Bryan Caplan and David Henderson

Arnold Kling: March 2012

An Author Archive by Month (51 entries)

Fukuyama on Acemoglu/Robinson

Books: Reviews and Suggested Readings
Arnold Kling
He writes, They are making almost the identical point to the one made in the 2009 book Violence and Social Orders by Douglass North, John Wallis, and Barry Weingast (NWW), who argue that most underdeveloped societies are what they term... MORE

Free for Now

Macroeconomics
Arnold Kling
Recent issues of some journals from de Gruyter publishers, including Capitalism and Society, which published a paper of mine on PSST.... MORE

Brief Notes from Kansas City

Income Distribution
Arnold Kling
Here is Tyler Cowen in cartoon form. At lunch, at our table we were talking about the question of why redistributive policies are not more popular with voters. Brink Lindsey said that voters prefer to affiliate with successful people than... MORE

Ed Glaeser on Job Creation

Labor Market
Arnold Kling
He writes, In every year since 1989, new companies have created more net jobs than the economy as a whole, which means that older companies are, on average, destroying more jobs than they create. In 2009, the latest year for... MORE

Timothy Taylor on College Loans

Economics of Education
Arnold Kling
He offers his usual outstanding analysis. Several decades ago, it was a low-risk option to spend a few years working part-time and attending a big public university: if it didn't end up in a degree, at least you didn't rack... MORE

I Believe These Are Related

Growth: Causal Factors
Arnold Kling
1. Timothy Taylor on the question of why different production techniques are used in different countries. 2. Don Boudreaux on how capital cannot just be reduced to its physical characteristics. I think that (2) provides insights that would help with... MORE

Friday

Upcoming Events
Arnold Kling
If you like economics bloggers, you might enjoy watching the Kauffman Forum on Friday, March 30. Note that all times are central standard time (one hour earlier than eastern time). The opening panel, on macroeconomic policy, is self-recommending. Brad DeLong,... MORE

DeLong and Summers

Macroeconomics
Arnold Kling
I outsource my comments to Scott Sumner. So let's start over. The Fed is unwilling to provide enough monetary stimulus. OK, now what is the point of this paper? Is this to train our future econ PhD students? Are we... MORE

Some Observations About Firing

Business Economics
Arnold Kling
Bryan poses the issue of why bosses are reluctant to fire unproductive employees. My observations: 1. Firing involves a confrontation. You tend to want to avoid confrontations. In large organizations, the confrontation is indirect. The boss tells HR, and HR... MORE

Mingardi on Hayek

Political Economy
Arnold Kling
Alberto Mingardi writes, Centralized government allocates resources badly--regardless of its intentions. The very nature of centralization makes it impossible to collect and compute all the information that is needed. This is as true for any grand scheme of industrial planning... MORE

Leveraging and De-leveraging

Macroeconomics
Arnold Kling
Timothy Taylor writes, The claim isn't that leverage cycles explain all recessions, but rather that they can help explain why some recessions--often those that also include a financial crash--can turn out to be so severe. The U.S. data on borrowing... MORE

Neuroscience and Ethics

moral reasoning
Arnold Kling
Ron Bailey writes, In my view, human prehistory and history has been a more or less random search for social institutions that increasingly discover and conform to our evolved natures. My contention is that is manifestly the case that liberal... MORE

Notes on the Phillips Curve

Macroeconomics
Arnold Kling
1. The original version expressed a trade-off in terms of the level of inflation vs. the level of the unemployment rate. From about 1953-1968, the trade-off was approximately: inflation + unemployment = 7 percent. 2. In the 1970's Phillips Curve... MORE

Potential Output Straw Man

Macroeconomics
Arnold Kling
Recently, bloggers have been talking about potential output or potential GDP. I find the discussion to be frequently misleading. For example, Mark Thoma quotes Tim Duy: If we claim the economic potential of the nation has declined - that in... MORE

The Speculator of Last Resort

Finance: stocks, options, etc.
Arnold Kling
Business Week reports, The Treasury purchased $225 billion in government- sponsored-enterprise bonds and made a profit of $25 billion from principal, interest and the sale. Treasury announced in March 2011 it would begin winding down the program through sales of... MORE

Some Notes from Haidt

Books: Reviews and Suggested Readings
Arnold Kling
That is, from The Righteous Mind. Many of these are gems. I've put them all below the fold.... MORE

The Authority of Ben Bernanke

Political Economy
Arnold Kling
In The Atlantic, Roger Lowenstein makes the case for bowing to the authority of Ben Bernanke. This a cover story, and the cover photo of Bernanke makes him look like a serene, benevolent emperor. There is no substantive argument to... MORE

Thinking about Think Tanks

Politics and Economics
Arnold Kling
Tevi Troy writes, If donors see and use think tanks as pawns in a political war, the value of their product will be diminished in the eyes of the public, journalists and senior government officials. He made this point in... MORE

Inequality and Status

Income Distribution
Arnold Kling
Jason Collins discusses the view that inequality is good because rich consumers stimulate innovation. I allude to this theory in my Khan-Academy style take on inequality for a forthcoming panel.... MORE

Another Must-Read

Books: Reviews and Suggested Readings
Arnold Kling
We are only half way through March, and I think I already have come across more must-read books than in all of 2011. I am about 2/3 of the way through Jonathan Haidt's The Righteous Mind, which makes the must-read... MORE

More Classic Jeffrey Friedman

Political Economy
Arnold Kling
This time, it's his essay on The Rhetorical Presidency, a riff on the book of that title by Jeffrey K. Tulis. The book's thesis is that before the Progressive era, Presidents were expected to stay in the background and mind... MORE

The Evolution of Macroeconomics, Part Two

Macroeconomics
Arnold Kling
My latest essay: We have accumulated more than six decades of macroeconomic experience since the end of World War II, yet neither stubborn Keynesians nor stubborn monetarists have encountered any data that would make them change their minds. Instead, since... MORE

Crosstalk on Financial Regulation

Finance: stocks, options, etc.
Arnold Kling
This is a program on Russian television, talking about a proposal to require pre-approval for financial products. The Capitol in the background was photo-shopped in. I had no visual feedback whatsoever--there was not even a monitor where I could see... MORE

Diamandis and The Diamond Age

Economics of Education
Arnold Kling
Peter Diamandis is trying to think of an X-prize to fix education. he has considered multiple directions that an Education X Prize could take, such as coming up with better ways to crowd-source education, or rewarding the creation of "powerful,... MORE

New Commanding Heights Watch

Labor Market
Arnold Kling
A reader who remembers this essay suggested this chart: I lifted the chart from Barry Ritholtz, who in turn lifted it from paper by David Andolfatto and Marcela M. Williams. I think that the evidence for structural change as a... MORE

Matt Yglesias on Urban Development

Books: Reviews and Suggested Readings
Arnold Kling
The book is The Rent is Too Damn High. Counties, municipalities, states, and everyone else involved in promulgating land-use regulations need to ease off on parking requirements, artificial constraints on lot size, height restrictions, etc. Other interesting excerpts below. (Possibly... MORE

Review of Why Nations Fail

Books: Reviews and Suggested Readings
Arnold Kling
The book is by Daron Acemoglu and James Robinson. The review is by Paul Collier. Collier writes, Their argument is that the modern level of prosperity rests upon political foundations. Proximately, prosperity is generated by investment and innovation, but these... MORE

James Manzi Watch

Books: Reviews and Suggested Readings
Arnold Kling
In the Journal of Economic Perspectives, Paul Joskow writes, a sensible deployment strategy is to combine a long-run plan for rolling out smart-grid investments with well-designed pilots and experiments. Using randomized trials of smart grid technology and pricing, with a... MORE

The Affiliation Heuristic, Continued

Institutional Economics
Arnold Kling
I can use Bruce Schneier's Liars and Outliers as the basis for another take. A basic question in the book is how human society is able to scale above the level where we can all recognize one another. For example,... MORE

Real Austerity

Fiscal Policy
Arnold Kling
The Hill reports, Members of the Senate Tea Party Caucus on Thursday announed a plan to balance the budget in five years, cutting spending by nearly $11 trillion compared to President Obama's budget. The plan was proposed by Senators DeMint,... MORE

Discussing Charles Murray

Books: Reviews and Suggested Readings
Arnold Kling
I organized a video conference to discuss Coming Apart. Participants were Brink Lindsey, Bryan Caplan, Megan McArdle, Reihan Salam, and Ross Douthat. There was not much discussion of the findings in the book, because everybody seemed to accept them. However,... MORE

The Predatory Lending Fallacy

Finance: stocks, options, etc.
Arnold Kling
Matthew O'Brien writes, I think we owe Greenspan a happy (belated) birthday. He's gotten a bad rap the past few years for his failings as a central banker, and that's just unfair. It should be about his failings as a... MORE

Today's Employment Report

Labor Market
Arnold Kling
The BLS reports (note that by next month this link will be to a new report) that payroll employment over the past three months has increased by an average of 245,000 jobs. One of the patterns that Ed Leamer found... MORE

The Affiliation Heuristic

Politics and Economics
Arnold Kling
It seems to come up a lot in the discussions of Cato. Cato has worked really hard to cultivate a favorable/neutral reputation with liberal intellectuals. "We're not the religious, homophobic, xenophobic right-wing crazies. We're the anti-war, anti-Fed, anti-pot-law right-wing crazies."... MORE

The Bailouts and the Economy

Macroeconomics
Arnold Kling
A Panel of Expert Economists was asked whether they agreed with: Because the U.S. Treasury bailed out and backstopped banks (by injecting equity into them in late 2008, and later committing to provide public capital to any banks that failed... MORE

Cato and the Kochs, Take 3

Business Economics
Arnold Kling
A Wapo Blogger has an email from the Kochs. I hesitate to add another take. If my basic view is that this less important than it seems, it is strange to blog three times on it. More below the fold.... MORE

Videoconferencing and Health Care

Business Economics
Arnold Kling
Scott Gottlieb writes, A patient recently asked me why doctors don't spend more time communicating over email or by videoconferencing. There's a simple answer: Medicare hasn't created a billing code for these services. I would love to stand up and... MORE

Timothy Taylor on Long-term Unemployment

Labor Market
Arnold Kling
Timothy Taylor writes, We need a convincing theory of this third kind of unemployment--sluggish unemployment, tar-pit unemployment--and an associated sense of what policies are useful for addressing it. Firms as a group have high profits and strong cash reserves, but... MORE

Serfdom Watch

Political Economy
Arnold Kling
The Washington Post writes, Parents [in Adelanto, California] are trying to become the first in the country to use a trigger law, which allows a majority of families at a struggling school to force major changes, from firing the principal... MORE

Another Take on the Soap Opera

Politics and Economics
Arnold Kling
Will Wilkinson writes, this isn't a battle between good and evil, and the stakes are probably lower than you think. Not unlike my take, although he has more inside knowledge than I do. Read the whole thing. I have a... MORE

Dinner with James Manzi

Books: Reviews and Suggested Readings
Arnold Kling
The publishers of Uncontrolled, his forthcoming book, hosted a dinner attended by about a dozen conservative media luminaries, as well as by yours truly. We received advance review copies prior to the dinner. Uncontrolled will not be available until May... MORE

Paul Krugman on IS-LM

Macroeconomics
Arnold Kling
He writes, The immediate problem was a huge shortfall of demand, as the private sector moved from large financial deficit to large financial surplus. Pointer from Mark Thoma. You have the basic identity that (S-I) + (T-G) = (X-M). That... MORE

Timing the End of the Liquidity Crisis

Finance: stocks, options, etc.
Arnold Kling
Tyler Cowen writes, By the time the three years is up, a lot of these institutions will have been nationalized, if only de facto. He offers this as one possible scenario for resolving the liquidity issues of European banks. (Bear... MORE

Bruce Schneier's Latest Book

Books: Reviews and Suggested Readings
Arnold Kling
It's Liars and Outliers, and I would rate it the best economics book of the year thus far. He writes about his book here and here. Schneier views our lives from the perspective of game theory. Every day, we must... MORE

The Koch Cato Affair

Business Economics
Arnold Kling
Don Boudreaux shares his thoughts. My take: 1. Usually, corporate soap opera is less important in the grand scheme of things than it is to the people involved. Institutions go on. History goes on. 2. We discussed think tanks with... MORE

Fisker Update

Business Economics
Arnold Kling
not doing well, apparently Wray alleges he received word from Fisker on January 18th in the form of a letter informing him that due to the need for equity capital financing there was now a pay to play action in... MORE

Various

Economics of Education
Arnold Kling
1. Kevin Carey writes, Not everyone is willing or able to get a bachelor's degree. But everyone should at least have the chance to try. After all, well-off students from upper-middle-class suburbs are going to college one way or another.... MORE

Hal Varian

Growth: Causal Factors
Arnold Kling
He is the economist who co-wrote Information Rules and now works for Google. Nick Schulz and I had a video conference with him. He has a very interesting perspective on where things are headed with robotics, for example. Here is... MORE

Podcasts

Growth: Causal Factors
Arnold Kling
These are from recent video conferences. Alex Tabarrok (just Alex and me) on policies to encourage innovation; and David Weinberger on how the Internet is affecting our views of knowledge (with Nick Schulz and me; unfortunately, the sound quality on... MORE

The Latest Literature

Finance: stocks, options, etc.
Arnold Kling
The first three articles in the February 2012 issue of the American Economic Review are: "Optimal Interventions in Markets with Adverse Selection." "Overcoming Adverse Selection: How Public Intervention Can Restore Market Functioning" "Collective Moral Hazard, Maturity Mismatch, and Systemic Bailouts"... MORE

De-Materialization

Books: Reviews and Suggested Readings
Arnold Kling
From Diamandis and Kotler's Abundance: Twenty years ago, most well-off US citizens owned a camera, a video camera, a CD player, a stereo, a video game console, a cell phone, a watch, an alarm clock, a set of encyclopedias, a... MORE

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