EconLog Archive
Uncategorized
Prescribing Capitalism
Marginal Revolution found RangelMD, a doctor who was willing to criticize the economics of single-payer government funded health care. In order to expand Medicare to cover every citizen and pay for all medical treatment and all medications that Americans have become accustomed to would require increasing the federal budget by over a third to over .. MORE
Social Security
Long Run Stock Returns
Because the stock market figures into most Social Security privatization plans, the Social Security Administration commissioned economists to estimate long-run returns from stocks. This analysis is three years old, but since I’ve brought up the issue on several occasions it seems worth a mention. Keep in mind that when the economists were writing the market .. MORE
Economic Methods
Math and Economics
Brad DeLong points to an interesting post by Daniel Davies on the use of math in economics. Davies writes, If the history of economic thought teaches us anything, it teaches us that people who don’t use the mathematics always, sooner or later, end up saying something badly wrong about economics. Paul Krugman has an essay .. MORE
Price Controls
Predicting Drug Price Controls
Jonathan Oberlander and Jim Jaffe think that drug price controls are on the horizon. They say that this is what happened to payments to physicians and hospitals under Medicare. The government has habitually responded to budget stresses by changing the reimbursement mechanism and lowering payments. Whatever one thinks of government efficiency, this practice has worked .. MORE
Microeconomics
Coase and Dean
Everett Ehrlich invokes Nobel Laureate Ronald Coase as Ehrlich interprets the success of Howard Dean in terms of reduced transactions costs in setting up a political organization. the Internet has changed all that in one crucial respect that wouldn’t surprise Coase one bit. To an economist, the “trick” of the Internet is that it drives .. MORE
Regulation and Subsidies
Water Privatization, Continued
Lynne Kiesling has two interesting posts on water privatization. In her first comment, she writes, Suppose you are not persuaded by my argument that water utilities should be private companies and not municipal utilities. OK, but you could still contract out the management and operation of the water treatment and water delivery facilities to a .. MORE
International Trade
Smooting the Weasels
Reason‘s Matt Welch comments on the story that the Bush Administration is going to refuse to allow bids for Iraqi reconstruction work from companies that are located in countries that did not support the coalition. 1) It [costs] the Iraqi people and the American taxpayer, by making them pay above-market prices for reconstruction. 2) Assuming .. MORE
Regulation and Subsidies
Water as a Private Good
If you ask people to list goods that should never be privatized, water is often one of the first that comes to mind. But Richard Tren writes, Those that campaign against private water ownership and supply on the grounds that somehow water is “different” should think again. It is precisely because water has been treated .. MORE
Growth: Consequences
A Nation of Entrepreneurs?
Jeff Cornwall points to a survey on entrepreneurship. Cornwall writes, The survey sampled 1,000 Americans over the age of 18. Here are some of their findings: * 56% of Americans dream of starting their own business (E.M. Couple this with 40% of college students who responded in another study that owning their own business is .. MORE
Economics of Education
State Universities vs. Vouchers
The fifty states use a variety of methods to subsidize higher education, but the most popular seems to be a subsidy for in-state students to attend specific public institutions. Bridget Terry Long compares this approach with a voucher program. up to 24 percent of first-year students would no longer choose a public, four-year school if .. MORE
Economic Growth
Growth Inhibitors in Europe
Alberto Alesina and Francesco Giavazzi write, The labor market flexibility in the US service sector is truly remarkable. During recessions and booms, you can feel the changes in quality and number of waitresses in restaurants, in the size of staffs in shops, in the availability of cleaning services. In the roaring 1990’s, it was almost .. MORE
Macroeconomics
Labor Market Surveys Diverge
The Bureau of Labor Statistics uses two different surveys to measure job growth. The latest report shows that for the last two months, the household survey shows an increase of just over one million jobs. The payroll survey shows an increase of just under 200,000 jobs. If you believe the household survey, then the party .. MORE
International Trade
A Bad Month for Libertarians?
In this essay, I say that libertarians had a bad month in November. Howard Dean came out in favor of re-regulation of “utilities, large media companies and any business that offers stock options.” As Megan McArdle put it, “those of us with libertarian tendencies had better keep looking for a politician who is really interested .. MORE
Economic Growth
Economics of Nanotechnology
If the nanotechnology revolution takes off, what will be the economic consequences? Brad DeLong proposes this analytical framework: What commodities–what goods and services–become extraordinarily cheap as a result of the technological revolution? What human activities–what jobs and skills–become key bottlenecks, and thus become remarkably valuable and well-paid? What risks blindside the society as the technology .. MORE
Austrian Economics
Meeting the Enemy
What leads to bad economic policy? Bryan Caplan writes, On the conventional view—widely accepted by economists, pundits, and the man in the street—the public demands policies in its own best interest, but the political system ignores their wishes. Bastiat and Mises dispute both parts of this story. They assert that democratic competition effectively drives politicians .. MORE
Social Security
Social Security Reform
The Social Security Administration has evaluated a proposal by Peter Ferrara for private social security accounts. This plan would establish voluntary, progressive individual accounts for workers who are under age 55 on January 1, 2005 and would provide for a reduction in the Social Security retirement and aged survivor benefits for those who participate. All .. MORE
International Trade
Immigration Policy
Samuel Brittan calls for an open immigration policy in the UK. If we favour the free movement of goods, capital and people, between Yorkshire and Lancashire, or between the north and south of England, why should a frontier make a difference? … Why not try complete free movement of labour for a five or ten .. MORE
Price Controls
A Re-importation Parable
Edward Lotterman tells fellow Minnesotans a parable to try to help them understand drug re-importation. The incomes of U.S. surgeons are substantially higher than those in any other country in the world. U.S. hospitals could save consumers tons of money by flying in rotating squads of Brazilian and German surgeons to operate on U.S. patients .. MORE
International Trade
India and the U.S.
Business Week runs a long, balanced article on India’s economy and its relationship to the United States. For all its R&D labs, India remains visibly Third World. IT service exports employ less than 1% of the workforce. Per-capita income is just $460, and 300 million Indians subsist on $1 a day or less. Lethargic courts .. MORE
Macroeconomics
Labor Market Issues
Today’s New York Times has two opinion pieces on the labor market. Pessimist Steve Roach does not believe that the productivity growth that we are seeing is real or lasting. we are woefully underestimating the time actually spent on the job. It follows, therefore, that we are equally guilty of overestimating white-collar productivity. Productivity is .. MORE
Regulation and Subsidies
Regulation and Housing Cost
Is housing more expensive in Manhattan because land is more valuable there? Edward L. Glaeser, Joseph Gyourko, and Raven Saks argue that housing is more expensive because of regulation. In twelve out of the twenty-one markets that we examine, on average home costs no more than ten percent more than the costs of the physical .. MORE