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May 2016

A Monthly Archive (71 entries)

It's hard to raise a lot of tax revenue

Supply-side Economics
Scott Sumner
Matt Yglesias has a new post pushing back against the claim that a Universal Basic Income (UBI) program is too expensive to be practical in the US: Let's rerun the numbers with a little more precision, though we won't change... MORE

Ozimek on Hanauer

Price Controls
David Henderson
A few days ago, a regular reader of Econlog wrote me to suggest that I do a critique of a long piece written by Nick Hanauer, the person who made a few billion dollars as a tech investor. Hanauer has... MORE

Robert Murphy on Voting

Public Choice Theory
David Henderson
A few days after I posted my critique of Jim Harper's post advocating voting, Bob Murphy posted an excellent critique that affirms my point and goes further. Recall Jim Harper's statement that even though your vote is highly unlikely to... MORE

Random thoughts on globalization

International Trade
Scott Sumner
Here's Scott Alexander: An article by Freddie deBoer in this month's Current Affairs proposes "Journalistic Self-Outsourcing". DeBoer notes that lots of journalists and intellectuals suggest that protectionism and other anti-globalization policies are immoral. For example, Zack Beauchamp of Vox calls... MORE

Goldberg on McCloskey and Spencer

Book Club
Alberto Mingardi
Jonah Goldberg has an excellent post on "Social Darwinism", in which he builds on a potential imprecision by Deirdre McCloskey, who published a piece in the Wall Street Journal abridging her new, wonderful book "Bourgeois Equality". Goldberg singles out this... MORE

Americans, on Average, Gain Big from Trade with China

International Trade
David Henderson
Update below The rise in exports from China has been one of the most significant events in international trade in recent decades. This trend has accelerated since that country's entry into the World Trade Organization (WTO) in 2001. Even before... MORE

Why I Think I Win My Bets

Behavioral Economics and Rationality
Bryan Caplan
I'm tempted to tell Scott, "You had me at 'Why Bryan Caplan wins almost all of his bets."*  But my story varies from his.  Scott begins:Bryan almost always takes the consensus view in any bet.Not really.  In general, I think... MORE

Why Bryan Caplan almost always wins his bets

Economic Philosophy
Scott Sumner
[This is aimed at clarifying my previous post, which David commented on.] Bryan almost always takes the consensus view in any bet. The view a betting market would take, if one existed. When I first hear about a new Caplan... MORE

My Response to Scott Sumner

Economic Philosophy
David Henderson
I'm still scratching my head at co-blogger Scott Sumner's recent post titled "You're not special." It seems like a combination of extreme subjectivism, denial of subjectivism, putting his thumb on the obvious, and argument from authority. Extreme Subjectivism Scott writes,... MORE

Migration and Welfare in Maoist China

Cross-country Comparisons
Bryan Caplan
The welfare state is an appealing rationale for migration restrictions.  Normally, of course, it's a rationale for international migration restrictions.  In Maoist China, however, the urban welfare state swiftly became a rationale for restricting domestic migration from the countryside, enforced... MORE

You're not special

Economic Philosophy
Scott Sumner
You may like your outgoing and family oriented culture, or your introspective and individualistic culture. But that fact, by itself, doesn't make your culture better than another. (Put aside the question of whether it is better, a much more difficult... MORE

Carl Menger 2016 Essay Contest

Austrian Economics
Emily Skarbek
Attention undergraduates and undergraduate educators - one week remains to submit papers for the 5th annual Carl Menger Essay Contest! The purpose of the contest is to recognize and encourage undergraduate scholarship in the Austrian tradition and the broadly catallactic... MORE

To Vote or Not to Vote?

Public Choice Theory
David Henderson
One of my favorite writers and thinkers on the Cato blog, Cato at Liberty, is Jim Harper. He posted yesterday on voting, titling his piece "Don't Not Vote." He makes some good points but goes too far. The issue for... MORE

Arguments from the Exit Side of Brexit

Political Economy
Emily Skarbek
My sense is that most of the coverage of Brexit in the US comes down in favour of remaining in the EU. That is the case put forward in Dalibor Rohac's new book. And for onlookers, I think it is... MORE

An Economist's Case for a Non-Interventionist Foreign Policy

Unintended Consequences
David Henderson
When I posted about a talk I was about to give a week or so ago, a number of readers asked if I could post the talk. There was no video, but I used my iPhone and the recording came... MORE

Why most regulations are harmful

Regulation
Scott Sumner
One of the most basic ideas in economics is that the vast majority of regulations are harmful. Here's a simple example. Suppose banks charged $2 to use ATMs. Then suppose the government passed a "pro-consumer' law banning those sorts of... MORE

Must a Business Serve the Whole Public?

Regulation
David Henderson
Former New Mexico governor Gary Johnson, running for the Presidential nomination of the Libertarian Party, wrote on Facebook: In a nationally-televised debate among three of the Libertarian candidates for President (A debate that should, by the way, have been more... MORE

Euroteach

Economic Education
Bryan Caplan
This summer, I'll be in Europe for a month, from June 16-July 16.  My activities: 1. Teaching Advanced Public Choice at the University of M√ľnster. Classes are on Monday afternoons and Tuesday mornings.  If you wish to audit, please email... MORE

The other story was about a policy change achieved through executive action: The Obama administration issued new guidelines on overtime pay, which will benefit an estimated 12.5 million workers. What both stories tell us is that the Obama administration has... MORE

The rich heart of Europe

Cross-country Comparisons
Scott Sumner
Razib Khan recently linked to a map of Europe, showing average incomes by region. The richest areas were colored dark green, and the poorest are colored dark red/brown: Notice that major capital cities such as London, Paris, Madrid, Stockholm, etc.,... MORE

My Daughter the Juror

Revealed Preference
David Henderson
My daughter, Karen Henderson, a resident of San Francisco, recently served on a California jury for almost two weeks for $15 a day. She is self-employed and her opportunity cost, therefore, was quite high. But as she said in a... MORE

Did Global Warming Help Cause California's Drought?

Energy, Environment, Resources
David Henderson
President Obama and Governor Brown believe the science is settled and carbon emissions lead to droughts. Before we test the veracity of their beliefs, consider that many of the warmest places on Earth, such as rainforests, are both warm and... MORE

What do "experts" say about trade?

International Trade
Scott Sumner
Imagine an article on the "carried interest" tax loophole, entitled as follows: "Carried Interest tax treatment should not be changed, experts agree" And suppose that all of the experts were hedge fund billionaires. CNBC has a new article discussing "expert"... MORE

Multinationals Are Well-Managed in All Countries

Cross-country Comparisons
Bryan Caplan
One picture is worth a thousand words, courtesy of Bloom and Van Reenen's "Why Do Management Practices Differ Across Firms and Countries?" (Journal of Economic Perspectives, 2010)My earlier comments on this still-underrated piece here.... MORE

Morley Safer, RIP

Obituaries
David Henderson
CBS Sixty Minutes reporter Morley Safer died today. He was one of my favorites. He had that smile of doubt when he was hearing someone he interviewed tell him what he thought was a spin. He was also a fellow... MORE

Why Bernie Doesn't Quit: Public Choice 101

Public Choice Theory
David Henderson
Jesse Walker, over at Reason's Hit and Run, just posted an excellent piece making an obvious point. I'm not undercutting him here: part of why it's obvious is that he says it so well. Here's the key part: Sometimes they... MORE

We're Number 10! We're Number 10!

Econlog Administrative Issues
David Henderson
A site called "Intelligent Economist" has posted its ranking of the "Top 100 Economics Blogs of 2016." And guess what? We're number 10. Here's the post. The site does not make clear how it came to that ranking. We're number... MORE

I've recently read a few articles that suggest the Russian economy is doing better than expected. The Economist attributes this success (or perhaps less failure than expected) to the adroit management of the head of Russia's central bank: Russia's economy... MORE

A Story of Signaling

Economics of Education
Bryan Caplan
Interesting email from journalist Henri Astier, reprinted with his permission. Hello, I am a French journalist living in London and - more relevant for the purpose of this email - an avid listener of Econtalk. I enormously enjoyed all your... MORE

As you may know, the American Revolution swiftly led to hyperinflation and price controls.  From Rothbard's Conceived in Liberty, vol. 4:By the end of 1775, Congress had already increased the nation's money supply by 50 percent in less than a... MORE

Is Drug Trafficking Inherently Violent?

Economics of Crime
David Henderson
Andrew C. McCarthy, a former federal prosecutor whose writing I have sometimes agreed with and found well-reasoned (see this, for example), writes the following: The bill that GOP leadership is currently joining with Democrats to try to ram through Congress... MORE

The alt-right's demographic nightmare

Economics and Culture
Scott Sumner
There is a growing strand of conservative thought that worries about demographic change, especially changes triggered by immigration. The percentage of Americans who are non-Hispanic white is projected to fall from 62.2% in 2014 to only 43.6% in 2060. Some... MORE

Vote Buying and Political Business Cycles

Public Choice Theory
Emily Skarbek
Traditional theories of political business cycles - Nordhaus (1975), MacRae (1977), Persson and Tabellini (1990) - predict monetary expansions in the run up to an election. Stimulating the economy, they argue, can help the incumbent politicians win elections. These theories... MORE

Don't Confuse Government Support with Charity

moral reasoning
David Henderson
Both Prime Minister Justin Trudeau and Alberta Premier Rachel Notley have announced that they will match Red Cross donations for Fort McMurray dollar-for-dollar. So people who consider giving money to the Red Cross for Fort McMurray know that their dollar... MORE

Don't solve problems, stop causing them

Public Choice Theory
Scott Sumner
Given that I share the same utilitarian value system of many progressives, you might expect me to also be a progressive. If I had to provide a one sentence explanation of why I am not, I might use the title... MORE

Prices on everything, please

Incentives
Alberto Mingardi
When it comes to the "informatization" of society, I suspect Italy followed a path that is shared by some other countries. 63% of families own a personal computer, whereas 93% own a cellphone. Most of these cellphones are smartphones: and... MORE

Reason TV's excellent video tells the story of Howard Root's fight against a federal government charge that, if successful, could have put him in prison. His "crime?" Telling doctors that a medical device that could be used for an... MORE

Peace Pick of the Week! Saturday, May 14, 3:00 - 4:30 pm, An Economist's Case for a Non-Interventionist Foreign Policy. David Henderson applies economic analysis, combined with history, to make the case that the United States should have stayed out... MORE

Hillary Clinton on Fed structure

Monetary Policy
Scott Sumner
Here's Ylan Mui of the Washington Post: Democratic presidential front-runner Hillary Clinton said she would support changes to the top ranks of the Federal Reserve, an issue recently championed by progressive groups amid debate over how long the central bank... MORE

The Specter of Open Borders

Behavioral Economics and Rationality
Bryan Caplan
Great short old piece by Matt Yglesias:[T]he specter of truly open borders is such an obvious specter for nativists to raise that proponents of more liberal immigration laws had better have something sensible to say about it.Indeed, the nativists I've... MORE

Consols Contra the Liquidity Trap

Macroeconomics
Bryan Caplan
Pace Scott Sumner, suppose a country is stuck in a liquidity trap.  Conventional monetary policy is futile, and unconventional monetary policy isn't working either.  What would happen if the government did the following?Step 1: The Treasury refinances the entire national... MORE

There's an invisible hyperinflation monster lurking right around the corner, which lots of people are having trouble seeing. (And no, this is not a sarcastic barb aimed at conservatives who were wrong about QE and inflation, it's aimed at people... MORE

Supply Management or Cartel Enforcement?

Regulation
David Henderson
The question is not whether to manage supply but who is to manage supply? Should producers of milk, eggs, cheese, and poultry be allowed to manage their supplies or should marketing boards, using the power of the state, do it... MORE

Emigration and Revolution

Behavioral Economics and Rationality
Bryan Caplan
Actions speak louder than words - and exiting your country - emigration - is the loudest action most people will ever take.  Mass emigration swiftly exposed the horrors of communism.  The French Revolution is also notorious for provoking flight.  How... MORE

Munger on Division of Labor

Growth: Causal Factors
David Henderson
In the early 1800s, David Ricardo developed a theory of comparative advantage as an explanation for the origins of trade. And this explanation has substantial power, particularly in a pre-industrial world. Assume, for example, that England is suited to produce... MORE

Was Hawtrey more Keynesian than Keynes?

Economic History
Scott Sumner
Ralph Hawtrey has always been in the shadow of Keynes, but might well have been the superior macroeconomist. I think you could also argue that Hawtrey's model of macroeconomics was more "Keynesian" than the General Theory, in the sense of... MORE

David Bowie, Bourgeois Hero?

Economic Philosophy
Alberto Mingardi
A book review by Samuel Goldman on The American Conservative alerted me to "We Can Be Heroes: The Radical Individualism of David Bowie" by Robert Dean Lurie, a short e-book whose title is self-explanatory. I shall confess I wasn't much... MORE

The Observational/RCT Correlation

Economic Methods
Bryan Caplan
What's the correlation between results from observational studies and results from randomized controlled trials?  Medicine's the obvious place to start, but if you know of any research on any topic that addresses this question, please share.... MORE

Fewer Judges, More Justice

Economics of Crime
David Henderson
Ten percent of federal judgeships are currently vacant, yet little is known on the impact of these vacancies on criminal justice outcomes. Using judge deaths and pension eligibility as instruments for judicial vacancies, I find that prosecutors decline more cases... MORE

Dementia, Antihistamines, and Cost-Benefit Analysis

Behavioral Economics and Rationality
Bryan Caplan
I've had severe allergies for as long as I can remember.  Until my early-20s, I assumed I just had to live with them.  Then my doctor at Princeton recommended Benadryl, which virtually cured my problem.  Since then, I've taken antihistamines... MORE

Choose for Yourself, Not Others

Economics of Health Care
David Henderson
Don't let your own perceived limits cause you to use force on others who have different views. Over at Cafe Hayek, Don Boudreaux quoted one of my favorite passages from my book The Joy of Freedom: An Economist's Odyssey: The... MORE

Two Nobel Prize winners, 18 years apart

Monetary Policy
Scott Sumner
Here's Milton Friedman in 1998, talking about Japan: Low interest rates are generally a sign that money has been tight, as in Japan; high interest rates, that money has been easy. . . . After the U.S. experience during the... MORE

Happy Birthday, F. A. Hayek!

Austrian Economics
Emily Skarbek
Today is F.A. Hayek's birthday. To celebrate, I'd like to briefly comment on particular facet of Hayek's thought that has influenced the way I see the world - his view of individualism 'true'. In his brilliant essay, Individualism: True... MORE

Great Moments in Arguing: Lindsey Graham Edition

Unintended Consequences
David Henderson
Taking the lead in bashing Trump at the Milken conference was South Carolina Republican Lindsey Graham, who on a panel said that his party had "lost its way" in nominating the New York real estate magnate. Referencing Trump's recent lament... MORE

Camille Paglia on making a career in ideas

Books: Reviews and Suggested Readings
Alberto Mingardi
Tyler Cowen's conversation with Camille Paglia is a must watch. The two are a very good match and the conversation is most entertaining. Paglia is very Paglia-esque on Harold Bloom, how the first feminists admired and didn't despise men, George... MORE

What If Donald Trump Isn't All That Different?

International Trade
David Henderson
I woke up Wednesday morning feeling a little bleak that our two main choices are two really awful candidates: Hillary Clinton and Donald Trump. Many of my libertarian and conservative friends have denounced Trump continuously, both on his policy views... MORE

Against Brexit

International Trade
Scott Sumner
In June, the British will vote on whether to leave the EU. There are lots of good arguments on both sides, and I have mixed feelings on the question. But in the end I believe the UK should stay in... MORE

The Value of History

Cost-benefit Analysis
Bryan Caplan
Today my homeschooled sons are taking the Advanced Placement United States History Exam.  I took the exam when I was 17.  They are 13.  Given how often I deride the practical value of history in The Case Against Education, you... MORE

Public Choice in Foreign Policy

Public Choice Theory
David Henderson
1.3 million is greater than 58,000 One of public choice economists' biggest insights is why, in a representative democracy, concentrated interest groups often gain at the expense of the dispersed consumers or taxpayers. Our favorite examples tend to be the... MORE

Correlation versus Causation

Economic Methods
David Henderson
This is from here. HT to Timothy Taylor.... MORE

Lip Service

Behavioral Economics and Rationality
Bryan Caplan
Individualists such as myself are often accused of being psychologically oblivious.  Look around!  The vast majority of human beings crave community and belonging.  Social thinkers who refuse to account for this obvious fact may be smart and articulate.  But they... MORE

Co-blogger Scott Sumner has written an excellent post this morning pointing out that the Keynesian model per se is not a big government model. He is right, for the reasons he gives. When the late Ben Rogge came to give... MORE

[This is a sort of follow-up to my most recent Econlog post.] Before getting into this post, let me remind you of previous pointless debates, such as whether "Islam" is "really" a this or that sort of religion. I hope... MORE

The End of British Coal

Energy, Environment, Resources
David Henderson
I was going through my pile of unread Wall Street Journals over the weekend and found this news story: Scott Patterson, "End of an Era: England Closes Its Last Deep Coal Mine," December 11, 2015. Here's one key paragraph: The... MORE

Lucas on Keynes and "spending flows"

Macroeconomics
Scott Sumner
If you rely on bloggers like Paul Krugman and Brad DeLong, you'll end up with a very crude caricature of Robert Lucas's views on macro. The following was from a 2003 Lucas paper (sent to me by Marcus Nunes), which... MORE

Exploring the Place Premium

Cross-country Comparisons
Bryan Caplan
Clemens, Montenegro, and Pritchett continue to expand the frontiers of human knowledge about migration.  Their latest working paper, "Bounding the Price Equivalent of Migration Barriers," mostly measures the total wage effect of globally relocating identical workers.  But it closes by... MORE

Victims of Communism Day

Liberty
Emily Skarbek
Yesterday Ilya Somin reminded readers of the Washington Post of his ongoing support for changing May 1st from a celebration of communists, socialists, and labor unions - to a holiday that commemorates the millions who have died because of communist... MORE

Anger B&B

Public Choice Theory
David Henderson
But the standard rendition of the B&B [Bootleggers and Baptists] story leaves out something that bootleggers and Baptists need to achieve their goals: emotion. One of the common emotions is anger, and the group whose anger is most important is... MORE

Japan's catastrophic yen-quake

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
Back on March 11, 2011, Japan was hit by the worst national disaster to strike a developed country in modern times. Last week, Japan was hit by a human made disaster with a comparable effect on the economy (albeit obviously... MORE

What the Primaries Mean

Economic Methods
Bryan Caplan
Donald Trump has wildly exceeded electoral expectations at every stage of the election.  But betting markets still say he has but a 20% chance of winning the presidency.  Isn't Trump's record of success after success strong evidence that he's far... MORE

More from Lester Thurow

Books: Reviews and Suggested Readings
David Henderson
In my post on the late Lester Thurow on April 15, I promised to post more from his book The Zero-Sum Society. Here are some further excerpts. Thurow as Ludwig von Mises Proposition VII: Regulation Leads to Regulation Since individual... MORE

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