I’m spending too much time around economists

Well, actually I think the time is well-spent.  But it is funny how often economic thinking and concepts directly intrude on my thoughts the older I get and the more time I spend with economists in person and in print.  Two cases in point, both related to the concept of opportunity cost: 1.   I was stuck at …

Uncertainty, the Small Investor, and Recovery

By now, we have all heard the basic argument that a core problem impeding recovery during the 1930s was the uncertainty created by public policy. In Robert Higgs’ words: “the New Deal prolonged the Great Depression by creating an extraordinarily high degree of regime uncertainty in he minds of investor.” New or anticipated taxes and …

Recovery Summer Update: Wie geht’s?

With but a few weeks left in “Recovery Summer,” this past week was not what many would have hoped. On Tuesday, the Federal Reserve’s FOMC announced that “the pace of recovery in output and employment has slowed in recent months” and “the pace of economic recovery is likely to be more modest in the near term …

Recovery Summer Update

The Summer Recovery Tour has just completed its scheduled stop at Yellowstone National Park, as the touching account on the White House Blog informs us. Meanwhile... The Beige Book, released yesterday, “underscored the Fed’s view that the recovery, while still moving forward, is progressing at a slower pace than earlier in the year.” (BusinessWeek) James …

Unemployment: the Shrinking Denominator

Well, the new jobs numbers were released today: nonfarm payroll employment fell by 125,000 in June. At the same time, the unemployment rate fell from 9.7 to 9.5 percent. Before the celebrations begin (“Recovery Summer is underway! The unemployment rate fell!”) recall that the rate only reflects those who are in the labor force. According …

Recovery Summer

The Recovery Summer is well underway. Vice President Biden sought to rally the troops in the Milwaukee stop of his Recovery Summer tour by noting: "there's no possibility to restore 8 million jobs lost in the Great Recession." Today, a  sharp drop in the Conference Board's Consumer Confidence Index have sent markets into a triple-digit …

Policy Differences Among Economists and “Disinterested Citizens”

Milton Friedman argued in 1953 (and again in 1967) that economic policy differences are rooted primarily in different views about the consequences of those policies -- and that these disagreements could largely be eliminated by better positive economics (!).  Specifically, he wrote: I venture the judgment, however, that currently in the Western world, and especially in the United States, …

Wanted: An economics of fear

During and after the financial panic of 2008, we were exposed to a host of economists trying to explain the market meltdown, what should be done about it, and how we might avoid repeating it. Some of the leading lights in the discipline weighed in on the market problems. Now we have a reform proposal …

Resource Curse: Fact or Myth?

The "resource curse" refers to a set of cross-national relationships between resource dependence on the one hand and economic growth and civil conflict on the other. Sachs and Warner were the first to document the negative relationship between resources and growth. The notion that countries blessed with abundant mineral resources tend to suffer slow economic …

Those looming deficits. Yawn.

Before I get voted off the island, let me say that I’m in favor of much smaller government, lower spending and lower taxes.  I’m also a supporter of reducing budget deficits. That said, however, I cannot find a reason to get that worked up by the budget future of the U.S. or most developed countries.  …

The Paul Millsap of Economics?

Even though I’m in the office working on a Saturday, I had a colleague (and fellow Jazz fan, incidentally) come by and berate me for comparing the great Bill Russell to Paul Millsap. Now, I’m a huge fan of Millsap—look at Game 2 of this series; he was the most valuable player on the floor—so …

When the Obvious isn’t Obvious

For many observers, it seems obvious that the roots of the current recession lie in the crisis in the banking sector.  In the Economist’s Voice (a non-technical, yet academic, electronic journal), Robert Barbera attacks University of Chicago Economist Casey Mulligan and other real business cycle theorists for having a framework that cannot either predict or …

Krugman’s Hackery on Deficit Hawkery

Just about everything Paul Krugman writes nowadays is in some way related to rationalizing the Obama deficits. Now, Krugman's a smarter man than I, but I think it's pretty clear that his partisanship drives his economic analysis these days, rather than the other way around. Yesterday Krugman turned a case against the euro into a …

Industrial Firms Lobbying Against Financial Reform

The NYT has this story on how manufacturers, auto dealers, and the Chamber of Commerce are lobbying against the proposed derivatives exchanges and new consumer financial protection agency in the financial reform bill. It seems to me that they're right to be concerned. Industrial firms, apart - apparently - from U.S.-owned automakers, are not treated …

The Arizona Conundrum

I’m interested in people’s opinions on the new Arizona anti-immigration law.  I have a hard time coming to a consensus in my own mind about the immigration issue and laws like the one Arizona passed. My civil libertarian mind hates the police state and harassment of anyone—citizen or otherwise. My rule-of-law mind hates that we …

Barro

I'm a political scientist.  Moreover, I'm a political scientist who loves history and values qualitative research methods (and not just the KKV way of doing things).  But I find economists to be fascinating.  They have their problems, mind you, something I'll likely write about in the future.  However, I seem to read more and more research done by economists every year …

Krugman on Friedman on the Depression

I just recently came across this profile of Milton Friedman by Paul Krugman in the February 15, 2007 New York Review of Books. Krugman pays homage to Friedman's research as a macroeconomist, including his and Schwartz's Monetary History of the United States, best known for its explanation of the Great Depression as a monetary phenomenon. …

The Left’s Misdiagnosis of U.S. Health Care

Obamacare makes no economic sense. It should be repealed and replaced with true, consumer-powered reform that will force doctors and hospitals to reduce their prices.