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September 2017

A Monthly Archive (56 entries)

My Retirement

Labor Market
David Henderson
You need to read to the end to know the significance of this picture. Today is my last official day at the Naval Postgraduate School (NPS) in Monterey. After today, I will be an emeritus professor, with all the... MORE

Cultural Philistines and Marxism

Central Planning vs. Local Knowledge
Scott Sumner
I guess if I'm going to pretend to write about art, I'd better at least bring in some economics. So here goes. First a disclaimer. Here I'll try to employ a non-pejorative definition of 'philistine'---let's make it a simple descriptive... MORE

The Forgotten Man/Woman

Family Economics
Bryan Caplan
Even today, we rarely socialize with co-workers of the opposite sex.  Back in July, the New York Times documented, then analyzed, this gender divide:Men and women still don't seem to have figured out how to work or socialize together. For... MORE

Modern Art and Occam's Razor

Economics and Culture
Scott Sumner
Bryan Caplan has a new post, which suggests that modern art is greatly overrated, and perhaps even a big mistake. Before commenting, a few clarifications: A. I'm not a huge fan of "modern art", as the 20th century is probably... MORE

Raj Chetty's Non Sequitur

Income Distribution
David Henderson
Stanford economics professor Raj Chetty, who studies income inequality, has put out on the web a rich array of PowerPoints and videos as part of his Equality of Opportunity project. I haven't looked at them all yet--the sheer number of... MORE

DeLong on Scott's Seeing Like a State

Austrian Economics
David Henderson
I was talking to an economist friend today about Berkeley economist Brad DeLong and I told him that my two favorite DeLong pieces are his "Cornucopia," which I have blogged about, and his review of James Scott's Seeing Like a... MORE

The Bias of Modern Art

Behavioral Economics and Rationality
Bryan Caplan
For as long as I can remember, the "My child could do that" critique of modern painting and sculpture has resonated with me.  Broadly defined, I hasten to add, modernity creates great new visual art all the time; just look... MORE

Ben Southwood directed me to a paper by Lawrence Christiano, with the following executive summary: The Great Recession was particularly severe and has endured far longer than most recessions. Economists now believe it was caused by a perfect storm of... MORE

Milgram's "Obedience to Authority" Replicates

Behavioral Economics and Rationality
Bryan Caplan
Stanley's Milgram's "Obedience to Authority" experiments are doubly famous.  First, he supposedly showed that most Americans would shock a total stranger to death because an authority told them to do so.Second, his experiment was widely perceived as emotionally abusive -... MORE

Henderson on Rothstein's The Color of Law

Regulation
David Henderson
"We have created a caste system in this country, with African Americans kept exploited and geographically separate by racially explicit government policies." So writes Richard Rothstein in The Color of Law: A Forgotten History of How Our Government Segregated... MORE

Friedman on Trump

Public Choice Theory
Alberto Mingardi
Jeffrey Friedman has published a series of posts, on the Niskanen Center's blog, on Donald Trump and "populism". Friedman's work (consider for example his excellent book on the financial crisis, co-written with Wladimir Kraus) is always thoughtful. In this... MORE

Abraham Lincoln on the Theory of Public Choice

Public Choice Theory
David Henderson
We then, do not say, nor need we say, to maintain our proposition, that Bank officers are more honest than Government officers, selected by the same rule. What we do say is that the interest of the Sub-Treasurer is against... MORE

You see a lot of hand wringing about the plight of America's middle class, so I thought I'd check the data. But which data? You might start with average incomes, but these are skewed by the rapid growth in income... MORE

Reply to Bryan on utilitarianism

Growth: Consequences
Scott Sumner
Bryan Caplan has responded to my recent post on liberalism and utilitarianism. I agree with his first criticism: First, if "Liberalism is what happens when you are optimizing for a safe environment, and illiberalism is what happens when you optimize... MORE

Cold James Buchanan

Tax Reform
David Henderson
I'm about 60 percent of the way through Nancy MacLean's Democracy in Chains, a book that many critics have commented on. On p. 32, Professor MacLean writes: His bearing was "austere," a later colleague explained; while he was "a good... MORE

Feldstein's Insight on Standards of Living

Growth: Consequences
David Henderson
In a recent op/ed in the Wall Street Journal, my former boss at the Council of Economic Advisers and Harvard economist Martin Feldstein points out that the data on real incomes in the United States systematically understate its growth. The... MORE

Left and Right: A Socratic Dialogue

Behavioral Economics and Rationality
Bryan Caplan
[Backstory: Greek luminaries Socrates, Pericles, and Leonidas have time-traveled from ancient times to the 21st century.  A few months after immersion in the modern world, Pericles is a convinced member of what modernity calls "the left," while Leonidas is an... MORE

Don't change the forecast; change the policy

Monetary Policy
Scott Sumner
Today the Fed abandoned its previous forecast, which called for 2% inflation in 2018. Now they forecast that inflation will run below 2% in 2018, as it has for most of the past decade. I agree that it is likely... MORE

My 1983 Response to Koch Lobbying on Oil

Energy, Environment, Resources
David Henderson
In preparation for my imminent retirement, I've been going through files and files, throwing things out but keeping things too. I came across a letter I wrote to George Pearson of Koch Industries, who took me to dinner in July... MORE

Moving young children from the Third World to Sweden wipes out about half of their national IQ deficit.  What about performance in high school?  Vinnerljung et al.'s "School Performance at Age 16 Among International Adoptees" (International Social Work, 2010)  compiles... MORE

Does Prosperity Make Us Utilitarian?

Behavioral Economics and Rationality
Bryan Caplan
Scott Sumner has some thought-provoking reactions to my critique of Scott Alexander's Thrive/Survive Theory of left and right.  Here's my reaction, point-by-point.  Scott's in blockquotes; I'm not.Liberalism is what happens when you are optimizing for a safe environment, and illiberalism... MORE

Beckworth interviews Summers

Macroeconomics
Scott Sumner
David Beckworth's recent interview of Larry Summers was a treat for two reasons; there was lots of thought-provoking discussion, and I found a written transcript of the interview. Here's an excerpt (discussing secular stagnation): You have a demassification of the... MORE

by Jennifer K. Thompson As we do with many institutions, we tend to think of nonprofits monolithically: nonprofits, we are likely to say, are tax-exempt organizations that benefit the public. We often understand philanthropy in much the same, one-size-fits-all... MORE

The Wonder of International Adoption: Adult IQ in Sweden

Cross-country Comparisons
Bryan Caplan
In Selfish Reasons to Have More Kids, I showed that nurture effects are small within the First World.  But I also freely conceded that the nurture effects of growing up outside the First World are probably large:The most important weakness... MORE

Happy Birthday, Dr. Johnson

Economic Philosophy
David Henderson
Google today highlights the birthday of Sam Johnson, the famous British intellectual in the 18th century. He is thought of as the father of the modern dictionary. I discovered him when I was in 10th grade and was hanging around... MORE

Does prosperity push us to the left?

Growth: Consequences
Scott Sumner
Bryan Caplan recently posted the following: A while back, Scott Alexander defended what he called the "Thrive/Survive Theory" of left and right. Digest version: My hypothesis is that rightism is what happens when you're optimizing for surviving an unsafe environment,... MORE

Himmelfarb on the Fabians

Book Club
Alberto Mingardi
I'm an unabashed admirer of historian Gertrude Himmelfarb. One of the many. Her work is always illuminating, erudite, and typically a rather splendid read. I was most happy to see a new book by her, published in 2017 by... MORE

Over at Hit and Run, Reason's blog, Robby Soave, whose work I normally like a lot, laid an egg. His post is titled "The Real Boobs Are People Who Think ESPN Must Fire Jemele Hill." You can read his post,... MORE

Tough Talk for Venezuela?

Foreign Policy
Alberto Mingardi
American threats often allow rather terrible regimes to flex their muscles and build up greater consensus. In Venezuela, the government held nationwide armed forces exercises on Saturday, calling on civilians to join reserve units to defend against a possible attack... MORE

Lots of non-economists think that economics is just common sense. Not so. It's not common sense that imports help an economy, or that price gouging is good and rent controls are bad. And the field of taxation also produces lots... MORE

A Poll of Economists on Price Gouging

Price Controls
David Henderson
In May 2012, the IGM Forum, based at the University of Chicago Booth School, did a poll of economists on a proposed anti-price-gouging law in Connecticut. The economists polled were on the IGM's panel of "experts." To clarify, the vast... MORE

Report from Naples

Central Planning vs. Local Knowledge
David Henderson
Former star student Thomas Strenge wrote me an interesting email and gave me permission to quote. What follows below is my slightly edited version of what he wrote. My Mom lives about 10 miles inland from Naples and her experience... MORE

A Taste of Bastiat

Behavioral Economics and Rationality
Bryan Caplan
Whenever I praise Tyler, I vaguely fear that I'm speaking a self-defeating prophesy.  But this is so good I can't resist:Sometimes you hear Texas described as a "low-wage" economy, perhaps contrasted with the high wages of California.  But there are... MORE

Core Concepts

Economic Education
David Henderson
One of my former students, a student who performed very well in my class and has kept in touch on economic issues, sent me a link to John Cassidy, "A New Way to Learn Economics," New Yorker, September 11, 2017.... MORE

As a consumer, I'm never scared to shop in legal but unregulated markets.  Never mind the right to sue; reputation and guarantees provide all the peace of mind I need.  Illegal, unregulated markets, however, are a different story.  Sure, they... MORE

How do we evaluate Robert Shiller's forecast?

Finance: stocks, options, etc.
Scott Sumner
Nobel Laureate Robert Shiller recently made some comments about Bitcoin: When it comes to economic bubbles, there is perhaps no single greater authority than Yale economics professor Robert Shiller. Shiller wrote a seminal book on speculation and its devolution into... MORE

by Art Carden Various incarnations of what is known as "Godwin's Law" suggest that if a discussion goes on long enough, it will invariably devolve into one party comparing the other party's position to Hitler or the Nazis. Similar principles... MORE

What's Wrong with the Thrive/Survive Theory of Left and Right

Behavioral Economics and Rationality
Bryan Caplan
A while back, Scott Alexander defended what he called the "Thrive/Survive Theory" of left and right.  Digest version:My hypothesis is that rightism is what happens when you're optimizing for surviving an unsafe environment, leftism is what happens when you're optimized... MORE

My Pre 9/11 Column

Foreign Policy
David Henderson
Various authors have posted what they wrote in the hours and days after that horrible morning of September 11, 2001. I've decided to post the last part of a column I wrote for Red Herring that was published on November... MORE

Case Against Education Updates

Economic Education
Bryan Caplan
1. As promised, I have now uploaded all of the underlying spreadsheets for my return to education results in The Case Against Education.  The book is still expected to release in January.2. This semester, I am designing and teaching a... MORE

Law Professor Glenn Reynolds Doesn't Understand U.S. Law

Labor Mobility, Immigration, Outsourcing
David Henderson
Byron York, in "Crime and immigration: What's in the Dream Act," Washington Examiner, September 7, writes: Commentary on the DACA controversy frequently notes that the nation's nearly 700,000 so-called Dreamers are a law-abiding group. But a new bill to give... MORE

A new paper by Vipin Veetil and Richard Wagner discusses a heterodox theory of business cycles, and then uses this theory to criticize NGDP targeting. Here is the abstract: This paper argues that NGDP targeting is unlikely to produce macroeconomic... MORE

In Defense of Dudley

Growth: Causal Factors
David Henderson
Looking for Bastiat's Broken Window Fallacy Where There Isn't One. A libertarian friend on Facebook linked to this two-minute interview of William Dudley, president of the New York Federal Reserve Bank, and claimed that Dudley was subscribing to Frederic Bastiat's... MORE

Minogue on intellectuals and politics

Books: Reviews and Suggested Readings
Alberto Mingardi
On Liberty and Its Enemies is a posthumous collection of essays by the late Ken Minogue. When Ken died, right after the 2013 Mont Pelerin meeting in the Galapagos Islands (the paper he gave there is included in the... MORE

Rugged Communitarians

Behavioral Economics and Rationality
David Henderson
Houston, we're solving our problems. This culture really shines through during events like Hurricane Harvey. Despite what the narrative spinners would have you believe, we are not rugged individualists; we are rugged communitarians. We know that when times are tough,... MORE

Are most Americans radical libertarians?

Politics and Economics
Scott Sumner
This survey by Stanford University suggests the answer is yes: Notes: The surveys asked whether individuals agreed or disagreed with the statement "I would like to live in a society where government does nothing except provide national defense and police... MORE

California is Broke(n)

Labor Market
David Henderson
A resident of my city of Pacific Grove recently did a huge service on Facebook by linking to a site that gives pay and pensions for state and local government workers. It's breathtaking. Question: Who received the highest pension in... MORE

More Reasons to Read About Religion

Behavioral Economics and Rationality
Bryan Caplan
Tyler Cowen urges us - especially the secular "us" - to read more about religion:So many religious facts have a very long half-life for their relevance.  Say you learn about how the four Gospels differ -- that's still relevant for... MORE

Thaler on Price Gouging

Price Controls
David Henderson
In a segment on the economics of price gouging on NPR Marketplace last Friday [it starts at about the 11:40 point], my former University of Rochester colleague Richard Thaler points out that merchants who price gouge create ill will among... MORE

Caplan Family School Graduation Podcast

Economic Education
Bryan Caplan
For the last two years, I homeschooled my elder sons, Aidan and Tristan, rather than send them to traditional middle school.  Now they've been returned to traditional high school.  We decided to mark our last day with a father-son/teacher-student podcast... MORE

Lemieux on Antidumping and Countervailing Duties

International Trade
David Henderson
On April 27, 2017, Boeing petitioned the U.S. Department of Commerce to impose antidumping and countervailing duties for a total of "at least" 159.91% on Bombardier's C Series commercial jets. Antidumping duties are supposed to compensate for the sale of... MORE

Larry Summers on the rise of monopoly power

Growth: Consequences
Scott Sumner
Here's Larry Summers in the Financial Times: Consumers also appear more likely now to have to purchase from monopolies rather than from companies engaged in fierce price competition meaning that pay checks do not go as far. I decided to... MORE

A week ago I criticized an article in the Economist, which saw a "puzzle" in the co-existence of low unemployment and sluggish wage gains. I said there was no puzzle, as wage growth was slow because nominal GDP growth was... MORE

Henderson and Cochrane on Climate Policy

Energy, Environment, Resources
David Henderson
Under my agreement with the Wall Street Journal I can now show you the whole article that John Cochrane and I had published on July 30. Here it is. Climate Change Isn't the End of the World By David R.... MORE

Gary North on Domestic Communism

Economic Philosophy
David Henderson
In retrospect, it is difficult to believe that Congress bothered to come to Hollywood to investigate Communist infiltration, other than for publicity. The movies that Hollywood cranked out from 1934 to 1959 were patriotic. They were socially conservative to a... MORE

Rajan on inequalities and the rise of populism

Politics and Economics
Alberto Mingardi
Raghuram Rajan recently gave a speech in Chicago on inequalities. Unfortunately the text is not available on line, but at "Pro Market" we can find a synthesis. Though most of it is hardly original, it seems to me that Rajan... MORE

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