EconLog small logo

October 2014

A Monthly Archive (82 entries)

About That 97 Percent

Energy, Environment, Resources
David Henderson
I've posted before (here and here) about the John Cook study that purports to find that 97% of climate scientists believe that humans are the main cause of global warming. Now Richard Tol, a professor of the economics of climate... MORE

Does Identity Politics Pay?

Behavioral Economics and Rationality
Bryan Caplan
When I scoff at group identity, critics often call me naive.  Won't anyone who heeds my advice to eschew identity politics end up being victimized by all the folks who do take their group identities with utmost seriousness?  Then rational... MORE

Supply and demand-side stagnation

Macroeconomics
Scott Sumner
Tyler Cowen often has posts entitled "A very good sentence." Here Tyler dishes up one of his own: Yes, it is a big mistake to assume Say's Law always holds but it is an even bigger mistake to think it... MORE

The Identity of Shame

Behavioral Economics and Rationality
Bryan Caplan
Every large, unselective group includes some villains.  Say whatever you like about the average moral caliber of Christians, atheists, Democrats, Republicans, plumbers, comic book fans, or Albanians.  The fact remains that each of these groups contains some awful people.  While... MORE

Henderson on Minimum Wage for Prager University

Price Controls
David Henderson
Prager University has published a beautiful graphic-filled video on the minimum wage with me as the "talent." You can see it here or here.... MORE

Emigration and Citizenism

Economic Philosophy
Bryan Caplan
I still remember watching this interview with Mikhail Gorbachev in my high school journalism class.  When Tom Brokaw asked Gorbachev about Soviet emigration restrictions, the Soviet dictator self-righteously replied:  What they're [the West] organizing is a brain drain.  And of... MORE

Is Violence Against Women Ever OK?

Economics of Crime
David Henderson
Of course, it is. I'm glad that co-blogger Bryan Caplan has introduced us to Scott Alexander. I had never come across him before, but I found most of the long piece that Bryan referred to refreshingly thoughtful. There is so... MORE

Read Scott Alexander

Books: Reviews and Suggested Readings
Bryan Caplan
I find fascinating new things to read every day.  But it's been a long time since I found a fascinating new thinker to read - someone who makes me say, "Tell me everything."  Then about two weeks ago, I discovered... MORE

John Goodman on Why We Have Political Stability

Public Choice Theory
David Henderson
One person who does understand economics and who frequently writes approvingly of Roosevelt's approach to politics is Paul Krugman. In The New York Times last Friday he had this to say: "... the political right has always been uncomfortable with... MORE

Repeat after the economics profession: resources are scarce, and they have alternative uses. Thomas Sowell has said that this is the first rule of economics. He has also said that the first rule of politics is to ignore the first... MORE

Teaching the Children by Example

Economic Philosophy
David Henderson
Here's a letter I had published in today's Monterey Herald. What's important is not so much the measure being debated and voted on, but the way the local school district used our money. It was the lead letter in the... MORE

The Germans have traditionally argued that the ECB should focus like a laser on their inflation target, paying no attention to unemployment. Fair enough. But how are they supposed to do this? The exact target is kind of vague, below... MORE

Who Will Build the Roads?

Central Planning vs. Local Knowledge
David Henderson
Is that even the right question? Often, when believers in economic freedom advocate economic freedom, questioners and skeptics ask us, "But if you didn't have government doing it, who would build the roads?" My guess is that most such... MORE

Henderson on Piketty, Part 4

Income Distribution
David Henderson
Here's the next installment from "An Unintended Case for More Capitalism," my long review in Regulation of Thomas Piketty's Capital in the Twenty-First Century: How does Piketty handle this serious problem? [The problem that his proposed tax on capital would... MORE

My naivete about government officials

Monetary Policy
Scott Sumner
Back in the 1980, I believed the Fed needed to target inflation or NGDP, and if they did so the problem of high inflation could be solved. These views were widely mocked by people on both the left and the... MORE

I'm 90 Percent American and 10 Percent Canadian

Behavioral Economics and Rationality
David Henderson
You can take the boy out of Canada, but you can't (completely) take Canada out of the boy As a U.S. federal employee, I'm going through a security clearance for the first time in years. The guy who came to... MORE

WARNING: CONTAINS FROZEN SPOILERS. My daughter is four years old, which means we consume a lot of Disney Princess merchandise: movies, toys, etc. As one might expect, everyone in our house basically knows every word to every song from Frozen.... MORE

Compulsory Attendance IVs Reconsidered

Economic Methods
Bryan Caplan
Using compulsory attendance laws to estimate the causal effect of education on outcomes has been hot in economics for over a decade.  But I was always a skeptic.  The idea that minimum schooling leaving laws are exogenous is bizarre, yet... MORE

I was on the road from Sunday a.m. to late last night and thus my sparser than usual blogging. I taught classes in Patuxent River, MD on Monday, Norfolk, VA on Tuesday, and Arlington, VA on Wednesday, with lots of... MORE

The title is my pathetic attempt to imitate Miles Kimball and Noah Smith, who sometimes post on religion. This won't be about religion; it's about monetary policy. Oh wait . . . In the 1970s, US policymakers knew that inflation... MORE

Minecraft has spawned a lot of imitators. One is Survival Craft, which we heard about a few days ago and downloaded. Our oldest has been playing it virtually non-stop for a couple of days, and he prefers it to Minecraft... MORE

Imagining the Proto-Blogosphere

Economics and Culture
Bryan Caplan
How is blogging different from traditional media?  My knee-jerk answer is, "It caters to a higher-IQ audience," but that's not really true.  The real story is that blogging lets a million voices bloom - including but hardly limited to voices... MORE

Krugman on Amazon

Business Economics
Alberto Mingardi
What does it mean that Amazon has "too much power"? Paul Krugman has published a vehement column on the online retailer, arguing basically that Amazon enjoys a significant "market power" vis-à-vis publishers. He refers to the feud between Amazon and... MORE

Did the Bush tax rebates actually work?

Fiscal Policy
Scott Sumner
Here's Matt Yglesias on fiscal stimulus: What the country needs is a stimulative process that has the bureaucratic properties of monetary policy, but the heft and comprehensibility of fiscal stimulus. If we had a national sales tax like Japan does,... MORE

Crime and Sheepskins

Economics of Education
Bryan Caplan
Criminals are poorly educated.  About 68% of state inmates dropped out of high school.  Many researchers study whether this effect is causal.  As usual, though, I'm more interested in whether the causal effect stems from signaling.  Education could reduce crime... MORE

Progress on OTC Contraceptives

Economics of Health Care
David Henderson
In February 2012, I posted a proposal that the federal government allow contraceptives to be sold over the counter. I wrote: Nevertheless, there is a way that the federal government now cuts access to contraceptives in a way that substantially... MORE

Ebola Bet Followup

Economics of Health Care
Bryan Caplan
I'm pleased by the high quality of comments on my Ebola bet, as well as the unusually high number of people willing to put their money where their mouth is.  First, the takers:Troy Barry:I'll take the bet (first form), not... MORE

The world is a pretty complex and mesmerizing place, and people (and firms) do a lot of things that are, at first glance, hard to understand. Consider airlines. I've heard on numerous occasions complaints about how major carriers board their... MORE

Nominal GDP is not real (and is really tiny)

Monetary Policy
Scott Sumner
Sometimes I argue that nominal GDP is like Coke, it's the "real thing." By that I mean it's a well-defined concept, the dollar value of all output of final goods and services. Of course I exaggerate, there are some conceptual... MORE

Preferences in The Warriors

Economics and Culture
Bryan Caplan
Economics makes many things funnier.  But econ's comedic value-added for the final scene of The Warriors (1979) is truly rich.  The first 15 seconds have the big unintended joke, but don't stop there.... MORE

Ebola Bet

Economics of Health Care
Bryan Caplan
Mainstream scientists assure us that Ebola poses very little threat to Americans; unless you're a health worker who cares for the infected, Ebola is almost impossible to catch in a rich, modern society.  Yet many populists and borderline conspiracy theorists... MORE

Fixed Costs and Open Borders

Economic Philosophy
Bryan Caplan
Given existing border controls, mild measures to prevent serious contagious disease seem morally acceptable.  Yet the best choice, in my view, remains fully open borders - tear down the walls and make travel between countries as free as travel within... MORE

Henderson on Piketty, Part 3

Income Distribution
David Henderson
More excerpts from my recently published review of Thomas Piketty's Capital in the Twenty-First Century. For those who are worried about growing wealth inequality because their own wealth is not growing, there is a simple solution: save more and invest... MORE

I have not posted on that sweet man, Leonard Liggio, who died this week. It's partly because co-blogger Alberto Mingardi already has and partly because, while thinking about what to say, I came across a video by Tom Palmer. The... MORE

The Grand Budapest Hotel's Sublime Apology

Economic Philosophy
Bryan Caplan
[mild spoilers]Here's a great scene from Wes Anderson's The Grand Budapest Hotel.  Gustave, manager of the Grand Budapest Hotel, has just escaped from prison after being framed for murder.  Zero, an immigrant who works as the hotel's lobby boy, helped... MORE

Housing and poverty

Regulation
Scott Sumner
The traditional definition of poverty in America has been criticized for ignoring factors such as government benefit programs and regional variation in the cost of living. Now the Census Bureau has released new estimates of poverty, which account for various... MORE

Ebola and Open Borders

Cost-benefit Analysis
Bryan Caplan
Opponents of immigration almost instantly latched onto Ebola (see here, here and here for starters).  Isn't this horrific disease the "killer argument" showing that open borders is a naively deadly proposal?  The Center for Immigration Studies' Mark Krikorian swiftly coined... MORE

A Stigler Story

Economic Philosophy
David Henderson
And now for something completely different. I ended my Wall Street Journal piece on Jean Tirole with the following paragraph: If George Stigler were alive today, he would probably recognize, in Jean Tirole, a kindred spirit. In 1950 Stigler advocated... MORE

What Does Fusion Mean for the Future?

Energy, Environment, Resources
Art Carden
Writing at Forbes.com (for whom I am also a contributor), William Pentland discusses Lockheed Martin's alleged breakthroughs in fusion technology. We've heard "fusion is just around the corner!" for a very long time now, but as Tyler Cowen notes, this... MORE

It's the economy, stupid

Macroeconomics
Scott Sumner
Here are some things that seem very likely: 1. The global stock/oil/bond yield plunge is at least partly due to expectations of slower nominal GDP growth. I know of no other economic news could explain a sudden decline of this... MORE

Prosecuting Truancy

Economics of Crime
Bryan Caplan
How are compulsory attendance laws actually enforced?  A preliminary search turned up some surprising claims, especially this:Truancy charges can result in large fines, jail time, and a criminal record for students in Texas--one of only two states (along with Wyoming)... MORE

Leonard Liggio RIP

Obituaries
Alberto Mingardi
The name of Leonard Liggio won't say much to non libertarians: but it means a lot to the insiders of the libertarian movement. Leonard, who passed away yesterday, was a great and benevolent figure in this movement of ours. He... MORE

An Odd A Priori Argument Against Private Education

Economics and Culture
Bryan Caplan
In her chapter on crime in The Social Benefits of Education (Behrman and Stacey, eds., 1997), Ann Dryden Witte provides an argument against private education likely to win many economists' immediate assent:Consider a world in which there were no public interventions... MORE

In this TED talk, Myriam Sidibe discusses the public health effects of hand-washing. She makes an interesting and important claim: a lot of families in India have soap, but they use it to wash clothes, bathe, and wash dishes because... MORE

Jean Tirole on Scaling Back Government

Fiscal Policy
David Henderson
Around the same time, Canada cut government expenditure by 18.9% without social turmoil - and without greatly reducing health, justice, or housing programmes. They did this while maintaining tax levies, so the result was a reduced public deficit and falling... MORE

Henderson on Tirole

Regulation
David Henderson
But they do not commit the mistake of thinking that regulators are necessarily better than firms in setting prices. Consider the recent issue of interchange fees (IF) in payment-card associations like Visa and MasterCard. Many regulators have advocated government regulation... MORE

Do bad times make us less smart? It sometimes seems that way. When times are good, people dispassionately explain how you don't want to overreact to plagues with draconian policies like quarantines, especially if the disease is not highly contagious.... MORE

Diseases of Poverty: Neglecting the Obvious

Economics of Health Care
Bryan Caplan
Before blogging Ebola, I've been reading up on the broader category of "diseases of poverty."  The low-point of the Wikipedia entry:There are a number of proposals for reducing the diseases of poverty and eliminating health disparities within and between countries.... MORE

When I taught at Rhodes College, I had a serious conversation with a colleague about whether accounting should be considered part of the core of a solid liberal education. We agreed that it should: beyond the fact that imparts vocational... MORE

Fawcett's Liberalism

Book Club
Alberto Mingardi
On the Library of Law and Liberty website, I have a long review of Edmund Fawcett's book "Liberalism: The Life of an Idea". Fawcett writes well and his book is a pleasant read. But he considers "liberalism" such a vague... MORE

The Bribes of Columbus

Economic Philosophy
Bryan Caplan
Christopher Columbus, a slaver and a murderer, exemplifies Western civilization at its worst.  Out of all the efforts to excuse his crimes, the most bizarre I've heard goes something like this:As a resident of the modern United States, you have... MORE

Henderson on Piketty, Part 2

Books: Reviews and Suggested Readings
David Henderson
In Piketty's view, if someone's share of wealth stays constant, he cannot be better off, even if wealth has increased. Yesterday I highlighted the opening of my lengthy published review of Thomas Piketty's Capital in the Twenty-First Century. Here's the... MORE

No hawks or doves, just owls

Monetary Policy
Scott Sumner
Here is Germany's representative at the ECB, Jens Weidmann: Mr. Weidmann's conservative stance contrasts with the ECB's latest attempts to convince investors that it will act forcefully to boost the flow of money to the economy, and may raise doubts... MORE

Conservative Relativism

Economic Philosophy
Bryan Caplan
I spent a lot of time conversing with conservative intellectuals this week.  What surprised me most was their moral relativism.  Sure, they spent a lot of time griping about left-wing relativism: The awful liberals refuse to admit the West is... MORE

Henderson on Piketty, Part 1

Books: Reviews and Suggested Readings
David Henderson
My long review of Thomas Piketty's Capital in Twenty-First Century is finally out. It is titled "An Unintended Case for More Capitalism." Over the next few days, I'll be highlighting various parts of my review. Here's the first highlight: Unlike... MORE

A 13 minute primer on DeirdreMcCloskeyanism

Books: Reviews and Suggested Readings
Alberto Mingardi
I had the good fortune, in the last couple of weeks, to spend a good deal of time with Deirdre McCloskey. My Institute, Istituto Bruno Leoni, invited her to Italy for a series of seminars and lectures, including the keynote... MORE

Economics is symmetrical

Monetary Policy
Scott Sumner
Many economic models are symmetrical. If higher business costs lead to higher prices, then lower business costs lead to lower prices. Thus if higher raw tobacco prices lead to higher cigarette prices, then lower tobacco prices lead to lower cigarette... MORE

Unclear Thinking About Income Inequality

Income Distribution
David Henderson
I wanted to let you know that on Wednesday, October 22, Intelligence Squared US will hold a debate on the motion "Income Inequality Impairs The American Dream of Upward Mobility." This is the opening sentence of a note I received... MORE

Risk Analysis in One Lesson

Cost-benefit Analysis
Bryan Caplan
Mueller and Stewart's new piece on "Responsible Counterterrorism Policy" doubles as a great primer on risk analysis:Terrorism is a hazard to human life, and it should be dealt with in a manner similar to that applied to other hazards--albeit with... MORE

Should Financial Literacy Be Part of the Core of K-12 Education?

Finance: stocks, options, etc.
Art Carden
I tweeted the following last night: If schooling is really about valuable skills, shouldn't personal finance be part of the core curriculum?— Art Carden (@artcarden) October 9, 2014 Economic and financial literacy among the populace is abysmal, and my impression... MORE

Maskin's Failure

Finance
David Henderson
UPDATE BELOW In particular, if I'm a bank and I'm making risky loans, I have an incentive, if I can, to make those loans using other people's money, in other words to make highly leveraged loans. But when I do... MORE

A certain laxity in word choice

Finance
Scott Sumner
Matt Yglesias is normally my favorite progressive blogger, but today I have two bones to pick. The first is perhaps a bit picky, as I object to a single word: On the other hand, one can make the case that... MORE

Words and meaning (good theft and bad)

moral reasoning
Scott Sumner
Many people like to attack ideas by linking them up with words that have ambiguous meaning, but either very positive or very negative connotations. Then they use the word as a sort of crude cudgel, to bash their opponent. This... MORE

Pot Calling the Kettle . . . White?

Labor Market
David Henderson
After years of playing down the problem, technology companies like Google, Facebook and Apple now say they're serious about improving the gender and ethnic diversity of their work forces and corporate boards. Recent data from those companies and others like... MORE

Lemieux: Let's Lose the "We"

Economic Philosophy
David Henderson
One can barely read a newspaper or listen to a politician's speech without hearing the standard "we as a society" or its derivatives. "You know, we're going to have to make some choices as a society," said President Barack Obama... MORE

Recently, the Birmingham Business Journal interviewed me and my colleague Darin White (@sports_biz_prof on Twitter) about the case for and the case against government financing for a domed stadium (info here; subscription required). Over the weekend, I re-read Rolf Dobelli's... MORE

I learned from my finance colleagues that there apparently aren't very liquid markets in which I could short-sell or buy put options on municipal bonds. Birmingham has been going around and around about expanding the Convention Center and building a... MORE

Getting a B.A. and Living With Your Parents

Economics of Education
Bryan Caplan
The most surprising figure in Arum and Roksa's new Aspiring Adults Adrift:Yes, lots of newly-minted college grads live with their parents.  Yes, the fraction of college grads who live with their parents has sharply increased.  But at least for 22-24... MORE

Can a Principled Person "Rise Above Principle?"

Economic Philosophy
David Henderson
In a recent critique of Richard Epstein's call for another U.S. military intervention in the Middle East, I wrote the following at the end of my piece: One issue I did not address was the issue of whether President Obama... MORE

Happy Birthday, Leland Yeager

International Macroeconomics: Exchange Rates, International Debt, etc.
David Henderson
A regular reader of Econlog told me that while he likes my obituaries of famous economists, it would be nice to pay tribute to older accomplished economists while they're still alive. Here is my first. Yesterday was Leland Yeager's 90th... MORE

In a recent post I criticized the "free lunch" view of printing money. However I did acknowledge that there was a sort of free lunch aspect to having a monetary system, but only to the tune of a bit over... MORE

Investing: A Weekend Thought

Finance: stocks, options, etc.
Art Carden
This post appears in the Facebook discussion group for my LearnLiberty Personal Finance Course. A Weekend Thought on Investing and Personal Finance: If behavioral economics and psychology have taught us anything, it's that people are not very good at making... MORE

Jeff Hummel's Case for Martin Van Buren over Tyler

Public Choice Theory
David Henderson
Last weekend, I posted about who should be on Mt. Rushmore. In the comments, there was discussion about who was the greatest American president. Ivan Eland, not a commenter but a friend who has written a book on the subject,... MORE

Twitter Chat on Personal Finance, Monday from 8-9 PM Central

Econlog Administrative Issues
Art Carden
I'm currently leading an online personal finance course for the IHS LearnLiberty project (disclosure: and getting paid for it) and teaching both Principles of Macroeconomics and the MBA "Economics of Competitive Strategy" course at Samford (disclosure: and getting paid for... MORE

The Wonder of Markets

Growth: Causal Factors
David Henderson
"Blue Jeans meeting." That's what I think showed up on my cell phone at about 6:20 this morning. I didn't know what it meant and I ignored it. It turned out that it was a reminder to talk to an... MORE

Still no free lunch

Monetary Policy
Scott Sumner
Here's Matt Yglesias: Here's the thing about the federal government -- it can print dollars, a highly profitable activity. You can't print dollars. I can't print dollars. Vox Media can't print dollars. The state of Tennessee can't print dollars. These... MORE

Aging Out of Addiction

Behavioral Economics and Rationality
Bryan Caplan
I've known about "aging out" for ages, but former addict and neuroscience journalist Maia Szalavitz eloquently boils down the evidence:According to the American Society of Addiction Medicine, addiction is "a primary, chronic disease of brain reward, motivation, memory, and related... MORE

Ron McKinnon, RIP

Obituaries
David Henderson
Ron McKinnon, the Stanford University economist who specialized in international finance, has died. According to his colleague John Shoven, Ron "fell on an escalator at SFO about twelve days ago and was badly injured." I didn't know Ron well but... MORE

The person who wants to get you fired is not your friend. Daniel S. Hamermesh and Elena Stancanelli recently presented data showing that Americans work longer hours, and more night and weekend hours, than Europeans. I'm not familiar with Professor... MORE

Is "spontaneous order" such a very bad idea?

Central Planning vs. Local Knowledge
Alberto Mingardi
A few days ago, Damon Linker at The Week published an article deeming "spontaneous order" "the silliest and most harmful of all" libertarian ideas. Will Wilkinson (here) and Nick Gillespie (here) have written well pondered responses. Linker's article is as... MORE

Rojas on Marijuana Legalization

Politics and Economics
Bryan Caplan
Support for marijuana legalization was stalled for decades, then skyrocketed.  What happened?  Vox's latest analysis heavily relies on sociologist Fabio Rojas, also known as the Best Man at my wedding.  Highlights:Fabio Rojas, a professor at Indiana University who studies social... MORE

The Ultimate Incivility

Economic Philosophy
Bryan Caplan
I've long believed that human beings are overly touchy.  Many actively look for excuses to take offense.  This excess negativity isn't just unpleasant.  Due to the scarcity of attention and patience, unreasonable offense frequently crowds out reasonable offense.  It's no... MORE

Return to top