and sick is no fun.  It's tempting to simply refuse to ponder the unpleasant future.  But notice: Whether people give into this temptation depends heavily on whether they're thinking personally or politically.Personally, almost everyone at least... MORE

Brief Notes from Kansas City

Income Distribution
Arnold Kling
Here is Tyler Cowen in cartoon form. At lunch, at our table we were talking about the question of why redistributive policies are not more popular with voters. Brink Lindsey said that voters prefer to affiliate with successful people than... MORE

Krugman on Supreme Court Reasoning About Health Insurance

Economics of Health Care
David Henderson
In his column today, "Broccoli and Bad Faith," Paul Krugman goes after the conservative judges on the Supreme Court for their lack of understanding of health insurance and their "self-evidently absurd" claim about coercion. First, the analogy between health insurance... MORE

Ed Glaeser on Job Creation

Labor Market
Arnold Kling
He writes, In every year since 1989, new companies have created more net jobs than the economy as a whole, which means that older companies are, on average, destroying more jobs than they create. In 2009, the latest year for... MORE

Timothy Taylor on College Loans

Economics of Education
Arnold Kling
He offers his usual outstanding analysis. Several decades ago, it was a low-risk option to spend a few years working part-time and attending a big public university: if it didn't end up in a degree, at least you didn't rack... MORE

Tyler's Telling Question About My Education Book

Economics of Education
Bryan Caplan
On Monday, Tyler asked me a telling question about my education book: Why do I keep re-interpreting other people's research to show that it's consistent with or supportive of signaling, instead of simply doing a new study of my own? ... MORE

David Autor Signals Wit and Insight

Information Goods, Intellectual Property
Bryan Caplan
I don't normally associate MIT with "funny," but David Autor's notes on signaling definitely qualify:Testing signaling versus human capital models of educationDoes it seem plausible that education serves (in whole or part) as a signal of ability rather than simply... MORE

I Believe These Are Related

Growth: Causal Factors
Arnold Kling
1. Timothy Taylor on the question of why different production techniques are used in different countries. 2. Don Boudreaux on how capital cannot just be reduced to its physical characteristics. I think that (2) provides insights that would help with... MORE

Friday

Upcoming Events
Arnold Kling
If you like economics bloggers, you might enjoy watching the Kauffman Forum on Friday, March 30. Note that all times are central standard time (one hour earlier than eastern time). The opening panel, on macroeconomic policy, is self-recommending. Brad DeLong,... MORE

Is the Pool of Liberty Drying Up?

Economic History
David Henderson
This is the title of a blog post by Ted Levy. I'll save you the suspense: his answer is yes. In his post, he takes on the views of David Boaz and Brink Lindsey that liberty is increasing. Levy gives... MORE

The Banality of Leninism vs. the Wisdom of Acton

Economic Philosophy
Bryan Caplan
I finally finished Crime and Punishment, and was rewarded with two more great Leninist diatribes that predate the dictator's birth.  The first is a confrontation between murderous intellectual Raskolnikov and his sister:"Aren't you half expiating your crime by facing the... MORE

DeLong and Summers

Macroeconomics
Arnold Kling
I outsource my comments to Scott Sumner. So let's start over. The Fed is unwilling to provide enough monetary stimulus. OK, now what is the point of this paper? Is this to train our future econ PhD students? Are we... MORE

Some Observations About Firing

Business Economics
Arnold Kling
Bryan poses the issue of why bosses are reluctant to fire unproductive employees. My observations: 1. Firing involves a confrontation. You tend to want to avoid confrontations. In large organizations, the confrontation is indirect. The boss tells HR, and HR... MORE

Why They Haven't Been Fired

Behavioral Economics and Rationality
Bryan Caplan
"Why haven't they been fired?"  Lots of great, non-dogmatic answers in the comments.  Everyone sees a lot of deadwood, though I'm puzzled by the repeated suggestion that "The next person might be worse."  If that's the concern, why not just... MORE

Henderson and Gochenour on "Presidential Greatness"

Political Economy
David Henderson
My co-author, Zachary Gochenour, and I have posted our article, "War and Presidential Greatness," on line here. Here's the abstract: Historians and journalists commonly survey other historians on the relative "greatness" of American presidents, and these rankings show remarkable consistency... MORE

Mingardi on Hayek

Political Economy
Arnold Kling
Alberto Mingardi writes, Centralized government allocates resources badly--regardless of its intentions. The very nature of centralization makes it impossible to collect and compute all the information that is needed. This is as true for any grand scheme of industrial planning... MORE

If the Mind Is a Muscle

Economics of Education
Bryan Caplan
People often compare education to exercise.  If exercise builds physical muscles, then education builds "mental muscles."  If you take the analogy seriously, however, then you'd expect education to share both the virtues and the limitations of exercise.  Most obviously: The... MORE

George Selgin on "The Bernank"

Monetary Policy
David Henderson
George Selgin has an excellent commentary on Ben Bernanke's maiden lecture on monetary policy at George Washington University. Not only does George dispel myths that most people believe, but also he dispels myths that I believed. An incomplete list of... MORE

Why Haven't They Been Fired?

Behavioral Economics and Rationality
Bryan Caplan
Three questions:1. What fraction of your co-workers are paid 125% or more of their true marginal product?2. What fraction of these overpaid/incompetent co-workers can you personally identify?3. Has the boss failed to fire these overpaid/incompetent workers because he doesn't know... MORE

The Unsung

Growth: Causal Factors
Bryan Caplan
GDP is an agnostic statistic.  If someone spends money on something, it counts as GDP.  This agnosticism helps statisticians avoid controversy.  But it's hard to see any other epistemic benefit.  If we really want to measure output, we have to... MORE

We Are So Different

Behavioral Economics and Rationality
Bryan Caplan
One of my rules of thumb is: "Human heterogeneity is bigger than you think."  At Less Wrong, Yvain explains it better than I ever have.  Lead-in:There was a debate, in the late 1800s, about whether "imagination" was simply a turn... MORE

The Problem with a Variable Tax on Gasoline

Energy, Environment, Resources
David Henderson
"Let's make our demand for gasoline even more inelastic." Other economists suggest a gasoline tax that would increase as gasoline prices fall toward a predetermined floor and decrease as pump prices rise above it. This way, OPEC countries would be... MORE

On April 6, 2010, an AT&T Inc. manager pondered a drop in volume in the company's government-subsidized service for hearing-impaired callers. Reassuring a colleague in an email, the manager said she was "not ready to throw up flags" because "it... MORE

Leveraging and De-leveraging

Macroeconomics
Arnold Kling
Timothy Taylor writes, The claim isn't that leverage cycles explain all recessions, but rather that they can help explain why some recessions--often those that also include a financial crash--can turn out to be so severe. The U.S. data on borrowing... MORE

Nordhaus's Global Warming Graph

Energy, Environment, Resources
David Henderson
In a recent article in the New York Review of Books, Yale University economist William Nordhaus presents a graph showing changes in global mean temperatures from 1880 to 2011. Take a look. The data appear to be annual and he... MORE

Bob Murphy on the Heartland Institute

Energy, Environment, Resources
David Henderson
The ever-productive Bob Murphy, a regular at Econlib Feature Articles, has a good article today on "L'Affair[e] Heartland." In it, he reminds the reader to read Megan McArdle's excellent reporting on the issue. One excerpt: Not only did McArdle keep... MORE

Neuroscience and Ethics

moral reasoning
Arnold Kling
Ron Bailey writes, In my view, human prehistory and history has been a more or less random search for social institutions that increasingly discover and conform to our evolved natures. My contention is that is manifestly the case that liberal... MORE

The Awful Mill

Economic Philosophy
Bryan Caplan
I've never been a fan of John Stuart Mill.  Yes, he had a massive IQ and a dreadful Tiger Dad.  But his thinking is shockingly muddled.  One especially cringeworthy example: In the span of two pages in On Liberty, Mill... MORE

Notes on the Phillips Curve

Macroeconomics
Arnold Kling
1. The original version expressed a trade-off in terms of the level of inflation vs. the level of the unemployment rate. From about 1953-1968, the trade-off was approximately: inflation + unemployment = 7 percent. 2. In the 1970's Phillips Curve... MORE

Michael Mann: I Don't Argue

Economic Methods
David Henderson
What Would Deirdre McCloskey Say? The article's online headline claims I "argue" that fossil-fuel burning is driving climate change. But communicating scientific facts is not arguing. Every national academy of science in the world, including our own, agrees that climate... MORE

Table of Contents for The Case Against Education

Books: Reviews and Suggested Readings
Bryan Caplan
Once you figure out the perfect structure for your book, it writes itself.  Unfortunately, figuring out that perfect structure is extremely difficult.  Here's the tentative structure for my book in progress, The Case Against Education. Normal 0 MicrosoftInternetExplorer4 /* Style... MORE

Gasoline "Demand:" Find the Flaw

Economic Education
David Henderson
If the Department of Energy is to be believed, weekly gasoline demand has fallen 7% on average from a year ago, to its lowest level since 2001. But few market observers believe it. The Energy Information Administration's weekly report on... MORE

The Thai Economy

International Trade
David Henderson
Earlier this month, I returned from a 10-day trip to Thailand. Here are some impressions of the Thai economy: "street-level" impressions, not impressions based on looking at aggregate data. Also, I didn't make it to Bangkok, spending the whole time... MORE

Licensing and the Return to Education

Economics of Education
Bryan Caplan
Private sector unions have almost disappeared, but occupational licensing is all the rage.  Almost 30% of all workers need a license to do their jobs - and licensed workers earn roughly a 15% wage premium.Occupational credentials are one common licensing... MORE

If Coming Apart is right, what should we do?  Charles Murray already proposed one frankly bizarre set of solutions in the NYT.  Now he offers a rather different set of solutions in the WSJ.  Or to be precise, one solution. ... MORE

Potential Output Straw Man

Macroeconomics
Arnold Kling
Recently, bloggers have been talking about potential output or potential GDP. I find the discussion to be frequently misleading. For example, Mark Thoma quotes Tim Duy: If we claim the economic potential of the nation has declined - that in... MORE

An Early Stanley Fish Moment

Economics and Culture
David Henderson
The Stanley Fish op/ed that I posted about on Sunday was shocking. I appreciate many of the thoughtful comments people made. I've had more time to think about it and I remembered an evening when I was about 14, a... MORE

My Comments for Haidt

Economic Philosophy
Bryan Caplan
Jonathan Haidt kindly let me read an earlier version of The Righteous Mind last June.  Here are the comments I sent him.  I haven't seen the final version, so perhaps he revised the book in response.Hey Jonathan, I finally finished... MORE

David Friedman on Nordhaus and Boyer

Energy, Environment, Resources
David Henderson
[E]arth's climate was not designed for us, hence there is no a priori reason to assume that large negative results due to a few degrees of warming are more likely than large positive ones. This is from David Friedman's latest... MORE

The Speculator of Last Resort

Finance: stocks, options, etc.
Arnold Kling
Business Week reports, The Treasury purchased $225 billion in government- sponsored-enterprise bonds and made a profit of $25 billion from principal, interest and the sale. Treasury announced in March 2011 it would begin winding down the program through sales of... MORE

Rand on Totalitarian Motives

Economic Philosophy
Bryan Caplan
Ayn Rand's verdict on totalitarian motives* is remarkably similar to mine.  From Galt's Speech:[I]f the ravages wrought by their acts have not made them question their doctrines, if they profess to be moved by love, yet are not deterred by... MORE

Some Notes from Haidt

Books: Reviews and Suggested Readings
Arnold Kling
That is, from The Righteous Mind. Many of these are gems. I've put them all below the fold.... MORE

The Banality of Leninism

Economic History
Bryan Caplan
Historians often act like Lenin's tyranny was a bolt from the blue: Who would have expected a bunch of socialists to be so bloodthirsty?  Admirers of Lenin, in contrast, often paint him as a great innovator - at least as... MORE

Stanley Fish: "Might Makes Right"

Economics and Culture
David Henderson
I know the objections to what I have said here. It amounts to an apology for identity politics. It elevates tribal obligations over the universal obligations we owe to each other as citizens. It licenses differential and discriminatory treatment on... MORE

The Authority of Ben Bernanke

Political Economy
Arnold Kling
In The Atlantic, Roger Lowenstein makes the case for bowing to the authority of Ben Bernanke. This a cover story, and the cover photo of Bernanke makes him look like a serene, benevolent emperor. There is no substantive argument to... MORE

Public Radio International, to its credit, after some digging into claims made against Apple by Mike Daisey, not only found that he told a number of lies but also retracted its previous coverage in which PRI had assumed that he... MORE

Scott Sumner on The Great Stagnation

Growth: Causal Factors
David Henderson
Scott Sumner writes: In other words, most economists now see the US trend rate of RGDP [real GDP] growth as being something like 1.5%. After 150 years of 3% trend, that's a startling downshift. Tyler Cowen is no longer a... MORE

Thinking about Think Tanks

Politics and Economics
Arnold Kling
Tevi Troy writes, If donors see and use think tanks as pawns in a political war, the value of their product will be diminished in the eyes of the public, journalists and senior government officials. He made this point in... MORE

Inequality and Status

Income Distribution
Arnold Kling
Jason Collins discusses the view that inequality is good because rich consumers stimulate innovation. I allude to this theory in my Khan-Academy style take on inequality for a forthcoming panel.... MORE

Open Borders: The Website

Economic Philosophy
Bryan Caplan
Vipul Naik has just opened the virtual doors of his Open Borders website.  The idea is to bring together the best philosophical and economic arguments for free migration, including a few by yours truly.  (I'm honored to be quoted on... MORE

A Non-Keynesian Turing Test

Economic Methods
Bryan Caplan
Can a non-Keynesian economist pass for a Keynesian?  Blogger Michael Hartwell tries to pass an ideological Turing Test here:As promised, I have assembled a team of informed Keynesians and left-wing econ fans to answer some general questions about modern economists.... MORE

Sunk Cost in War

Cost-benefit Analysis
David Henderson
I am used to people making the sunk cost fallacy when discussing war, that is, in one of the most important cases in which not to commit the fallacy. So I was pleasantly surprised by a segment on The O'Reilly... MORE

Quietism and the Bubble

Economics and Culture
Bryan Caplan
If I prefer to live in a Bubble, why do I spend so much my time publicly promoting my own ideas?  A true Bubble Boy, you'd think, would give up on the world; to say, with The Misanthrope's Philinte: Normal... MORE

Another Must-Read

Books: Reviews and Suggested Readings
Arnold Kling
We are only half way through March, and I think I already have come across more must-read books than in all of 2011. I am about 2/3 of the way through Jonathan Haidt's The Righteous Mind, which makes the must-read... MORE

Like Byran Caplan and Karl Smith, I think conversational evidence is important to pay attention to. And like Bryan, and unlike Karl, I do hear lots of conversation about the effect of marginal tax rates (MTR), especially on spouse's labor... MORE

Conversational Evidence

Economic Methods
Bryan Caplan
I've long argued that economists should take more stock in introspection.  Now Karl Smith argues that economists should take more stock in conversation:[F]or example if you asked someone - why didn't you move to San Francisco or conversely, why did... MORE

More Classic Jeffrey Friedman

Political Economy
Arnold Kling
This time, it's his essay on The Rhetorical Presidency, a riff on the book of that title by Jeffrey K. Tulis. The book's thesis is that before the Progressive era, Presidents were expected to stay in the background and mind... MORE

The Evolution of Macroeconomics, Part Two

Macroeconomics
Arnold Kling
My latest essay: We have accumulated more than six decades of macroeconomic experience since the end of World War II, yet neither stubborn Keynesians nor stubborn monetarists have encountered any data that would make them change their minds. Instead, since... MORE

Crosstalk on Financial Regulation

Finance: stocks, options, etc.
Arnold Kling
This is a program on Russian television, talking about a proposal to require pre-approval for financial products. The Capitol in the background was photo-shopped in. I had no visual feedback whatsoever--there was not even a monitor where I could see... MORE

A Libertarian Defense of Blacklisting at The Nation

Economics and Culture
Bryan Caplan
Ilyse Hogue has a shockingly libertarian piece on the Limbaugh boycott at The Nation.  Not "civil libertarian," but hard-line my-money-my-choice libertarian.  Background:Bill Maher spent a significant portion of last Friday's Real Time defending Rush Limbaugh. Well, not defending the man,... MORE

Diamandis and The Diamond Age

Economics of Education
Arnold Kling
Peter Diamandis is trying to think of an X-prize to fix education. he has considered multiple directions that an Education X Prize could take, such as coming up with better ways to crowd-source education, or rewarding the creation of "powerful,... MORE

Property Rights ARE Human Rights

Property Rights
David Henderson
One of the left's most effective canards has been its alleged distinction between property rights and human rights. The fact is that property rights are human rights. My right to my computer--my property--is not my computer's right to itself. It's... MORE

Reciprocity and Irony: A View from My Bubble

Behavioral Economics and Rationality
Bryan Caplan
Steve Sailer has a revealing comment on my Bubble post:Of course, if there were a big war, it would be nice to be defended by all those dreary Americans you despise. And, the irony is, they'd do it, too, just... MORE

New Commanding Heights Watch

Labor Market
Arnold Kling
A reader who remembers this essay suggested this chart: I lifted the chart from Barry Ritholtz, who in turn lifted it from paper by David Andolfatto and Marcela M. Williams. I think that the evidence for structural change as a... MORE

Matt Yglesias on Urban Development

Books: Reviews and Suggested Readings
Arnold Kling
The book is The Rent is Too Damn High. Counties, municipalities, states, and everyone else involved in promulgating land-use regulations need to ease off on parking requirements, artificial constraints on lot size, height restrictions, etc. Other interesting excerpts below. (Possibly... MORE

Compromise and Priorities

Economic Philosophy
Bryan Caplan
I'm steering clear of the Cato-Koch dispute.  But these remarks by Will Wilkinson are intriguing at the meta level: [I]n actual large-stakes political fights in Washington, Cato is generally on the Republican side. It would not be strange to spot... MORE

Losing Ground, The Bell Curve, and Coming Apart: A Reconciliation

Behavioral Economics and Rationality
Bryan Caplan
During Arnold's video conference on Coming Apart, Brink Lindsey pointed out the curious fact that Charles Murray wrote three different books about poverty, each with a different explanation.*  Losing Ground says that the welfare state gives the poor perverse incentives. ... MORE

Gold and Oil Prices

Energy, Environment, Resources
David Henderson
Oil prices aren't high right now. In fact, they are unusually low. Gasoline prices would have to rise by another $0.65 to $0.75 per gallon from where they are now just to be "normal". And, because gasoline prices are low... MORE

Review of Why Nations Fail

Books: Reviews and Suggested Readings
Arnold Kling
The book is by Daron Acemoglu and James Robinson. The review is by Paul Collier. Collier writes, Their argument is that the modern level of prosperity rests upon political foundations. Proximately, prosperity is generated by investment and innovation, but these... MORE

James Manzi Watch

Books: Reviews and Suggested Readings
Arnold Kling
In the Journal of Economic Perspectives, Paul Joskow writes, a sensible deployment strategy is to combine a long-run plan for rolling out smart-grid investments with well-designed pilots and experiments. Using randomized trials of smart grid technology and pricing, with a... MORE

The Affiliation Heuristic, Continued

Institutional Economics
Arnold Kling
I can use Bruce Schneier's Liars and Outliers as the basis for another take. A basic question in the book is how human society is able to scale above the level where we can all recognize one another. For example,... MORE

Does Obama Bear Responsibility for the Increased Gasoline Price?

Energy, Environment, Resources
David Henderson
Cato Institute scholars Peter van Doren and Jerry Taylor write that President Obama is not responsible for the spiraling price of gasoline. They correctly blame the price increase on the increase in the price of oil. They focus on the... MORE

Crowding In

Central Planning vs. Local Knowledge
David Henderson
Austin Keegan kneels on a tiny footbridge on Garrapata State Park's Rocky Ridge Trail and replaces a damaged plank with pre-cut lumber from home. "It's just basic maintenance," he says. "It needs to be done."
 His pal David Thiermann, carrying... MORE

Real Austerity

Fiscal Policy
Arnold Kling
The Hill reports, Members of the Senate Tea Party Caucus on Thursday announed a plan to balance the budget in five years, cutting spending by nearly $11 trillion compared to President Obama's budget. The plan was proposed by Senators DeMint,... MORE

My Beautiful Bubble

Economics and Culture
Bryan Caplan
Unlike many readers of Coming Apart, you don't have to convince me that I live in a Bubble.  I've known it for decades.  In fact, I think my 3-out-of-20 score on the "How Thick Is Your Bubble?" quiz greatly overstates... MORE

Discussing Charles Murray

Books: Reviews and Suggested Readings
Arnold Kling
I organized a video conference to discuss Coming Apart. Participants were Brink Lindsey, Bryan Caplan, Megan McArdle, Reihan Salam, and Ross Douthat. There was not much discussion of the findings in the book, because everybody seemed to accept them. However,... MORE

The Predatory Lending Fallacy

Finance: stocks, options, etc.
Arnold Kling
Matthew O'Brien writes, I think we owe Greenspan a happy (belated) birthday. He's gotten a bad rap the past few years for his failings as a central banker, and that's just unfair. It should be about his failings as a... MORE

Today's Employment Report

Labor Market
Arnold Kling
The BLS reports (note that by next month this link will be to a new report) that payroll employment over the past three months has increased by an average of 245,000 jobs. One of the patterns that Ed Leamer found... MORE

In recent years I've noticed more and more people misusing the terms "begging the question" or "begs the question." They use it as if "begging" and "begs" are synonyms for "raising" and "raises." But "begging the question" has a specific... MORE

The Affiliation Heuristic

Politics and Economics
Arnold Kling
It seems to come up a lot in the discussions of Cato. Cato has worked really hard to cultivate a favorable/neutral reputation with liberal intellectuals. "We're not the religious, homophobic, xenophobic right-wing crazies. We're the anti-war, anti-Fed, anti-pot-law right-wing crazies."... MORE

Minimum Wage: Charles Murray Surrenders

Labor Market
David Henderson
As co-blogger Bryan noted earlier today, Charles Murray advocates requiring that internships pay the at least the minimum wage, currently $7.25 an hour at the federal level. Is this because he, a perceptive and economically literate analyst, does not understand... MORE

The Solutions Murray Should Have Proposed

Income Distribution
Bryan Caplan
I'm fan of Coming Apart.  But I'm baffled by the policy "solutions" Charles Murray proposes in today's NYT.  Impose a minimum wage on internships?  Ban the SAT in favor of achievement tests?  Switch to socioeconomic affirmative action?  Forbid the use... MORE

Downton Abbey

Economics and Culture
Bryan Caplan
Downton Abbey (season 1 streaming on Netflix) doesn't just live up to the hype.  It also beautifully illustrates the power of firing aversion during the heydey of employment at will.  Highly recommended.... MORE

The Bailouts and the Economy

Macroeconomics
Arnold Kling
A Panel of Expert Economists was asked whether they agreed with: Because the U.S. Treasury bailed out and backstopped banks (by injecting equity into them in late 2008, and later committing to provide public capital to any banks that failed... MORE

Cato and the Kochs, Take 3

Business Economics
Arnold Kling
A Wapo Blogger has an email from the Kochs. I hesitate to add another take. If my basic view is that this less important than it seems, it is strange to blog three times on it. More below the fold.... MORE

Videoconferencing and Health Care

Business Economics
Arnold Kling
Scott Gottlieb writes, A patient recently asked me why doctors don't spend more time communicating over email or by videoconferencing. There's a simple answer: Medicare hasn't created a billing code for these services. I would love to stand up and... MORE

Under the Jim Crow laws, discrimination was not merely legal.  It was mandatory.  It was illegal for blacks to live, work, and shop in certain places.  Virtually everyone today regards this as an enormous injustice.  So do I.  But I... MORE

Timothy Taylor on Long-term Unemployment

Labor Market
Arnold Kling
Timothy Taylor writes, We need a convincing theory of this third kind of unemployment--sluggish unemployment, tar-pit unemployment--and an associated sense of what policies are useful for addressing it. Firms as a group have high profits and strong cash reserves, but... MORE

Thomas Sowell on the Koch, Cato Controversy

Information Goods, Intellectual Property
David Henderson
Why Oswald Rabbit Isn't as Famous as Mickey Mouse In his book, Knowledge and Decisions, one of my favorite books he has written, Thomas Sowell, in a section on "The Physical Fallacy," writes: A revealing episode in the early career... MORE

Serfdom Watch

Political Economy
Arnold Kling
The Washington Post writes, Parents [in Adelanto, California] are trying to become the first in the country to use a trigger law, which allows a majority of families at a struggling school to force major changes, from firing the principal... MORE

Another Take on the Soap Opera

Politics and Economics
Arnold Kling
Will Wilkinson writes, this isn't a battle between good and evil, and the stakes are probably lower than you think. Not unlike my take, although he has more inside knowledge than I do. Read the whole thing. I have a... MORE

The Age of Contestability

Microeconomics
Bryan Caplan
When economists want to measure the competitiveness of an industry, they usually start by counting the number of competing firms.  If they see a lot of firms, they infer a lot of competition.  Few firms?  Little competition.  One firm?  No... MORE

Dinner with James Manzi

Books: Reviews and Suggested Readings
Arnold Kling
The publishers of Uncontrolled, his forthcoming book, hosted a dinner attended by about a dozen conservative media luminaries, as well as by yours truly. We received advance review copies prior to the dinner. Uncontrolled will not be available until May... MORE

Paul Krugman on IS-LM

Macroeconomics
Arnold Kling
He writes, The immediate problem was a huge shortfall of demand, as the private sector moved from large financial deficit to large financial surplus. Pointer from Mark Thoma. You have the basic identity that (S-I) + (T-G) = (X-M). That... MORE

Timing the End of the Liquidity Crisis

Finance: stocks, options, etc.
Arnold Kling
Tyler Cowen writes, By the time the three years is up, a lot of these institutions will have been nationalized, if only de facto. He offers this as one possible scenario for resolving the liquidity issues of European banks. (Bear... MORE

Moreover, contrary to widely accepted conventional arguments on the subject, free-market sales of bodily organs can actually lower their effective prices. In this article, we focus on the market for transplantable kidneys, but only for purposes of illustration. The points... MORE

Bruce Schneier's Latest Book

Books: Reviews and Suggested Readings
Arnold Kling
It's Liars and Outliers, and I would rate it the best economics book of the year thus far. He writes about his book here and here. Schneier views our lives from the perspective of game theory. Every day, we must... MORE

Fund-Raising and the Independent Scholar

Behavioral Economics and Rationality
Bryan Caplan
Arnold writes:Think tanks, like universities, may be ripe for disintermediation. Although I think my writing for Cato helped my personal brand, I would rather be viewed as an independent scholar. I view scholars as personal brands, and I do not... MORE

The Koch Cato Affair

Business Economics
Arnold Kling
Don Boudreaux shares his thoughts. My take: 1. Usually, corporate soap opera is less important in the grand scheme of things than it is to the people involved. Institutions go on. History goes on. 2. We discussed think tanks with... MORE

Fisker Update

Business Economics
Arnold Kling
not doing well, apparently Wray alleges he received word from Fisker on January 18th in the form of a letter informing him that due to the need for equity capital financing there was now a pay to play action in... MORE

Various

Economics of Education
Arnold Kling
1. Kevin Carey writes, Not everyone is willing or able to get a bachelor's degree. But everyone should at least have the chance to try. After all, well-off students from upper-middle-class suburbs are going to college one way or another.... MORE

Was the 2001 Tax Cut Regressive?

Taxation
David Henderson
In a post today, Paul Krugman approvingly cites Jonathan Chait's claim that the Bush tax cut of 2001 was regressive. Chait wrote: When George W. Bush proposed a huge, regressive tax cut in 2001, Snowe, sitting at the heart of... MORE

Hal Varian

Growth: Causal Factors
Arnold Kling
He is the economist who co-wrote Information Rules and now works for Google. Nick Schulz and I had a video conference with him. He has a very interesting perspective on where things are headed with robotics, for example. Here is... MORE

Podcasts

Growth: Causal Factors
Arnold Kling
These are from recent video conferences. Alex Tabarrok (just Alex and me) on policies to encourage innovation; and David Weinberger on how the Internet is affecting our views of knowledge (with Nick Schulz and me; unfortunately, the sound quality on... MORE

Retired U.S. Admiral: Iranians are Human Too

International Trade
David Henderson
Does Bob Schieffer Owe Ron Paul an Apology? ADM. FALLON: Yeah - just to add, if I could, to what General Cartwright said: I think it's really important that at the end of the day, these are people - 70,000,000... MORE

Goldin-Katz and the Education Plateau

Economics of Education
Bryan Caplan
v\:* {behavior:url(#default#VML);} o\:* {behavior:url(#default#VML);} w\:* {behavior:url(#default#VML);} .shape {behavior:url(#default#VML);} Normal 0 MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman";} Education has not plateaued.  Does this... MORE

Tear Down These Walls

Labor Mobility, Immigration, Outsourcing
David Henderson
Is there some action a government of India could take that would lead the Indian economy to grow like Indonesia's or Egypt's? If so, what, exactly? If not, what is it about the "nature of India" that makes it so?... MORE

The Myth of the Education Plateau

Economic History
Bryan Caplan
Why has the return to education increased so much in recent decades?  The simplest explanation is that the supply of well-educated workers just isn't keeping up with the demand.  Indeed, many claim that American educational attainment has been stagnant for... MORE

The Latest Literature

Finance: stocks, options, etc.
Arnold Kling
The first three articles in the February 2012 issue of the American Economic Review are: "Optimal Interventions in Markets with Adverse Selection." "Overcoming Adverse Selection: How Public Intervention Can Restore Market Functioning" "Collective Moral Hazard, Maturity Mismatch, and Systemic Bailouts"... MORE

De-Materialization

Books: Reviews and Suggested Readings
Arnold Kling
From Diamandis and Kotler's Abundance: Twenty years ago, most well-off US citizens owned a camera, a video camera, a CD player, a stereo, a video game console, a cell phone, a watch, an alarm clock, a set of encyclopedias, a... MORE

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