Bryan Caplan and David Henderson

Regulation

A Category Archive (257 entries)

I Agree with Barbara Ehrenreich

Income Distribution
David Henderson
On a flight home from Las Vegas last night, I found the April 14 issue of Time magazine. I hadn't read it in years. On the last page was a feature called "10 Questions." They were 10 questions to "activist,... MORE

In recent history, the UK has liberalized its rules concerning the hours that pubs can operate. For example, the Licensing Act of 1988 expanded Sunday hours and no longer required pubs to close for two and a half hours in... MORE

The Moral Vision of a Blind Economist

Obituaries
David Henderson
That's the title that Regulation gave my piece on Walter Oi. [I had given it the title "An Economist of Character Who Was a Real Character.] It appears in the Spring 2014 issue of Regulation. I had already written a... MORE

Reason's Home Run on Immigration

Labor Mobility, Immigration, Outsourcing
David Henderson
When I dug into [Reason e-book] Humane and Pro-Growth, I realized that I had fallen behind in the immigration debate. Sure, I had read all of my [Econlog] co-blogger Bryan Caplan's excellent posts on immigration. And I've become quite familiar... MORE

What we are up against

Regulation
Scott Sumner
The Great Recession led to a lot of "if only" comments. If only we could charge a negative interest rate on reserves, to discourage banks from hoarding excess reserves. If only we had had more regulation back during the housing... MORE

Lessons from "The Lives of Others"

Regulation
David Henderson
Our economic lives. A local libertarian group showed the movie, "The Lives of Others," at the Marina Public Library last night. The group invited me to give a few remarks after the showing. What motivated them to show the movie... MORE

From the Vault: Reply to the Village Voice

Regulation
David Henderson
In writing a tribute to the late Murray Weidenbaum last weekend, I came across a piece I wrote in 1979, a piece that had caused me to get in touch with Murray. I titled it "Reply to the Voice." It... MORE

How Diabolical is Unz's Proposal?

Economic Philosophy
Bryan Caplan
Ron Unz wants to raise the minimum wage to discourage illegal immigration.  The mechanism: The minimum wage raises unemployment for low-skilled workers, and illegal immigrants are very low-skilled.  His words:In effect, a much higher minimum wage serves to remove the... MORE

Michael Cannon's Cannon

Economics of Health Care
David Henderson
Cato Institute's health economist Michael Cannon is the lead economist in a legal case that takes on the IRS. The Affordable Care Act (ACA), aka Obamacare, grants tax credits to low-income people who buy health insurance in state-run exchanges. There... MORE

Murray Weidenbaum, RIP

Obituaries
David Henderson
Murray Weidenbaum, Ronald Reagan's first chairman of the President's Council of Economic Advisers, died on Thursday. The New York Times obit on him is excellent, uncovering some nuggets about him that I hadn't known. Check out the picture in the... MORE

The Legacy of Milton Friedman

Monetary Policy
Scott Sumner
Last month I attended a conference on Milton Friedman, in Austin, Texas. The final session discussed his legacy, and I thought I'd share a few of my remarks. I argued that Friedman and Schwartz's Monetary History of the United States... MORE

Was Bork Right About Mergers?

Business Economics
David Henderson
In a just-published NBER study, "Did Robert Bork Understate the Competitive Impact of Mergers? Evidence from Consummated Mergers," NBER Working Paper 19939, economists Orley C. Ashenfelter of Princeton, Daniel Hosken of the Federal Trade Commission, and Matthew C. Weinberg of... MORE

Reminiscences of Rogge

Business Economics
David Henderson
UPDATE BELOW: Earlier today over at Cafe Hayek, Don Boudreaux highlighted a quote from the late Benjamin A. Rogge. That brought back warm memories for me. Rogge, who lived from 1920 to 1980, was a libertarian economics professor at Wabash... MORE

What Say You? The Intuitive Case Against the Minimum Wage

Behavioral Economics and Rationality
Bryan Caplan
Don Boudreaux asks minimum wage supporters to answer two questions they should have asked themselves long ago.Question #1:Name some other goods or services for which a government-mandated price hike of 25 percent will not cause fewer units of those goods and services... MORE

Smoking Prevention: Nagging versus Taxing

Regulation
James Schneider
Often times, government policies are ostensibly about providing knowledge, when they are actually about nagging. Consider cigarette warning labels. They now take up more space on the packaging than they did in the past, but they still provide surprisingly little... MORE

Like other legislation of that era, the Fed was a government intervention supported both by ideologically-motivated and well-meaning reformers and by the industry being regulated. Rather than being this as some sort of unique conspiracy to take control of the... MORE

Henderson on Jonathan Macey

Finance
David Henderson
Advocates of free markets and deregulation are often accused of being apologists for big business. The main reason for this seems to be that we defend the rights and accomplishments of big businesses that achieve great things under economic freedom.... MORE

"Fear is Why Workers in Red States Vote Against Their Economic Self-Interest" is the title Robert Reich gives yesterday's post on his site. Reich starts by addressing why no one in West Virginia complained [I'm taking his word for it... MORE

Do barriers create "bubbles?"

Finance
Scott Sumner
Ryan Avent discusses a recent speech by Larry Summers:The basic set-up of his narrative remained unchanged from last year. Imagine a world, he said, in which resources are increasingly concentrated in the hands of those with high propensities to save and... MORE

Robert Frank's Confusions

Income Distribution
David Henderson
Cornell University economist Robert Frank has become the Johnny One Note of economics. His one note: how bad wealth and income inequality (he often doesn't distinguish between the two although he should) are, along with his particular reasoning about why... MORE

NSA Spying: A Cost/Benefit Analysis

Cost-benefit Analysis
David Henderson
Why does the National Security Agency (NSA) spy on Americans? In short, it is attempting to reduce even further the small probability of terrorist attacks on Americans. That reduction in probability, times the value of the damages averted, is the... MORE

Great Moments in Crowd Sourcing

Economic Education
David Henderson
One highlight of my third year at Columbia was the Industrial Organization course that Larry [Moss] and I took along with several Randians. The professor, Donald Dewey, started off the semester by stating that there were three respectable views on... MORE

Thank you for vaping

Eurozone crisis
Alberto Mingardi
The war against tobacco has been fought vigorously by the European Union. Lately, the European Commission has been pushing for changing the Tobacco Products Directive, in an even more restrictive sense. To dissuade young people from picking up smoking, health... MORE

The Swiss overwhelmingly rejected a popular initiative that would have capped executive pay to 12 times the wage of the lowest-paid employee in the same business. Some 65% of the voters came out against the proposal, which was proposed by... MORE

The art of silly norms

Regulation
Alberto Mingardi
Photographer Olivia Locher (here's an interesting interview) has recently presented a new art project, "I Fought the Law". This photo series captures a selection of what Ms Locher regards as the silliest regulations and prohibitions enacted by U.S. states. Among... MORE

I'm at the Southern Economic Association meeting this weekend. We'll be sharing food, fun, laughs, and our research. I'm looking for things to trim off my "Projects" list, so I'm going to start blogging ideas for papers I'll never take... MORE

Obama: Government Doesn't Work

Economics of Health Care
David Henderson
You know, one of the lessons--learned from this whole process on the website [healthcare.gov]--is that probably the biggest gap between the private sector and the federal government is when it comes to I.T. [Information Technology] ... Well, the reason [that... MORE

"This is great news. Raising the minimum wage will help America succeed," said Jon Cooper, the President of Spectronics Corporation in Westbury, NY. "Employers like me need to do our part by paying a decent minimum wage - closer to... MORE

"No one benefits from making it more difficult for an individual who owes money to make money." When I teach my Cost-Benefit course, I give out a problem set early in each quarter in which one of the questions is... MORE

Reclaiming Fairness: Competition Policy

Political Economy
Bart Wilson
To follow up on my attempt to reclaim fairness for commerce, let's consider what this means for competition policy. The 18th century meaning of unfair with its roots in commerce didn't completely disappear by the 20th century. In 1914 Congress... MORE

Why Not Protect Workers from Customers?

Behavioral Economics and Rationality
Bryan Caplan
Most countries have a long list of "worker protection" laws.  Laws protect workers against low pay, lack of benefits, discrimination, sexual harassment, overtime at normal pay, and much much more.  Basic labor economics teaches us to view these laws with... MORE

Higher-Cost Health Insurance for Older California Resident

Economics of Health Care
David Henderson
One thing that pretty much everyone expected if he/she had paid attention during the ObamaCare debate is that the new law would impose a huge cost on young people. That seems to be happening. But what do we make of... MORE

I apologize if I've over-emphasized the "for the children!" meme recently, but today's FEE article from Jeffrey A. Tucker, "The Abolition of the Playground: How Regulation Stifles Spontaneous Order and Play" deserves to be read widely. It's popular to say... MORE

My posts last week explained why the government should regulate, if not prohibit outright, meals cooked at home as a matter of public health and also as a matter of employment and prosperity (1, 2). Here's another idea. You require... MORE

Coase on Regulating Goods and Ideas

Regulation
David Henderson
One of the articles by the late Ronald Coase that I highlighted in my recent Wall Street Journal encomium to him was his clever 1974 piece, "The Market for Goods and the Market for Ideas." I had remembered the highlights... MORE

I appreciate the feedback on yesterday's post about underground dinner parties, but I don't think people understand just how serious this is. Just a few minutes ago and just a step or so away from my precious perfect snowflake one-year-old... MORE

Galbraith Opposes Cronyism

Books: Reviews and Suggested Readings
David Henderson
In John Kenneth Galbraith: His Life, His Politics, His Economics, Richard Parker writes: The following year [1951], at the invitation of Puerto Rico's reform-minded governor, Luis Munoz Marin, Galbraith and a small team of researchers paid repeated visits to the... MORE

Can Higher Limits of Out-of-Pocket Costs Help Consumers?

Economics of Health Care
David Henderson
UPDATE BELOW: Avik Roy replies. I got back from my vacation early Monday morning, a vacation on which I had limited Internet access. That's why I didn't respond to this Avik Roy article earlier. Still, I thought that by the... MORE

Sunstein Goes Straight to Coercion

Regulation
David Henderson
Time out from posting on Galbraith to note a current discussion. My next post on Galbraith will appear this afternoon. Co-blogger Bryan Caplan has posted recently and cogently about libertarian paternalism and outright coercion. As it happens, I have a... MORE

Why No Slippery Slope? Because Paternalists Start at the Bottom

Behavioral Economics and Rationality
Bryan Caplan
If libertarian paternalism is a slippery slope, why aren't we sliding?  Don Boudreaux provides the obvious answer: Because almost all paternalism is coercive from the get-go:One reason why the empirical record isn't more full of nudges turning into diktats is... MORE

In praise of Over-Legislation (the essay)

Regulation
Alberto Mingardi
This very same month in 1853, the Westminster Review was publishing a truly seminal article in the history of classical liberalism: "Over-Legislation" by Herbert Spencer. In his lifetime, Spencer was virtually a household name among philosophers. He has since been... MORE

Congratulations to Cato Legal Scholars

Regulation
David Henderson
The Supreme Court's term is over, with 75 cases having been argued and decided. It's safe to say that the most significant ones were those decided this week, on the politically fraught subjects of affirmative action, the Voting Rights Act... MORE

Ben Powell on the Drug War

Regulation
David Henderson
Economics is a science of means and ends. Thus, the question for economics is whether the means--drug prohibition--is effective in promoting the ends of greater health, safety, and productivity, as well as lower violence and criminal justice costs. In "The... MORE

Henderson on Kunruether et al

Economics of Health Care
David Henderson
But Kunreuther, Pauly, and McMorrow show that when insurance regulators themselves don't cause adverse selection, it tends not to happen. They write: Where adverse selection does potentially occur, and to a serious degree, is in markets where regulation prevents insurers... MORE

NSA Surveillance: More Hay and More "Hey!"

Regulation
David Henderson
In a post earlier this week, "NSA Surveillance: A Cost/Benefit Analysis," I quoted John Mueller and Mark G. Stewart's statement, "However, the reaction has continually been to expand the enterprise, searching for the needle by adding more and more hay."... MORE

NSA Surveillance: A Cost/Benefit Analysis

Cost-benefit Analysis
David Henderson
However, the reaction has continually been to expand the enterprise, searching for the needle by adding more and more hay. Far overdue are extensive openly published studies that rationally evaluate homeland-security expenditures. The NSA's formerly secret surveillance programs have been... MORE

One way or another, the supply of taxis is regulated in most places. In some countries, governments raise barriers to entry and get into fixing prices, awarding licenses only to individual drivers. In others, cab companies are allowed to operate... MORE

What has (Local) Government Done to Our Ice Cream?

Property Rights
Alberto Mingardi
To paraphrase Einstein, two things are infinite: the universe and the creativity of politicians. My own country, Italy, offers plenty of examples of such a creativity. Let me just point to a recent one. Together with pizza and spaghetti, "gelato"... MORE

When Government Cries Wolf

Regulation
David Henderson
Henderson's Law of Warnings: Trivial Warnings Drown Out Serious Warnings If the government were more judicious with its warnings and tried to focus on the high-probability dangers--and this is what governments do in many other countries--lives would be saved. Human... MORE

Free Markets to the Rescue

Regulation
David Henderson
One of my biggest disagreements with fellow libertarians is on the issue of optimism versus pessimism. I tend to be an optimist, while some fellow libertarians--I have in mind my friend Robert Higgs as an extreme example--tend to be pessimists.... MORE

John Allison's Nice Summary

Public Choice Theory
David Henderson
As a financial contributor to the Cato Institute, I get a bimonthly memorandum from the president and CEO of Cato, John A. Allison. In the latest one, he leads off with two paragraphs that sum up, beautifully succinctly, so much... MORE

Coase on a Plane, or, an Idea, Recycled

Microeconomics
Art Carden
I agree with co-blogger Bryan that most voters are rationally irrational. My sense is that there are also a lot of voters and people in positions of influence who know just enough economics to be dangerous. As Steve Horwitz and... MORE

The Flaw in Heyne, Boettke, and Prychitko

Economics of Health Care
David Henderson
In a post on Tuesday, "Find the Flaw," I asked readers to find and evaluate the implicit assumption in the following passage from an economics textbook: When physicians must be licensed and new drugs approved by the Food and Drug... MORE

Find the Flaw

Economics of Health Care
David Henderson
Here is a passage from one of my favorite economics textbooks: When physicians must be licensed and new drugs approved by the Food and Drug Administration (FDA) before they can be marketed, buyers are spared the cost of evaluating goods... MORE

Why Trailers Instead of Manufactured Homes?

Regulation
David Henderson
It's the regulations. In a comment on my post, "Tocqueville's Trailers," MingoV writes: Small manufactured houses make more sense than mobile homes. Here's why: 1. Almost no owner moves a mobile home, so the costs of frame/chassis, axles, wheels, hitch,... MORE

Open Borders in The Atlantic

Economic Philosophy
Bryan Caplan
The Atlantic profiles Vipul Naik, Michael Clemens, Michael Huemer, and other champions of free migration.  Highlights:What if there was a program that would cost nothing, improve the lives of millions of people from poorer nations, and double world GDP? At... MORE

Boston: Centralization vs. Friedrich Hayek and Jane Jacobs

Central Planning vs. Local Knowledge
David Henderson
The Massachusetts' governor's response to one murderer being at large was to shut down an entire large city--de facto, martial law. Various commenters have said that he "asked" people to stay in their homes. That might be literally true. But... MORE

Proposition 65: When Government Cries Wolf

Central Planning vs. Local Knowledge
David Henderson
There was some confusion a few days ago about whether certain kinds of licorice are legal in California. I had pointed out that an out-of-state firm was unwilling, because of Proposition 65, to ship its licorice to California. That does... MORE

Proposition 65 and the Red Licorice Police

Regulation
David Henderson
My wife is a big fan of red shoestring licorice. She tried to order some on-line from an out-of-state vendor. Here's the e-mail she got back: Please accept our sincerest apologies. Due to changes in the California Proposition 65 at... MORE

Legality of Credentialism Bleg

Labor Market
Bryan Caplan
I'm looking for sources about the legality of hiring on the basis of educational credentials.  If you've got any pointers for me, please share them in the comments.P.S. Evidence on what firms can safely do in practice is much more... MORE

Yglesias on Freedom in the 50 States

Economic Philosophy
David Henderson
The Mercatus Center, for which I have done a few studies, is about to release a study of the degree of freedom in the 50 states of the union. I'll probably have more to say once it's released, but enough... MORE

Rand Paul's Filibuster

Central Planning vs. Local Knowledge
David Henderson
Every once in a while, I depart from strictly economic education and information, the purpose of Econlog, to comment on important things that are happening in the political world. My latest article on antiwar.com discusses the Rand Paul filibuster. This... MORE

New York City's plan to ban large sugary drinks from restaurants, movie theaters and other establishments was invalidated by a judge on Monday, the day before the new law was to take effect. State Supreme Court Justice Milton Tingling in... MORE

Michael Barone's Mistaken Prediction

Regulation
David Henderson
We should be happy when "Ain't it Awful" Predictions Don't Come True Often, when I make the points I made in my recent post, "Why Am I So Cheerful?", people hand me their distress. That is, they argue back about... MORE

What's driving the high price of doctors: market inequality or government entry restrictions?  My co-bloggers' debate reminds me of a random encounter with some striking evidence: The Digest of Education Statistics' Table 294.If you peruse this table, you'll discover that... MORE

The Air Travel Revolution

Regulation
David Henderson
Derek Thompson's "How Airline Ticket Prices Fell 50% in 30 Years (and Why Nobody Noticed)" is a nice round-up of the facts about the effects of airline deregulation. People who know the story well--I guess Derek would call us "nobodies"--won't... MORE

Town Without Traffic Lights II

Regulation
Garett Jones
In 2010, Alex wrote:Here's a video of a small town in Britain that turned its traffic lights off.  Order ensued.It's 2013.  Here's a video of another small town in Britain, Poynton, that turned its traffic lights off in the heart... MORE

Krugman and a Critic on the Minimum Wage

Labor Market
David Henderson
President Obama has proposed an increase in the minimum wage from its current level of $7.25 an hour to $9.00 an hour. This is after the George W. Bush increase, between 2007 and 2009, from $5.15 an hour to $7.25... MORE

David's latest reply on illegal immigration is excellent, and I freely concede his two main points as I understand them.  Namely:1. A narrow segment of illegal workers would lose in the short-run from legalization:I had in mind a specific group... MORE

The Perks of Being Illegal

Labor Market
Bryan Caplan
David makes a very strong case for the strange-to-me view that employers actually prefer illegal workers.  He's especially compelling when he notes:[I]f you're an illegal worker earning less than the minimum, then when you become legal, your ability to credibly... MORE

Is Illegality A Benefit?

Labor Market
Bryan Caplan
One of the strangest claims I've heard is that employers prefer to hire illegal immigrants because they don't have to pay them minimum wage or follow other labor market regulations.  I can imagine this happening under special circumstances (e.g. everyone... MORE

A proposal by the Prince George's County Board of Education to copyright work created by staff and students for school could mean that a picture drawn by a first-grader, a lesson plan developed by a teacher or an app created... MORE

Taken together, the results imply that anti-opium efforts substantially increased the opiate-industry resources flowing to the Taliban. For each kilogram of opium removed from the market, the estimates imply that only one-sixth of a kilogram would have come from Taliban-heavy... MORE

The Feds' Suit of S&P

Finance: stocks, options, etc.
David Henderson
I found two pieces on the federal government's suit of S&P particularly interesting because both make important points I hadn't thought of. First, the Wall Street Journal's editorial page take, which is titled "Payback for a Downgrade?" It's dec line... MORE

Travis Vanderbilt Kalanick

Regulation
David Henderson
The idea worked. How could Mr. Kalanick tell? Four months after the launch in San Francisco, Uber was served with a "cease and desist" order from the California Public Utility Commission and the San Francisco Municipal Transportation Agency. "Given my... MORE

Alan S. Blinder is one of America's leading economists. One of the few economists who write really well, he is also a master storyteller. In "After the Music Stopped," Mr. Blinder, previously a vice chairman of the Federal Reserve Board... MORE

Billie Holiday, arguably the greatest jazz vocalist of all time, was also a heroin addict.  After serving her first prison term for narcotics possession, she endured further punishment at the hands of the nation's occupational licensing system.  From her autobiography,... MORE

Henderson on Rich-Hunt

Books: Reviews and Suggested Readings
David Henderson
In Rich-Hunt, philosopher Roger Donway tells the detailed story of how [Greg] Reyes ended up in this position and how little the prosecutor cared about truth, let alone justice. The result is a chilling page-turner. If you don't know much... MORE

Horwitz on Hoover's Economic Policies

Regulation
David Henderson
Many historians, most of the general public, and even many economists think of Herbert Hoover, the president who preceded Franklin D. Roosevelt, as a defender of laissez-faire economic policy. According to this view, Hoover's dogmatic commitment to small government led... MORE

In that order: 1.  U.S. and UK regulators are trying to find a workable way to shut down big international banks.  If they find a solution it would remove one of the the big barriers to ending Too Big To Fail.... MORE

Hummel on Moss on Limited Liability

Finance
David Henderson
San Jose State University economist Jeffrey Rogers Hummel sent the following capsule review of David A. Moss, When All Else Fails: Government as the Ultimate Risk Manager (Cambridge: Harvard University Press, 2000). Jeff writes: Limited liability remains a subject of... MORE

A Question of Educational Discrimination: Some Answers

Economics of Education
Bryan Caplan
Last week I posted the following final exam question:Some sociologists have argued that discrimination on the basis of educational credentials should be illegal.  What do the human capital and signaling models of education predict about the effect of such a... MORE

A Question of Educational Discrimination

Labor Market
Bryan Caplan
My favorite question from my latest Labor Economics final exam: Some sociologists have argued that discrimination on the basis of educational credentials should be illegal.  What do the human capital and signaling models of education predict about the effect of... MORE

Update on OTC Contraceptives

Economics of Health Care
David Henderson
In February, I wrote: Nevertheless, there is a way that the federal government now cuts access to contraceptives in a way that substantially raises the cost. Were the government to get rid of the regulation that does this, women's access... MORE

Postrel on Progress

Growth: Causal Factors
David Henderson
I wish I had been aware of Virginia Postrel's excellent piece on technological progress when I wrote my post yesterday on electricity. In it, she takes on the views of Jason Pontin, my former editor at the Red Herring, and... MORE

Betting: Automatic Weapons vs. Rental Cars

Economics of Crime
David Henderson
One thing my co-blogger Bryan and I agree on is that proposing a bet is a good way of making people fess up to whether they're really confident, especially about their extreme statements. Bryan might have said it differently than... MORE

The Economics of "Right to Work"

Labor Market
David Henderson
I was at a conference last weekend at which one of the participants, from Michigan, was excited about the Michigan legislature's passage of a "right to work" law. I started to share his excitement. On the other hand, some libertarian... MORE

Terror Profiling

Behavioral Economics and Rationality
Bryan Caplan
Two quick replies to Garett:1. If terrorists were as flexible as he suggests, airport security would be useless.  Terrorists would simply switch to one of the countless undefended targets: trains, sporting events, malls, etc.  Profiling doesn't have to be perfect... MORE

The False Advertising of the CFTC

Behavioral Economics and Rationality
Bryan Caplan
The U.S. Commodity Futures Trading Commission (CFTC) is suing one of my favorite websites and my primary source of news: Intrade.  The CFTC accuses Intrade of:[O]ffering commodity option contracts to U.S. customers for trading, as well as soliciting, accepting, and... MORE

Prosecutorial Persecution

Regulation
David Henderson
Broadcom co-founder Henry Samueli, a Silicon Valley legend, refused to testify for the prosecution and had strong evidence that he could offer Ruehle. But he, too, had been bludgeoned into pleading guilty to a minor felony and so refused to... MORE

Free Market Airport Security

Cost-benefit Analysis
Bryan Caplan
I think Garett's basically wrong about airport security on the free market.  Yes, both markets and politics respond to risk misperceptions.  But the political response is much more likely to ignore cost and convenience, to impose whatever sounds good.  The... MORE

The Mouse's Power: Popularity or Cash?

Public Choice Theory
Garett Jones
Alex notes that once again, the Mouse appears to have won a copyright battle (he won a big one back in 1998).  So, is this evidence that most political outcomes are driven by cash?  Is this evidence that, contrary to... MORE

Some Unpleasant Immigration Arithmetic

Economic Philosophy
Bryan Caplan
Let C=total number of immigrants - legal and illegal - who annually enter the U.S. under existing laws.Let F=the total number of immigrants who would annually enter the U.S. under open borders.Under perfectly open borders, C=F.  Under perfectly closed borders,... MORE

Coming ObamaCare Challenges

Economics of Health Care
David Henderson
John Goodman had an excellent post yesterday discussing the coming challenges in implementing the Affordable Care Act. One of his major points is that the Affordable Care Act makes health insurance less affordable: Adding to the problem is that the... MORE

FDA Breaks Its Own Regulations

Regulation
David Henderson
Most people believe that the FDA needs to ensure that the medicines we Americans consume have been proven to be safe and effective long before we ever get a chance to use them. Yet the Makena story gives us a... MORE

TSA: A Slight Glimmer of Hope

Regulation
David Henderson
And please, don't tell me in the comments how I'm making a big deal about this: I'm making a small deal. I report bad things; I also like to report good things, even slightly good things. I fly out of... MORE

UPDATE BELOW: When I have approximately 4 hours to research and write a Wall Street Journal article each year on the Nobel prize winners in economics, by necessity, I have to pick and choose what to emphasize. Another constraint is... MORE

Designing Men

Regulation
David Henderson
That's the title I gave my piece in today's Wall Street Journal on the Nobel prize winners in economics. But, consistent with my experience as author of over 200 op/eds, the editors didn't use my title. The title they used... MORE

At least at some Red Lobsters:The owner of Olive Garden and Red Lobster restaurants is putting more workers on part-time status in a test aimed at limiting the impact of looming health coverage requirements.Mickey Kaus's Monday prediction becomes Tuesday's news.  No surprise here,... MORE

Henderson on Landsburg's "Armchair Economist"

Books: Reviews and Suggested Readings
David Henderson
Steven Landsburg's The Armchair Economist is one of the best economics books ever written. It is insightful, disarmingly simple and yet sophisticated and, at the same time, provocative, passionate, and witty. Were I to detail the many things I like... MORE

Milton Friedman on Segregation

Labor Market
David Henderson
This morning, co-blogger Bryan Caplan wrote: Consider the period between 1930 and 1964. What priority did libertarians give to the abolition of Jim Crow laws? How many even considered the issue worth specifically addressing? Towards the end of that time... MORE

How Economists Helped End the Draft

Labor Market
David Henderson
This is the video of the talk I gave at Middle Tennessee State University Wednesday night. Thanks to Mike Hammock for doing a great job of recording and for inviting me. Mike has given me permission to post this video.... MORE

Biden Calls for Free Market in Health Care

Economics of Health Care
David Henderson
At least for women. He didn't address health care for men. In his acceptance speech for the vice-presidential nomination last night, Joe Biden, surprisingly, called for a free market in health care for women. He stated, to much applause: we... MORE

The Federal Reserve as Central Planner

Regulation
David Henderson
John H. Cochrane of the University of Chicago has an excellent op/ed in today's Wall Street Journal, "The Federal Reserve: From Central Bank to Central Planner." [If you are blocked from the Journal, you can go to John's site and... MORE

Eubulides, Wilkinson, and Discrimination

Economic Philosophy
Bryan Caplan
Eubulides of Miletus is best-known for the Sorites paradox:The paradox goes as follows: consider a heap of sand from which grains are individually removed. One might construct the argument, using premises, as follows: 1,000,000 grains of sand is a heap... MORE

The Auto Boom: Healthier Economy or CAFE?

Regulation
David Henderson
In a post yesterday, Mark J. Perry writes: Based on new vehicle sales during the first 16 selling days of this month, J.D. Power and Associates is predicting sales during the full month of August to increase by 20% over... MORE

Jenkins on CAFE and GM

Regulation
David Henderson
Holman Jenkins has hit a home run with his analysis in today's Wall Street Journal of the CAFE (Corporate Average Fuel Economy) mess. It's titled "GM Faces Its Own Regulatory Cliff." I've written about this here, here, here, and here.... MORE

In a recent e-mail alerting me to an important 2011 piece by Alan Greenspan that I somehow had missed ("Activism," International Finance 14:1, 2011: pp. 165-182), Jeff Hummel writes the following: One of the unusual features of the current recession... MORE

Arnold's Hypotheticals

Behavioral Economics and Rationality
Bryan Caplan
I agree with Arnold's analysis of all three of his hypotheticals.  But I doubt Capital One's sales pitch was analogous to:I tell you that a tree is about to fall on you, but if you give me all the money... MORE

The Relevance of the Religious Hypothetical

Behavioral Economics and Rationality
Bryan Caplan
Consider two contrasting arguments against a policy rationale:1. Your rationale could conceivably be abused for bad ends.2. Your rationale supports many policies you yourself oppose.Arnold seems to think that my religious objection to his consumer protection views (here, here, and... MORE

California: Land of the Free

Regulation
David Henderson
I went on line a few days ago to order some vitamins. One of the items I ordered was Green Tea Complex. When I tried to place the order, I got a message in red saying that I couldn't order... MORE

Up From Poverty

Labor Market
David Henderson
"Up From Poverty" is the title of my review [scroll down to page 12] of Walter Williams's book, Up From the Projects: an Autobiography. Why do I review an autobiography in a publication titled Regulation? Here's why: When economists want... MORE

Joffe on LIBOR

Finance
David Henderson
As many readers probably know, there has been a huge scandal recently about the setting of the London InterBank Offer Rate (LIBOR). This is the rate used around the world on literally trillions of dollars in loans, including many mortgages.... MORE

This is from a talk I gave on my book, The Joy of Freedom: An Economist's Odyssey, less than 3 months after 9/11. HT to Jim Cardoza.... MORE

TSA: Thieves Sacking Americans

Regulation
David Henderson
Read David Friedman's latest blog post and the comments on it for his story about TSA. it turns out that there really is a noticeable difference between government workers in protected jobs and private firms hired to do the government's... MORE

In the comments section on my recent post on unpaid internships, there was a lot of good discussion and the argument did advance somewhat. To his credit, Derek Thompson engaged in the debate in a positive way as did many... MORE

The Good and the Bad

Fiscal Policy
David Henderson
The Good Scott Sumner has an excellent post about Krugman and about fiscal policy in Britain and Sweden. To refute the idea that the Swedish economy is doing well (Krugman admits it's doing well) even though the Swedish government has... MORE

Does Facebook Restrict Liberty?

Regulation
David Henderson
In a comment at the Bleeding Heart Libertarians (BHL) site, "figleaf" wrote: Consider further that the privately owned Facebook restricts user liberty more than any fully-owned public university website. Therefore it's not as simple as private-sector = more liberty, public... MORE

Morning Roundup

Monetary Policy
David Henderson
There are too many interesting things to write about at length this morning and so I'll just say a little about three. EU Dispersion: Check out this graphic of hypothetical monetary unions to see how incredibly diverse are the members... MORE

Small businesses care almost twice as much about licensing regulations as they do about tax rates when rating the business-friendliness of their state or local government. The power to tax is the power to destroy. That seems obvious. What may... MORE

Is Cybersecurity a Public Good?

Public Goods
David Henderson
The usual argument for government intervention, aside from the paternalist and the distribution arguments, is some kind of "market failure," either in the area of public goods or in the area of externalities. When economists want to make a case... MORE

Mankiw's Missing Solution

Business Economics
David Henderson
I'm using some of the chapters of Greg Mankiw's economics textbook, Essentials of Economics, in an Energy Economics class I'm teaching. Most of the students have never taken an economics course or took one more than 7 years ago. I've... MORE

The Bottom One Percent

Income Distribution
David Henderson
I gave a short talk yesterday at a mixer of the Monterey County Libertarian Party, Libertarians for Peace, and Seaside Taxpayers' Association. I always try to come up wth something a little new that I haven't said before, so I... MORE

Robin Hanson reports on a popular article based on a paper by law and economics professors Eric Posner and Glen Weyl in which they advocate a kind of Food and Drug Administration for financial instruments. The paper is titled "An... MORE

Is the Pool of Liberty Drying Up?

Economic History
David Henderson
This is the title of a blog post by Ted Levy. I'll save you the suspense: his answer is yes. In his post, he takes on the views of David Boaz and Brink Lindsey that liberty is increasing. Levy gives... MORE

On April 6, 2010, an AT&T Inc. manager pondered a drop in volume in the company's government-subsidized service for hearing-impaired callers. Reassuring a colleague in an email, the manager said she was "not ready to throw up flags" because "it... MORE

Licensing and the Return to Education

Economics of Education
Bryan Caplan
Private sector unions have almost disappeared, but occupational licensing is all the rage.  Almost 30% of all workers need a license to do their jobs - and licensed workers earn roughly a 15% wage premium.Occupational credentials are one common licensing... MORE

In recent years I've noticed more and more people misusing the terms "begging the question" or "begs the question." They use it as if "begging" and "begs" are synonyms for "raising" and "raises." But "begging the question" has a specific... MORE

Peter Thiel on Regulation and Progress

Regulation
David Henderson
Peter Thiel gave an interesting talk at the International Students for Liberty Conference earlier this month. In it, he claimed that few sectors other than the relatively unregulated IT sector have had substantial progress decade by decade. He mentioned, for... MORE

How Legal Is Free-Range Parenting?

Family Economics
Bryan Caplan
Law professor and free-range dad David Pimentel carefully reviews the legality of free-range parenting.  Just one case:In State v. Hughes, a father was convicted in a bench trial for leaving his 5-year-old daughter in the air-conditioned cab of his pickup... MORE

How to Cut the Cost of Contraceptives by Regulating Less

Economics of Health Care
David Henderson
In his "compromise" with Catholic critics, President Obama has said that various church-affiliated employers don't have to provide a contraception benefit in their insurance plans. However, insurance plans will have to provide such a benefit separately and must not charge... MORE

Break the Buck!

Finance
David Henderson
Regulators are completing a controversial proposal to shore up the $2.7 trillion money-market fund industry, more than three years after the collapse of Lehman Brothers Holdings Inc. sparked a panic that threatened the savings of millions of investors and forced... MORE

Alex Tabarrok on Innovation

Energy, Environment, Resources
Arnold Kling
At The Atlantic. The U.S. Department of Energy, for example, estimates that small and environmentally friendly hydro-electric projects could generate at least 30,000 MWs of power annually. That's equivalent to the generating capacity of about 30 nuclear power plants. Moreover,... MORE

Antitrust Kills

Cost-benefit Analysis
Bryan Caplan
Since 2007, Bill Gates has given away $28B, 48% of his net worth.  Frugal Dad estimates that he's saved almost 6 million lives.  I haven't double-checked his sources, but it's a plausible estimate.Back in the nineties, Bill Gates was experiencing... MORE

A SOPA Analogy

Information Goods, Intellectual Property
David Henderson
I've been trying to understand what the Stop Online Piracy Act (SOPA) would or wouldn't do. Would it simply protect intellectual property? Then I'm somewhat sympathetic. Why just "somewhat?" See my previous post and the links therein. Or would it... MORE

The aptly-named Institute for Justice is challenging another democratic achievement: Regulations requiring useless expenditures.May the government force entrepreneurs to do useless things, like build extra rooms in their stores that they do not need and will never use, just to... MORE

The Benefits of Wealth

Regulation
David Henderson
Tyler Cowen has a thoughtful answer to the question, "Does wealth equal power?" (Of course, the obvious answer is "Yes, it equals power over material things but no, it doesn't equal power over other things. It might give one power... MORE

Let's Deregulate all the Lawyers

Labor Market
David Henderson
The authors carefully build their case, first telling of the various restrictions on who can be a lawyer. All but a few state governments, they note, require prospective lawyers to have graduated from a law school that the American Bar... MORE

The Mind of Robin Hanson: The Inside Story

Behavioral Economics and Rationality
Bryan Caplan
People occasionally accuse my colleague Robin Hanson of extreme dogmatism.  But they don't know him like I do.  When I first met Robin Hanson, he earnestly believed that voters were rational and selfish.  He rejected any model that violated these... MORE

My "Occupy Monterey" Talk, Part I

Regulation
David Henderson
I finally have found time to tell the story of my "Occupy Monterey" talk last Saturday, titled "Crony Capitalism versus the Free Market." My expectations for the success of my talk, on a scale of 10, were 3 to 6... MORE

Some Motives Revealed

Economics of Health Care
David Henderson
In my chapter on health care in my The Joy of Freedom: An Economist's Odyssey, I had an extensive discussion of government regulations that drive up the price of insurance and . At the end of that discussion I wrote:... MORE

Greenspan on Dodd-Frank: Start Over

Finance
David Henderson
As I noted yesterday, in his Friday talk at the Hoover Institution, Alan Greenspan advocated two policies. The second is to scrap the Dodd-Frank financial regulation law and start over. The law, said Greenspan, "is unimplementable." He went on to... MORE

Gun Control: Things I Didn't Know

Regulation
David Henderson
The Ku Klux Klan, Ronald Reagan, and, for most of its history, the NRA all worked to control guns. The Founding Fathers? They required gun ownership--and regulated it. And no group has more fiercely advocated the right to bear loaded... MORE

Will Only the Criminals Have Tans?

Regulation
David Henderson
My friend, Ted Levy, MD, sent me the following. It was so good that I couldn't figure out a way to cut it down or choose only a few paragraphs. So here's the whole thing. In the 19th century, one... MORE

David Sedaris on TSA

Regulation
David Henderson
As regular readers of my posts know (see here, here, here, and here, for example), I think the TSA is one of the most anti-liberty, intrusive government organizations in America. So I follow the culture to see what people are... MORE

How Government Intervention Helped Start the 1967 Detroit Riot Here's the [Kerner Commission] report's first paragraph on Detroit: "On Saturday evening, July 22, the Detroit Police Department raided five 'blind pigs.' The blind pigs had their origin in prohibition days,... MORE

Reason TV has up two parts of an interview that Nick Gillespie did recently with interviewee Ken Burns. Burns has a new 3-part PBS series out on Prohibition, which my economist/historian friend, Jeff Hummel, tells me is excellent. These interviews... MORE

Hooper on Personalized Drugs vs. the FDA

Economics of Health Care
David Henderson
My sometimes co-author Charley Hooper has an interesting post on how FDA regulation will hobble the shift to personalized drugs. Two key paragraphs: If each drug takes $1 billion to reach the market and 10 million people use it over... MORE

Most of the Devils Are Here

Finance
David Henderson
How did Fannie Mae get such political clout? This is one of the best-told stories in the book. McLean and Nocera tell how a well-connected Democrat named Jim Johnson made Fannie Mae almost invulnerable politically. Johnson, who had been Vice... MORE

Is the United States a Police State?

Regulation
David Henderson
In an article today, Lew Rockwell answers yes. See what he has to say. I'm organizing a session on this at the Association for Private Enterprise Education (APEE) meetings in Las Vegas in April and I've asked people who I... MORE

Basel III's Deadly Cocktail

Finance
David Henderson
The global sovereign debt crises, and the Greek fiscal crisis, are bad enough on their own. Basel III is just making things worse. If I may summarize past comments, under the purview of Basel III banks in the United States... MORE

The Decline in U.S. Economic Freedom: The Movie

Politics and Economics
David Henderson
Matt Mitchell, a sharp young economist at the Mercatus Center, has come up with a 14 second video that shows the rise and fall of economic freedom over the last 4 decades. Note that the decline was precipitous under Bush... MORE

Ron Paul and Austin Frakt Agree

Economics of Health Care
David Henderson
Background: There's been a lot of discussion on the blogosphere about Ron Paul's answer to a question about health care from Wolf Blitzer: was it a softball, how should Ron Paul have answered, etc. (For a post that links to... MORE

They [the Department of Transportation and the Environmental Protection Agency] will swoop in with turgid - and then threatening - demands that you sell no cars to the public (no matter how much the public may want those cars) until... MORE

AT&T/T-Mobile Merger is Pro-Consumer

Business Economics
David Henderson
The share prices of AT&T and T-Mobile parent Deutsche Telekom AG fell sharply, while shares of No. 3 cellphone company Sprint Nextel Corp., seen as the biggest loser if the proposed merger goes through, were up nearly 6%. This is... MORE

Guitar Felons

Business Economics
David Henderson
Federal agents swooped in on Gibson Guitar Wednesday, raiding factories and offices in Memphis and Nashville, seizing several pallets of wood, electronic files and guitars. The Feds are keeping mum, but in a statement yesterday Gibson's chairman and CEO, Henry... MORE

Response to Thomas Boyle

Regulation
David Henderson
Commenter Thomas Boyle points out the following counterexample to Steve Horwitz's claim that the price of almost everything, in labor hours, has fallen: In 1947, the airplane [the Piper Cub] sold for $2,400, or about $25,000 adjusted for inflation to... MORE

A Day That Should Live in Infamy

Regulation
David Henderson
Today is the 40th anniversary of President Nixon's announcement of price controls on the American economy. He imposed an immediate freeze on all wages and prices that lasted for 90 days. Then he went through the various phases of control,... MORE

Hooper and Henderson on Out-of-Control FDA

Economics of Health Care
David Henderson
Then there's the issue of off-label promotion. A drug's "label" is the drug's FDA-approved prescribing information--those complicated package inserts that we've all seen. Any approved use is on-label, while any use not listed on the insert is considered off-label, even... MORE

The Problem with Greece

Growth: Causal Factors
David Henderson
Summed up in a nutshell I'm giving a presentation at the Mont Pelerin Society meetings in Istanbul in October and I'm staying over a few days to see the country and visit former students. The Turkish students I've taught have... MORE

TSA Wins Another Round

Regulation
David Henderson
I've posted before on the TSA (here, here, here, here, and here.) I had some hope for a little assertion of federalism from Texas. The Texas legislature, after the U.S. Attorney John E. Murphy threatened that the TSA would ban... MORE

Cannon's Law

Regulation
Arnold Kling
This story got picked up by several outlets. Soon, "mystery shoppers" may come to medicine. And doctors are outraged. The Department of Health and Human Services proposes using them to figure out why so many new patients are having problems... MORE

Obama's Criminalization of Business

Regulation
David Henderson
I'm visiting a friend who does due diligence for his private equity fund's investments in various U.S. companies. As a result, he talks to businessmen every week. For many months now, he has found businessmen complaining about the Obama administration's... MORE

Life in the USSA

Regulation
David Henderson
Steve Horwitz has written an excellent article in which he claims, credibly in my opinion, that the United States is now a police state. Read the whole thing. It isn't long. And while you're at it, read my article from... MORE

My review of Jeff Friedman's edited book, What Caused the Financial Crisis?, was published in Policy Review last week. Some excerpts from my review: The most important chapter is the first. This 66-page segment is editor Jeff Friedman's overview of... MORE

Where is Fred Kahn When We Need Him Again?

Regulation
David Henderson
Follow us on banana. French anchors on television can't mention specific social networking sites unless a story is about them because of a 1992 law, highlighting the difficulty of legislating in the Internet age. The host of a news or... MORE

Hanson on Regulatory Bias

Economic Philosophy
Bryan Caplan
Don't miss this great post by the great Robin Hanson.  The heart of it:[R]egulations hold some things to higher standards than others, even when the relevant consequences seem similar. For example we seem to prefer: Individuals over firmsNon-money over money... MORE

Who is "We"?

Regulation
David Henderson
In a comment on my most-recent post, Arnold Kling seems to set up a straw man. I had made the point that if you looked at Osama bin Laden's goals, you would conclude that he achieved a good portion of... MORE

How Osama Won

Regulation
David Henderson
I just finished reading the best piece by Ezra Klein that I've ever read by him. Klein argues that Osama bin Laden achieved many of his goals. One of bin Laden's main goals, claims Klein, was to bankrupt the U.S.... MORE

Price Floors on Trial

Regulation
Bryan Caplan
The Institute for Justice is suing to overturn Nashville's sedan and limo price floors:Can government force transportation businesses to charge a minimum price to protect politically connected companies from competition? That is the question the Institute for Justice (IJ) and... MORE

Minimum Wage: The Missing Explanation

Labor Market
David Henderson
LET THEM WORK In essence, we have seen the rise of a large class of "zero marginal product workers," to coin a term. Their productivity may not be literally zero, but it is lower than the cost of training, employing,... MORE

Tort Reform, Grassroots Style

Regulation
David Henderson
Citing America's Declaration of Independence and the Maine Constitution, the ordinance proposed that "Sedgwick citizens possess the right to produce, process, sell, purchase, and consume local foods of their choosing." These would include raw milk and other dairy products and... MORE

Maymin on Financial Regulation

Regulation
David Henderson
One might think that the ideal regulations would be those that find the right numbers for these portfolios, not too small and not too large--the Goldilocks of risk. Surprisingly enough, it is not possible. It turns out that no algorithm... MORE

Jack Calfee, RIP

Regulation
David Henderson
I hadn't known until reading Arnold's post this morning and then the Wall Street Journal article that he referenced that Jack Calfee, a health economist at AEI, had died. I didn't know Jack well--we talked on the phone only about... MORE

Murphy on Airline Security

Central Planning vs. Local Knowledge
David Henderson
Are you tired of having naked pictures taken of you and/or being groped at the airport in this "land of the free," but still worried about a terrorist hijacking of the airplane you're on? Is there a way out of... MORE

Win Jason Furman's Money

Labor Market
Arnold Kling
Or something like that. Via Greg Mankiw, I learn that the Hamilton Project has launched a prize competition to identify new and innovative thinking about policies to create jobs in the United States and enhance productivity. My suggestion would be... MORE

John Green on Freedom

Regulation
David Henderson
It has become so standard, when a family has had a tragedy, for a family member to advocate some further restriction on freedom even if that restriction would create more tragedies than it would prevent. It's kind of understandable. When... MORE

Hazlett on Kahn

Regulation
David Henderson
My friend and fellow UCLA alum, Tom Hazlett, has a beautiful appreciation of Fred Kahn in the Financial Times (HT to Don Boudreaux). Tom is one of the best writers in economics. I learned so much from this relatively short... MORE

Further Advice for a Future Regulator

Cost-benefit Analysis
David Henderson
Tyler Cowen posted a while ago about some advice for a future regulator. I thought the best comment adding advice was this one: Do your best to fight for freedom by attempting to combat any proposed new regulations and undermine... MORE

Bank Regulation Boosts Payday Lending

Finance
David Henderson
Payday lenders like Advance America are pushing hard to lure away customers from traditional banks. The effort is getting a boost from the industry's loan crunch, especially for borrowers with blemished credit, and toughened regulation of fees and interest rates... MORE

Alfred Kahn, RIP

Regulation
David Henderson
Alfred Kahn, the Cornell University economist who, as head of the Civil Aeronautics Board, got airline deregulation moving, died yesterday. I won't try to tell you what you can get from the various news stories today. Instead, I'll tell you... MORE

Rena Henderson on the FDA

Regulation
David Henderson
My wife, Rena Henderson, is a cancer survivor who follows the FDA more than most. A local lawyer, Neil Shapiro, has a regular column in our local newspaper, the Monterey Herald, and it's usually quite good. However, in his most... MORE

Roger Cohen on TSA

Regulation
David Henderson
New York Times columnist Roger Cohen has an excellent column pointing out the real issue with TSA, naked pictures, and groping. In a column aptly titled, "The Real Threat to America," Cohen writes: I don't doubt the patriotism of the... MORE

David Friedman on TSA

Regulation
David Henderson
David Friedman asks how we can trust TSA when it has shown itself untrustworthy. He gives two examples: To take the earliest and most striking example, the TSA used to, for all I know still does, interpret the rule against... MORE

TSA: Totally Subjugating Americans

Regulation
David Henderson
I've been working on what TSA really stands for and the title above is the one I've narrowed in on. I'd be interested in hearing yours. A few developments. First, TSA has backed down on groping or taking nude pictures... MORE

TSA's Phony Choice

Politics and Economics
David Henderson
This is from an article in yesterday's Wall Street Journal. The "he" referred to is John Pistole. [Ayn Rand was accused of overdoing it when she used less-obvious names for villains.] "If you have two planes, one where people are... MORE

Abolish the TSA

Central Planning vs. Local Knowledge
David Henderson
Art Carden has an excellent article on Forbes.com in which he advocates abolishing the TSA. I give a segment on this in my econ class when I discuss, at length, Hayek's "The Use of Knowledge in Society." How does Hayek's... MORE

Drug War Debate Bleg

Regulation
Bryan Caplan
The GMU Econ Society wants me to debate the drug war in the spring, but I can't think of any decent debating partners.  The ideal opponent is a smart, civil, high-status prohibitionist who lives in the DC area.Your suggestions?... MORE

Big Business and Regulatory Double Standards

Economic Philosophy
Bryan Caplan
Robin Hanson points out yet another way that, contra left-libertarians, big business faces exceptionally and unreasonably harsh regulation:Many of our regulations apply to big firms more strongly than small firms, and and even less to homes. For example, many regulations... MORE

The Attack on Civilization

Growth: Consequences
David Henderson
Somewhere along the way, during the last 50 years, the critique of capitalism changed from condemning its failure to spread the wealth to condemning the very opposite. Suddenly the great sin of capitalism was that it was producing too much,... MORE

Martin Wolf on Freedom of the Press

Regulation
David Henderson
[Libertarianism] is hopeless intellectually, because the values people hold are many and divergent and some of these values do not merely allow, but demand, government protection of weak, vulnerable or unfortunate people. Moreover, such values are not "wrong". The reality... MORE

The Decline in Civil Liberties

Regulation
David Henderson
On a flight from Chicago to Washington, D.C., in 1981, I sat beside a U.S. foreign service officer who had just finished a stint in Moscow. He told me that although he had enjoyed the job, he needed to get... MORE

Jerry Jordan on Regime Uncertainty

Fiscal Policy
David Henderson
In this five-minute interview with Karen Gibbs, Jerry Jordan lays out nicely the "regime uncertainty" (Bob Higgs's term) that we face. That is, business people, and the rest of us, for that matter, don't know what future tax rates or... MORE

How FDA Regulation Stifles Drug Development

Regulation
David Henderson
In the current issue of Regulation magazine, I have a review of two books, Overdose, by Richard Epstein, and Leviathan's Drug Problem, by John R. Graham. Both are excellent. Although Epstein's book came out in 2006, it didn't make much... MORE

How Don Boudreaux Got Hooked on Economics

Economic Education
David Henderson
In a previous post, I praised Don Boudreaux of Cafe Hayek for spreading economic wisdom to people in letters to the editor. This is the story Don told me about how he got hooked on economics. I tell this story... MORE

Government as Deus Ex Machina

Regulation
David Henderson
The above title should have been the title of my previous post. The title I gave it, "Mark Thoma Doesn't Get It," was unnecessarily provocative, as one of my co-bloggers has pointed out. I know the myth of male power,... MORE

Mark Thoma Doesn't Get It

Regulation
David Henderson
Government as Deux Ex Machina Almost all economists recognize that there are some market failures that must be corrected by government intervention, the disagreement is over their prevalence. Some economists see widespread and costly market failures, and that government can... MORE

That's not the title of a piece in today's San Francisco Chronicle by my friend and Hoover colleague, Joe McNamara. But it could be. One excerpt: Who would buy pot on dangerous streets if they could get it at regulated... MORE

Exacerbating Problems Always

Regulation
David Henderson
First, the Environmental Protection Agency can relax restrictions on the amount of oil in discharged water, currently limited to 15 parts per million. In normal times, this rule sensibly controls the amount of pollution that can be added to relatively... MORE

Russ Roberts on Hayek

Monetary Policy
David Henderson
Russ Roberts has a nice op/ed on Hayek's main ideas in today's Wall Street Journal. He highlights four contributions of Hayek. I agree with all four, but he gave a poor example for one of them. The four are: 1.... MORE

Rule of Law, 1, Obama 0

Regulation
David Henderson
I've read a lot of judges' decisions, but I've rarely read any that are so blunt as the one issued by Martin Feldman today, a decision that overturns the Obama administration's moratorium on offshore oil drilling. Some excerpts: Much to... MORE

Joe Barton is Wrong

Politics and Economics
David Henderson
Yesterday, Republican leaders John Boehner, Eric Cantor and Mike Pence issued a statement castigating their fellow Republican Congressman Joe Barton. Barton had apologized to BP's CEO, Tony Hayward, for the shoddy treatment he received from Congressmen of both parties. He... MORE

Ludwig von Mises on the Drug War

Regulation
David Henderson
I'm at a weekend conference at which we're discussing various works by economists and philosophers. One of the readings is "The Foundations of Liberal Policy," a chapter in Ludwig von Mises's book, Liberalism: The Classical Tradition, published in 1927. Of... MORE

Better Regulation Fails To Strengthen Banks

Finance: stocks, options, etc.
Arnold Kling
That is the conclusion of Asli Demirgüç-Kunt and Enrica Detragiache, two economists with the International Monetary Fund. All in all, we do not find support for the hypothesis that better compliance with BCPs [Basel Core Principles] results in sounder banks... MORE

The Decline of Freedom

Regulation
David Henderson
In the January 23, 2010, Los Angeles Times crossword puzzle, one of the clues was "Sassy reply to criticism." The answer: "It's a free country." Why do I find this so striking? For two reasons. First, when I grew up... MORE

Cognitive Dissonance on Vehicle Safety

Regulation
David Henderson
In this morning's Monterey Herald are two articles from the Associated Press, the first co-authored by Ken Thomas and Natasha Metzler and the second co-authored by Ken Thomas and Natasha Metzler. First article headline: Roadway deaths fall to lowest level... MORE

Too Small to Succeed?

Finance
David Henderson
Indeed, one of the major contributors to bank failures during the Great Depression was the National Banking Act of 1864. That law, according to monetary historian Jeff Hummel, an economist at San Jose State University, banned any branching (interstate or... MORE

The Economics of the Microsoft Case

Regulation
David Henderson
I don't know when it happened, but my review of Page's and Lopatka's excellent book on the Microsoft antitrust case is on-line. It appeared in the Fall issue of Regulation. It's both here and here. My two favorite paragraphs from... MORE

The Economics of Illegal Drugs

Taxation
David Henderson
WSJ article gets a lot right and a little wrong. A recent article by David Luhnow in the Wall Street Journal, "Saving Mexico," contains a lot of good economic analysis of the market for illegal drugs, as well as a... MORE

Deborah Spar's The Baby Business is, by far, the best overview of the cutting-edge technology and sociology of having babies.  If you want to learn about in vitro fertilization, surrogacy, cloning, and international adoption, Spar's book is a one-stop shop. ... MORE

FP2P Quip of the Day

Regulation
Bryan Caplan
From Arnold and Nick: "In many poorly governed countries, ordinary businesses are as tenuous as drug-dealing in the United States."... MORE

Calomiris on the Financial Crisis

Finance
David Henderson
I posted last month on one part of Russ Roberts' interview with Charles Calomiris. Some of the commenters highly recommended the whole podcast and I agree. I've listened to it twice all the way through and taken notes. Calomiris often... MORE

A Glimmer of Hope on Freedom

Regulation
David Henderson
In some ways, Canada has much less freedom of speech than we have in the United States. Specifically, someone can be fined, told to apologize, and prohibited from speaking on the subject again if he engages in certain kinds of... MORE

FDA May Decide to Raise Transactions Costs

Regulation
David Henderson
That's not the headline, of course. The headline in the New York Times is, "F.D.A. Says It May Ban Alcoholic Drinks With Caffeine." When I read it, I thought, "Oh, no. The FDA is about to ban rum and coke."... MORE

Maine's Pelosi/Baucus Care

Economics of Health Care
David Henderson
An excellent news story in today's New York Times highlights the problems with government regulation of health insurance in Maine, problems that, the reporter notes, would likely occur if the U.S. Senate's and the U.S. House of Representatives' versions of... MORE

Stiglitz and Orszags on Fannie Mae

Finance
David Henderson
The paper concludes that the probability of default by the GSEs is extremely small. Given this, the expected monetary costs of exposure to GSE insolvency are relatively small -- even given very large levels of outstanding GSE debt and even... MORE

A Child Understands the Fall of the Wall

Regulation
David Henderson
As Bryan has mentioned, Monday, November 9 will be the 20th anniversary of the fall of the Berlin Wall. In Chapter 3 of my book, The Joy of Freedom: An Economist's Odyssey, I tell that story and integrate it with... MORE

The Broward Sherriff's Office is engaging in entrapment operations to catch unlicensed contractors. On this tape, at about the minus 1:45 point, Detective Daniel Belyeu explains that right now many people are desperate for work. His solution? Make them more... MORE

Law and Order's Economics

Economics of Health Care
David Henderson
My student, Mike Williams, sent me the following last night: I don't know if you watch Law and Order Special Victims Unit but they had a rather frustrating take on the pharmacutical companies tonight. In the episode one of their... MORE

Economies of Scale in Compliance

Regulation
David Henderson
This morning, after a highly-productive Liberty Fund seminar in Santa Fe, I went over to Pasquale's for breakfast. I sat with a woman who runs a Mexican restaurant in a small town in Colorado. We talked about various things, including... MORE

Consumer Warning on Drugs

Regulation
David Henderson
An Indiana woman was recently charged with a crime for buying cold medicine. It's due to a bill signed by that great believer in freedom, George W. Bush, in 2006. Many state governments, including Indiana's, followed suit with their own... MORE

Unintended Consequences of Regulation

Regulation
David Henderson
From yesterday's Wall Street Journal, two good old-style news stories on the consequences of regulation. To Outfox the Chicken Tax, Ford Strips Its Own Vans BALTIMORE -- Several times a month, Transit Connect vans from a Ford Motor Co. factory... MORE

The Feds' Attack on Freedom of Speech

Regulation
David Henderson
Not the Fed, as in Bernanke, but the Feds, as in the federal government. Here are excerpts from an AP news story that just came in: The government is investigating a major insurance company for allegedly trying to scare seniors... MORE

Tyler's complex pluralistic take on local regulation perplexes Matt Yglesias:[W]hy on earth isn't the libertarian take on this that we should permit high density construction and let the market decide what happens? The answer to Matt's question is surprisingly simple. ... MORE

One More Step toward Fascism

Regulation
David Henderson
The Wall Street Journal reports the following today: Policies that set the pay for tens of thousands of bank employees nationwide would require approval from the Federal Reserve as part of a far-reaching proposal to rein in risk-taking at financial... MORE

Now that my baby situation is under control, I'm ready to respond to Matt Yglesias.  Last week, he wrote, "Bryan Caplan specifically cites America's large houses and ample parking spaces as the benefits of our free market approach when they... MORE

Kennedy and Airline Deregulation

Regulation
David Henderson
My Hoover colleague, Thomas G. Moore, has a letter on his office wall from Senator Kennedy thanking him for his contributions to transportation deregulation. As many bloggers have noted (here and here), the late Senator Kennedy had a large role... MORE

Madrick's Case for Big Government

Regulation
David Henderson
In the latest issue of Regulation, my review [.pdf] of Jeff Madrick's The Case for Big Government appears. One of my favorite grafs: If economic freedom works, he argues, our economy should be doing very well because we have had... MORE

Henry Waxman Wants Less Regulation?

Regulation
David Henderson
To save money for consumers, Waxman is willing to allow certain drugs, called biologic drugs, to enter the market without clinical testing that proves their efficacy. He realizes that requiring clinical testing for efficacy will slow things down and needlessly... MORE

Not From the Onion

Regulation
David Henderson
FTC Takes First Step in Regulating Internet Alarming Development on Internet Catches Government's Attention What some fail to realize, though, is that such reviews can be tainted: Many bloggers have accepted perks such as free laptops, trips to Europe, $500... MORE

The New York Times today carries a story about how the Federal Reserve Board is making decisions about who gets loans and who doesn't. The reporter, Edmund Andrews, writes: But the financial crisis has drastically changed the role of the... MORE

The Bizarre World of Regulation

Regulation
David Henderson
Today's Wall Street Journal carries an article that highlights how strange regulation can be. Before reading, recall that one of the major alleged goals of regulation of cigarettes was to handle the problem of second-hand smoke. The idea was that... MORE

Fuel Economy and Relative Prices

Regulation
David Henderson
The essence of price theory is that relative prices affect allocation and that various shifts in supply and demand, mandated or otherwise, affect relative prices. On Wednesday, I posted on the short-term auto boom that Obama's proposed fuel-economy standards, if... MORE

Here's a bizarre set of predictions about the effect of new credit card regs:...Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And... MORE

Unintended Consequences, Chapter 4386

Regulation
David Henderson
In today's Wall Street Journal, travel reporter Scott McCartney has a story that is rife with unintended consequences of government policies. Titled "From Paradise to Hellish Hours on the Tarmac," it's a story about passengers kept on Delta flight #510... MORE

Democratic Senator Jay Rockefeller has introduced a bill that would give presidents the power to shut down the Internet. It was introduced on April 1, but it appears to be serious. According to the eweek article above: According to the... MORE

Econo-Spirit

Regulation
David Henderson
His view is that most people who complain about Spirit fail to grasp how it's different from other airlines -- like visiting Wal-Mart and expecting Nordstrom-level service. You want Spirit's fares? You'll have to play by Spirit's rules. This is... MORE

The Nature of Government

Regulation
David Henderson
Kiss the Emperor's Ring The Dallas cop who prevented the NFL player from seeing his mother-in-law before she died has gotten a lot of press. Various people have taken various sides. Bill O'Reilly, true to form, said last night that... MORE

Me on New Hampshire TV

Fiscal Policy
David Henderson
Last Wednesday, I did a 23:00 minute interview on MCAM TV23 in New Hampshire. I can't tell the ideology of these two interviewers, which I find refreshing because at the same time they do have strong views. We talked about... MORE

Obama on Leno

Finance
David Henderson
I just finished watching my DVR of President Obama on NBC's "The Tonight Show with Jay Leno." There were some interesting highlights. Of course, Obama was charming: he does that very well. If I judged him only by looks, tone,... MORE

Buffett on Mark to Market

Finance
David Henderson
My favorite Wall Street Journal writer, Holman W. Jenkins, Jr., has an excellent piece today on Buffett's views of Mark-to-Market. It seconds what I quoted Less Antman saying last week and what commenter Patrick Sullivan pointed out. Sullivan linked to... MORE

Yeah, right . . . The Time Inconsistency Problem

Public Choice Theory
David Henderson
Yesterday, Shaun Donovan, the secretary of the Department of Housing and Urban Development, was on Face the Nation to defend President Obama's bailout program for mortgage holders. The questioner, CBS's Bob Schieffer, asked some good questions. One of his best... MORE

One-Two Punch on Mark-to-Market

Regulation
David Henderson
Today, the Wall Street Journal published two excellent letters on the mark-to-market regs that banks are under. IMO, too little has been written about this by economists. The second letter tells a horror story; the first makes a constructive suggestion... MORE

Drug War Success

Regulation
David Henderson
The best sentence of the day: "If the drug effort were failing there would be no violence," a senior U.S. official said Wednesday. In other words, the fact that there is violence in Latin America means the drug war is... MORE

Obama's New Deal

Regulation
David Henderson
On a recent talk show, I made the point that although Obama's fiscal "stimulus" is likely to destroy wealth, at least he is not making four major mistakes that Herbert Hoover and FDR made: (1) substantially raising tariffs (Hoover with... MORE

Wolfe in Safety's Clothing

Politics and Economics
David Henderson
In my latest Forbes.com article (co-authored with my book co-author Charles Hooper), I (we) take on Naderite Sidney Wolfe's views on safe drugs and on conflicts of interest. We point out that despite Wolfe's view that consultants to drug companies... MORE

Letter from Birmingham Jail

Regulation
David Henderson
With Martin Luther King day being celebrated tomorrow, it's appropriate to read or reread his "Letter from Birmingham Jail,'' written in April 1963. Some powerful passages are below. On why he went to Birmingham even though he wasn't from Birmingham... MORE

Plastic Logic

Central Planning vs. Local Knowledge
David Henderson
In coastal California, where I live, various cities have weekly publications that are distributed at a zero price, have a cutting-edge, vaguely (sometimes explicitly) leftist slant, and almost always are uncritically "environmentalist." They rarely take on any policy that most... MORE

Jenkins on CAFE

Energy, Environment, Resources
David Henderson
My favorite Wall Street Journal columnist, Holman W. Jenkins, Jr., has another good column today on how the Corporate Average Fuel Economy law hampers the Detroit-based auto companies (note: not the U.S. auto industry.) Jenkins points out that in an... MORE

The Brains of TSA

Regulation
David Henderson
Lesley Stahl did a moderately good job on "60 Minutes" this evening in her story on the Transportation Security Administration (TSA). Why good and why just moderate? Good for two reasons. First, she actually interviewed a critic who pointed out... MORE

Obama's Economics: Bad and Good

Regulation
David Henderson
On Meet the Press last Sunday, President-elect Obama showed some of his fuzziest thinking and some of his clearest thinking on economics. First the bad. In a discussion of the auto industry, interviewer Tom Brokaw said: As soon as gas... MORE

Too Much Deregulation?

Regulation
David Henderson
In the latest issue of the Cato Institute's Policy Report, I have the lead article. It's title: "Are We Ailing from Too Much Deregulation?" In it, I quote from articles by Los Angeles Times reporter Peter Gosselin and Washington Post... MORE

The New Football Czar

Regulation
David Henderson
On CBS's "60 Minutes" this evening, almost the whole time was devoted to an interview with Barack and Michelle Obama. They are an incredibly charming couple and it's hard not to like them, especially him. But at the end, interviewer... MORE

Devil Says "Sin Less"

Regulation
David Henderson
That should have been the headline on George W. Bush's op/ed in today's Wall Street Journal. The title the Journal gave it is "The Surest Path Back to Prosperity." And the decline (that's the line underneath the title that sums... MORE

Tweak Cafe and Save Detroit

Regulation
David Henderson
My favorite writer/thinker at the Wall Street Journal, Holman Jenkins, had a marvelous article yesterday on how to save Detroit. His solution is to tweak CAFE standards. CAFE, you might recall, stands for Corporate Average Fuel Economy. Imposed by President... MORE

How to Kill Drug Development

Regulation
David Henderson
My co-author and former student, Charles Hooper, has written an excellent article on today's Forbes.com. In the article, Hooper calls himself a "drug killer," telling why he advises firms to "kill" even drugs that have promising uses. Here's a quote:... MORE

A Pareto-Optimal Move

Economics of Health Care
David Henderson
Economists often talk about Pareto-optimal moves, that is, changes in policy that make some people better off without making anyone else worse off. But we have trouble coming up with any real examples. It's an easy exercise to show that... MORE

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