Bryan Caplan and David Henderson

Arnold Kling: January 2008

An Author Archive by Month (56 entries)

Economics in the Classroom

Economics of Education
Arnold Kling
An anonymous teacher says, I was desperate -- every day I went home feeling like I was escaping a war zone -- and so I set up a classroom economy, a variant of what the behaviorists call "token reinforcement." I... MORE

Health Care and Organization

Business Economics
Arnold Kling
Russ Roberts writes, Within a firm and within a family, resources and decisions get made without prices and often without profits. The answer (as Coase understood and as Lauren notes in her comment) is that in these organizations, the savings... MORE

Tyler Cowen Cheers Democracy

Institutional Economics
Arnold Kling
He writes, unlike one of my esteemed colleagues, I believe that we should revere democracy as one of the modern world's greatest achievements... Democracy is pretty good at pushing scoundrels out of office, or checking them once they are in... MORE

The Massachusetts Health Care Tar-baby

Economics of Health Care
Arnold Kling
Shikha Dalmia writes, The state health-care bill for fiscal 2008-2009 is expected to touch $400 million -- 85% more than originally projected. Still the state won't be able to fully shield those it subsidizes from the premium increases. But uninsured... MORE

Two Dismal Books

Books: Reviews and Suggested Readings
Arnold Kling
Atlas Shrugged, by Ayn Rand and The Dismal Science by Stephen Marglin... MORE

My Ongoing Frustration

Economics of Health Care
Arnold Kling
I'm back home, a thousand miles away from my father. But he had another setback, and he is back in the main hospital. I am not expecting any miracles. I know that the clock has been ticking ever since his... MORE

The Government Health Care System

Economics of Health Care
Arnold Kling
My latest essay: Medicare is wonderful for relieving the elderly from the burden of worrying about health care expenses. By the same token, it is wonderful for relieving doctors of the burden of worrying about the elderly as customers. You... MORE

Some Wishful Prizes

Political Economy
Arnold Kling
A web site called The Victory Project proposes billion-dollar prizes for To the first person(s) that solves any of these Problems: 1. Develop a cure for breast cancer. 2. Develop a cure for diabetes. 3. Reduce greenhouse emissions from petroleum... MORE

Preference Heterogeneity and Insurance

Economics of Health Care
Arnold Kling
David Cutler, Amy Finkelstein and Kathleen McGarry write, Standard theories of insurance, dating from Rothschild and Stiglitz (1976), stress the role of adverse selection in explaining the decision to purchase insurance. In these models, higher risk people buy full or... MORE

Stimulus?

Macroeconomics
Arnold Kling
I spell out my current thinking on macroeconomics. Over the past twenty years, Keynesian forecasters, such as Morgan Stanley's Stephen Roach, have predicted many phantom recessions--slumps that never took place. In order to remain attractive, the picture of Keynesian economics... MORE

A Good Explanation

Institutional Economics
Arnold Kling
Alex Tabarrok writes, The law of unintended consequences is what happens when a simple system tries to regulate a complex system. The political system is simple, it operates with limited information (rational ignorance), short time horizons, low feedback, and poor... MORE

Richard T. Ely, Founding Fascist

Political Economy
Arnold Kling
One of the revelations of Jonah Goldberg's Liberal Fascism was the beliefs espoused by Richard T. Ely, the founder of the American Economic Association. In this essay, Ely wrote The law of society is service. This is the supreme law... MORE

Boudreaux vs. Macro

Macroeconomics
Arnold Kling
Don Boudreaux writes, Government cannot create genuine spending power; the most it can do is to transfer it from Smith to Jones. If the Treasury sends a stimulus check to Jones, the money comes from taxes, from borrowing, or is... MORE

Jonah Goldberg's Liberal Fascism

Books: Reviews and Suggested Readings
Arnold Kling
My review of the book is here. I would argue that it is many books, written by an author with Multiple Personality Disorder. There is Goldberg the revisionist historian, Goldberg the outraged conservative child, and Goldberg the troll. ...The most... MORE

A Good Sentence

Political Economy
Arnold Kling
Tyler Cowen writes, a good notion of individual responsibility might start with: "We're not going to label every "little guy" a victim, even when it supports our political narrative to do so." Of course, we will abolish political demagoguery just... MORE

Questions for Goolsbee and Samuelson

Business Economics
Arnold Kling
On Radio Free Megan, Austan Goolsbee (now an adviser to Barack Obama) discusses, among other things, the role of regulation in financial markets. Using his 20/20 hindsight, Goolsbee tells us that the mortgage market should have been better regulated. I... MORE

Stimulus: The Mainstream View

Macroeconomics
Arnold Kling
Peter Orszag does his job, offering the mainstream view on economic stimulus. When the constraint on short-term growth is aggregate demand, as appears to be the case today, both monetary and fiscal policy can help by boosting spending. i. On... MORE

Race and Institutions

IQ in Economics
Arnold Kling
Gary Becker writes, Yet it may be possible to overcome to a considerable degree this intergenerational transmission of low status. The most promising approaches in my opinion involve self-help programs that encourage better choices in black communities, the legalization of... MORE

The New Economics of Marriage

Human Capital: Returns to entrepreneurs, skills, etc.
Arnold Kling
Betsey Stevenson and Justin Wolfers write So what drives modern marriage? We believe that the answer lies in a shift from the family as a forum for shared production, to shared consumption...the key today is consumption complementarities — activities that... MORE

Climate Debate Daily

Energy, Environment, Resources
Arnold Kling
No, I am not planning that here. It's the name of a new web site, which bears a not-coincidental resemblance to Arts and Letters Daily, an old favorite on our blogroll. Current links include a Time Magazine portrait of Lester... MORE

Outrunning a Bear

Political Economy
Arnold Kling
Tyler Cowen responds to a typical straw-man argument against libertarianism. I am more likely to think -- or should I say admit -- that human beings are irrational, even when the stakes are high (see the self-deception chapter in Discover... MORE

Two New Books

Books: Reviews and Suggested Readings
Arnold Kling
Don Boudreaux talks about his new book, Globalization. He does not believe in "victims of trade," "our collective trade deficit," or other popular notions. If you digest his arguments, you will know more about the trade issue than most economists.... MORE

Brooks vs. Caplan

Behavioral Economics and Rationality
Arnold Kling
David Brooks writes, In reality, we voters — all of us — make emotional, intuitive decisions about who we prefer, and then come up with post-hoc rationalizations to explain the choices that were already made beneath conscious awareness. “People often... MORE

Tyler Cowen's Daily Miracle

Growth: Consequences
Arnold Kling
He writes, Any single year there has been inflation, from one year to the next. From 1900 to 2008 there has been radical *deflation*, for instance in the Sears catalog. You'd rather spend 10K in the modern catalog than in... MORE

School Choice Pessimism

Economics of Education
Arnold Kling
Sol Stern writes, If Hoxby and Peterson were right in asserting that markets were enough to fix our education woes, then the ed schools wouldn’t be the disasters that Hirsch, Ravitch, and others have exposed. Unlike the government-run K–12 schools,... MORE

McKitrick on Global Warming

Energy, Environment, Resources
Arnold Kling
Ross McKitrick writes, In a greenhouse, movement of air is diminished, so the radiative portion of the energy drain must intensify. Physics can predict with certainty that in order to increase outbound radiation from a greenhouse, temperature inside the greenhouse... MORE

Financial Crises and Real Growth

Macroeconomics
Arnold Kling
Alex Tabarrok writes, Forget the talk of recession. The world is about to enter a new era in which miracle drugs will conquer cancer and other killer diseases and technological and scientific advances will trigger unprecedented economic growth and global... MORE

Mencius Moldbug Asks Some Questions

Political Economy
Arnold Kling
He writes, given your rather vehement views on the Ron Paul controversy, I am curious as to how you might answer the following questions. I would not describe my views on Ron Paul as vehement. His supporters are vehement. I... MORE

Posner vs. Becker

Economics of Health Care
Arnold Kling
Richard Posner writes, the uninsured are on average less rather than more healthy than the insured Gary Becker writes most of those without health insurance are young and do not have major medical expenses. Well, I suppose that the uninsured... MORE

Inconvenient Truth about Energy

Energy, Environment, Resources
Arnold Kling
Robert Bryce writes, Fans of energy independence argue that if the United States stops buying foreign energy, it will deny funds to petro-states such as Iran, Saudi Arabia and Hugo Ch¿vez's Venezuela. But the world marketplace doesn't work like that.... MORE

Useful Research

Economic Methods
Arnold Kling
Tyler Cowen discusses what he sees as some of the most interesting findings of the past year in economics. The common thread in these various discoveries is a careful use of data and an interest in real-world problems and puzzles.... MORE

Happiness Research

Behavioral Economics and Rationality
Arnold Kling
Helen Johns and Paul Ormerod write, One could conclude from the lack of correlation over time between aggregate happiness and almost any other socioeconomic variable of interest one of two things. Either that attempting to improve the human lot through... MORE

Liberal Fascism Watch

Political Economy
Arnold Kling
The Boston Globe reports Mayor Thomas M. Menino embarked on a highly public campaign yesterday to block CVS Corp. and other retailers from opening medical clinics inside their stores, an effort that exposed a rift between Menino and the state's... MORE

My Classroom, Con't

Econlog Administrative Issues
Arnold Kling
Let me add some more color to my tone of comments post. 1. I do not mean to suggest that I have inherent credibility based on credentials or somesuch. 2. By "classroom" I mean to suggest decorum. By "my classroom"... MORE

Tone of Comments

Econlog Administrative Issues
Arnold Kling
My blog is my classroom. Some blogs may want their comments to be wide-open forums where anything goes. I don't. Some blogs may want only sycophants and supporters to comment. Others ban comments altogether. Some bloggers have reputations for deleting... MORE

Thoughts on Medicare

Economics of Health Care
Arnold Kling
Megan McArdle writes, My (partial) list of the interesting questions: 1. Is Medicare well structured to provide good health care to the elderly? 2. Is Medicare encouraging today's workers to save less than they will ultimately need? In other words,... MORE

Politics and Cults

Political Economy
Arnold Kling
I started to write this as a blog post this morning, but I turned it into an essay, and TCS quickly ran it. So, I still have not defined "cult." For now, let's say that you are in a cult... MORE

Truck and Barter or Bandits?

Economic History
Arnold Kling
Paul Walker writes, Arnold Kling isn't buying into this. He writes,"I just don't believe that over a thousand years ago human beings had the trustworthiness, discipline, numeracy, and institutional base to engage in what we would today recognize as free... MORE

Megan McArdle on Demographics

Productivity, Baumol's cost disease
Arnold Kling
She writes (or will write--It really ticks me off that by the time my Atlantic arrives the best articles have been blogged. Remind me why I pay to get the magazine?) As the Boomers age, they will consume fewer of... MORE

Ron Paul's Baggage

Politics and Economics
Arnold Kling
Folks have dug up some newsletters from the 1980's and 1990's put out under the Ron Paul brand. They do not sound so good. "[O]ur country is being destroyed by a group of actual and potential terrorists--and they can be... MORE

My Essay on the Fair Tax

Tax Reform
Arnold Kling
On my earlier post, commenter Morgan wrote, This is where the transparency of the sales tax is such a huge advantage. For the first time we can say, do you support this Bill at the cost of $.01 of sales... MORE

Interesting Tidbits

Economic Education
Arnold Kling
Professor Donald Lacombe of Ohio University is offering a course in Econoblogging! Will this test Tyler's assertion that the best way to learn economics nowadays is through blogs? In addition to blogs, a venerable source of economic wisdom is the... MORE

Virtual Political Economy

Behavioral Economics and Rationality
Arnold Kling
Edward Castronova talks about World of Warcraft, Second Life, and such with Russ Roberts on the latest econtalk. I used to play bridge quite a bit, but I stopped when I went to grad school. At that point, the last... MORE

Of Mayas and Markets

Economic History
Arnold Kling
The New York Times reports, The findings, archaeologists say, are some of the first strong evidence that the ancient Maya civilization, at least in places and at certain times, had a market economy similar in some respects to societies today.... MORE

The Internet, New York, Detroit, and House Concerts

Information Goods, Intellectual Property
Arnold Kling
Edward L. Glaeser and Giacomo A.M. Ponsetto write, This paper advances the hypothesis that improvements in transportation and communica- tion technology can explain both the decline of Detroit and the reinvigoration of Manhattan. While we present some suggestive evidence, the... MORE

Why The Fair Tax is Unworkable

Tax Reform
Arnold Kling
Brad DeLong explains. Estimates of the actual rate of taxation required for the FairTax to be "revenue neutral" (meaning for it to bring in exactly the same amount of revenue that the federal government collects under the current system) start... MORE

Manzi writes, think that Weitzman has seriously engaged on the AGW issue at a unique level of depth. I admire his tenacity, seriousness and intellectual creativity in refusing to shrink from the issue. But he has tried to cross a... MORE

Mankiw on Fairy Godmotherism

Energy, Environment, Resources
Arnold Kling
Greg Mankiw writes, As a former energy secretary during the Clinton administration, Richardson has presumably studied these issues. But here he demonstrates extraordinary ignorance (or perhaps extraordinary disingenuousness) about the economic impact of cap-and-trade systems. By contrast, Obama shows extraordinary... MORE

Alan Blinder on Globalization

International Trade
Arnold Kling
He writes, Americans who want to stop the world fear that the nation either already is or is destined to become a victim of globalization. Such pessimism seems downright un-American. It is also fundamentally illogical. After all, much of globalization... MORE

Iowa's Terms of Trade Improve

Energy, Environment, Resources
Arnold Kling
The Financial Post reports, Wheat prices alone have risen 92% in the past year, and yesterday closed at US$9.45 a bushel on the Chicago Board of Trade. At the centre of the imminent food catastrophe is corn - the main... MORE

Predicting What Bryan will Write Sunday

Political Economy
Arnold Kling
Mark Thoma peers into the future to find this column by Bryan Caplan. In 1996, Gallup ran a survey about the minimum wage. Some respondents were asked if they favored an increase. More than 80 percent said yes. The rest... MORE

Global Warming Scorecard

Energy, Environment, Resources
Arnold Kling
According to an unflattering analysis by Douglas Hoyt, climate models have made 1 correct prediction ("win"), 27 incorrect predictions ("losses"), and 4 predictions that cannot be judged either correct or incorrect ("ties"). Of the models' "losses," the one I consider... MORE

One Property Rights, Many Recipes?

Institutional Economics
Arnold Kling
Karol Boudreaux and Paul Dragos Aligica write, The legislative path is considered a rapid course to the creation of property rights...In some cases, when the economic mechanisms have been destroyed or have never existed in a functional form, the top-down... MORE

Some Responses on Global Warming

Energy, Environment, Resources
Arnold Kling
The response to my global warming question has been mostly either bitter denunciation or support, but few answers. However, Anand Gnanadesikan understands what I am looking for. For example, he recommends this paper. This study highlights the role of water... MORE

Brockman, Mind-Changing, con't

Behavioral Economics and Rationality
Arnold Kling
Robin Hanson will like this one.... MORE

John Brockman strikes again

Behavioral Economics and Rationality
Arnold Kling
This year's "Edge" question is What Have You Changed Your Mind About? Why?. Fifteen years ago, Brockman wrote, the traditional American intellectuals are, in a sense, increasingly reactionary, and quite often proudly (and perversely) ignorant of many of the truly... MORE

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