EconLog small logo

February 2017

A Monthly Archive (62 entries)

Illiberal Reformers is Heartening

History of Economic Thought
David Henderson
No, using "is" instead of "are" is not a typo. Illiberal Reformers is the title of an excellent book by Princeton University economics lecturer Thomas C. Leonard. The subtitle is "Race, Eugenics & American Economics in the Progressive Era."... MORE

My Deportation Index: The Drum Critique

Economic Methods
Bryan Caplan
Kevin Drum thoughtfully critiques my Deportation Index.  But first, he makes my numbers look pretty:His critique begins with some some data I didn't know about.The next step is to calculate this as a percentage of the number of illegal immigrants... MORE

BLS Overstates Drop in Labor Share

Labor Market
David Henderson
One of the most striking and troubling patterns in the US economy in recent decades is the "declining labor share: that is, the pattern that the share of the value of output (in the nonfarm business sector) that goes... MORE

Trump Bet Clarification

Economic Methods
Bryan Caplan
In November, I bet an anonymous EconLog reader: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 that he takes the Oath of... MORE

Here's Bloomberg: President Donald Trump will select three members of the Federal Reserve board during his term in office, including a replacement chair for Janet Yellen when her appointment expires early next year. He should seize the chance to refresh... MORE

Again on Cowen's techno-pessimism

Politics and Economics
Alberto Mingardi
I find it kind of amusing that in a very short time the public discussion of the dangers lying ahead has moved from the great stagnation to excessive automation. That is, we stopped talking of productivity stalling, to start worrying... MORE

How to Run a Drug Cartel

EconTalk
Amy Willis
If you missed this week's EconTalk episode with Tom Wainwright of The Economist, you're missing out...whether or not you have any drug-running aspirations. Wainwright's new book, Narconomics, host Russ Roberts calls "a tribute to economics." In his book, Wainwright... MORE

Getting the Facts

Behavioral Economics and Rationality
David Henderson
In the late 1990s and early 2000s, in one standard part of an optimistic speech I gave about the modern economy and the effect of the Internet, I told a story from a 1977 Woody Allen movie, Annie Hall, that... MORE

Monetary offset in the UK?

Macroeconomics
Scott Sumner
James Alexander has a new post discussing recent trends in NGDP growth in the UK: UK RGDP saved by accelerating NGDP Unfortunately, the headline is a bit misleading. NGDP (left scale) grew at a 5.0% rate in the first half... MORE

Quinones versus Eberstadt

EconTalk
David Henderson
We have demonized government and laughed at government and called it incompetent, not paid taxes to support it. And we have a situation now, in my opinion, where--having done all that, having exalted the private sector, demonized government, what we... MORE

What has Syria ever done for us?

Labor Mobility, Immigration, Outsourcing
Scott Sumner
The Detroit area is a magnet for Muslim immigrants, who are helping to revitalize the city. Here is The Economist: For [Detroit] Mayor Duggan, even a slowdown in his city's depopulation is good news; and he owes it entirely to... MORE

Who's the Real "Deporter in Chief"?

Economic Methods
Bryan Caplan
Immigration activists repeated named Obama the "Deporter in Chief."  Were they right?  Strictly speaking, yes: More human beings were deported under Obama than any other presidency in history.  Substantively, however, the critics were very wrong.  Key fact: U.S. immigration law... MORE

Kenneth Arrow, RIP

Obituaries
David Henderson
Yesterday, Nobel Prize winning economist Kenneth Arrow died. Many first-rate appreciations of him have been published and I won't try to duplicate what they have said. Rather, I'll give my own recollections of Arrow. And I'll lead with one joke... MORE

A few predictions (Nothing will change)

International Trade
Scott Sumner
A year from today everything will be much clearer. I'm not sure what will happen, and I'm not much of a forecaster, but I'll take a shot. I think the safest prediction one can make is that nothing will happen,... MORE

Do Middle-Class College Kids Already Have a UBI?

Behavioral Economics and Rationality
Bryan Caplan
In our Universal Basic Income debate, Will Wilkinson had one fun argument I didn't have time to answer.  His claim: Middle-class college kids (like stereotypical Students for Liberty attendees) already get a UBI from their parents.  Thanks to this UBI,... MORE

How San Diego Built a Bridge Over the Wall

International Trade
David Henderson
That's the title of a great article in Politico by Ethan Epstein. There's so much interesting in there: 1. How forward-looking San Diegans figured out how to get a better airport without using a military base--and why. (On the latter,... MORE

Freedom of Speech and Private Property

Property Rights
David Henderson
In the last few days, I've seen a number of discussions, mainly on Facebook, in which even some libertarians have claimed that two people's free speech rights were violated in two recent events. I was thinking about writing about it,... MORE

Whither the Ex-Im Bank?

International Trade
Scott Sumner
The Ex-Im Bank is often considered a near perfect example of crony capitalism. But the politics of Ex-Im are very messy, perhaps the most confusing and complicated of any issue: 1. Obama opposed Ex-Im as a candidate, and then supported... MORE

UBI Debate Video

Economic Philosophy
Bryan Caplan
Video of the Wilkinson-Caplan Universal Basic Income Debate is available here.  The video quality could be a little higher, but the camera does get properly rotated after a few seconds.  Thanks again to Students for Liberty and the Institute for... MORE

Bryan Caplan's Best Line and My Thoughts

Taxation
David Henderson
I was stuck at LAX for about 9 hours on Saturday after my wife's and my flight was cancelled. So we used our time to work and I used part of my time to watch on Facebook co-blogger Bryan's debate... MORE

Here's my opening statement for my Students for Liberty debate with Will Wilkinson.  Enjoy. Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in;... MORE

Beckworth interviews Eggertsson

Monetary Policy
Scott Sumner
David Beckworth has done a very interesting set of interviews with leading figures in monetary economics and related fields. One of my favorite occurred a few weeks ago when David interviewed Gauti Eggertsson. Eggertsson is a prominent monetary theorist, who... MORE

Taxes and Deadweight Loss

Taxation
David Henderson
In his excellent post on taxes and the incidence of taxes, co-blogger Scott Sumner does not mention another important issue in taxation: deadweight loss. The deadweight loss from a tax is the part of the loss to those who bear... MORE

The lump of labor fallacy

Labor Market
Scott Sumner
Andy Puzder was one of the few Trump appointees that I sort of liked (I say "sort of", because even he had ethical issues.) He was pro-immigration and anti-minimum wage. But in the end even many conservatives opposed him so... MORE

Michael Novak RIP

Economics and Culture
David Henderson
Michael Novak, the well-known Catholic theologian at the American Enterprise Institute, died today. I didn't know him well and I didn't know his work well. My late friend Roy Childs, Jr., was somewhat of a fan, if I recall correctly.... MORE

Why Tyler Cowen's Pessimism Fails to Persuade Me

Growth: Consequences
David Henderson
"Why should it be different this time?" So asks Tyler Cowen in opening his recent Bloomberg article "Industrial Revolution Comparisons Aren't Comforting." The idea of people who ask that question--I'm one of them--is that the Industrial Revolution worked out pretty... MORE

See You At ISFLC 2017

Economic Education
Bryan Caplan
Team Caplan is once again attending ISFLC.  I'll be in two official events.Event #1: UBI Debate with Will Wilkinson, 3:30-4:30 PM on Saturday.Event #2: Ask Me Anything, 5:00-5:45 on Saturday.If you want to meet up sometime during the conference, email... MORE

Here's Business Insider: Janet Yellen's warning about low rates causing a recession doesn't make sense Federal Reserve Chair Janet Yellen told Congress this week that the US central bank could cause a recession if it waited too long to raise... MORE

I'll Never Ever Ever Do It Again

Behavioral Economics and Rationality
Bryan Caplan
One of my pet theories is that children reveal the true nature of man.  They have the same emotions as adults; they're just terrible at hiding them.  Even when their emotions are monstrous, kids either just blurt out whatever they're... MORE

Protectionism IS Inflationary

Monetary Policy
David Henderson
Co-blogger Scott Sumner wrote a post recently titled "Protectionism is Not Inflationary." I disagree. Thus the title of this post. We both learned from the great Milton Friedman--Scott as one of his students, me indirectly as a student of two... MORE

In 1996, U.K. statisticians estimated 10 recessions between 1955 and 1995. In 2012, other U.K. statisticians "disappeared" 3 of them. In 1966, the late Paul Samuelson stated that the stock market has predicted 9 of the last 5 recessions. That's... MORE

How to think about taxes

Tax Reform
Scott Sumner
Because tax reform is currently in the news, I thought it would be useful to describe what economists know, and don't know, about taxes. I'll start with what we know: 1. Legal tax incidence doesn't matter. If a tax is... MORE

The Costs of Diversity: What Will I Learn?

Economic Methods
Bryan Caplan
As you may have heard, I'm collaborating with SMBC's Zach Weinersmith on a non-fiction graphic novel on the philosophy and social science of immigration.  Working title: All Roads Lead to Open Borders.  I'm now writing chapter 4, "Crimes Against Culture,"... MORE

Stories about Bitcoin seemed to me to be all the rage for a while, having since tapered off. (At least in my own newsfeed...) The digital currency has long been trumpeted by libertarian-leaning types. I mean, what's not to... MORE

The Case for Check-Cashing Stores

Business Economics
David Henderson
Lisa Servon is an economist in disguise. A number of bloggers have linked to this article in the last few days and it's well worth reading. It's about Lisa Servon, a professor of city and regional planning at the... MORE

The Psychiatry Museum vs. the Reasonable Radical

Behavioral Economics and Rationality
Bryan Caplan
During my last visit to LA, I visited the Psychiatry: An Industry of Death Museum.  Though I knew the Church of Scientology was heavily involved, I was still favorably predisposed.  I reject the philosophy of mind that underlies modern psychiatry,... MORE

Protectionism is not inflationary

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
Protectionism is clearly a bad policy. But it's not bad for the reasons that many people assume. If you put barriers on the import of a specific good, it tends to raise the relative price of that good. But an... MORE

Final Reply to Dolan on the UBI, For Now

Economic Philosophy
Bryan Caplan
Here's one last reply to Ed Dolan on the UBI:...As for more recent evidence, the CBO working paper that I cited is the most comprehensive literature review I have been able to find. The CBO review reaches the following conclusions... MORE

The Henderson Squawk Box Highlight Reel

Productivity, Baumol's cost disease
David Henderson
CNBC has posted a 3-minute version of my 4.7-minute video from earlier this morning. It's here.... MORE

The title of this post covers a lot of ground, but the answer is identical for all three cases. The questions . . . Would it be a good thing if interest rates rose? Would it be a good thing... MORE

Henderson on Squawk Box

Upcoming Events
David Henderson
I'll be on Squawk Box tomorrow early a.m. from Pebble Beach. It's on CNBC. 6:30 a.m. to 6:40 a.m. EST. 3:30 a.m. to 3:40 a.m. PST. I'll have to get up at about 2:20 a.m. Yikes! Set your DVRs.... MORE

The shocking truth about border tax adjustments

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
When a country does a currency reform, say exchanging 100 old pesos for 1 new one, it doesn't have major macroeconomic effects. Debt contracts and wage contracts get automatically adjusted in the same way, leaving both types of contracts the... MORE

Rejoinder on UBI

Economic Philosophy
Bryan Caplan
Here's my reply to Ed Dolan, point-by-point.  He's in blockquotes, I'm not. First of all, thank you, Bryan, for the civil, cogent, and detailed response. Likewise.1. You say that I acknowledge elsewhere that the incentives are theoretically ambiguous,income effect vs.substitution... MORE

Bribe Bully Beg Borrow Steal

Public Choice Theory
David Henderson
That's the title Reason gave to my cover story in the March issue. An excerpt: "Donald Trump's Carrier Deal is Pure Crony Capitalism," read the headline of a Newsweek op-ed by American Enterprise Institute fellow Claude Barfield. Trump supporter Sarah... MORE

What's so bad about sugar?

EconTalk
Amy Willis
What's so bad about sugar? According to this week's EconTalk guest Gary Taubes, just about everything. Taubes's real concern is insulin resistance, which he argues is the trigger for most diseases that afflict the denizens of the Western world.... MORE

It seems like hardly a week goes by without me running into another article suggesting that Japan needs to do fiscal stimulus. Today there's one discussing the recommendations of Nobel Laureate Christopher Sims, using the "Fiscal Theory of the Price... MORE

How NAFTA Facilitates Supply Chains

International Trade
David Henderson
When I teach about gains from trade, I start with two people and two goods on a desert island and work from there. Then I graduate to multiple people and multiple goods in two cities, then states, and, finally countries.... MORE

UBI: Ed Dolan Responds

Economic Philosophy
Bryan Caplan
Ed Dolan responds to me on the UBI in the comments.  Complete text: First of all, thank you, Bryan, for the civil, cogent, and detailed response. I think we might even find common ground--I might eventually be able to get... MORE

TANSTAAFL

Labor Market
David Henderson
Pardon the grammar. The correct grammar is: TINSTAAFL: There is no such thing as a free lunch. Don Boudreaux has an excellent post this morning in which he takes on a post at the American Enterprise Institute about mandated... MORE

UBI: Reply to Dolan

Economic Philosophy
Bryan Caplan
Ed Dolan thoughtfully replies to my Universal Basic Income challenge on the Niskanen blog.  Here's my point-by-point reply.  Dolan's in blockquotes, I'm not.Here are three kinds of libertarians who might take a UBI very seriously indeed. Libertarian pragmatists ...By some... MORE

Hans Rosling RIP

Obituaries
David Henderson
Hans Rosling died today of pancreatic cancer. What a loss! If you have never watched any of his videos, these are the two main ones I recommend: 1. The washing machine. 9 minutes. And here's my own reminiscence about... MORE

Has President Obama changed the GOP?

Politics and Economics
Scott Sumner
Here's Ramesh Ponnuru: At no point in Obama's presidency did his political success make Republicans consider assimilating some of his views into their philosophy, as Bill Clinton had done with Reaganism. Republicans are even less likely to make such an... MORE

Hooper on Henry George on Protection or Free Trade

International Trade
David Henderson
Protection or Free Trade is two books in one. The first part is a thorough dismantling of protectionist arguments and a defense of free markets, free trade, capitalism, specialization, economic progress, and freedom in general. The second part of the... MORE

A Surprising Supply of Communist Dupes

Behavioral Economics and Rationality
Bryan Caplan
When I was first learning economics, I was surprised by how pro-communist many economics textbooks were.  I don't mean, of course, that economics textbook ever said, "Communism is good."  What I mean, rather, is that textbooks were very positive... MORE

How to identify shocks

Monetary Policy
Scott Sumner
I'm seeing two common mistakes by commenters trying to analyze the Brexit vote shock: 1. Assuming that monetary offset applies to real shocks 2. Assuming that a cut in the BOE's target interest rate represents an easing of policy. It... MORE

Not all macroeconomic problems are recessions

International Trade
Scott Sumner
I recently argued that uncertainty over Brexit did not lead to the recession that many forecasters expected. Actually 'argued' is the wrong term, "pointed out" is more descriptive. But I continue to believe Brexit was a mistake, and that it... MORE

Politics is Not Usually About Policy

Behavioral Economics and Rationality
David Henderson
Why you probably shouldn't pay attention to Milo Yiannopoulos. Co-blogger Bryan Caplan is a fan of his colleague Robin Hanson. One of Robin's favorite aphorisms is "Politics is not about policy." When I first heard it, I did what many... MORE

Cotton from Teksa

International Trade
David Henderson
In preparing my OLLI talk on free trade that I discussed yesterday, I read large parts of The Travels of a T-Shirt in the Global Economy by Pietra Rivoli. It's very good. Rivoli, a professor at Georgetown University, does... MORE

How to Sell YIMBY to California and New York

Behavioral Economics and Rationality
Bryan Caplan
Housing is strangely expensive in California and New York.  Economists routinely blame their unusually strict regulation of land use and construction.  Political observers, in turn, routinely blame unusually strict regulation on NIMBYism - current residents' "Not In My BackYard" mentality. ... MORE

We Wanted Workers...

EconTalk
Amy Willis
Amidst all the babble recently about building walls, travel bans, and so on, it was refreshing to find a reasoned and nuanced discussion of immigration issues in this week's EconTalk episode. Borjas, himself an immigrant, is less sanguine about... MORE

This will probably be my most important post of the year, but I predict that almost no one will pay any attention. Macroeconomics is a deeply flawed field, because it is extremely hard to do controlled experiments. Ideally, you'd like... MORE

Speaking at Osher Lifelong Learning Institute

International Trade
David Henderson
Bottom line: If you get asked to make a proposal to speak at OLLI, say yes. Yesterday, I gave a talk in Monterey for the local Osher Lifelong Learning Institute (OLLI), the one that's affiliated with California State University,... MORE

Return to top