Assorted Links (9/10/2010)

Here’s a list of articles that I have been reading lately:

Are Counterfeit Drugs Really 10% of All Drugs? – The Numbers Guy – WSJ

“An oft-repeated claim that 10% of drugs in the world are counterfeit appears to be ill-founded.”

Trennert: Treasurys and the Danger of Short-Term Debt –

“In The Wall Street Journal, Jason Desena Trennert says that more than 60% of U.S. debt is set to mature within the next three years.”

Kevin Hassett and Glenn Hubbard: Obama Discovers Incentives –

“In The Wall Street Journal, Kevin Hassett of the American Enterprise Institute and Glenn Hubbard of Columbia University say the president’s proposals to cut taxes on business investment are a welcome departure fro Keynesian stimulus.”

Henninger: A President’s Class War –

“In the Wall Street Journal, Wonder Land columnist Daniel Henninger asks: Where on the income scale does Mr. Obama divide the country between us and them?”

Peter Ferrara and Larry Hunter: How ObamaCare Guts Medicare –

“In The Wall Street Journal, Peter Ferrara and Larry Hunter make the case that ObamaCare cuts to Medicare reimbursements threaten the health care of senior citizens.”

Assessing the Terrorist Threat

“This report by members of the BPC’s National Security Preparedness Group details how the terrorist threat has evolved since the attacks in 2001, including the development of homegrown networks and the increasingly diverse and decentralized nature of terrorism.”

Does Drinking in College Affect Your Grades? –

“To some people, the following conclusion should be filed under “Duh.” But even they might appreciate the empirical rigor undertaken by Scott E. Carrell, Mark Hoekstra, and James E. West in a new working paper called “Does Drinking Impair College Performance? Evidence from a Regression Discontinuity Approach”.

A Symposium: What Should the Federal Reserve Do Next? –

“A prolonged period of near-zero interest rates and unprecedented asset purchases by the Fed has failed to return the U.S. economy to robust growth or make an appreciable dent in our unemployment problem. It is now commonly asserted that the Fed is out of ammunition. Is it?”

To Expand Private Sector, Let Government Shrink, an Economist Says –

“Military spending was not what ended the Great Depression, and now only gets in the way of expanded private-sector employment, an economist writes.”

HHS Explicitly Threatens the Insurance Lobby

“After claims from insurance companies that they plan to dramatically increase premiums this year because of the Affordable Care Act, the White House fired off a threat to the industry’s main lobbying group today.”

Insurers Pin Rate Hikes on Health Law

“Insurers nationwide plan to raise premiums on some Americans as a direct result of the health overhaul as soon as next month, complicating Democrats’ efforts to trumpet their signature achievement ahead of elections.”

Who Is Austan Goolsbee?

“Obama’s choice of Austan Goolsbee to succeed Christina Romer as the head of the CEA represents a change of personality at the top of the board, if not a shift in policy.”

Pop Quiz: How Do You Stop Sea Captains From Killing Their Passengers? : Planet Money : NPR

“A story about 17th century sea voyages gets at the heart of economics: Get the incentives right, and you can do anything.”

U.S. Rebukes Health Insurers

“The Obama administration on Thursday told health insurers that it will track those who enact unjustified rate increases and may block those companies from a new marketplace for insurance coverage.”

Mixing Economics With Politics – Room for Debate –

“Can Obama’s tax cut package promote a faster recovery?”

The Effects of Fiscal Stimulus: Evidence from the 2009 ‘Cash for Clunkers’ Program

Here’s the abstract for this paper: “A key rationale for fiscal stimulus is to boost consumption when aggregate demand is perceived to be inefficiently low. We examine the ability of the government to increase consumption by evaluating the impact of the 2009 “Cash for Clunkers” program on short and medium run auto purchases. Our empirical strategy exploits variation across U.S. cities in ex-ante exposure to the program as measured by the number of “clunkers” in the city as of the summer of 2008. We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 – only seven months after the program ended. The effect of the program on auto purchases was significantly more short-lived than previously suggested. We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.”

For what it’s worth, I made similar points last fall on this blog – see and

Rogue Wave Prediction Spares Ships, Sailors : Discovery News

“Lighthouses may safeguard ships from the shore, but light waves could keep them out of harm’s way in the open ocean.”

The Higher Education Bubble: Ready to Burst? – Rasmussen Reports™

This article, written by the American Enterprise Institute’s Michael Barone, sees a “higher education bubble” forming as a consequence of excessive government subsidies to higher education. While that is a very interesting idea unto itself, what caught my eye in Barone’s article is his reference to the American Council of Alumni and Trustees’ website, located at This website ranks colleges and universities according to their graduation rates and whether they require courses in composition, literature, foreign languages, U.S. history, economics, mathematics and science For what it’s worth, my university (Baylor) is one of only 16 colleges and universities to make the American Council of Alumni and Trustees’ “A” list (see for ACAT’s “A” list, for ACAT’s rating criteria, and for Baylor’s “report card”). 

Divided by a Two-Track Economy –

“For American business, it’s a two track economy, with global players getting big boosts from fast-growing foreign markets, while companies focused on the U.S. are hemmed in by recession-scarred consumers.”

NZ Earthquake » Insurance Industry Blog

“A 7.0-magnitude earthquake that struck near Christchurch on New Zealand’s South Island early Saturday follows major earthquakes in Baja (California), Chile, Haiti and China earlier this year.”

The Gospel of Wealth

“The betrayal of the age of excess has made us hungry for a new code reconciling material and spiritual longings.”

Arti$ts and the Market

“Many in the art world cling to the myth that financial gain does not motivate artists. This is not only bad economics, but bad art history.”

Deciphering the Liquidity and Credit Crunch 2007-2008

Here’s a link to a (free) Journal of Economic Perspectives article by Princeton economics professor Markus K. Brunnermeier, entitled “Deciphering the Liquidity and Credit Crunch 2007-2008”.