Bryan Caplan and David Henderson

Arnold Kling: February 2007

An Author Archive by Month (45 entries)

Finkelstein on Health Insurance

Economics of Health Care
Arnold Kling
Amy Finkelstein writes, Research I conducted shows that Medicare had a substantial effect on the health-care sector. By 1970, the program caused a 37% increase in hospital spending. This is an enormous number. If I extrapolate from the Medicare experience... MORE

More on Mental Health and Poverty

Human Capital: Returns to entrepreneurs, skills, etc.
Arnold Kling
Bryan wrote, When someone asks me what I would do to eliminate poverty in America, the first thing that pops into my head is the need for industry, thrift, and prudence. It seems that he and I share a common... MORE

The Congressional Budget Office on Health Care

Economics of Health Care
Arnold Kling
Chapin White writes Figure 2 illustrates excess growth in real Medicare spending on physician and clinical services. During the 1970s and 1980s, excess growth was quite high, generally ranging between 4 percent and 8 percent. Beginning around 1990, excess growth... MORE

Public-sector Enron

Finance: stocks, options, etc.
Arnold Kling
James Hamilton writes, When I heard about the disastrously irresponsible investments made by the Amaranth hedge fund, my first reaction was, who would be so stupid to have put up the margin requirements for such a scheme? The answer turned... MORE

Mental Health

Income Distribution
Arnold Kling
From an editorial in the Seattle Times: Montana, for example, faces predictions of rapidly rising prison populations; Gov. Brian Schweitzer notes that 93 percent of the state's prisoners are incarcerated in part because of alcohol and drug addiction and 50... MORE

Tom Palmer on Markets

Economic Philosophy
Arnold Kling
He writes Market competition is decidedly unlike the competition of the jungle. In the jungle animals compete to eat each other, or to displace each other. In the market, entrepreneurs and firms compete with each other for the right to... MORE

Betting on Longevity

Finance: stocks, options, etc.
Arnold Kling
The Financial Times reports, While someone in the 1840s lived, on average, to 40, today's generation can expect to hit 80, "and for our grandchildren, it could be 160," says [pension economist David] Blake, stabbing a pale green corner of... MORE

Economic Turbulence

Labor Mobility, Immigration, Outsourcing
Arnold Kling
From Economic Turbulence, by Clair Brown, John Haltiwanger, and Julia Lane: The basic message here is that businesses with higher-quality work forces and lower churning are more likely [to] survive...Wal-Mart has succeeded with a low workforce quality and high worker... MORE

Subjective Relative Measurement

Economic Methods
Arnold Kling
John Quiggin writes, Suppose you wanted to establish whether children’s height increased with age, but you couldn’t measure height directly. One way to respond to this problem would be to interview groups of children in different classes at school, and... MORE

Church and State

Political Economy
Arnold Kling
In In this essay, I coin a term civil societarian. The stereotypical libertarian might cite Ayn Rand and exalt the independent individual. Instead, a civil societarian would cite Alexis de Tocqueville, and his observation that "Americans of all ages, all... MORE

The Median Household

Income Distribution
Arnold Kling
Anne Kim, Adam Solomon, Bernard L. Schwartz, Jim Kessler, and Stephen Rose write, the “real” middle class is made up of households in their prime working years, ages 25-59, 75 percent of whom are couples and 56 percent of whom... MORE

Drug Patents

Information Goods, Intellectual Property
Arnold Kling
This week's econtalk, featuring Richard Epstein talking about patent issues with respect to pharmaceuticals, I found to be really taxing mentally. I have thought a great deal about these issues, yet Epstein was talking faster than I could absorb. Also,... MORE

Where Does the Money Go?

Economics of Education
Arnold Kling
Greg Mankiw writes, Harvard tuition is about $30K (not counting room and board). Assuming 4 classes each of the two 12-week semesters and 3 class hours a week in each class, one finds that each hour class at Harvard costs... MORE

Marriage and Inequality

Income Distribution
Arnold Kling
Stephanie Coontz writes, In 2001, University of Texas psychologist David M. Buss and colleagues compared mate preferences based on national surveys taken for several decades beginning in 1939. Their research, published in the Journal of Marriage and Family, found that... MORE

Hayek and Fusionism

Political Economy
Arnold Kling
Ed Feser writes, The foundation of Hayek's thought is an emphasis on the severe limitations on human knowledge, especially where human social institutions and other complex phenomena are concerned. For Hayek, even the knowledge we do have is dispersed and... MORE

McFadden on the Prescription Drug Program

Economics of Health Care
Arnold Kling
Nobel Laureate Daniel McFadden writes, My overall conclusion is that, so far, the Part D program has succeeded in getting affordable prescription drugs to the senior population. Its privatized structure has not been a significant impediment to delivery of these... MORE

Social Security and Global Warming

Energy, Environment, Resources
Arnold Kling
Mark Thoma writes, Here's what I've noticed. Some of the same people who argue there's too much uncertainty about the climate 75 years in the future to justify drastic action now use the so-called crisis in Social Security funding 75... MORE

The U.S. as a Health Care Spending Outlier

Economics of Health Care
Arnold Kling
The McKinsey Global Institute reports, In a study comparing the United States and the United Kingdom, Aaron showed that the United States has four times the number of CT scanners per person, and performs four times the number of scans... MORE

Interesting Experiment in Education

Economics of Education
Arnold Kling
Po Bronson reports, Blackwell split her kids into two groups for an eight-session workshop. The control group was taught study skills, and the others got study skills and a special module on how intelligence is not innate. These students took... MORE

More on Weitzman and Global Warming

Energy, Environment, Resources
Arnold Kling
My latest essay: Weitzman implicitly shares my concern with climate models. Obviously, we have nothing to worry about if the models are too pessimistic. If it turns out that over the next decade global temperatures edge down, or rise more... MORE

I recommend An Internet broadcast featuring Brian Doherty. He argues that libertarianism was so unfashionable in the 1940's and 1950's that the process of natural selection was bound to yield quirky individuals. He sees the link between economics and libertarianism... MORE

Rational Autocrats

Political Economy
Arnold Kling
Another terrific audio interview by Russ Roberts. In this case, he talks to political scientist Bruce Bueno de Mesquita. Basically, his outlook on the world is that autocrats are rational, and they do what is best in order to maintain... MORE

The Malthusian Trap

Growth: Causal Factors
Arnold Kling
Tyler Cowen chews, but does not swallow, a new paper by Greg Clark. Clark writes, we can test empirically whether the average person in 1800 was any better off than the people of 10,000 BC on any dimension, and the... MORE

Weitzman on Global Warming

Energy, Environment, Resources
Arnold Kling
I love Martin Weitzman's paper. From his conclusion: On the political side of the Stern Review, my most-charitable interpretation of its urgent tone is that the report is an essay in persuasion that is more about gut instincts regarding the... MORE

The CEA on Exchange Rates

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
From the 2007 Economic Report: the Chinese intervention does not systematically change the relative real prices between the United States and China. Had the Chinese government not intervened, Chinese domestic prices would have remained the same in terms of yuan... MORE

The CEA on Productivity

Growth: Causal Factors
Arnold Kling
From the 2007 Economic Report of the President: the surge in productivity in the late 1990s appears to be a story of growth in industries making and using IT capital...efficiency growth since 2000 has been particularly strong in the high-tech... MORE

Five Big Health Care Questions

Economics of Health Care
Arnold Kling
My latest essay: Somehow, health insurance has become a social fetish. I could travel to the far reaches of the globe, and almost everywhere I would find merchants where my credit is good and my dollars are welcome. But here... MORE

Phelps on Culture and Dynamism

Growth: Causal Factors
Arnold Kling
New Nobel Laureate Edmund Phelps writes, The values that might impact dynamism are of special interest here. Relatively few in [France, Germany, and Italy] report that they want jobs offering opportunities for achievement (42% in France and 54% in Italy,... MORE

World GDP and Global Warming

Energy, Environment, Resources
Arnold Kling
Jonah Goldberg writes, Earth got about 0.7 degrees Celsius warmer in the 20th century while it increased its GDP by 1,800 percent, by one estimate. How much of that 0.7 degrees can be laid at the feet of that 1,800... MORE

Inequality

Income Distribution
Arnold Kling
At Cato Unbound, Alan Reynolds and his critics debate inequality statistics. So far, Reynolds and Gary Burtless have weighed in. For those interested in the topic, Brad DeLong has a reading list. I have an uneasy feeling that the people... MORE

Oil is Oil

Energy, Environment, Resources
Arnold Kling
Shame on Reason for giving us this essay on "terror-free" oil. I usually give Citgo a pass because most of the company's profits wind up on the hands of the Venezuelan government, headed by the socialist, Castro-loving, anti-globalization, and virulently... MORE

Milton Friedman on Big Business vs. Freedom

Regulation and Subsidies
Arnold Kling
In the context of Wal-Mart's joining the crowd that wants government to fix health care, Don Boudreaux reminds us of this quote from Milton Friedman. The two chief enemies of the free society or free enterprise are intellectuals on the... MORE

Planning vs. Experimentation

Business Economics
Arnold Kling
Hal Varian writes, it is simple to run a controlled experiment with a Web page. Amazon can show a different page layout to every hundredth visitor and determine in a few days whether the new design increases sales. Similarly, a... MORE

Britain's Bureaucratic State

Economics of Education
Arnold Kling
Theodore Dalrymple writes Schools may no longer exclude disruptive children—that would be the very opposite of social inclusion—so a handful of such children may render quite pointless hundreds or even thousands of hours of schooling for scores or even hundreds... MORE

Feynman's Question

Growth: Causal Factors
Arnold Kling
Nick Schulz points to a lecture in 1963 by physicist Richard Feynman. The best web reference I can find for it is here. Some time ago, in about 1949 or 1950, I went to Brazil to teach physics. There was... MORE

Radical Health Care Reform

Economics of Health Care
Arnold Kling
Ezekiel J. Emanuel and Victor R. Fuchs write, [Most health care reform plans] prop up the sagging employment-based insurance system, with all its inefficiencies and inequities, and preserve the second-class income-tested programs such as Medicaid... The country needs comprehensive reform.... MORE

The New Deal Legacy

Economic History
Arnold Kling
The online Wall Street Journal arranged a celebrity death match between Brad DeLong and yours truly on the topic of the New Deal. What would have happened in the U.S. without the New Deal? My father answers with one word:... MORE

Politics, Economics, and Religion

Political Economy
Arnold Kling
I write, I find it a challenge trying to persuade religious conservatives to loosen the relationship between their religious beliefs and their political agenda. However, I find it even more of a challenge to deal with the Left, where their... MORE

Russell's Question

Arnold Kling
Jared Diamond wrote Guns, Germs, and Steel as an answer to what he called Yali's question: how did the rich nations turn out be Europe rather than, say, the islands of the South Pacific? Russ Roberts wants to know how... MORE

Globalization and Inequality

Growth: Consequences
Arnold Kling
Tim Worstall writes, The theory is the Stolper-Samuelson Theorem. Stripped to its essentials this says that we would expect the process of globalization to have the following effect: it will lower wages in the US and raise corporate profits (more... MORE

Kidney Bleg

Econlog Administrative Issues
Arnold Kling
Some of you may have read how Virginia Postrel became a kidney donor. It turns out that we have a friend who needs a kidney. Soon. Anyone who has any ideas for helping to find a live donor is welcome... MORE

From Musgrave to Shaviro

Books: Reviews and Suggested Readings
Arnold Kling
I was sent a copy of Daniel N. Shaviro's Taxes, Spending, and the U.S. Government's March Toward Bankruptcy. Our march toward government insolvency is a complex historical event with multiple causes. The central causes involve health care technology and demographics,... MORE

Furman on Social Security

Social Security
Arnold Kling
Jason Furman writes Indexing benefit levels for longevity, the retirement age, or the payroll tax rate goes in the right direction – delivering larger adjustments as people live longer – but only captures a small part of the uncertainty about... MORE

Failure in an Open-Access Order

Institutional Economics
Arnold Kling
Clay Shirky writes, Open systems are a profound threat not only because they outsucceed commercial firms but also because they outfail them. They grow not in spite of failure but because of it. In traditional business, trying anything is expensive,... MORE

Libertarian Principles

Political Economy
Arnold Kling
In my latest essay, I articulate a list. It starts with, 1. We weave a thread of self-reliance into a sturdy fabric of interdependence. By respecting the law, we reinforce impersonal justice. By competing intensely and fairly in an impersonal... MORE

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