Bryan Caplan and David Henderson

Arnold Kling: March 2008

An Author Archive by Month (42 entries)

Meltzer on Financial Regulation

Finance: stocks, options, etc.
Arnold Kling
Allan Meltzer writes, Regulators and most politicians are good at developing rules and restrictions, but poor at thinking about the incentives that the market will face. If the incentives are strong, the market circumvents the regulation. The Basel regulation encouraged... MORE

The Plunder Economy

Economic History
Arnold Kling
From Jack Weatherford, Genghis Khan and the Making of the Modern World, p. 221: The expansion and maintenance of the trading routes did not derive from an ideological commitment of the Mongols to commerce and communication in general. Rather, it... MORE

Education, Assortative Mating, and Inequality

Economics of Education
Arnold Kling
I am going to combine comments on two papers cited by Tyler Cowen. First, he cites a paper on inequality and mobility. It argues that skill differentials are widening, and that parental education seems to be increasingly important. (Note that... MORE

Junk Macroeconomic Science

Macroeconomics
Arnold Kling
Several days ago, Greg Mankiw linked to a list of top economists according to some objective criteria related to published work. I was familiar with most of the top 150, at least to the point of being able to identify... MORE

Financial Commentary

Arnold Kling
Russ Roberts said, The Federal Reserve and the Treasury Department have orchestrated the survival of Bear Stearns. The defenders of that maneuver argue that if Bear Stearns had failed it would have created a lot of collateral damage, so much... MORE

Snippets of Subversive Folk Songs

Political Economy
Arnold Kling
I have not had much time to pursue the folk song idea, but I have written a few snippets. [now slightly revised] First, I am trying to do something to the tune of "Union Maid" that speaks to the moral... MORE

Sherry Glied vs. Jacob Hacker

Economics of Health Care
Arnold Kling
In Sunday's Washington Post, Jacob Hacker wrote, getting the government more involved in health care would actually reduce costs, improve quality and bolster the U.S. economy -- which helps explain why public insurance is the secret weapon in both of... MORE

The Paperback Arrives

Economics of Health Care
Arnold Kling
Crisis of Abundance is now in paperback, for ten bucks at Amazon. The fact that Peter Orszag, no ideological fellow-traveler of mine, sounds many similar themes indicates to me that I can feel justifiably proud of the book. Two changes... MORE

Peter Orszag on Health Care Costs

Economics of Health Care
Arnold Kling
He spoke at the Wilson School. The audio sounds bad on my computer, but he makes an important point. If health care costs are 16 percent of GDP, and we could reduce spending by 30 percent with no worse outcomes,... MORE

On the "to be read" list

Books: Reviews and Suggested Readings
Arnold Kling
Murat Iyigun says he cannot wait to get his hands on Joel Mokyr's forthcoming book, The Enlightened Economy: An Economic History of Britain. Nicholas D. Kristof writes about Matthew Connelly's Fatal Misconception, making it sound like a cross between Liberal... MORE

Folk Songs

Economic Education
Arnold Kling
This past weekend, my wife and I attended a sing-along. About fifty of us Baby Boomers, along with a few children and grandchildren, gathered with some guitars, banjos, and other instruments to sing the classic tunes of Woody Guthrie, Pete... MORE

Defending Market-Value Accounting

Finance: stocks, options, etc.
Arnold Kling
Felix Salmon writes, Krugman's saying they're all wrong, and that Bear Stearns, along with other financial institutions, actually has a negative book value. He's not giving any reasons why he's right and they're wrong, he's just asserting it. And so... MORE

The Medium and The Message

Political Economy
Arnold Kling
Not the topic du jour, by any means, but one that has interested me for a long time. Megan McArdle writes, I'm an enormous fan of John McWhorter's book on the decline of formal language, Doing Our Own Thing. I... MORE

Financial Turmoil

Finance: stocks, options, etc.
Arnold Kling
It's the topic du jour. Start with Alex Tabarrok. In 1997, inflation-adjusted house prices were close to their average levels over the previous half-century. Only four years later, the price of the average home nationwide exceeded anything ever seen before... MORE

Costs and Benefits of the Patent System

Information Goods, Intellectual Property
Arnold Kling
Patent Failure is a new book by James Bessen and Michael J. Meurer. Here is a lecture by Bessen. The book's introduction emphasizes the importance of what the authors call "the notice function." An efficient property system notifies non-owners of... MORE

A Historical Anecdote

Finance: stocks, options, etc.
Arnold Kling
From Supermoney, by 'Adam Smith' (George Goodman), p. 31 - 49: In a Crunch, the country runs very dry of money...... MORE

Monetary Theory and Policy

Monetary Policy
Arnold Kling
In today's econtalk podcast, Tyler Cowen and Russ Roberts discuss monetary theory and monetary policy. It is a wide-ranging discussion, covering several weeks worth of an intermediate macro course. If you are not familiar with the subject, you might have... MORE

Another Parable

International Trade
Arnold Kling
Greg Mankiw writes, A 2006 poll of Ph.D. members of the American Economic Association found that 87.5 percent agreed that “the U.S. should eliminate remaining tariffs and other barriers to trade.” The benefits from an open world trading system are... MORE

Not Fannie Mae!

Finance: stocks, options, etc.
Arnold Kling
Brad DeLong writes, If I were Treasury Secretary Hank Paulson, I would spend the weekend building a legislative vehicle to introduce Monday morning on an emergency basis to give Fannie Mae the resources and the mission to undertake this mortgage... MORE

Speculator of Last Resort?

Finance: stocks, options, etc.
Arnold Kling
In an unusual move, The Fed is lending to Bear Stearns. My view of what is going on starts with The Risk Disclosure Problem. When times are good, a firm like Bear Stearns keeps its risks under its kimono, and... MORE

The Love of Hierarchies

Institutional Economics
Arnold Kling
Denis Dutton writes, Human beings are naturally hierarchical and they like arranging themselves into hierarchies of skill, age, wealth, competence, experience, whatever. David Brooks writes, they go into one of those fields like law, medicine or politics, where a person's... MORE

Once Upon a Time

Economic Education
Arnold Kling
In a recent comment, Troy Camplin pointed to a short story that he wrote a few years ago. Milton Wilcain was obviously not a very smart man...if he had been intelligent, he would have been allowed to keep his money... MORE

An Army of Spitzers

Political Economy
Arnold Kling
Amidst the tawdriness, I attempt to draw a real lesson. Suppose that we define "Spitzer" as someone who believes in the aggressive use of political power. A Spitzer believes it is his mission to tell us what to do for... MORE

Why Colleges Need More Money

Economics of Education
Arnold Kling
Inside Higher Ed has the scoop. the majority of full-time professional employees in higher education are in administrative rather than faculty jobs. A university consists of a faculty attached to a fundraising apparatus, where it used to be the other... MORE

My Review of Gregory Clark

Books: Reviews and Suggested Readings
Arnold Kling
Is on the Claremont Review web site (it did not make the dead-tree publication). How is it that in the 19th century, England came to have dominion over so many lands and so many peoples? Though he uses modern quantitative... MORE

Selection and Politicians

Political Economy
Arnold Kling
Today's news (usually not my best blog topic) is Eliot Spitzer. When I heard about his, er, affair, I started wondering: Is every successful politician that arrogant? Does our process work that well at selecting for arrogance, or am I... MORE

Sacrificing an Economic Adviser

Politics and Economics
Arnold Kling
Tyler is upset. It seems the Barack Obama campaign is distancing itself from Austan Goolsbee, who is indeed a first-rate economist...Which kinds of advisers will flourish best in a "message consistency" environment? Independent and critical minds, able and willing to... MORE

What is Revolutionary Science?

Information Goods, Intellectual Property
Arnold Kling
Bruce Charlton and Peter Andras write, a research foundation working in a specific scientific field might at present spend 100 million dollars per year – and might spread this money among ten 10 million dollar program grants. In all likelihood,... MORE

Where are the Hedge Funds?

Finance: stocks, options, etc.
Arnold Kling
Tyler Cowen asks, Is/was the subprime crisis simply a mask for a more general revaluation of the meaning and extent of liquidity? Are such revaluations always so bumpy and so lacking in locally stable iterative processes? Earlier, he wrote, we... MORE

International Inequality

Growth: Causal Factors
Arnold Kling
Charles I. Jones writes, By the end of the 20th century, per capita income in the United States was more than 50 times higher than per capita income in Ethiopia and Tanzania. Dispersion across the 95th-5th percentiles of countries was... MORE

George McGovern, Libertarian

Regulation and Subsidies
Arnold Kling
While Martin Feldstein is proposing more government meddling in mortgage markets, George McGovern writes, There's no question, however, that delinquency and default rates are far too high. But some of this is due to bad investment decisions by real-estate speculators.... MORE

Feldstein's Lender Bailout Proposal

Finance: stocks, options, etc.
Arnold Kling
Martin Feldstein writes, The federal government would lend each participant 20% of that individual's current mortgage, with a 15-year payback period and an adjustable interest rate based on what the government pays on two-year Treasury debt (now just 1.6%). The... MORE

Civil Disobedience Alert

Political Economy
Arnold Kling
The LA Times reports, Parents who lack teaching credentials cannot educate their children at home, according to a state appellate court ruling that is sending waves of fear through California's home schooling families. ..."Parents do not have a constitutional right... MORE

Energy Scenarios

Energy, Environment, Resources
Arnold Kling
I spell out my conjectures. ScenarioMost Economical TimeframeRemarksCarbon Competition2008-2020Cheapest energy sources, except for political barriersConservation2008-2015Smarter electric grid, better car batteriesNu-cu-lar2013-2030It works, but at what risk?Franken-fuels2020 and beyondThe most likely revolutionSolar Singularity2025 and beyondHope it happens... MORE

Jonah Goldberg's Alternative Title

Political Economy
Arnold Kling
He writes, the one thing libertarians grasp better than conservatives or liberals is the danger of the category error when it comes to the role of government...The fundamental insight of libertarianism is that the government is the government. It cannot... MORE

Podcasting is so 2005

Growth: Consequences
Arnold Kling
What delicious irony that Steve Marglin tries to argue against modernity--saying that we need more community and less stuff--in an appearance on...YouTube. Will Wilkinson keeps sounding like he wants to put "community spirit" into the utility function, so that economists... MORE

Progressives, Eugenics, and Airbrushing

Political Economy
Arnold Kling
In a history of Swarthmore's economics department, Joshua Hausman wrote, Nearing is also the only Swarthmore professor to have taught eugenics in an economics class. He omits his past interest in eugenics from his 1972 autobiography... In a 1912 book,... MORE

Economics and Sociology

Economic Methods
Arnold Kling
Reviewing the last chapter of Tim Harford's The Logic of Life, Fabio Rojas writes, the market system itself, as indicated by Tim’s concluding chapter, depends on population, innovation, and liberal economic institutions. These, in turn, depend on psychology, group culture,... MORE

Security Symbolism

Political Economy
Arnold Kling
Megan McArdle writes, Perhaps I am too jaded by excess air travel, but most of our homeland security seems designed to A) Increase the power of congressmen and agency heads or B) Put on a show for the yokels rather... MORE

Who Owns Oil

Energy, Environment, Resources
Arnold Kling
Nansen G. Saleri writes, Modern science and unfolding technologies will, in all likelihood, double recovery efficiencies. Even a 10% gain in extraction efficiency on a global scale will unlock 1.2 to 1.6 trillion barrels of extra resources -- an additional... MORE

Life Under Socialism

Political Economy
Arnold Kling
Ibsen Martinez writes about life in Venezuela. Consider breakfast. My breakfast, to be exact. It's been months since I have had an oatmeal breakfast or a nice cup of espresso with a drop of milk because coffee and milk has... MORE

Kurzweil on Solar Power

Energy, Environment, Resources
Arnold Kling
LiveScience quotes Ray Kurzweil. "It is doubling now every two years. Doubling every two years means multiplying by 1,000 in 20 years. At that rate we'll meet 100 percent of our energy needs in 20 years." Simple. Next problem? This... MORE

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