Bryan Caplan and David Henderson

May 2012

A Monthly Archive (101 entries)

John Mueller on Port Security

Economics of Crime
David Henderson
Among other ventures, this concern has led to a rather bizarre, and highly expensive, preoccupation with port security, driven by the assumptions, apparently, 1) that after manufacturing their device at great expense and effort overseas, an atomic terrorist or desperately... MORE

1>0, and Other Thoughts on Apprenticeships

Economics of Education
Bryan Caplan
Last night I heard Robert Lerman of American University make the case for apprenticeships as an alternative to standard academic education.  He got considerable pushback from the audience.  Some of the leading complaints: 1. Unlike standard academic education, which prepares... MORE

Really???

Macroeconomics
Arnold Kling
Simon Wren-Lewis writes, I do not think targeting nominal GDP means that the monetary authorities can achieve that target at all points in time. The main way I think it overcomes the zero lower bound (ZLB) for nominal interest rates... MORE

Andrew Lo, JP Morgan, and PBR Audits

Regulation and Subsidies
Arnold Kling
In an interview, Andrew Lo says, There is one very simple question that you can ask -- which has a definitive answer -- about the small number of individuals who were responsible for managing this group at JP Morgan and... MORE

Firing Aversion Bleg

Behavioral Economics and Rationality
Bryan Caplan
I'm having trouble finding any pre-existing academic literature on firing aversion.  Google Scholar has two hits for "firing aversion" and zero hits for "hirer's remorse."  Anyone know of any relevant research under another name?P.S. Much oblige to kenneth and steve... MORE

Somin on Extremer Extremists

Economic Philosophy
Bryan Caplan
Ilya Somin at Volokh Conspiracy methodically answers my questions about extremer extremists.  My original suggested response umbrellas:1. Public relations. Views more extreme than your own are counter-productive because they alienate the moderates you need to convince to get better results.... MORE

Summers Joins FIRE

Economics of Education
David Henderson
FIRE is pleased to announce the newest addition to its Board of Advisors - Lawrence H. Summers. Professor Summers is President Emeritus of Harvard University. For those of you who don't know, FIRE is the Foundation for Individual Rights in... MORE

The Problem with Wikipedia

Economic Education
David Henderson
When I first heard about Wikipedia, I thought, "this can't work." My reason: there was no assurance that letting huge numbers of people fill in entries and update things would lead to correct information. That said, it works much better... MORE

Steven Chu vs. Bernie Madoff

Politics and Economics
Arnold Kling
A commenter on this post wrote, I don't find it very credible that Steven Chu spends his whole life studying physics (and extremely successful at it) so one day he could reward some political cronies of his boss. Comparing Chu... MORE

Random Thought

Politics and Economics
Arnold Kling
From a graduation speech by Neil Howe, reprinted by John Mauldin. The Millennial Generation is correcting for the excesses of Boomers and Gen Xers who today run America. I need not remind you what those excesses are: leadership gridlock, refusal... MORE

A Signaling Theory of Suboptimal Telecommuting

Information Goods, Intellectual Property
Bryan Caplan
Americans spend a ton of time commuting.  According to happiness researchers, commuting is the low point of the typical day.  If you look at the jobs that people actually do, though, it's hard to understand why so many workers continue... MORE

The Energy Loan Scandal as a Non-story

Politics and Economics
Arnold Kling
Mark A. Thiessen writes, as Hoover Institution scholar Peter Schweizer reported in his book, "Throw Them All Out," fully 71 percent of the Obama Energy Department's grants and loans went to "individuals who were bundlers, members of Obama's National Finance... MORE

Wikipedia's Error on the Dismal Science

Economic History
David Henderson
In addition to Adam Smith's legacy, Say's law, Malthus theories of population and Ricardo's iron law of wages became central doctrines of classical economics. The pessimistic nature of these theories led to Carlyle calling economics the dismal science and it... MORE

The Extremer Extremists

Economic Philosophy
Bryan Caplan
I'm an extremist.  I freely admit it.  The status quo is deeply immoral, and would remain so even if there were many moderate changes in the right direction.  Many EconLog readers presumably think the same, even if they sharply disagree... MORE

Great Moments in Numeracy: LBJ's Odds of Becoming President

Statistical theory and methods
David Henderson
When it became clear to Johnson that he could not reach the top of the ticket, he began to consider the second spot. He had his staff look up how many presidents in the previous hundred years had died in... MORE

A Memorial Day Appreciation

Central Planning vs. Local Knowledge
David Henderson
Over at "Facts and Other Stubborn Things," Daniel Kuehn, a frequent commenter on this site, asks that we share thoughts of appreciation for veterans. Here is mine. It's for Richard Timberlake, a well-known monetary economist and student of Milton Friedman.... MORE

Audits and Principles-Based Regulation

Regulation and Subsidies
Arnold Kling
One point that many people miss about principles-based regulation is that it gives regulators an additional enforcement tool, other than addressing actions that are improper. That tool is a process audit. Audits can be very useful. In 1990, Freddie Mac's... MORE

Edward Glaeser on GSE Reform

Public Choice Theory
Arnold Kling
He sees it (earlier, preliminary, no-cost version here) as a public choice problem. If there is a high probability that political leadership will be induced to pursue policies that maximize the profitability of private entities at the expense of taxpayers,... MORE

More Comments on Principles-Based Regulation

Regulation and Subsidies
Arnold Kling
1. I think that many people are missing an important feature of principles-based regulation, which is the role of audits in producing compliance. I will explain that in the next post on the topic. 2. One principle I want to... MORE

Jerusalem: Chronicles from the Holy City

Books: Reviews and Suggested Readings
Bryan Caplan
Guy Delisle's latest graphic novel, Jerusalem: Chronicles from the Holy City, is outstanding - second only to his transcendent Pyongyang: A Journey in North Korea.  Like most of Delisle's books, Jerusalem is a non-fiction travelogue.  His wife works for Doctors... MORE

Sentences to Ponder on the Eurozone

Eurozone crisis
Arnold Kling
1. From Tyler Cowen. It probably is about time to judge the euro zone as a failed idea -- and rarely is it wise to double down on failed ideas. 2. From David Zervos via John Mauldin's newsletter (you may... MORE

Caplan v. Murphy on Paul: Getting to Bet

Economic Methods
Bryan Caplan
Bob Murphy's confident that Ron Paul will have a lasting political legacy.  I'm not.  He proposed a bet, I counter-offered, and we haggled.  Bob reproduces our haggling with permission.  My offer #1:Right now there are roughly zero members of Congress... MORE

The Economics of Sanctions on Iraq

International Trade
David Henderson
However, the devastation of Iraq in the service of limiting proliferation did not begin with the war in 2003. For the previous 13 years, that country had suffered under economic sanctions, visited upon it by both Democratic and Republican administrations,... MORE

Eugenics and Man at Yale

Political Economy
Arnold Kling
The Yale Alumni Magazine has this: In the early decades of the twentieth century, eugenics "fell squarely in the mainstream of scientific and popular culture," according to Yale history professor Daniel Kevles, author of the 1985 book In the Name... MORE

Friday Night Video: Markets Breed Virtue

Economic Philosophy
David Henderson

My Review of James Manzi

Books: Reviews and Suggested Readings
Arnold Kling
is out in National Review (dead tree edition a couple weeks ago, on line now). Reihan Salam calls Manzi's work "the most important book of 2012." As you know, I think that honor belongs to Jonathan Haidt's The Righteous Mind,... MORE

Do College Students Get a Bad Break from Adjuncts?

Economics of Education
David Henderson
In a guest post at Megan McArdle's blog yesterday, former political science professor Laura McKenna lays out some interesting data on colleges. She notes a shift of fairly high-quality students from private colleges to government colleges. The reason, she notes,... MORE

The Anti-Mandel

Books: Reviews and Suggested Readings
Arnold Kling
I am reading Edward Conard's Unintended Consequences, because Tyler Cowen wrote, I find parts of this book brilliant and other parts dead wrong. In any case it is full of substance, it is one of the must-read books of the... MORE

The Terrorist Contradiction

Behavioral Economics and Rationality
Bryan Caplan
After watching Carlos - a dramatization of the life of notorious terrorist Carlos the Jackal - I had an epiphany.  Carlos supposedly turns to terrorism because the wicked bourgeois imperialists don't understand any language but violent resistance.  But the only... MORE

PBR, once again

Regulation and Subsidies
Arnold Kling
Kyle writes, Kling's line is very simple: 1. Ideal regulatory systems can be modeled as games. 2. Regulators *try* to solve problem by creating regulations. 3. The regulated participants *try* to circumvent regulations by following the letter of the law,... MORE

A Neglected Private Benefit of Education

Economics of Education
Bryan Caplan
One neglected lesson of Charles Murray's Coming Apart is that, due to changing family structure, the private return to education has risen even more than it seems.  In the 60s, rates of marriage and divorce barely varied by education level. ... MORE

Quotations from Alice Rivlin

Fiscal Policy
David Henderson
My last post was about Sidney Winter's talk at the Naval Postgraduate School on Monday. This is about Alice Rivlin, the co-presenter. The format she and her husband, Sidney Winter, tried was to model a productive discussion between a "liberal,"... MORE

The Importance of Nirvana

moral reasoning
Arnold Kling
On Wikipedia, The nirvana fallacy is the logical error of comparing actual things with unrealistic, idealized alternatives. It can also refer to the tendency to assume that there is a perfect solution to a particular problem. I thought of this... MORE

The Freedom to Disown

Economic Philosophy
Bryan Caplan
[Warning: Downton Abbey spoiler near the end.]Once your children come of age, you are free to disown them.  A parent can financially and emotionally cut off his own children with legal impunity.  The children have the same right, but since... MORE

Principles-Based Regulation

Regulation and Subsidies
Arnold Kling
In my latest essay, I argue for principles-based regulation. With PBR, legislation would lay out broad but well-defined principles that businesses are expected to follow. Administrative agencies would audit businesses to identify strengths and weaknesses in their systems for applying... MORE

Ron Paul's Revolution

Books: Reviews and Suggested Readings
Bryan Caplan
Ron Paul's Revolution: The Man and the Movement He Inspired is the latest book by historian and journalist Brian Doherty.  Like his magisterial Radicals for Capitalism, Ron Paul's Revolution is first and foremost an oral history.  Doherty lays out all... MORE

Sidney Winter's Case for Government Intervention

Economic Philosophy
David Henderson
Married couple economists Sidney Winter and Alice Rivlin came to the Naval Postgraduate School today and gave a joint talk. I'll blog on Rivlin's talk tomorrow. Today I want to focus on a true story that Winter told to make... MORE

Alan Reynolds writes: One affluent member of the Top One Percent club, Paul Krugman, has narrowed his sights to the even more affluent top 0.1 percent in his new book, End This Depression Now! He claims that, "Recent work by... MORE

Market Failure: The Case of Organic Food

Behavioral Economics and Rationality
Bryan Caplan
Right-leaning people typically believe that (a) markets work, and (b) organic food is a scam.  I definitely fit the profile.  As a result, my every trip to the grocery store inspires cognitive dissonance.  Organic food isn't merely on the shelves;... MORE

A Question of Principle?

moral reasoning
David Henderson
I watched most of the movie Paradise Road yesterday. I recommend it, by the way. It's about a large group of women who were captured in Singapore during World War II and taken prisoner by the Japanese government to the... MORE

TSA: Thieves Sacking Americans

Regulation
David Henderson
Read David Friedman's latest blog post and the comments on it for his story about TSA. it turns out that there really is a noticeable difference between government workers in protected jobs and private firms hired to do the government's... MORE

The Ethos of Arthur Brooks

Books: Reviews and Suggested Readings
Bryan Caplan
Ethos (Credibility), or ethical appeal, means convincing by the character of the author. We tend to believe people whom we respect. One of the central problems of argumentation is to project an impression to the reader that you are someone... MORE

Friday Night Video: The Joy of Capitalism

Economics of Health Care
David Henderson
This is from a talk I gave in 2001. Update: In response to Jonathan Bechtel below. For how strangers who are paid to be nice to you look awfully like a friendly community, see my post on New York.... MORE

Would a World Plebiscite Lead to Open Borders?

Behavioral Economics and Rationality
Bryan Caplan
People occasionally say that "Democracy and open borders are incompatible."  If they're talking about national democracy, they're right.  But suppose we actually lived up to the democratic "one man, one vote ideal" by having a world plebiscite on open borders. ... MORE

In the comments section on my recent post on unpaid internships, there was a lot of good discussion and the argument did advance somewhat. To his credit, Derek Thompson engaged in the debate in a positive way as did many... MORE

The Road to Freedom: Bumps and All

Economic Philosophy
Bryan Caplan
Reading Arthur Brooks' The Road to Freedom is eerily like having a conversation with myself.  He never calls himself a libertarian, and certainly never mentions Ayn Rand or Thomas Reid.  But the Hollywood pitch version of Brooks' book is "Rand... MORE

The Good and the Bad

Fiscal Policy
David Henderson
The Good Scott Sumner has an excellent post about Krugman and about fiscal policy in Britain and Sweden. To refute the idea that the Swedish economy is doing well (Krugman admits it's doing well) even though the Swedish government has... MORE

Timothy Taylor on Health Care Spending in the U.S.

Economics of Health Care
Arnold Kling
He concludes, The question of why the U.S. spends more than 50% more per person on health care than the next highest countries (Switzerland and Netherlands), and more than double per person what many other countries spend, may never have... MORE

Arbitrary Intervention

Cost-benefit Analysis
Bryan Caplan
Life is full of suffering.  At least that's what the Buddha tells us - and if you're a glass-half-empty kind of person, you'll find endless confirmation.  In a statist society, our response often seems to be, "If there's a problem,... MORE

Ron Paul vs. the Median Voter Model

Books: Reviews and Suggested Readings
Bryan Caplan
I'm already devouring Brian Doherty's Ron Paul's Revolution.  Brian's such a great writer and such a careful historian - a true treasure.  To me, though, the biggest puzzle isn't how Ron Paul can command the loyalty of 5% of the... MORE

Thoughts on Spain

Eurozone crisis
Arnold Kling
1. The Washington Post pushes the "austerity" narrative. The economic debate consuming Europe comes down to the question of whether struggling countries should choose austerity by clamping down on government spending to rein in unsustainable deficits or pursue growth stimulated... MORE

Thanks for many good answers on the Kim dynasty vs. the stationary bandit model.  But as far as I can tell, no one drew the distinction I was looking for: durability versus stability.The Kim dynasty is clearly durable: it's ruled... MORE

Are Unpaid Internships Immoral?

Labor Market
David Henderson
Derek Thompson at the Atlantic blog argues that unpaid internships are immoral. His case? The essence of it is that because the employer gets valuable services, the employer should pay for them. Of course, the employer does pay for them,... MORE

Criticizing Your Own Side

Politics and Economics
Arnold Kling
Mark Thoma thinks that pundits on the left are more willing to criticize their own team than pundits on the right. My guess is that people on the right think it's the other way around. If so, then let me... MORE

I Do Not Like Big Banks and Government

Finance: stocks, options, etc.
Arnold Kling
In NRO, I write, When large banks have resources, politicians will be tempted to treat them as piƱatas, taking whacks at them in order to extract money to distribute to constituents (see the recent "foreclosure settlement," or the pressure being... MORE

The Kim Dynasty vs. the Stationary Bandit Model

Cross-country Comparisons
Bryan Caplan
Question from the final exam for my graduate Public Choice class:The Kim family has ruled North Korea for three generations.  Doesn't the stationary bandit model imply that the country should be prospering?  If so, what's wrong with the stationary bandit... MORE

Financial Advisor

Finance
David Henderson
NOTE: This post is NOT financial advice. Rather, it's my relating of some interesting stories that my tax accountant told me. Every March I have my annual meeting with my tax accountant. The meeting lasts 30 minutes. In the first... MORE

David Andolfatto Questions the Narrative

Finance: stocks, options, etc.
Arnold Kling
He writes, This couple bought their Reno home in June 1988 for $127,000. Their home is currently valued at $100,000. They currently have a mortgage worth $168,000. At first blush, this seems strange. Assuming a normal down payment and paying... MORE

Why Applicants Don't Volunteer Their Test Scores

Economics of Education
Bryan Caplan
Lots of great feedback in response to last week's question, "Why don't applicants volunteer their test scores?"  I'm increasingly impressed by the wide range of first-hand education/job experiences; clearly the world is full of puzzles few economists have ever conceived,... MORE

Occupational Licensing

Regulation and Subsidies
Arnold Kling
Timothy Taylor summarizes some recent and not-so-recent research showing the surprising extent of occupational licensing. My own guess is that the politics of passing state-level occupational licensing laws is driven by three factors: 1) lobbying by those who already work... MORE

Timothy Taylor on Editing Economists

Economic Education
David Henderson
Timothy Taylor, managing editor of the Journal of Economic Perspectives, has an excellent article in the Spring 2012 issue on his job of editing economists. I'll hit highlights along with comments on how his experience with editing dovetails with mine.... MORE

Baiting Garett Jones

IQ in Economics
Arnold Kling
Charles Kenny writes, The good news is that decolonization began a process of leveling the playing field, with rapidly climbing and converging indicators of health and education worldwide. Thanks to the Flynn effect, IQs are doubtless on a path of... MORE

Does breast-feeding really give your kids a leg up in life?  It's an important question, and there's a lot of research on it.  But most of the research is, at best, moderately convincing.  The key weakness: If parents falsely believe... MORE

Bob Murphy's Critique of Bill Nordhaus

Energy, Environment, Resources
David Henderson
In March, I had a post about William Nordhaus's article in the New York Review of Books, an article in which he responded to claims by 16 scientists who are global warming skeptics. That post gave rise to a lot... MORE

Education Signaling in China

Cross-country Comparisons
Bryan Caplan
Yang, a Manchester student from China, emailed me some interesting observations about education signaling in China.  Reprinted with his permission.Professor Caplan, Your signalling model is illuminating. Allow me to furnish you with some data from China. After secondary schooling, students in China... MORE

Does Facebook Restrict Liberty?

Regulation
David Henderson
In a comment at the Bleeding Heart Libertarians (BHL) site, "figleaf" wrote: Consider further that the privately owned Facebook restricts user liberty more than any fully-owned public university website. Therefore it's not as simple as private-sector = more liberty, public... MORE

Teen Pregnancy

Income Distribution
Arnold Kling
Timothy Taylor's post is based on an article by Melissa S. Kearney and Phillip B. Levine in the journal Taylor helps to edit. The cause-and-effect evidence here suggests that for many women who give birth as teenagers, their life outcomes... MORE

Wax's Behavioral Economics of the Family

Behavioral Economics and Rationality
Bryan Caplan
Scott Beaulier and I argue that behavioral economics explains a lot about poverty; indeed, the poor deviate from neoclassical assumptions to an unusually large degree.  Consider, for example, the fact that the poor are far more likely to be single,... MORE

Morning Roundup

Monetary Policy
David Henderson
There are too many interesting things to write about at length this morning and so I'll just say a little about three. EU Dispersion: Check out this graphic of hypothetical monetary unions to see how incredibly diverse are the members... MORE

Cartel Federalism

Books: Reviews and Suggested Readings
Arnold Kling
In his book The Upside-Down Constitution, Michael Greve suggests that in theory there are two types of federalism. With competitive federalism, state governments compete with one another for citizens. With cartel federalism, state governments collude to raise spending and taxes... MORE

Redo of Proposition 29 Tax Calculations

Taxation
David Henderson
In a comment on my post yesterday, BLM4L had another way of calculating the implied elasticity of demand for cigarettes. His looked right; mine looked right too. But they didn't give the same result. The problem, it turns out, is... MORE

Why Don't Applicants Volunteer Their Test Scores?

Economics of Education
Bryan Caplan
When lawyers hear about the signaling model of education, they often invoke the Supreme Court case of Griggs vs. Duke Power.  Griggs created a strong legal presumption that it is "discriminatory" for employers to hire on the basis of IQ... MORE

Economic Analysis of Prop 29

Taxation
David Henderson
Good Analysis by a Government Official Next month, we California voters will get to vote on Proposition 29, an initiative to raise the cigarette tax by $1.00 per pack. On Econlog, we are not allowed to advocate passage or defeat... MORE

Brad Plumer, meet Bill McBride

Labor Market
Arnold Kling
Plumer writes, while part of the story is clearly that the labor force is shrinking because the bad economy is driving workers out, another significant factor is that baby boomers are beginning to retire early -- a trend that has... MORE

Eugenics, Malthusianism, and Trepidation

Economic Philosophy
Bryan Caplan
The Nazis were eugenicists and Malthusians (see Mein Kampf, chapter 4).  They wanted to murder "the inferior" because they were convinced there wasn't enough food to go around.  The Malthusianism told them that millions had to die; the eugenics told... MORE

Group Affiliation Bias

Behavioral Economics and Rationality
Arnold Kling
Or something like that. Justin Fox writes, We all like to think we can evaluate information and arguments rationally, regardless of where they come from. But we don't. As Yale Law School's Dan Kahan, who has studied this stuff a... MORE

Small businesses care almost twice as much about licensing regulations as they do about tax rates when rating the business-friendliness of their state or local government. The power to tax is the power to destroy. That seems obvious. What may... MORE

Schooling, Income, and Reverse Causation

Economics of Education
Bryan Caplan
Economists normally measure the private return to education by estimating a "Micro-Mincer" regression: (1) log(personal income in $s)= a + b1*(individual education in years) Given crucial assumptions, b1 is the private return to education.  I've discussed some of these crucial... MORE

Is Cybersecurity a Public Good?

Public Goods
David Henderson
The usual argument for government intervention, aside from the paternalist and the distribution arguments, is some kind of "market failure," either in the area of public goods or in the area of externalities. When economists want to make a case... MORE

Are Resources Exhaustible?

Energy, Environment, Resources
David Henderson
If resources are not fixed but created, then the nature of the scarcity problem changes dramatically. For the technological means involved in the use of resources determines their creation and therefore the extent of their scarcity. The nature of the... MORE

Online Education: The Best-Case Scenario

Economics of Education
Bryan Caplan
Do you think that online education is going to put traditional universities out of business?  Great.  Now tell me: Who moves first?  It easy to say, "Forget brick-and-mortar college.  I'm 'going' to Online U."  But what kind of students will... MORE

Bet for Brooks: No Education Tsunami Is Coming

Economic Methods
Bryan Caplan
David Brooks joins the list of people who think that higher education is going the way of the daily newspaper:What happened to the newspaper and magazine business is about to happen to higher education: a rescrambling around the Web. I... MORE

Another Reason to Distrust Non-profits

Political Economy
Arnold Kling
Reihan Salam quotes John DiIulio, Jr., About three-quarters of non-profit organizations, including most faith-based ones, spend under a half a million dollars a year and receive little or no government grant or contract money. But the quarter of the sector's... MORE

Notes on the "campus tsunami"

Economics of Education
Arnold Kling
David Brooks writes, The early Web radically democratized culture, but now in the media and elsewhere you're seeing a flight to quality. The best American colleges should be able to establish a magnetic authoritative presence online. My thoughts: 1. Do... MORE

Chris Edwards on Time-Inconsistent Fiscal Policy

Fiscal Policy
David Henderson
To Keynesians, the short run is always more important than the long run, so it's impossible for them to have a "credible" long-run commitment to deficit reduction. Even today, prominent Keynesian economists are demanding more "stimulus," but the economy is... MORE

Mankiw's Missing Solution

Business Economics
David Henderson
I'm using some of the chapters of Greg Mankiw's economics textbook, Essentials of Economics, in an Energy Economics class I'm teaching. Most of the students have never taken an economics course or took one more than 7 years ago. I've... MORE

Gray on Haidt

Books: Reviews and Suggested Readings
Arnold Kling
John Gray writes, With the possible exception of Poland, there is no advanced industrial country as deeply polarized as America is today. Gridlock in Washington is a failure of American politics, and the solution--if there is one--can only come from... MORE

The Bettor's Oath

Economic Methods
Bryan Caplan
Another great thing about my new daughter: she got me to start watching Game of Thrones.  The first episode didn't hook me last year, but now I can't stop thinking about the show.  I've even been inspired by the Night's... MORE

Curley Effect in California

Public Choice Theory
David Henderson
James Michael Curley, a four-time mayor of Boston, used wasteful redistribution to his poor Irish constituents and incendiary rhetoric to encourage richer citizens to emigrate from Boston, thereby shaping the electorate in his favor. Boston as a consequence stagnated, but... MORE

Diamond Age Watch

Income Distribution
Arnold Kling
Timothy Taylor writes, Orazio Attanasio, Erik Hurst, and Luigi Pistaferri provide evidence that inequality of consumption has risen as well. But here, I want to focus on another one of their arguments: the rise in inequality of leisure. But there's... MORE

Unrealist Foreign Policy

Economic History
Bryan Caplan
From Sean McMeekin's The Russian Origins of the First World War:To assume that Russia really went to war on behalf of Serbia in 1914 is naive.  Great powers do not usually mobilize armies of millions to protect the territory of... MORE

Paul vs. Paul

Monetary Policy
David Henderson
If you had asked me how I would have expected Ron Paul to do in debating Paul Krugman, I would have said that Krugman would score a TKO. He would rack up points in each round and dominate. This isn't... MORE

Let the Spinning Begin

Economic Methods
Arnold Kling
James Heckman and many co-authors write, a sample of rhesus monkeys...subject to a randomized early rearing protocol to show evidence that the lack of a secure attachment relationship early in life has detrimental consequences on physical and mental health later... MORE

Social Justice of the Gaps

Economic Philosophy
Bryan Caplan
Consider the so-called "God of the gaps" argument:1. There are many questions that science hasn't - and perhaps never will - answer.2. Therefore, God exists.You could call this this a straw man, and insist that no theist ever really made... MORE

The Top 0.1 Percent

Human Capital: Returns to entrepreneurs, skills, etc.
David Henderson
Paul Krugman has a post today linking to an article in the New York Times magazine about a wealthy man named Edward Conard. In the second line of his post, Krugman writes: Because, you see, they don't spend all their... MORE

What I'm Saying

Finance: stocks, options, etc.
Arnold Kling
At a Mercatus event on the future of housing finance. 1. In recent decades, the U.S. housing finance system took the "ownership" out of home ownership. Instead of starting out with equity in the form of a 20 percent down... MORE

Bleeding-Heart Libertarianism: Stephen Hicks Weighs In

Economic Philosophy
David Henderson
Philosophy professor (and fellow Canuck) Stephens Hicks has a thoughtful post on bleeding-heart libertarianism (BHL). The whole thing is not long and is well worth reading. Two highlights: As a political-philosophical method: BHL says we should start politics by dividing... MORE

Moderate immigration reformers usually argue in favor of more skilled immigrants.  As a matter of economic efficiency, are they correct?  Suppose skilled immigrants earn $30,000 at home and $100,000 here; unskilled immigrants earn $1000 at home and $25,000 here.  Then... MORE

What I'm Reading

Books: Reviews and Suggested Readings
Arnold Kling
The Kindle sample for Robert Hetzel's The Great Recession. I will probably buy the book, but its exorbitant price strikes me as profoundly unfair. If you are interested in the book, then I recommend my Million Mutinies series (continues here... MORE

The Able Slave

Economic Philosophy
Bryan Caplan
Suppose there are ten people on a desert island.  One, named Able Abel, is extremely able.  With a hard day's work, Able can produce enough to feed all ten people on the island.  Eight islanders are marginally able.  With a... MORE

George Stigler on Prisons

Economic Philosophy
David Henderson
In a comment on my last post, John Goodman went in a different direction from mine. I had pointed out that prisons make people poor or keep them poor. My idea was that many of the people in prison shouldn't... MORE

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