EconLog small logo

March 2015

A Monthly Archive (74 entries)

I'm a Full Professor!

Labor Market
David Henderson
Last summer, after 22 years as a tenured Associate Professor, I decided to come up for promotion to Full Professor. I did so partly at the urging of three colleagues in the Graduate School of Business and Public Policy, where... MORE

The Prevalence of Marxism in Academia

Politics and Economics
Bryan Caplan
As the Iron Curtain crumbled, people often joked, "Marxism is dead everywhere - except American universities."  The stereotype of the Marxist professor runs deep.  But is this stereotype grounded in statistical fact?  Here are the results from a 2006 nationally... MORE

Talking about Britain while talking about Singapore

Growth: Causal Factors
Scott Sumner
The Guardian has a long piece on Lee Kuan Yew, with the following subtitle: The founding prime minister of an independent Singapore, he sought to encourage prosperity through ensuring a dominant role for the state The article also contains this:... MORE

Last summer, I highlighted famous Canadian whisky producer Sam Bronfman's claim that the greatest invention in history is interest. I then posted on how to get rich slowly and drew strongly on the idea of compound interest. Of course, I... MORE

How to Fix Seminars

Economic Education
Bryan Caplan
I'm sick of academic seminars.  Even if the presenter has a good paper and speaks well, the audience ruins things.  How?  Two minutes into any talk, the fruitless interruptions begin.  Half the time, they're premature quality control: "Are you going... MORE

Russ Roberts on Adam Smith's Rules for Living

Books: Reviews and Suggested Readings
David Henderson
The prudent man, claims Roberts, does not smoke, is "physically active and keeps his weight under control," and "works hard and avoids debt." On debt, I must part company. It was by taking on what seemed like a massive debt... MORE

What's new since 1982?

Income Distribution
Scott Sumner
When I moved to Boston in 1982, no one talked about the declining share of national income going to labor. Or increasing income inequality. Now these are the hottest topics in economics. Much of the discussion seems to implicitly suggest... MORE

He Had Me at Page One

Books: Reviews and Suggested Readings
David Henderson
"I've always had trouble succeeding along traditional Bush family lines." So writes Jonathan Bush on p. 1 of his book, Where Does It Hurt? With that one sentence, he had me. Bush is a nephew of George H. W. Bush... MORE

Richer than Rockefeller?

Growth: Consequences
David Henderson
This is the longest time I've gone without posting, other than when I'm on vacation at my cottage in Canada in August. I was traveling and my computer was being repaired after I got back. I gave a talk at... MORE

Truly Notable and Quotable

Entrepreneurialism
Alberto Mingardi
The Wall Street Journal often provides its readers with eye-opening arguments in the "Notable and Quotable" column hosted in its editorial page. On March 13, the WSJ quoted William Baumol, Robert Litan, and Carl Schramm, "Good Capitalism, Bad Capitalism, and... MORE

Plug-and-Play People

Economics and Culture
Bryan Caplan
One common complaint about proponents of open borders is that we picture human beings as interchangeable parts.  If an American can do X, so can a Haitian.  Why can't the open borders crowd see the obvious truth that people are... MORE

I think we all agree that private property rights are an important feature of capitalism. But what is "property"? It increasingly seems like the answer is just about everything: Taylor Swift Trademarks 'This Sick Beat' and Other Catchphrases Thinking about... MORE

When Orwell Met Aumann

Behavioral Economics and Rationality
Bryan Caplan
Cowen and Hanson's "Are Disagreements Honest?" summarizes the theoretical case against "agreeing to disagree."Yet according to well-known theory, such honest disagreement is impossible. Robert Aumann (1976) first developed general results about the irrationality of "agreeing to disagree." He showed that... MORE

Is Stanley Fischer too complacent?

Monetary Policy
Scott Sumner
Stanley Fischer is one of the world's most thoughtful monetary economists. And now he is also vice chairman of the Federal Reserve Board. He recently gave a speech on monetary policy, which as you'd expect contained many wise observations. However... MORE

The Most Convincing Figure in Irrational Exuberance

Behavioral Economics and Rationality
Bryan Caplan
I never got around to reading the previous editions of Robert Shiller's Irrational Exurberance, but I've finished reading the new third edition cover-to-cover.Rather than review the whole book, consider the single most convincing figure.  At first glance, it's easy to... MORE

Hard Asia, Soft Europe

Scott Sumner
Former Singapore Prime Minister Lee Kuan Yew died today. He was famous for being dismissive of "soft" European welfare states. But was Lee as important as most friends and foes assume? I'm not sure; the other two small Chinese tiger... MORE

Perfect Pedagogy

Industrial Organization
Bryan Caplan
When you were taught about perfect competition, what was the underlying interpretation of the model?1. The model is a good approximation: Markets in the real world work about as well - and in roughly the same way - as the... MORE

This Wednesday I'm presenting my preliminary work on "The Selfish and Social Returns to Education" here at the Fairfax campus of GMU.  Open to the public.  Location: Carow HallTime: Lunch at 11:45, Talk from 12:00-1:15I'm trying out a new system... MORE

A Rare Disagreement with Bryan Caplan

Labor Market
David Henderson
Last week I highlighted Bryan Caplan's comprehensive notes, homework sets, and keys to homework for the courses he teaches. While perusing his first homework set for his labor economics course, I came across the following problem: Using separate supply-and-demand curves,... MORE

The Boys in the Boat

Books: Reviews and Suggested Readings
David Henderson
On my flight from Chicago to Phoenix on Thursday, I finished The Boys in the Boat. It's subtitled "Nine Americans and Their Epic Quest for Gold at the 1936 Berlin Olympics." I highly recommend it. Not that this is why... MORE

My Speech at UNC Wilmington

Upcoming Events
David Henderson
This coming Monday, March 23, I will be speaking at the University of North Carolina at Wilmington. Title of Speech: Seven Myths About Free Markets Date: March 23 Time: 7:00 p.m. Place: Cameron Hall, 105 If you make it to... MORE

A Partial Defense of David Friedman

Public Goods
David Henderson
Scott Alexander, about whom both David Friedman and co-blogger Bryan Caplan have raved, has a lengthy book review of David's The Machinery of Freedom. As I write this, there are 479 comments on his post and I looked only at... MORE

Fed officials don't like the idea of a rigid policy instrument rule, such as the Taylor Rule. They don't even like less restrictive policy targets, such as 2% inflation; to be achieved in any way the Fed chooses. Currently the... MORE

Does Burning Your Money Make You Poor?

Income Distribution
Bryan Caplan
Does burning your money make you poor?  Almost everyone responds, "Obviously."  And in a sense, it is obvious.  If you take all your money and burn it, you'll be hungry and homeless as a result.  QED.In another sense, though, burning... MORE

On libertarian strategies

Book Club
Alberto Mingardi
Sometimes libertarians remark that they spend too much time thinking about liberty, and not quite enough attempting to spread it. Well, in my experience, libertarians do talk a lot about "political strategy." The weird thingĀ is that for people who tend... MORE

I recently argued that Krugmanomics would become instantly obsolete the moment the Fed raises interest rates (a date that seems to be steadily receding into the future, although still expected this year.) A new post by Noah Smith suggests that... MORE

Gerson's Confusion about Inequality

Income Distribution
David Henderson
Putnam's goal is to reveal the consequences of inequality on kids. This unfairness is rooted in various, interrelated trends: family instability, community dysfunction and the collapse of the blue-collar economy. The result is a growing, class-related gap in social capital... MORE

Where Is the School of the 3 R's?

Economics of Education
Bryan Caplan
What is the most prominent K-12 U.S. school - public or private - that single-mindedly focuses on reading, writing, and math?  Barring that, what is the most prominent K-12 U.S. school that single-mindedly focuses on academics - reading, writing, math,... MORE

Me at Northwood University

Economic Education
Bryan Caplan
Tomorrow I'm speaking at Northwood University in Midland, Michigan on "Are We Stuck with the Great Society"?  Open to the public.  If you're there, please say hi.... MORE

The Republicans in Congress are facing an interesting decision on the budget. Here is the New York Times: WASHINGTON -- The congressional push this week to secure the first Republican budget plan in nearly a decade is revealing a chasm... MORE

The Ides of March: Gordon Tullock Strikes Again

Public Choice Theory
David Henderson
Phil Edwards over at Vox has written a fun piece on the assassination of Julius Caesar on the Ides of March. Most of us know what we "know" about it from Shakespeare. Bad idea, says Edwards, and he shows why.... MORE

Determinism and Motivated Reasoning

Behavioral Economics and Rationality
Bryan Caplan
Martin Luther is near the top of my list of Utterly Wrong Thinkers I Enjoy Reading.  He writes beautifully, logically, and candidly.  In this revealing passage, he explains why he finds free will so emotionally threatening and determinism so emotionally... MORE

In the 1990s and early 2000s Paul Krugman basically employed a classical approach to policy analysis, with opportunity costs playing a central role. (Note that this should not be confused with New Classical claims of the non-importance of demand shocks,... MORE

Bryan Caplan's Notes

Economic Education
David Henderson
In a post this morning, co-blogger Bryan Caplan made the following statement: Furthermore, when there's a surplus of workers, the cost of outright bigotry sharply falls. I thought the link he would give would be to the article "Discrimination" in... MORE

The Open Borders Manifesto

Economic Philosophy
Bryan Caplan
The Open Borders Action Group has prepared a short manifesto in honor of Open Borders Day.  Reprinted in its entirety:Freedom of movement is a basic liberty that governments should respect and protect unless justified by extenuating circumstances. This extends to... MORE

The Other Cause of Immigrant Idleness

Regulation and Subsidies
Bryan Caplan
Happy Open Borders Day!  The world remains light-years from free migration, but the intellectual case and elite support for open borders continue to build.  In honor of the day, let's explore a little topic I call... "the other cause of... MORE

A Gap in Public Choice?

Public Choice Theory
David Henderson
Sometimes Politicians' Own Thoughts and Interests Matter for Understanding Policy Even though public choice has not taken the economics profession by storm, there's a kind of crude public choice that is popular among libertarians and libertarian-leaning people who are skeptical... MORE

Krugman and Netanyahu

Cross-country Comparisons
David Henderson
Reading Paul Krugman's latest post on Greece motivated me to go back and reread an earlier post by Tyler Cowen at Marginal Revolution. And that got me thinking about Bibi Netanyahu's recent speech to Congress and an analytic piece by... MORE

On Fringe Benefits I Blew the Equilibrium

Economics of Health Care
David Henderson
Three commenters whom I respect and whose work I respect--John Goodman, Tim Worstall, and Scott Sumner--made critical comments on my most recent blog post, "Fringe Benefits and Stagnating Wages." My basic point is right, but I blew the equilibrium. I... MORE

Krugman's dangerous idea (It worked for me too!)

Economic Philosophy
Scott Sumner
In a recent post I argued that Paul Krugman had started out as a critic of intellectuals who ignored economic models---the sort of person who argued that the laws of supply and demand do not apply to the minimum wage... MORE

Greece and tax sadist tourism

Eurozone crisis
Alberto Mingardi
The arm wrestling over Greece may be more serious than it originally appeared to many. The Greek government has submitted a draft list of reforms to unlock new financial aid. So far, the other European partners appear to be unimpressed... MORE

Income and Irresponsibility

Economic Philosophy
Bryan Caplan
Suppose you learn that rich and poor people get drunk equally often.  Should you conclude that the poor are no more prone to irresponsible drinking than the rich?No.  You can't sensibly categorize behavior as "responsible" or "irresponsible" until you know... MORE

Fringe Benefits and Stagnating Wages

Labor Market
David Henderson
Former co-blogger Arnold Kling has an excellent post this morning on measurement of worker compensation. He quotes a question from one of his readers. I'll let you read it for yourself. Then Arnold answers: There is a measure of wage... MORE

My Ohio Tour

Economic Education
Bryan Caplan
I'm speaking all over Ohio this April.  Talks open to the public:1. April 14, 6-8 PM, Bowling Green State University: "The Case Against Education"2. April 15, 5:30-6:30 PM, Ohio State University: "Immigration Restrictions: A Solution in Search of a Problem"3.... MORE

Leveling the Playing Field for Online Education

Economics of Education
Bryan Caplan
Governments at all levels annually give traditional colleges about one-third of a trillion dollars.  That's roughly $1000 per American per year, a massive subsidy.  Question: Why don't cheerleaders for online education loudly call for slashing or ending this subsidy, to... MORE

Paul Samuelson's Take on the Great Depression

Economic History
David Henderson
In jumping around through the blogosphere last night, I came across this quote from Paul Samuelson, in an interview he did in 2009 with Conor Clarke: Well, let me give you a bit of boring autobiography. I came to the... MORE

All human institutions are fallible, and hence need to be accountable. That should be obvious, but when it comes to the Fed some people seem to think we just need to trust them. Allan Meltzer knows otherwise, and did a... MORE

Overselling Online Education 2.0: Comment on Carey

Economics of Education
Bryan Caplan
First-generation fans of online education pushed a simple story: Online education is a better, cheaper way to learn, and will therefore soon do to brick-and-mortar colleges what downloading did to the record companies.  I've long argued that these fans are... MORE

The Henderson Misery Index

Macroeconomics
David Henderson
A Friendly Amendment: Don't Forget Your Irving Fisher During the 1976 campaign for U.S. president, candidate Jimmy Carter popularized the "Misery Index" as a way of criticizing his opponent, Jerry Ford. The misery index--equal to the sum of the inflation... MORE

Distorted Incentives for Prosecutors

Economics of Crime
David Henderson
You get (more of) what you (don't) pay for. When a local prosecutor sends a convicted felon to prison, the cost of keeping him locked up--an average of $31,286 per year--is paid for entirely by the state, not the county... MORE

In a paper I wrote back in 2008 I speculated that what I called "economistic" thinking led to classical liberal (i.e. free market) views on economics. By 'economistic' I meant thinking that takes economic theory very seriously. The belief that... MORE

The Straw Man Straw Man

Behavioral Economics and Rationality
Bryan Caplan
When I criticize painfully foolish positions, people occasionally accuse me of "straw manning" my opponents.  I say the shoe's on the other foot: They're straw manning me.  Consider the following:1. Criticizing specific person X for a painfully foolish position he... MORE

Rubio-Lee Isn't Great

Taxation
David Henderson
Co-blogger Scott Sumner, over at his TheMoneyIllusion blog, has a post titled "Rubio-Lee is great, so why not make it even greater?" I don't agree that Rubio-Lee is great. It has many good features and Scott has listed pretty much... MORE

Consider the following thought experiment. The Democrats take control of Congress and the Presidency. With more than 60 seats in the Senate, they can do as they like. Do they go after the root cause of inequality in income? Let's... MORE

Ball State University economists Philip R.P. Coelho and James E. McClure wrote a short piece recently that makes an obvious and telling point. But even though it's obvious, few people who discuss the minimum wage are talking about it. And... MORE

Education's Selfish and Social Returns

Economic Methods
Bryan Caplan
I've created a resource page for The Case Against Education's calculations of education's selfish and social returns.  This work is the tentatively final version of what I blogged last June.Start with the slideshow.  If that piques your interest, the remaining... MORE

The Case Against Education: What's Taking So Long

Economics of Education
Bryan Caplan
I started writing The Case Against Education in 2011.  I'm still not done, but I'm shooting for release in 2017.  What's taking so long?Almost the opposite of writer's block.  The book is taking a long time because I've repeatedly realized... MORE

Dom Armentano

Books: Reviews and Suggested Readings
David Henderson
Following a few of links in Bryan Caplan's latest post, I came across this book (zero-price as a pdf) edited by Walter Block. Titled I Chose Liberty, it's a series of essays on how various libertarians or close-to libertarians came... MORE

Fellow Travelers Welcome

Behavioral Economics and Rationality
Bryan Caplan
My debate partner, Vivek Wadhwa, has made feminists so angry that he's decided to stop talking about sexism in the tech industry.  The New York Times on the conflict:Women in tech criticized Mr. Wadhwa for clumsily articulating their cause. They... MORE

Cooperate with Others, Brain Feels Fuzzy

Behavioral Economics and Rationality
David Henderson
I can almost guarantee that you won't have a clue what this post is about just by reading the title. How does it fit on an economics blog? Because it's about psychic rewards from helping make things work and go... MORE

Krugman versus Krugman on Labor versus Butter

Price Controls
David Henderson
OMG. In my recent post "Krugman's Priceless Economics," I criticized a recent column by Paul Krugman in which he argued against thinking about labor markets in terms of supply and demand. I quoted the following from his article: Specifically, this... MORE

The bizarre way economists calculate real income

Income Distribution
Scott Sumner
Over the years I've argued that economists are horribly confused about the concept of "income." They use income for tax incidence discussions and also economic inequality, whereas on theoretical grounds consumption is clearly the appropriate variable. And yet until a... MORE

Can One Conduct Cost-Benefit Analysis of a Policy?

Cost-benefit Analysis
David Henderson
The answer to the question I asked in the title seems as if it should be "Yes." And not just "yes," but "Obviously yes." Yet economist John Whitehead says that one can't conduct cost-benefit analysis of a policy. Specifically, he... MORE

Illegal Means Illegal

Economics of Crime
David Henderson
What's the difference between Silk Road and e-Bay? George Washington University political science professor Henry Farrell recently wrote a piece titled "Dark Leviathan." He states his case so well that I won't try to paraphrase it. Instead, I'll quote one... MORE

Scoring Your Ukraine Predictions

Economic Methods
Bryan Caplan
I just reviewed all 50 responses to my original Ukraine prediction challenge.  Seven comments did not make unconditional predictions, and two were obvious jokes.  Here's how I scored the remaining 41 sets of predictions:1. My last post named six major... MORE

Krugman's Priceless Economics

Microeconomics
David Henderson
As regular readers of my posts on Econlog know, although I am often critical of Paul Krugman, I defend him when he's doing good economics (here, for example). His New York Times column yesterday, though, "Walmart's Visible Hand," essentially throws... MORE

The last New Keynesian left alive

Macroeconomics
Scott Sumner
I've done numerous posts pointing out that prior to 2008, New Keynesian economists believed the fiscal multiplier was roughly zero. Paul Krugman used to say that aggregate demand was essentially whatever Alan Greenspan wanted it to be. Jared Pincin sent... MORE

What Happened in Ukraine

Behavioral Economics and Rationality
Bryan Caplan
A year ago I challenged EconLog readers to make unconditional predictions about the Ukraine conflict:Challenge: In the comments, go on the record and predict what will actually come of the emerging Ukrainian-Russian conflict.  Only unconditional, falsifiable predictions count.  No claims... MORE

Who Loses from Insider Trading?

Business Economics
David Henderson
In one of this month's two Feature Articles, "Who Is Harmed by Insider Trading?", Charles L. Hooper takes a look at insider trading. Specifically, whom does it hurt. A key paragraph: Insider "hurt" Uninformed Buyer by nabbing Uninformed Buyer's unexpected... MORE

Uber reacts to the Spanish ban

Regulation
Alberto Mingardi
One thing that regulators, and regulation's enthusiasts, rarely get is that private businesses will do their best to off-set the impact regulation has on them. This is particularly true in instances in which regulation is considered the second-best option to... MORE

The Taboo Trade-Offs of Tracking

Behavioral Economics and Rationality
Bryan Caplan
Most Americans are okay with educational "tracking" - measuring potential, then tailoring each student's education to his measured potential.  But if you advocate extending or expanding the role of tracking, most Americans resist.  Suppose you propose, for example, that the... MORE

Consider the Substance

Behavioral Economics and Rationality
David Henderson
In Econlog's sister blog, Online Library of Law & Liberty, Lauren Weiner makes an important distinction. Left wing pundit David Corn has accused Fox News Channel's Bill O'Reilly of exaggerating in telling about his experience in Argentina during and after... MORE

How interest rates matter, and how they don't

Monetary Policy
Scott Sumner
There are certain topics that are extremely hard to explain to the average person. Interest rates are one of those topics. I've often argued that interest rates don't really matter that much; they are a sort of epiphenomenon of monetary... MORE

Krugman's Bait and Switch

Revealed Preference
David Henderson
Paul Krugman has a post on the importance of MIT economists in policy discussions. Had he simply made the point that they are highly influential, his post would have been fine. We could still argue about which of the influences... MORE

Return to top