HispanicPundit + fundamentals   318

What I Told the Liberaltarians - Econlib
There are two health policies that liberals and libertarians would both prefer to the status quo.  The first is a free market plus redistribution for the poor.  The second is bare bones, high-deductible national health care, with a free market for all add-ons.

The reason neither are likely to happen is mistrust.  Liberals think that if they sign on for the free market plus redistribution, the redistribution won’t actually happen.  Libertarians think that if they sign on for bare bones national health care, the cost will quickly increase.
healthcare  libertarianism  Liberalism  fundamentals  foundational 
7 weeks ago by HispanicPundit
Firm Functionalism – Econlib
Defending for-profit business as a great way of organizing against textbook criticisms.
profit  economics  fundamentals  Caplan 
august 2018 by HispanicPundit
The Grumpy Economist: Cross-subsidies
Cross-subsidies are an under-appreciated original sin of economic stagnation. To transfer money from A to B, it would usually be better to raise taxes on A and to provide vouchers or otherwise pay competitive suppliers on behalf of B. But our political system doesn't like to admit the size of government-induced transfers, so instead we force businesses to undercharge B. Since they have to cover cost, they must overcharge A. It starts as the same thing as a tax on A to subsidize B. But a cross-subsidy cannot withstand competition. Someone else can give A a better price. So our government protects A from that competition. That ruins the underlying markets, and next thing you know everyone is paying more for less.
economics  fundamentals  Airlines  healthcare  cochrane 
june 2018 by HispanicPundit
The Inequality Hype - The American Interest
Recounted in its most auspicious light, the story of this interaction over the past three decades reveals that while inequality increased, so did household incomes at every level. Measured by disposable household income the U.S. standard of living is among the highest of all the advanced industrial democracies, not to mention the rest of the world. Indeed, reflecting on the rest of the world, Tyler Cowen urges us to preface all discussions of inequality with a reminder that although economic inequality has been increasing in advanced industrialized nations, over the past two decades global inequality has been falling.16 And given global economic patterns, this is not a coincidence but a relationship.
Inequality  AmericanInterest  fundamentals 
april 2018 by HispanicPundit
Fact-Based Health Care Reform - The American Interest
The harmful impacts of this ill-conceived approach are now well documented: Insurance premiums have skyrocketed; many insurers have withdrawn from the state marketplaces; and for those with coverage, doctor and hospital choices have narrowed dramatically. The ACA will also undoubtedly accelerate the development of the kind of two-tiered health care system characteristic of other nationalized systems, where people with money or power are able to circumvent the substandard government systems that the lower classes must endure. The result will be an end to the superior access, broad freedom of choice, and exceptional quality of care that distinguishes American health care from the centralized systems that are failing the world over.
ObamaCare  healthcare  fundamentals  AmericanInterest 
january 2018 by HispanicPundit
Ideas: Division Rules and Assortative Mating
Generalizing from the simple model, we would expect to see assortative mating in contexts where differences among potential partners are large and pairs, or larger groups, are constrained to a roughly equal division, because the loss to the high value partner of having to share equally with the low value partner(s) outweighs the benefit of a more efficient division of labor. We would expect the opposite pattern where potential partners are free to vary the division between them.
marriage  economics  fundamentals  friedman 
march 2017 by HispanicPundit
Why I favor taxing subsidized goods, Scott Sumner | EconLog | Library of Economics and Liberty
Recall that a subsidy will tend to increase output and reduce government revenue. A tax imposed on this same good will reduce output and increase government revenue, essentially reversing the effect of the subsidy, and thus moving you back closer to the optimal level of output.
subsidies  taxes  fundamentals  TrumpCare  sumner 
march 2017 by HispanicPundit
The Grumpy Economist: Immigration, trade, and child care
This is a small example of a spreading disease in American economic policy. The recipe: 1) introduce strong supply and competition restrictions, usually to politically favored groups. Soon, however, those groups start charging higher prices. So 2) give subsidies so people can pay the higher prices induced by 1). It's perfect: now both sides depend on politicians. See, most egregiously, health care and housing.
subsidies  fundamentals  cochrane  childcare 
september 2016 by HispanicPundit
Sorry to Have to Tell You: You're Rich - Cafe Hayek
How capitalism brings the once luxury of the rich to the basics of the poor.
capitalism  fundamentals  video  boudreaux 
september 2016 by HispanicPundit
Charity: The Concise Encyclopedia of Economics | Library of Economics and Liberty
But with the dramatic increase in public aid during the Great Depression, which began in late 1929, private charities were “crowded out.” They could no longer successfully compete for donations with a federal government that could compel “donations” via the tax system. Table 1 shows how private charity during the Great Depression grew initially, then faded as government spending surged dramatically.
charity  fundamentals  roberts 
september 2016 by HispanicPundit
Trading in Fallacies
The problem is confounded by the fact that with free trade, unlike many other policies, the winners are often poorer than the losers. When Americans lose their $30 an hour jobs making air conditioners so that they can be made by $20-an-hour foreigners, the big losers are Americans whose wages fall from $30 to $20. The big winners are Americans who can now for the first time afford air conditioning. Most of those people are probably making less than $20 an hour.
free-trade  fundamentals  landsburg 
july 2016 by HispanicPundit
Comcast monopoly: One cable franchise to rule them all.
It's an interesting argument, and I wonder how far he would take it. The logic of this position, after all, isn't so much that Comcast and Time Warner should merge but that we should encourage the merged company to merge with Cox and Charter and Cable One too. That there should be basically one gigantic nationwide cable monopoly. In terms of television, the Cable Monopolist would compete with DirectTV and cord cutting. In terms of broadband, the Cable Monopolist would compete with slow DSL and getting by with your mobile phone. In a handful of markets, the Cable Monopolist would compete with a fiber option. But mostly you'd have one giant Cable Monopolist with a ton of leverage over content providers and huge economies of scale. You would basically have a 21st-century version of the old AT&T system. And like the old AT&T system it would need to be really heavily regulated. Which is fine, in principle, but the actual history of how that worked was not so encouraging.
economics  fundamentals  misc  yglesias  monopoly 
november 2015 by HispanicPundit
In Defense of Price Gouging and Profiteering — The American Magazine
If you don’t like price rationing, please explain how limited supplies of a good are to be allocated.
gouging  fundamentals  Amer 
august 2014 by HispanicPundit
Uber Makes Economists Sad - Bloomberg View
Sadly, no one else loves surge pricing as much as economists do. Instead of getting all excited about the subtle, elegant machinery of price discovery, people get all outraged about “price gouging.” No matter how earnestly economists and their fellow travelers explain that this is irrational madness -- that price gouging actually makes everyone better off by ensuring greater supply and allocating the supply to (approximately) those with the greatest demand -- the rest of the country continues to view marking up generators after a hurricane, or similar maneuvers, as a pretty serious moral crime.
gouging  uber  bloomberg  fundamentals 
july 2014 by HispanicPundit
What Does Public Schooling Teach Us About Predatory Pricing?, Bryan Caplan | EconLog | Library of Economics and Liberty
Bottom line: The example of public schools should deter any normal business from pursing a predatory strategy. If permanently giving your product away for free only yields a 90% market share, what's the best that could happen if a normal business temporarily sold for 10% below cost? Customers should hope firms will be cocky enough to try predation. The long-run monopoly prices are sheer speculation - and the short-run discounts are undeniable. Unless, of course, your tax dollars are funding the discounts.
fundamentals  prices  economics  misc  caplan 
march 2014 by HispanicPundit
Some Questions for Minimum-Wage Proponents
- Suppose (not unreasonably) that poor people are disproportionately likely, compared to wealthier people, to own high-mileage used cars produced, say, between 1989 and 1995. And assume that the average price at which poor people sell each of these cars (when, say, they want to buy newer cars, or when they choose to rely more heavily upon public transportation) is $3,000. Do you support minimum-used-car-price legislation that prohibits the sale of any car at a price of less than $5,000? Do you believe that such legislation would make poor people richer? Would your answer change if the legislated minimum price for cars is $3,250 rather than $5,000? (I proposed a similar thought experiment back in June 2006.)
minimum-wage  fundamentals  boudreaux 
december 2013 by HispanicPundit
Why Not Medicaid For All? - NYTimes.com
Douthat lays out the intelligent, conservative, criticism of the liberal 'single payer' drive for healthcare.
fundamentals  douthat  conservatives  liberalism  healthcare 
october 2013 by HispanicPundit
Why Not Protect Workers from Customers?, Bryan Caplan | EconLog | Library of Economics and Liberty
What gives? The real explanation, once again, is probably the popular double standard in favor of indirect coercion. When customers treat workers badly, legal remedies would be direct coercion. Most people would recoil: "Noxious customers ought to mend their ways, but it would be brutal, unfair, and wrong for the law to impose good manners." When firms treat workers badly, legal remedies are mere indirect coercion. Most people effuse: "Unfair businesses ought to mend their ways, and government has the right - nay, the duty - to make them do so." Since the law coerces businesses, which in turn discipline managers and other employees, no normal person bats an eye.
fundamentals  jobs  caplan  regulations 
october 2013 by HispanicPundit
Libertarianism as Moral Overlearning, Bryan Caplan | EconLog | Library of Economics and Liberty
My claim: The fundamental difference between libertarians and non-libertarians is that libertarians have overlearned common-sense morality. Non-libertarians only reliably apply basic morality when society encourages them to do so. Libertarians, in contrast, deeply internalize basic morality. As a result, they apply it automatically in the absence of social pressure - and even when society discourages common decency.
fundamentals  caplan  libertarianism  sidebar  moralissues 
august 2013 by HispanicPundit
What if Tipping Became the Norm at McDonald's? Best Answers, Art Carden | EconLog | Library of Economics and Liberty
In the long run, the prospect of tips will attract more workers into fast food, lowering the wages firms have to pay to attract workers. On net, workers end up earning whatever they would have earned before, just with a different composition (more tips, lower wages).
fundamentals  tipping  carden  sidebar 
august 2013 by HispanicPundit
What if Tipping Became the Norm at McDonald's?, Art Carden | EconLog | Library of Economics and Liberty
Second, if you do tip, who will be the likely beneficiaries? Please answer in the comments. I'll select the best answers and post an answer next week (actually, this looks like a great exam question). If you absolutely must know RIGHT NOW, here are pages 205 and 206 of the 7th edition of Stephen Landsburg's Price Theory, from which I used to teach micro.
fundamentals  landsburg  tipping  carden  sidebar 
august 2013 by HispanicPundit
When Should Governments Contract Out? - Megan McArdle - The Atlantic
So when should we privatize services? I think the number one rule is that we should be extremely cautious about privatizing services with a captive audience, especially when the people they are supposed to serve have little political voice. So no to privatized courts, prisons, or welfare agencies, though it may well work to contract out specific functions within those agencies that have easily agreed-upon objective measures which are hard to abuse.
fundamentals  mcardle  outsourcing  yglesias  sidebar  government 
june 2013 by HispanicPundit
The Oocyte Cartel
ASRM-SART surely believe that they are doing good but I think it no accident that they also do well from a policy that reduces the price of their inputs. A price controlled below the market price generates rents. In the traditional analysis, the rents are dissipated away by long-lines, a form of rent seeking (see Modern Principles–first edition now a bargain!). It’s also possible, however, for suppliers to grab up the rents, especially suppliers of complementary goods.
fundamentals  sex  organs  sidebar  tabarrok 
june 2013 by HispanicPundit
The Great Canadian Sperm Shortage
Another example of the government model messing things up!
fundamentals  canada  sidebar  government  tabarrok 
june 2013 by HispanicPundit
Bar supply elasticity: A tragedy.
And in the longer term it makes landlords happy since they can raise rent. But it doesn't increase the number of happy customers and it doesn't increase employment either. You're looking at a dysfunctional political economy dominated by rent-seeking in which "in the know" customers hope that other customers don't find out about high-quality options. To make things better, you need to make it easier to get liquor licenses but also perhaps learn to love chains. If demand for ShopHouse skyrockets, it'll accelerate the pace at which new outlets open and add lots of jobs. It's the lovable local bar or restaurant whose inelastic supply creates the bad economics.
fundamentals  alcohol  yglesias  sidebar  culture 
june 2013 by HispanicPundit
Discriminatory Pricing - Megan McArdle - The Atlantic
But marginal cost (the cost of producing and selling an extra unit) is usually lower than the average cost, because companies have fixed overhead costs like rent and equipment that have to be paid somehow. So there's a lost profit opportunity: there are customers who are not willing to pay as much as your average cost, but would be quite willing to pay something closer to your marginal cost. Since this is still more than the marginal cost of the extra units, this would be a good deal for both producer and consumer. But if you can only charge one price for your product, you can't make that deal; you'd be losing money on your total sales volume.
fundamentals  mcardle  price-discrimination  sidebar 
april 2013 by HispanicPundit
Left's big mistake about real wages and the economy.
The way a given worker or class of workers improves his real wages is by persuading his boss to give him a nominal raise that outpaces the growth in the cost of living. But the way the economy as a whole works is that my income is your cost of living. If Slate doubled my salary, I'd be thrilled. But if everyone's boss doubled everyone's salary starting on Monday, we'd just have one-off inflation. As it happens, a little inflation would do the macroeconomy some good at the moment. But the point still holds that while "you get a raise" is the way to raise your living standards, "everyone gets a raise" is not the way to raise everyone's living standards. To raise real wages across the economy rather than for some favored group of insiders, what you need to do is make things cheaper.
fundamentals  labor  macro  yglesias  sidebar  wages 
march 2013 by HispanicPundit
Student Loan Scam
Why are today’s poor subsidizing tomorrow’s rich?
sidebar  fundamentals  reason  subsidies  costs  education  loans 
december 2012 by HispanicPundit
Joseph Schmidt and the Tragedy of Discrimination, Bryan Caplan | EconLog | Library of Economics and Liberty
As every opera fan knows, life is full of tragedy.  Sometimes people laugh at you for being short.  Sometimes people hate you for being a Jew.  Tragedy, however, is more than a matter of intentions.  Markets muffle the effects of bad intentions.  Governments amplify the effects of bad intentions to their logical conclusion.  Market discrimination gave Joseph Schmidt an ugly hurdle to overcome - but with some ingenuity, he overcome it.  Government discrimination, in contrast, deliberately walled off his every option.  He tried to escape, but there was no escape.  Governments driven by prejudice stripped Joseph Schmidt of his livelihood, then took his life.
sidebar  caplan  fundamentals  government  discrimination 
november 2012 by HispanicPundit
CONVERSABLE ECONOMIST: The Case For and Against Advertising
But while many see this glass as totally empty, economist see it as half-full. Yes, advertising can be a arms-war of expenditures that benefits no one, while creating consumer dissatisfaction. But it can also be a form of active competition leading to lower prices and better products for consumers.  Here, I'll give a few facts about advertising, review the classic arguments from back in Alfred Marshall's 1919 classic Industry and Trade, and point out a bit of recent evidence that consumers may well benefit from lower prices when advertising expands.
sidebar  fundamentals  taylor  marketing 
november 2012 by HispanicPundit
Brennan's Libertarianism: What Everyone Needs to Know, Bryan Caplan | EconLog | Library of Economics and Liberty
If Wal-Mart started to pay high wages, Wal-Mart jobs would become attractive to skilled workers.  People who currently work as medical assistants or car mechanics would want Wal-Mart jobs.  Since they are more productive and have more skills - since their labor is worth more - they will outcompete the kind of people who currently work at Wal-Mart.  So, raising wages above market levels is unlikely to help unskilled workers.  Instead, it causes job gentrification. (Imagine if Wal-Mart offered to pay its workers $100/hr. Then many of my colleagues would consider becoming Wal-Mart cashiers).
sidebar  caplan  fundamentals  wages  libertarianism  books  wal-mart 
november 2012 by HispanicPundit
You Should Repeatedly Read Cochrane's "After the ACA", Bryan Caplan | EconLog | Library of Economics and Liberty
When I read John Cochrane, an analogous question keeps popping into my head.  How did a guy this unguarded get tenure at the University of Chicago?  His recent essay, "After the ACA: Freeing the Market for Health Care" is a prime example.  Cochrane doesn't just present evidence; he happily tell us what he thinks the evidence means.
sidebar  caplan  fundamentals  cochrane  obamacare 
november 2012 by HispanicPundit
Sergei Brin hates political parties, but he'd like the alternative even less.
Political partisanship is kind of like representative democracy itself—a terrible mess, but clearly superior to the alternatives. After all, we don't need to guess at what representative democracy without political parties would look like. Just examine almost any American city council—be it New York, DC, Chicago, San Francisco, whatever—and you'll see a legislative body that's so overwhelmingly Democratic that partisan politics don't drive outcomes. The result of this isn't a utopia of good government and sound policy, it's an orgy of hyper-localism. Political parties are organized, for better and for worse, around clashing visions of what's better for America. The quest for partisan advantage is, among other things, a quest for the opportunity to build a better society. Absent parties you get a situation where instead of a clash of visions of what would be best for the city as a whole, council members give undue preference to strong local interests. In city government, that means NIMB
sidebar  yglesias  fundamentals  politics 
november 2012 by HispanicPundit
The Public Goods Model vs. Social Desirability Bias: A Case of Observational Equivalence, Bryan Caplan | EconLog | Library of Economics and Liberty
Public goods theory provides one explanation: The complainers are largely sincere, but routinely free ride off each other.  Government is the solution: It forces these free riders to provide the funds required to realize their dream of marijuana prohibition.

Social desirability bias provides a very different explanation: The complainers barely care despite their pious platitudes.  Government is the problem: It forces these otherwise harmless bigmouths to put their money where their mouths are.  The result is a costly crusade against a problem most people would prefer to neglect.
sidebar  fundamentals  caplan  social-insurance  government 
september 2012 by HispanicPundit
Discrimination, Liberty, and the Sorites Paradox, Bryan Caplan | EconLog | Library of Economics and Liberty
The key difference between libertarians and normal people isn't acceptance of this sort of claim.  The key difference, rather, is whether you accept such claims for employers.  E.g.:

1. If every employer on earth refuses to hire you, it does not impair your liberty.
2. If every employer on earth is mean to you, it does not impair your liberty.
3. If every employer on earth refuses to offer you healthcare, it does not impair your liberty.
Etc.

My question: Why on earth should we regard employers so differently?
sidebar  caplan  wilkinson  libertarianism  fundamentals  discrimination 
september 2012 by HispanicPundit
Do You Care More than Paul Krugman Cares? | John Goodman's Health Policy Blog | NCPA.org
What about within the United States? Some years back the Council of Economic Advisers (CEA) calculated a “predicted poverty rate” based on economic growth alone. In other words, economic growth by itself lifts people out of poverty, even if nothing else is happening. The CEA results suggest that if there had never been a welfare state (no Aid to Families with Dependent Children, no food stamps, no Medicaid, etc.) the poverty rate would actually be lower today than it actually is! This adds to a wealth of evidence that the welfare state is subsidizing poverty, not eliminating it.
communist  sidebar  goodman  fundamentals  liberalism  conservatives  welfare  capitalism  Democrats  Republicans 
august 2012 by HispanicPundit
Scott Adams’s Finest Hour: How to Tax the Rich
When I fill out my taxes, I notice that even receipts for $25 donations have thank you notes attached. But for the tens of thousands of dollars I give each year to help keep our wonderful Republic afloat, nothing. Can’t we do a little more as a nation to honor our taxpayers individually? If the First Spouse is willing, how about a thank-you note for every taxpayer signed by the President of the United States and the often much-more-popular First Spouse? (To save on postage, it could be mailed along with the annual Social Security report people get sometime close to their birthdays, for example.) And how about a dinner at the White House honoring the top 100 taxpayers in the country? Not the 100 richest people in the country, but the top 100 taxpayers. One might object that they would just use the opportunity to lobby for lower taxes, but if they did, they wouldn’t get invited the next year. If we honored the top 100 taxpayers like that, maybe they wouldn’t feel like fools for paying th
sidebar  Kimball  wsj  fundamentals  taxes 
august 2012 by HispanicPundit
Chicago Booth Blog: Fault Lines by Raghuram Rajan - Fault Lines by Raghuram Rajan
The fundamental problem, though, is scarcity. We cannot accommodate everyone in the room who might have an interest in a particularly important hearing. So we have to “sell” entry. We can either allow people to use their time (standing in line) to bid for seats, or we can auction seats for money. The former seems fairer, because all citizens seemingly start with equal endowments of time. But is a single mother with a high-pressure job and three young children as equally endowed with spare time as a student on summer vacation? And is society better off if she, the chief legal counsel for a large corporation, spends much of her time standing in line? Whether it is better to sell entry tickets for time or for money thus depends on what we hope to achieve. If we want to increase society’s productive efficiency, people’s willingness to pay with money is a reasonable indicator of how much they will gain if they have access to the hearing
books  fundamentals  capitalism  culture  Rajan  sidebar 
august 2012 by HispanicPundit
Would Arnold Support an RFPB?, Bryan Caplan | EconLog | Library of Economics and Liberty
Am I saying that Arnold wants to abolish the First Amendment and start a massive government crusade against religion?  Of course not.  I'm confident that Arnold is a staunch friend of religious freedom.  But his principles of consumer protection - all three versions -  are inconsistent with religious freedom.  Anyone who believes in religious freedom has to defend people's right to spend their money foolishly - and the right of firms to cater to such people. 

I understand why Arnold is offended when firms part fools and their money.  But I don't understand why he strays from his usual policy of tolerating what offends him.  If you correctly perceive a product to be junk, don't buy it.  Tell your friends not to buy it.  Tell the world not to buy it.  But don't ask the government to ban it.
sidebar  caplan  kling  fundamentals  regulations  constitution  religion 
july 2012 by HispanicPundit
The Buck Stops Here: Don't Insure Small Items
Cutler on insuring small things: no for consumer electronics, but yes on healthcare???
sidebar  buck  cutler  fundamentals  insurance  healthcare 
july 2012 by HispanicPundit
Whose Interests? Which Corporations?
As the great metaphysician Mitt Romney put it, corporations are people and concrete political controversies often pit the interests of entire firms or sectors against those of others. This reality is somewhat obscured from view precisely by the fact that labor unions are so weak in the American private sector. But if there were a labor union representing the majority of rank-and-file insurance company workers, they'd have been leading the charge against the public option. The United Mine Workers stand up for the interests of mine workers versus mine owners, but also for the interests of the mining industry versus the broader public interest in preventing the coal industry from sapping the atmosphere's ability to absord CO2 emissions.

I think the practical issue here is a very real, but substantially narrower one. Labor unions are a clear and consistent voice for progressive taxation and public services against high-income individuals' strong interest in paying less taxes.
unions  politics  liberalism  corporate  lobbying  fundamentals  yglesias  sidebar 
june 2012 by HispanicPundit
Riffing on Bargaining Power
One obvious lesson is that the ability to freely bargain and trade is more valuable poorer people than it is to rich people.  If Bill Gates’s monetary wealth were somehow randomly transformed into an equivalent amount of real goods and services, all banked in his (enormous) basement, he’d suffer less from prohibitions on bargaining and trading than would a poor American whose relatively meager monetary net worth were likewise randomly transformed into real goods and services.  Bill Gates is far more likely, in such a scenario, to have adequate supplies of food, clothing, shelter, entertainment options, transportation opportunities, and other valuable stuff than is the poor American.  So inability to trade would inconvenience – heck, would harm - Bill Gates far less than it would an ordinary American.
sidebar  sidebar  fundamentals  boudreaux  caplan  labor  regulations  trade 
june 2012 by HispanicPundit
If You Want to Keep Dating Me, You’d Better Let Me Fuck You | Bleeding Heart Libertarians
Murphy and Nagel say that you don’t really own your pre-tax income, because but for government and the public goods it provides through taxation, you wouldn’t have any income.  However, we can extend their argument to defend the corvée, not just the income tax.  An authoritarian can say that you don’t really have a right to your body or your time, because but for government and the public goods it provides through taxation (including, if it wants, through the corvée), you’d probably be dead, and thus not have a body or any time.

Why would the IDA work to block a libertarian’s objection to income taxation but not a liberal’s objection to the corvée?  What’s the difference?
caplan  sidebar  bleedingHeartLibertarians  libertarianism  philosophy  liberalism  fundamentals  property-rights 
june 2012 by HispanicPundit
If You Don't Like It, Bryan Caplan | EconLog | Library of Economics and Liberty
If you take Roehling's "unequal bargaining power" or "asymmetric information" rejoinders seriously, current rules of the dating market should outrage you.  Think about the inequality of bargaining power between, say, Channing Tatum and an unattractive single mom who cleans hotel rooms for a living.  He has movie star looks, magnetic personality, fabulous riches, and millions of female fans; she's ugly, poor, alone, and responsible for her child's support.  As a result, he could practically dictate the terms of any relationship.  Does this mean she should have some recourse beyond, "If you don't like how Channing treats you, break up"? 

The same goes for asymmetric information.  People keep all kinds of secrets from those they date - past relationships, current entanglements, income, philosophy, whether they'll ever commit.  And again, people's ultimate legal threat against romantic partners' concealed information and dishonesty is only, "If you don't like it, break up."
sidebar  caplan  regulations  fundamentals  labor 
june 2012 by HispanicPundit
CONVERSABLE ECONOMIST: McWages Around the World
In passing, it's interesting to note that McWage jobs pay so much more in western Europe than in the U.S., Canada and Japan. But let's pursue the highlighted theme: How can the same job with the same output and the same technology pay more in one country than in another? One part of the answer, of course, is that you can't hire someone in India or Sough Africa to make you a burger and fries for lunch. But at a deeper level, the higher McWages in high-income countries is not about the skill or human capital in those countries, but instead reflects that the entire economy is operating at a higher productivity level.
mcdonalds  sidebar  timtaylor  productivity  fundamentals  wages 
june 2012 by HispanicPundit
Highlights from "Does Technology Drive the Growth of Government?", Bryan Caplan | EconLog | Library of Economics and Liberty
[N]o one of these technological advances serves as the cause of governmental growth. Taken as a group, however, these factors made very large government possible for the first time.
To see this, perform a very simple thought experiment. Assume that we had no cars, no trucks, no planes, no telephones, no TV or radio, and no rail network. Of course we would all be much poorer. But how large could government be? Government might take on more characteristics of a petty tyrant, but we would not expect to find the modern administrative state, commanding forty to fifty percent of gross domestic product in the developed nations, and reaching into the lives of every individual daily.
Think also about the timing of these innovations. The lag between technology and governmental growth is not a very long one. The technologies discussed above all had slightly different rates of arrival and dissemination, but came clustered in the same general period. With the exception of the railroads an
sidebar  caplan  books  cowen  fundamentals  history  government 
may 2012 by HispanicPundit
Caplan,2012: The Able Slave
This is a good example of what puzzles me most about bleeding-heart libertarians: At times, they sound less libertarian than the typical non-libertarian.* I'm not claiming that the "hard libertarian" intuition is certainly true. But in a thought experiment with ten people, the hard libertarian intuition is at least somewhat plausible. And once you start questioning the justice of the islanders' treatment of Able Abel, questions about the justice of the modern welfare state can't be far behind.

Needless to say, bleeding-heart libertarians usually sound a lot more libertarian than the typical non-libertarian. Yet this just amplifies the puzzle. Unjust treatment of the able may not be the greatest moral issue of our time. (Then again...) But unjust treatment of the able is a serious moral issue. And it's a serious moral issue that mainstream moral and political philosophy utterly ignores. My question for bleeding-heart libertarians everywhere: Why don't your hearts bleed for the
sidebar  caplan  taxes  fundamentals  philosophy  libertarianism  BHL 
may 2012 by HispanicPundit
The Path to Prosperity at Steven Landsburg | The Big Questions: Tackling the Problems of Philosophy with Ideas from Mathematics, Economics, and Physics
And if you want more high-quality tractors, you need more factories producing them — which means fewer factories producing consumer goods like, say, cars. That in turn requires consumers to rein in their immediate appetites, spending less and saving more. In other words, capital accumulation is driven in part by frugality. Forgo that car purchase and the factories will produce another tractor instead. That’s why tax policies matter. A tax that punishes saving (e.g. the estate tax) is a tax that encourages spending. Because of that tax, the rich buy more cars, the factories produce fewer tractors, and farm wages fall. If you doubt that farm wages depend heavily on the production of tractors, have another look at the graph.
economic-growth  fundamentals  landsburg  poverty  africa  graphs  history  sidebar 
april 2012 by HispanicPundit
A Primer on Tax Incidence Analysis (Part 2) — My wages are lower. But how much lower? | PrometheeFeu's Blog
If a small change in price scares off many potential customers without inducing much more product, producers are reluctant to raise the price even when a tax is imposed. On the other hand, if customers don’t react much to price changes compared to producers, producers will be able to pass on the tax to the customers without fear of losing much business.So how might this apply in the labor market? It is of course difficult to say as there are many different labor markets and estimating elasticities is no easy feat. But as a first-order approximation, you can look at the relative negotiating power of your employer and yourself. If you and your colleagues feel confident that you can get a raise when you ask for it, it is likely that your employer is bearing more of the burden than you are. On the other hand, if you feel that your employer can dictate the terms of your employment, it is likely that your employer is passing more of the burden on to you.
taxes  labor  fundamentals  prometheefeu  sidebar 
march 2012 by HispanicPundit
A Primer on Tax Incidence Analysis (Part 1) — How taxes lower your salary and the number of widgets you can buy. | PrometheeFeu's Blog
Note that in this simple example, the seller and buyer share equally in the loss from the tax despite the consumer writing the check to the IRS. You could re-do the math having the producer send the check. The result is the same. I will follow up with another post detailing how in different markets, the burden might be shared differently between producers and consumers.

Note that this works the same way whether we are selling widgets to consumers or selling work to our employers. If you tax something, it will cost more to those who buy it, bring in less to those who produce it and less of it will be bought, sold and produced.
taxes  fundamentals  prometheefeu  sidebar 
march 2012 by HispanicPundit
Freakonomics » Ed Glaeser Argues Against Food Stamps
The conventional economic logic is that cash transfers are more effective at helping the poor than in-kind gifts, such as food stamps and housing vouchers. I am grateful for the freedom I enjoy when spending my earnings; surely, aid recipients also like autonomy. They can choose the spending that best fits their needs if they are given unrestricted income.
welfare  fundamentals  glaeser  freakonomics  sidebar 
march 2012 by HispanicPundit
Inequality and Stagnation
If the poorest people have the highest divorce rates, the increase in households in the 1980′s and beyond are going to come from the poorest people, adding numbers of households below the median and pulling the measured median down as a pure statistical artifact. That fall in median household income tells you nothing about the health of the economic system. It’s telling you something about the health of American marriages. (The increase in college attendance over this time period softens the magnitude of the impact, btw. But it doesn’t change it.)

You can’t conclude then, that “people are getting worse off.” Or “the average person has had no gains.”

The average (or more accurately, the median) person in 2011 is not the same person who was the median 10 and 20 and 30 and 40 years ago.
sidebar  fundamentals  roberts  poverty  culture  books  murray  marriage  inequality 
february 2012 by HispanicPundit
The Desperate Need for Market Forces in Education « Jay P. Greene's Blog
How market forces have transformed other industries, but because of its absence in education, education has remained largely the same.
sidebar  greene  fundamentals  vouchers 
february 2012 by HispanicPundit
What If the Stranger Is a Drowning Child?
4. Singer is quick to move from the moral obligation to rescue a Drowning Child to a moral obligation to rescue lots of strangers. But suppose we revise his initial hypothetical: Instead of one Drowning Child on a random day, there's a new Drowning Child every day. Indeed, suppose there are Drowning Children as far as the eye can see, 24/7. What then? Now it seems clear that a policy of rescuing strangers is above and beyond the call of duty. And sadly, as Singer himself points out, this is the world we live in.

Last point: Singer is quick to conclude that we have massive obligations to help millions of desperate strangers. But all First World countries violate a far less controversial obligation to the world's poor. Under the guise of "immigration policy," every First World country makes it a crime for foreigners to accept a job offer from a willing First World employer. Economically speaking, this is a big deal: The best evidence says that worldwide free trade in labor would
sidebar  caplan  charity  moralissues  philosophy  singer  fundamentals  welfare  poverty 
february 2012 by HispanicPundit
Aborting the contraception policy follies
2. More broadly, it makes little sense for "insurance" to cover small, predictable expenditures. No one does this with their car insurance. The reason they do it with health insurance is because of the tax favoring mentioned above, which overcomes the lost output due to the administrative overhead associated with the insurance system. We should be trying to move away from this equilibrium, not swimming further out into the seething ocean of bad policy design.
sidebar  jeffsmith  abortion  fundamentals  healthcare  contraceptions  catholic 
february 2012 by HispanicPundit
The Grumpy Economist: The Real Trouble With the Birth-Control Mandate
Why should the Department of Health and Human Services (HHS) decree that any of us must pay for "insurance" that covers contraceptives?

I put "insurance" in quotes for a reason. Insurance is supposed to mean a contract, by which a company pays for large, unanticipated expenses in return for a premium: expenses like your house burning down, your car getting stolen or a big medical bill.

Insurance is a bad idea for small, regular and predictable expenses. There are good reasons that your car insurance company doesn't add $100 per year to your premium and then cover oil changes, and that your health insurance doesn't charge $50 more per year and cover toothpaste. You'd have to fill out mountains of paperwork, the oil-change and toothpaste markets would become much less competitive, and you'd end up spending more.

How did we get to this point? It all leads back to the elephant in the room: the tax deductibility of employer-provided group insurance.
fundamentals  sidebar  cochrane  moralissues  costs  healthcare 
february 2012 by HispanicPundit
Naming the Puppy: Firing Aversion and the Labor Market, Bryan Caplan | EconLog | Library of Economics and Liberty
This may sound good.  But it's a mixed bag at best.  Yes, firing aversion makes life more secure for the employed.  But it also makes it harder to find a job in the first place.  From a social point of view, the labor market would work better if employers were as free of firing aversion as robots.
sidebar  caplan  jobs  fundamentals  labor 
february 2012 by HispanicPundit
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