Bryan Caplan and David Henderson

Arnold Kling: October 2007

An Author Archive by Month (50 entries)

Another One of My Health Care Debate Peeves

Economics of Health Care
Arnold Kling
As you see in the comments on this post, the Left has an answer to my concern that Medicare is the fiscal equivalent of the Titanic. The answer is, "We need to control health care costs!" Of course! Why didn't... MORE

Race, Marriage, and Poverty

Income Distribution
Arnold Kling
Walter Williams writes, There's one segment of the black population that suffers only a 9.9 percent poverty rate, and only 13.7 percent of their under-5-year-olds are poor. There's another segment of the black population that suffers a 39.5 percent poverty... MORE

How to Debate Happiness

Behavioral Economics and Rationality
Arnold Kling
Tyler Cowen will be one of the protagonists at the Economist debate in New York on November 10th. The proposition is "America is failing at the pursuit of happiness." For the affirmative will be Jeff Sachs and Betsey Stevenson. For... MORE

Gregory Clark, Aubrey de Grey, and Warren Buffett

Finance: stocks, options, etc.
Arnold Kling
have little in common, but all were mentioned in today's Washington Post. Robert J. Samuelson writes on Clark. Clark's theory is controversial and, at best, needs to be qualified. Scholars do not universally accept his explanation of the Industrial Revolution.... MORE

The Personal is Political

Political Economy
Arnold Kling
Reuters reports, Karl Marx, who complained of excruciating boils, actually suffered from a chronic skin disease with known psychological effects that may well have influenced his writings, a British expert said on Tuesday. ...hidradenitis greatly reduced his self-esteem," said Shuster,... MORE

Good News, Bad News

Income Distribution
Arnold Kling
Ricardo Hausmann sees the silver lining. According to the latest gender related statistics published in the 2007 World Development Indicators (WDI) by the World Bank, the gaps between the sexes are going through a major shift worldwide. In 2006, literacy... MORE

More Passengers on the Titanic

Economics of Health Care
Arnold Kling
Kevin Drum writes, here's an idea: expand Medicare (or create a similar program) to cover every person in America under the age of 21. And then let them keep it as they grow older. In ten years everyone under 31... MORE

IQ, Race, and History

Economic History
Arnold Kling
Michael H. Hart's book, Understanding Human History, probably first came to my attention via Tyler Cowen. In his conclusion, Hart writes (p. 416), The central hypothesis of this book is that genetic differences between human groups (in particular, differences in... MORE

Expressing Economic Ideas

Economic Education
Arnold Kling
Although it's a painful download, Tyler Cowen's talk on economics blogging is really outstanding. It runs quite counter to the angst that seems to be showing up lately on Greg Mankiw's blog. One question that Tyler addresses is, "Why economics?"... MORE

Maggie Mahar vs. Arnold Kling

Economics of Health Care
Arnold Kling
She is a market-hating health care expert. She writes, Just as the U.S. spends more per person on healthcare than any other country in the world on healthcare, healthcare expenditures in Massachusetts surpass spending in every other state. And this,... MORE

Random Things to Read

Income Distribution
Arnold Kling
Terry J. Fitzgerald in the Minneapolis Fed Review: Fringe benefits have become an increasingly important part of employee compensation over the past 30 years. The BLS estimates that benefits currently account for about 30 percent of employer costs for employee... MORE

Piling On

Political Economy
Arnold Kling
Dan Klein writes, If it happened that it was the sociologists who were relatively enlightened and libertarian, while economists were relatively foolish and statist, Bryan would have said Sociologists represent the more “rational” answers to questions. Let me start with... MORE

Masonomics Bloggers

Econlog Administrative Issues
Arnold Kling
Some of the Mason bloggers (other than Cowen, Tabarrok, Hanson, Caplan, Kling, Roberts, and Boudreaux): Faculty bloggers include Austrian Economists (Boettke, Coyne, Leeson, Sautet). Adam Smith Lives (Peart) Neuroeconomics (Saletta) I am told that some of the Tax Policy bloggers... MORE

Econometric Confirmation Bias

Economic Methods
Arnold Kling
Russ Roberts writes, Edward Leamer’s indictment of modern econometrics, “Let’s take the ‘con’ out of econometrics” is the best known critique of our habits as empirical economists but it has not been taken to heart by the profession. There are... MORE

Mortgage Fraud

Finance: stocks, options, etc.
Arnold Kling
Moody's plotted the rate at which recent mortgages are going into default within the first 9 months of issuance, and it is quite high. Look at the graph at Calculated Risk, reproduced by James Hamilton. When I was at Freddie... MORE

Classic Economics

International Trade
Arnold Kling
A 2-1/2 minute video lesson, from Milton Friedman. It is based on the story I, Pencil, by Leonard Read. Thanks to Don Boudreaux for the pointer.... MORE

Mason Blogger Bleg

Econlog Administrative Issues
Arnold Kling
One of the things about my Masonomics essay is that I did not mention a lot of Mason bloggers. Could you leave comments with your blogs? I want to publish a list, and I'd prefer not to miss any. I... MORE

Kahneman

Behavioral Economics and Rationality
Arnold Kling
Daniel Kahneman, the psychologist who won an economics Nobel, talked at Edge.org. Transcript. it turns out that experience utility can be defined in at least two very different ways. One way is when a dentist asks you, does it hurt?... MORE

A Quibble with Tyler

Economics of Health Care
Arnold Kling
Tyler Cowen writes, Two strong points that can be scored against conservatism or market-oriented ideas, as opposed to the Bush Administration. First, state-level tax and spending limits haven't worked out. Second, "the right" doesn't (yet?) have a coherent health care... MORE

Losing to Dani Rodrik

Books: Reviews and Suggested Readings
Arnold Kling
After reading his book One Economics, Many Recipes, I keep imagining myself debating Dani Rodrik...and losing. Kling: I favor limited government. Rodrik: I favor right-sized, adaptive government. Government must select policies and regulations that take into account local history and... MORE

Rodrik on Blogging and Lemons

Economics of Education
Arnold Kling
Dani Rodrik writes, if economists with high opportunity costs of time start to get out, shall we have a lemons problem on our hands? Will eventually the only prolific bloggers remain the ones that are not worth reading? It takes... MORE

Single-Payer: Klein vs. Kling

Economics of Health Care
Arnold Kling
You might think that the fact that I disagree with Ezra Klein about single-payer health insurance is a "dog bites man" story. But read on. Klein writes, We’ve got all these great universal bills passing at the state level, and... MORE

The Inequality Fuss

Income Distribution
Arnold Kling
Some recent posts on the inequality fuss: 1. Greg Mankiw writes If I were a redistributionist, here is what I might propose: A large fixed payment to every citizen, paid at the beginning of every month, financed by a proportional... MORE

Doctors' Statistical Ignorance

Economics of Health Care
Arnold Kling
Megan McArdle writes, Take a test for a disease that has a false positive rate of 5%, and a disease prevalence of 1 in 1000--lupus, say. If you test positive in a random assay, what are the odds that you... MORE

Masonomics

Economic Philosophy
Arnold Kling
I try to explain what George Mason economics is all about. If you want to be a Masonomist, you have to lose the we. When people use we in today's politics , they are doing two things. 1. Appealing to... MORE

Lecture on Mechanism Design

Microeconomics
Arnold Kling
He's not a Nobel Laureate, but Al Roth gave a recent lecture at Google on the topic. He talks about job matching and kidney sales as examples. Bonus question: can you name the economist who introduces Roth? Thanks to Greg... MORE

Survey Availability Bias

Behavioral Economics and Rationality
Arnold Kling
What do the following beliefs have in common? A. Belief that Kerry won in 2004, and that a vote-counting conspiracy took place. B. Belief that men have more sex partners than women. C. Belief that epidemiology is equivalent to a... MORE

Two Metaphors for Government

Political Economy
Arnold Kling
On our left, we have George Lakoff, discussing the way taxes ought to be framed. Are you paying your dues, or are you trying to get something for free at the expense of your country? It's about being a member.... MORE

Clark gives Greif Grief

Institutional Economics
Arnold Kling
Gregory Clark goes medieval on Avner Greif. In chapter 2, Greif lays out a formal definition of an institution. This is, “An institution is a system of rules, beliefs, norms and organizations that together generate a regularity of (social) behavior”... MORE

A Theory of Financial Intermediation

Finance: stocks, options, etc.
Arnold Kling
I write, Fundamentally, financial intermediation is about enticing investors to buy securities backed by investments whose risks the investors cannot fully evaluate. The intermediary, such as a bank, hedge fund, or ordinary corporation, specializes in evaluating risk. The investor who... MORE

Nobel Prize in Abstraction

Game Theory
Arnold Kling
From this year's citation While direct mechanisms are not intended as descriptions of real-world institutions, their mathematical structure makes them amenable to analysis. Finding the best of all direct mechanisms for a given problem is often straightforward, and once the... MORE

The Worlds Oldest Algorithm?

International Trade
Arnold Kling
If you believe Matt Ridley, it's Ricardian comparative advantage. His is one of many answers to the Edge question of What's your formula? your equation? your algorithm?. Other interesting answers from Tooby, Kurzweil, Haidt, and many others.... MORE

Senator McCain on Health Care

Economics of Health Care
Arnold Kling
He asks some rhetorical questions For all the grandiose promises made in this campaign, has any candidate spoken honestly to the American people about the government's role and failings about individual responsibilities? Has any candidate told the truth about the... MORE

Overtreated

Economics of Health Care
Arnold Kling
My review of Shannon Brownlee's new book. Brownlee proposes the alternative of paying doctors a salary, based on the number of patients that they see. However, I would argue that this would create the opposite incentive. Under a capitation based... MORE

Roberts Rules

International Trade
Arnold Kling
The New York Times turned Russ Roberts loose, along with some other economists, on the Republican Presidential debate. One of Roberts' comments: Mr. Romney is asked if he still supports trade even though we’ve lost 5 million jobs to foreign... MORE

Odyssey Years

Economics of Education
Arnold Kling
David Brooks writes, People who were born before 1964 tend to define adulthood by certain accomplishments — moving away from home, becoming financially independent, getting married and starting a family. In 1960, roughly 70 percent of 30-year-olds had achieved these... MORE

The Nonprofit Boom

Institutional Economics
Arnold Kling
Eugene Steuerle writes, in a few decades we'll find that most people will produce services and products that could be produced as easily in the nonprofit sector as in the profit-making one. Some cities like the District are harbingers of... MORE

Why is Africa Still Under-developed?

Growth: Causal Factors
Arnold Kling
Megan McArdle asks this question more colloquially. there's a whole, very large literature on why Africa is particularly screwed up. The awful climate under which most of it labors. The bad maritime geography: apparently one of the two coasts offers... MORE

Becker vs. Caplan

Political Economy
Arnold Kling
Gary Becker writes, the evidence that has been accumulated since Schumpeter's book gives good marks to free market systems in promoting the interests of the poor and middle classes, including minorities. And examples abound of corrupt and incompetent government officials... MORE

Mandatory Health Insurance?

Economics of Health Care
Arnold Kling
Glen Whitman writes, To enact any mandate, legislators and bureaucrats must specify a minimum benefits package that an insurance policy must cover. Yet this package can't be defined in an apolitical way. Each medical specialty, from oncology to acupuncture, will... MORE

Stanford Marshmallow Experiment

Growth: Causal Factors
Arnold Kling
I went to hear Greg Clark give a noontime seminar at Cato today. He is fairly persuasive in person. One thing about pursuing a line of thought for a long time when most people disagree with you is that your... MORE

Bon Mot

Political Economy
Arnold Kling
From Alex Tabarrok: In fact, liberalism, meaning classical liberalism, has never been conservative. It began as a movement of the left against feudalistic, conservative insiders and it remains so today.... MORE

More on Journalists

Political Economy
Arnold Kling
Tyler Cowen makes 8 remarks about journalism. The one that most reinforces what I believe is: Journalists tend to favor visible stories and neglect invisible opportunity costs and invisible hand mechanisms, which often but not always puts them against the... MORE

Economic Policy, Energy and Otherwise

Energy, Environment, Resources
Arnold Kling
Megan McArdle points to Scott Adams At the risk of oversimplifying, our current energy policy in The United States involves shooting bearded people. At the risk of stepping on a funny line, I would say that our energy policy is... MORE

Prisoners' Dilemma and The Unmentionable

Behavioral Economics and Rationality
Arnold Kling
Garett Jones writes, Are more intelligent groups of people better at cooperating? Repeated prisoner’s dilemma (RPD) experiments run at numerous universities since 1959 may hold the answer. Overall, the tendency is clear: Students at schools with higher average SAT and... MORE

Acemoglu on Growth

Growth: Causal Factors
Arnold Kling
The New Economist quotes from a preliminary draft of a magnum opus from wunderkind Daron Acemoglu on economic growth. The central questions are these: (1) Why did the world economy not experience sustained growth before 1800? (2) Why did economic... MORE

"Fiscal Responsibility First"?

Fiscal Policy
Arnold Kling
According to the Washington Post (editorial page), this is future President Hillary Clinton on Social Security: "I'm not putting anything on the proverbial table until we move toward fiscal responsibility," she said during Wednesday's debate I really have not been... MORE

Carbon Footprints and Central Planning

Energy, Environment, Resources
Arnold Kling
Megan McArdle discusses the issue of whether urban hipsters or suburban ticky-tackies have the more carbon-intensive lifestyle. This is one of those questions for which the answer is too difficult to calculate. For example, there was a story making the... MORE

Process Innovation

Growth: Causal Factors
Arnold Kling
G. Pascal Zachary writes, Designers led by Mr. Bohr in Hillsboro, Ore., chose hafnium to replace silicon oxide, the venerable insulator in chips and a material used in making glass. Mr. Bohr also helped to identify new materials, whose identity... MORE

GMU Economics

Institutional Economics
Arnold Kling
In the latest econtalk, Russ Roberts interviews his co-blogger Don Boudreaux. This is a good opportunity for people to catch the distinctive flavor of GMU economics. I like to put it his way: at Chicago, they say "Markets work well.... MORE

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