EconLog small logo

November 2016

A Monthly Archive (57 entries)

Ten Points on the Wrong Side of History

Behavioral Economics and Rationality
Bryan Caplan
In the last few weeks, several critics have told me things like: "History will not be kind," "History will judge you," and "You are on the wrong side of history."  My initial reaction is sheer puzzlement.  If my critics can't... MORE

Primitive cultures need a dose of utilitarianism

Economics and Culture
Scott Sumner
In this post I will discuss two primitive cultures, the Sudanese and the Americans. I will argue that both need to adopt a utilitarian ethical framework. Let's start with the Sudan. In the Sudan, female genital mutilation is a common... MORE

Did John Allison just endorse NGDP targeting?

Monetary Policy
Scott Sumner
Lars Christensen has a new post pointing to a recent interview of John Allison, who is being considered for the post of Treasury Secretary. Here is what Allison said: We need discipline, we need some kind of rule, I like... MORE

In Praise of Ineffective Politicians

Liberty
David Henderson
Twitter today is all heated up with justifiable upset about Donald Trump's latest anti-liberty proposal: a prison sentence and possibly loss of citizenship for someone who burns a flag. Other tweeters have pointed out that the prison sentence part of... MORE

Why I'm Not Freaking Out

Behavioral Economics and Rationality
Bryan Caplan
Until recently, I thought I'd steered clear of what Scott Alexander calls, "the toxoplasma of rage."  Now, sadly, I'm at the point where people are getting angry at me for failing to be properly angry about Trump's election.  This will... MORE

How Castro is Like the Minimum Wage

Behavioral Economics and Rationality
Bryan Caplan
How many people did Castro murder?  The authoritative Black Book of Communism blames him for 15-17,000 executions.  More speculative estimates put the blood of another 80,000 Cubans on his hands - everyone who perished trying to flee his doleful paradise. ... MORE

Capitalism has a PR problem

Cross-country Comparisons
Scott Sumner
Here's one of my favorite Deirdre McCloskey remarks, from her Bourgeois Virtues: I don't care how one defines capitalism, as long as it's not defined as evil incarnate. Unfortunately, that's exactly how it is often defined. Here's a recent example... MORE

Fidel Castro's Monstrous Behavior

Regulation
David Henderson
I learned about flash mobs early on in my life. One of my aunts was particularly religious. She and I end up going to church one Sunday morning probably in late 1961 or early 1962. While the mass is taking... MORE

My Writing Tutor: Dan Seligman

Business Economics
David Henderson
Last month, I told the first part of the story about Dan Seligman, the Fortune editor who taught me so much about writing. I promised to tell the second part. Here it is. To recall, Dan had asked me to... MORE

Giving Thanks

moral reasoning
David Henderson
On previous Thanksgivings, I've written blog posts expressing my thankfulness for a relatively high degree of freedom in my adopted country and for various people in my life who have helped me along the way. The posts are here, here,... MORE

The third domino?

Scott Sumner
Here's Wolfgang Münchau: The largest and most important is the Five Star Movement, a party that defies the usual left-right classification. The second is Forza Italia, Silvio Berlusconi's party, which has turned rabidly anti-euro after the former prime minister was... MORE

Trump Bets: One Actual, Ten Potential

Economic Methods
Bryan Caplan
An anonymous reader and I have agreed to the following bet on Trump's presidency:If Donald Trump resigns, is removed  by the Senate after impeachment, or otherwise is permanently removed as per the the 25th Amendment, or if it never happens... MORE

If the Angry Could Hear What the Calm Do Not Say

Behavioral Economics and Rationality
Bryan Caplan
Dear Angry Person,I can tell that you're angry at me again.  I think I understand your complaint, though I have trouble understanding why this specific issue is upsetting you on this specific day.  But based on past experience, asking for... MORE

Mercantilism Dies Hard

International Trade
David Henderson
One of the things that economists, whatever their other views, are most sure of is that free trade is a good idea. The normal way we argue for trade, either between individuals and companies in a country or between individuals... MORE

In defense of rational expectations models

Macroeconomics
Scott Sumner
David Glasner has a post criticizing the rational expectations modeling assumption in economics: What this means is that expectations can be rational only when everyone has identical expectations. If people have divergent expectations, then the expectations of at least some... MORE

Noah Smith on the Islamic Civil War

Foreign Policy
David Henderson
Noah Smith has a beautifully numerate discussion of wars being fought by radical Muslims. He does it in the context of analyzing Trump advisor Steve Bannon, and that analysis is not bad. But what really struck me was his response... MORE

Xenophobia and Canada

Behavioral Economics and Rationality
Bryan Caplan
Are Americans racist and xenophobic?  As usual, two package deals angrily competing for our attention.  The first says: Americans are obviously racist and xenophobic.  The second says: No, you're just being paranoid.  Neither package deal sees America clearly.  For racism,... MORE

Larry Summers's Perspective

moral reasoning
David Henderson
In a post yesterday, Tyler Cowen writes, "Here is perspective from Larry Summers." Not here is a perspective from Larry Summers. Not here is Larry Summers's perspective. The implication is that Larry Summers has a good perspective. The issue? Trump.... MORE

I've been frequently arguing that fiscal stimulus makes no sense, especially at a time when the unemployment rate is 4.9% and the Fed is raising interest rates. Any impact on aggregate demand will be offset by tighter monetary policy. In... MORE

Repealing Regulations

Regulation
David Henderson
Might the administrative state have expired quietly, six months ago? Arguably it did, if what we mean by the administrative state is the array of regulatory agencies, not only executing the law, but also creating binding new law without legislative... MORE

Trump, Krugman and the long run

Economic Philosophy
Alberto Mingardi
From what we are reading in the papers, it would appear Donald Trump is relying mainly on seasoned Republican apparatchiks: people that may be liked or disliked, but not considered amateurish newcomers to the Washington scene. Some people, however, are arguing that... MORE

Memory of Credibility

Behavioral Economics and Rationality
Bryan Caplan
The more I learn, the more I'm amazed by people who claim to base their views on "the data alone."  It's a noble dream, but ponder these harsh realities:1. Carefully studying data is enormously time consuming and question-specific.  If you... MORE

Eichengreen on Market Failure

Regulation
David Henderson
If you took Economics 101, you can probably dredge up cases of market failure in which government intervention is justified. For example, governments tax the emission of pollutants (or regulate them directly) because the cost of pollution would otherwise be... MORE

Dr. Strangelove at the Fed

Monetary Policy
Scott Sumner
Perhaps you recall this classic line from Dr. Strangelove: The whole point of the doomsday machine...is lost if you keep it a secret! I thought of that line when reading a recent Bloomberg piece on monetary offset of the widely... MORE

Breaking Conformity Equilibria: The Case of Mormon Polygamy

Behavioral Economics and Rationality
Bryan Caplan
Polygamy was Mormonism's most controversial theological novelty.  Critics casually equated it with slavery, dubbing them "the twin relics of barbarism."  Whatever you think about the wisdom of polygamy, its emergence in 19th-century Mormonism raises a deeper question.  Given human conformity,... MORE

Tyler Cowen on fiscal stimulus

Fiscal Policy
Scott Sumner
Here's Tyler Cowen in Bloomberg: In Keynesian theory, fiscal policy only works well if you use it in down times and pay off the bill during a boom. Trump seems ready to do the opposite by upping spending as the... MORE

The Silent Suffering of the Non-Neurotic

Behavioral Economics and Rationality
Bryan Caplan
Negative emotions like sadness, anger, and fear tend to come as a package.  Personality psychologists call this package "Neuroticism."  There's a spectrum, of course.  At the high end of Neuroticism, we have people like Seinfeld's George Costanza, who finds misery... MORE

Lake Wobegon Keynesianism

Fiscal Policy
Scott Sumner
With the recent discussion of a possible "fiscal stimulus" coming out of Washington, I find that many people are forgetting a few basic ideas from EC101. As you may know, I do not believe that fiscal stimulus in the US... MORE

The Excellent and Admirable Alex Tabarrok

Economic Education
Bryan Caplan
Here's my speech delivered Friday at the fiftieth birthday of the noble Alex Tabarrok.Today we celebrate Alex Tabarrok's fiftieth birthday.  Alas, fifty years is far too short a time to live alongside such an excellent and admirable hobbit!  ... MORE

You always fail . . . until you succeed

Cross-country Comparisons
Scott Sumner
Will Wilkinson has a post on Wagner's Law: "Wagner's Law" says that as an economy's per capita output grows larger over time, government spending consumes a larger share of that output. . . . There's an abiding faith on the... MORE

Trump on Obamacare

Economics of Health Care
David Henderson
Many people say they are humbled when others bestow honors on them. I've never understood that. When I get honors, I feel proud, if I think I deserve them. I get humbled when I make mistakes. I've consistently made one... MORE

The Case for Non-Compete Agreements

Labor Market
David Henderson
I sometimes learn from people's comments. So I want to hat tip a recent commenter on one of my four pieces on the Council of Economic Advisers' report on alleged monopsony in the labor market. In Part II, I said... MORE

India's Assault on Money

Money
David Henderson
In our 5-minute discussion in class on Wednesday, a student asked me about the implications of the Indian government's crackdown on people holding high-denomination currency. I didn't know much about it and gave a so-so answer. Now I know more.... MORE

Implications of Trump for monetary policy?

Monetary Policy
Scott Sumner
It's difficult to know what Trump will do about monetary policy, or any other issue for that matter. Lars Christensen has suggested that inflation expectations are rising due to the perception that Trump will do massive infrastructure spending. (And a... MORE

Wisdom and Courage from Arnold Kling

Behavioral Economics and Rationality
David Henderson
Former co-blogger Arnold Kling writes: I am not going to be bullied into supporting policies that I believe are bad just because they are popular. If you want to talk me out of my position against a policy, tell me... MORE

The morning after

Politics and Economics
Scott Sumner
Here I'll list a few observations: I've been consistently wrong about Trump, so I won't even try to predict what he'll actually do. This is the most Republican national government of my lifetime. Will they shrink government, or increase spending... MORE

I Win All My Election Bets

Behavioral Economics and Rationality
Bryan Caplan
As of yesterday, I had three outstanding election bets.1. Nathaniel Bechhofer bet me 2:1 that Clinton would win the presidential election.  I bet against.2. A bunch of people bet me Gary Johnson would win 5% of the popular vote.  I... MORE

When do you get your best ideas- early in the morning, or when you're drifting off to sleep at night? Have you ever suffered writer's block or a similar affliction? Do you use music to induce your creativity? Or... MORE

One argument for a minimum wage is that there sometimes isn't enough competition among employers. In our nation's history, there have been company towns where one employer truly dominated the local economy. As a result, that employer could affect the... MORE

Final thoughts before the election

Politics and Economics
Scott Sumner
President Obama has been campaigning hard in recent days. He's told his supporters that he needs them to vote, in order to preserve his legacy. That's probably because Donald Trump has promised to undo almost every single significant policy initiative... MORE

Robert P. Murphy on Pitfalls in GDP Accounting

Macroeconomics
David Henderson
People often use the GDP formula to erroneously derive conclusions about economic causation. For example, in the wake of the financial crisis of 2008, some proponents of "stimulus" spending argued that a boost in government spending on infrastructure would obviously... MORE

One Last Election Bet

Economic Methods
Bryan Caplan
Today at lunch, I bet Nathaniel Bechhofer $50 at even odds that Trump will not officially concede the election by Saturday, November 12, at 12:01 AM Eastern Standard time.  I win if there's no concession by that time; Nathaniel wins... MORE

Why the Electoral College Will Not be Abolished

Public Choice Theory
David Henderson
Steve Chapman, a columnist at the Chicago Tribune, has an excellent short article on the electoral college this morning. It explains why the candidates spend a disproportionate amount of time in swing states. Probably most readers knew why, but he... MORE

Should the Fed give workers a raise? No

Monetary Policy
Scott Sumner
After many years of 2% wage growth, nominal average hourly earnings are finally accelerating, up to 2.8% in October (year over year). This reflects the fact that the (downward) wage adjustments in the wake of the Great Recession are over,... MORE

This is the last post in a series of four (here, here, and here) in response to the Council of Economic Advisers' recent report on monopsony in the labor market. At the end, I'll sum up. (In yesterday's Wall Street... MORE

My Intellectual Insurance Policy

Cost-benefit Analysis
Bryan Caplan
My The Myth of the Rational Voter argues that many wonderful policies are extremely unlikely to be adopted because voters are deeply irrational.  You could call it a bleak conclusion: If my descriptive views about the world of politics are... MORE

Ben Bernanke is a mild mannered and modest individual. Anyone who has read his memoir will not confuse him with Donald Trump. During the Great Recession, Bernanke suggested that it would be helpful if fiscal authorities would help to boost... MORE

Are Anti-Dumping Tariffs Intelligent?

International Trade
David Henderson
One area in which I had always thought that Paul Krugman and I pretty much agreed close to 100% was his own area: international trade. His "Ricardo's Difficult Idea" is one of the best things ever written on trade and... MORE

The Divisiveness of Cohesion

Behavioral Economics and Rationality
Bryan Caplan
Suppose you live in a deeply divided society: 60% of people strongly identify with Group A, and the other 40% strongly identify with Group B.  While you plainly belong to Group A, you're convinced this division is bad: It would... MORE

Hooray For Our Side

Politics and Economics
David Henderson
What a field-day for the heat A thousand people in the street Singing songs and carrying signs Mostly say, hooray for our side --Buffalo Springfield, "For What It's Worth" Now that I've had more time to think about the economists'... MORE

Legal in some states, life imprisonment in others

Economics of Crime
Scott Sumner
Defenders of the War on Drug Using Americans often tell me that people almost never go to jail for mere possession, rather it is the evil "dealers" who are imprisoned. (I must admit that I don't see why one side... MORE

The Full Hanson-Caplan Robot Debate

Economic Philosophy
Bryan Caplan
Two weeks ago, I debated Robin Hanson on, "Robots will eventually dominate the world and eliminate human abilities to earn wages."  Here's the full debate!... MORE

Economists Against Trump

International Trade
David Henderson
370 economists have signed a statement opposing Donald Trump for president. It's quite good with one exception that I'll get to. If I had known that this would come along, I would have (a) tried to be one of the... MORE

Lots of people argue that the Fed would not offset a push for more spending out of Washington. In fact, while that would be technically possible, as a practical matter they have almost no choice in the matter. They are... MORE

Brigham Young, Pioneer Prophet: A Biography with Depth

Books: Reviews and Suggested Readings
Bryan Caplan
John Turner, of GMU's Religious Studies Department, has produced one of the most fascinating historical works I've read in years.  Brigham Young: Pioneer Prophet (Harvard University Press, 2012) is much more than a biography of the father of modern... MORE

Semi-Private Production of National Defense

Public Goods
David Henderson
I was planning to post yet one more item on the Obama Council of Economic Advisers' report on monopsony. I will do so later. Now to a new issue. The main issue that has kept me from becoming an anarchist... MORE

Suppose you favor a 4% NGDP target. And suppose NGDP growth is running at 3%. What advice should you give to the Fed? I will argue that you should not advise the Fed to push NGDP growth up to 4%.... MORE

Return to top