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David Henderson: August 2015

An Author Archive by Month (25 entries)

WSJ Highlights

Business Economics
David Henderson
I spent part of Sunday catching up on Wall Street Journals that had piled up when I was at my cottage in Canada. Some highlights, in chronological order. 1. "ObamaCare Undercover," August 1-2, 2015 (July 31 on-line). Highlight: Last year... MORE

Buying Puts for Years?

Finance: stocks, options, etc.
David Henderson
In a response to, I think, me, although he doesn't make it clear whether he's responding to me, Robert P. Murphy writes: I realized from Levi's comment that people are genuinely misunderstanding what I was trying to say in that... MORE

Bio of Eugene Fama

Finance: stocks, options, etc.
David Henderson
His major early contribution was to show that stock markets are efficient (See efficient capital markets). The term "efficient" here does not mean what it normally means in economics--namely, that benefits minus costs are maximized. Instead, it means that prices... MORE

Robert P. Murphy: We've "Been Warning for Years"

Austrian Economics
David Henderson
Austrian economist Robert P. Murphy writes: As shocking as these developments [drops in stock prices and increased volatility] may be to some analysts, those versed in the writings of economist Ludwig von Mises have been warning for years that the... MORE

Bio of Oliver Williamson

Business Economics
David Henderson
The turning point in Williamson's thinking about markets and firms happened when he was an economist in 1966-67 with the Antitrust Division of the U.S. Department of Justice. In his biography at the Nobel site, Williamson writes: Although the leadership... MORE

Ask What Changed

Finance: stocks, options, etc.
David Henderson
Many people are trotting out their pet theories for why the stock market has crashed in the last week. Some of them may even be right. But there's one question we should ask of all of them: What changed? Here's... MORE

Chinese Entrepreneurs in Egypt

Business Economics
David Henderson
Nobody in the family seems intimidated by life in Asyut, and they don't consider themselves successful; Chen and Lin often say that their factory is just a low-level industry. But, whenever I visit, I can't help thinking: Here in Egypt,... MORE

A few days ago, I posted about a problem with government provision of information and government's mandates that private firms provide information. The problem: there's no guarantee and, moreover, no reason to think, that the government will provide or mandate... MORE

Our Rights versus Government "Rights"

Behavioral Economics and Rationality
David Henderson
In a post earlier this morning, in which I responded to Kurt Schlichter, I quoted the following from Schlichter: Number One: We Americans have an absolute right to decide who does and doesn't come into our country and the conditions... MORE

Reply to Kurt Schlichter

Labor Mobility, Immigration, Outsourcing
David Henderson
Pundit and trial lawyer Kurt Schlichter has written a strongly worded article telling Republican candidates for President how they should think about immigration. The tone suggests that he's not very open to changing his mind. Nevertheless, the points he makes... MORE

A Problem with Information Mandates

Information Goods, Intellectual Property
David Henderson
Even many very pro-free-market economists, noting that there is imperfect information in the marketplace, advocate that government provide information or require private firms to provide information. Even they often tend to regard government as an entity that will somehow provide... MORE

Krugman's Strange Conclusion

Macroeconomics
David Henderson
UPDATE: I was wrong. Alex Tabarrok has provided the data from FRED. I should have done so. Median family income was $56,447 in 1984, down slightly from $56,585 in 1980. Given how wrong I was, I would rather not have... MORE

I try to reread 3 books ever 10 years or so: To Kill a Mockingbird, Lucky Jim, and The Adventures of Huckleberry Finn. This summer, the second book I read (I've posted about the first one here, here, and here)... MORE

Bryson on Eugenics

Behavioral Economics and Rationality
David Henderson
In his book One Summer, about America in 1927, Bill Bryson writes: Remarkably, the Ku Klux Klan was not the most dangerous outpost of bigotry in America in the period. That distinction belonged, extraordinary though it is to state, to... MORE

The Grisly Public Choice Behind the End of Prohibition

Public Choice Theory
David Henderson
Writing about Prohibition in his One Summer (about the United States in 1927), Bill Bryson tells a story about a tragic incident that may well have helped lead to the end of Prohibition. Earlier in the book, Bryson had told... MORE

America Takes Over the World--Peacefully

International Trade
David Henderson
I had promised to post more about the first book I read on my vacation. But in the tradeoff between swimming and posting, I leaned strongly to the former. Now I'm catching up. In One Summer, Bill Bryson, discussing the... MORE

Scott Alexander on Malcolm Muggeridge

Books: Reviews and Suggested Readings
David Henderson
Many people whom I respect have highly recommended the blog slatestarcodex by "Scott Alexander." The quotation marks are there because the name is a pseudonym. I have taken longer to warm up to him. But he had me at Malcolm... MORE

Kevin Williamson on Social Security

Social Security
David Henderson
Note: I returned late Thursday from my 2.5-week vacation at my cottage in Canada. Thus the relative sparseness of my posts and especially of my answers to commenters. In an otherwise excellent post, which I highly recommend, Kevin D. Williamson... MORE

Bio of Elinor Ostrom

Energy, Environment, Resources
David Henderson
Most economists are familiar with the late Garrett Hardin's classic article, "The Tragedy of the Commons" (see Tragedy of the Commons). Hardin's idea was that when no one owns a resource, it is overused because no one can control its... MORE

Bryson on U.S. Standard of Living in 1927

Growth: Consequences
David Henderson
The first book I read on my current vacation at my cottage is Bill Bryson's One Summer, subtitled America, 1927. It's his story about various events in the United States in 1927. I've been a fan of his travel writing;... MORE

Optimal Worker Safety One More Time

Labor Market
David Henderson
MikeDC, the person for whom I wrote my original post, writes: Daniel Kuehn and Hazel Meade pretty straightforwardly state my objection. I think I'd just reiterate that the problem comes when the equilibrium wage is sufficiently low that the optimal... MORE

The Rule of Law in the Regulatory State

Regulation
David Henderson
What banker dares to speak out against the Fed, or trader against the SEC? What hospital or health insurer dares to speak out against HHS or Obamacare? What business needing environmental approval for a project dares to speak out against... MORE

Does Market Power Affect Optimal Worker Safety?

Central Planning vs. Local Knowledge
David Henderson
The possibly surprising answer is "No." In an earlier post, I showed that in a free market and under certain assumptions, even workers who are poor will get what is, from their viewpoint, the optimal amount of safety. One commenter... MORE

In a comment on a recent post of mine on worker safety, in which I highlighted the "Job Safety" entry by W. Kip Viscusi in The Concise Encyclopedia of Economics, MikeDC wrote: If you've got an impoverished and hungry subsistence... MORE

The Huge Benefits of the Sharing Economy

Free Markets
David Henderson
There has been a lot of excitement recently over what many people call the "sharing economy," in which new firms such as Uber, Lyft, Airbnb and other website businesses are increasing the value of capital assets. Uber and Lyft allow... MORE

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