EconLog Archive
Economics of Health Care
Becker and Posner vs. Medicare
Richard Posner writes, As a matter of economic principle (and I think social justice as well), Medicare should be abolished. Then the principal government medical-payment program would be Medicaid, a means-based system of social insurance that is part of the safety net for the indigent. Were Medicare abolished, the nonpoor would finance health care in .. MORE
Game Theory
See Saw
The excellent Saw comes out on DVD this Tuesday. If you’ve got a cast-iron stomach, there is no better fictional exploration of the Prisoners’ Dilemma available. (If you don’t have a cast-iron stomach, may I suggest Pooh’s Heffalump Movie?) The premise of Saw is straight out of intro micro: two men wake up chained in .. MORE
Politics and Economics
Why I Don’t Hate Why Americans Hate Welfare
I suspect a lot of my friends would hate Martin Gilens‘ Why Americans Hate Welfare. Gilens takes a stab at the question: Why doesn’t the United States have a European-style welfare state? And his answer, to put it crudely, is racism. But unlike most people who feel this way, he has some data to back .. MORE
Business Economics
Mail Un-Rebates Revisited
I hope this got it out of my system. If mail-in rebates went away, then retailers would still have to earn their profits somehow. Either other shady sales practices would expand, or the retailers would have to raise prices. In my opinion, higher prices without the rebate game would be an improvement, because so much .. MORE
Fiscal Policy
Conservatives and the Bush Budget
David Corn writes, What I wonder about is the absence of conservative outrage over Bush’s budget numbers. Alex Tabarrok wrote, My prediction is that it will be easier to add $540 billion in Medicare spending than it will be to cut $5 billion in farm subsidies. Jane Galt wrote, Part of the [increase in estimated .. MORE
Economics of Health Care
Health Care Celebrity Death-Match
The latest Wall Street Journal blogger celebrity death-match features Russ Roberts and John Irons on health care. Here’s Russ: Because of various government subsidies, out-of-pocket spending is a little more than 10% of total health spending (thanks to Alex Tabarrok at Marginal Revolution for the link). The rest comes from the government and insurance. …Overall, .. MORE
Social Security
Social Security Risk
I did not take away much from the first day of Cato’s Social Security Bash. I guess my views on the subject are pretty well settled, so that for me the session served to illuminate what other folks are worried about than anything else. Unfortunately, I have to miss tomorrow’s session, where Ed Prescott talks .. MORE
Game Theory
The Economics of the Israeli-Palestinian Conflict
News of an Israeli-Palestinian cease fire reminds me of Tyler’s Cowen’s excellent game theoretic exploration of their long struggle. This essay is worth a thousand news stories on the subject, but I still think that Tyler misses the simplest explanation of this sad situation: out-of-sync tit-for-tat. Axelrod famously showed that in repeated Prisoners’ Dilemma games, .. MORE
Austrian Economics
The Price System
Russ Roberts writes Over the next five or ten years, hundreds of millions of Chinese are expected to leave the Chinese countryside and move to the city. This extraordinary migration will require millions of adjustments to take place to make sure that our lives here in America are not thrown totally out of whack. All .. MORE
Microeconomics
Random Punishment
“People with kids care more about the future than people without kids.” Who could take offense at this truism? “Gays are substantially less likely to have kids than straights.” Angry yet? “Gays probably care less about the future than straights.” How about now? I’m not, but apparently one student of Prof. Hans-Hermann Hoppe is: “I .. MORE
Books: Reviews and Suggested Readings
Ayn Rand, Wise Philosopher Despite Some Bad Arguments
Ayn Rand has some lame philosophical arguments, including a tortured “proof” that “life is the standard of value” and an odd effort to base individual rights on ethical egoism. So how can I maintain that Rand the philosopher is worth reading? To answer this, I have to let you in on philosophy’s dirty little secret: .. MORE
Social Security
The Three Percent Solution?
This briefing on the Administration’s proposals for Social Security personal accounts cleared up a number of issues, such as the way that accounts would be administered and the type of investment options available. In both cases, the Federal Employees’ Thrift plan was used as a model. However, the briefing created some confusion concerning how to .. MORE
Energy, Environment, Resources
Energy Conservation
In this essay, I argue that energy conservation is not a useful tool of foreign policy. In my view, the worst policy option of all is to subsidize the use of alternative forms of energy. If other forms of energy are not economical on their own, then taxpayer subsidies are only harmful. The use of .. MORE
Books: Reviews and Suggested Readings
Ayn Rand, the Russian-American Victor Hugo
Ayn Rand’s novels blend two distinct genres. She fits squarely into the tradition of the Russian philosophical novelists like Tolstoy and Dostoyevsky. But she is also a plot-rich Romantic in the tradition of Victor Hugo. Some standard features of the Russian approach: 1. Characters embody philosophical positions. 2. The plot explores the implications of these .. MORE
Business Economics
A Swindle, not a Joke
In this post, I joked about the complexity of mail-in rebate forms. It turns out that this is not a joke. It is in fact a deliberate swindle, which I am now quite sorry that I fell for. Ed Foster writes, the average claim rate on the rebate fulfillment house’s table was about 25 percent. .. MORE
Austrian Economics
Value and Exchange
Peter Gordon points to an interesting article by Meir Kohn in the Cato Journal The exchange paradigm has a very different theory of growth. Growth does not mean movement along an equilibrium path but rather the unfolding of a complex process. At any moment the potential of the economy is not completely realized: unexploited opportunities .. MORE
Books: Reviews and Suggested Readings
Join the Party: Why You Should Celebrate Rand’s 100th
Today is Ayn Rand’s one hundredth birthday, and I want to party down. I probably wouldn’t be a professor if it weren’t for her, and even if I were, I doubt I would be having a fraction of the fun. But when I have a party, I like all my friends to come. And the .. MORE
Finance: stocks, options, etc.
Manne More Than Ever
Stiglitz’s The Roaring Nineties partially blames the big accounting scandals on market fundamentalism. But I’m inclined to agree with Henry Manne that one of the best cures for fishy accounting is to legalize insider trading. Here’s an excerpt from an interview with Larry Elder: Elder: Let’s talk about the recent state of corporate accounting scandals: .. MORE
Social Security
Social Security Deal?
Brad DeLong proposes 1. Shift responsibility for maintaining actuarial balance off of the Congress and onto the Social Security Administration–have it gradually raise (and lower) the retirement age or the benefit-rule bend points in order to keep the system in projected balance. 2. Uncap FICA and apply it to all wage income in order to .. MORE
Economics of Education
Economics of Higher Education
James B. Twitchell writes, At the turn of the 20th century, one percent of high school graduates attended college; that figure is now close to 70 percent. This is an industry that produces a yearly revenue flow more than six times the revenue generated by the steel industry… Americans donate more money to higher education .. MORE
Microeconomics
Schumpeter’s Spectacle: How I Underestimated Cinematic Competition
I was overjoyed last year as I anticipated the opening of the Cinema de Lux at Fairfax Corner. If you haven’t been there, go – the theater is beautiful, the seats are extremely comfortable, and the screens are enormous. But my initial enthusiasm was dampened by my reflections on the indirect effects of this new .. MORE