Assorted Links (12/30/2011)

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

The Perils of Drunk Walking

Friends don’t let friends drive OR walk drunk. Quoting from this article, “…every mile walked drunk… turns out to be eight times more dangerous than the mile driven drunk. To put it simply, if you need to walk a mile from a party to your home, you’re eight times more likely to die doing that than if you jump behind the wheel and drive your car that same mile.”

Chavez Falls Off The Edge of the World

“Hugo Chavez has a new theory: that the US has developed a secret technology and is using it to give cancer to left wing Latin American rulers that we don’t like… Bringing the logical acuity and sure grasp of the laws of probability and of cause and effect that he brings to all his policy making, Chavez… has shared his reasoning with the world…”

Are we alone in the universe?

“The Fermi Paradox: Is intelligence fatal?”

10 Things Our Kids Will Never Worry About Thanks to the Information Revolution

“You know you’re getting old when you start using the same sort of “kids these days” rants with your children that your parents threw your way long ago…”

Vaclav Havel 1936-2011: Living in truth

“HAD communists not seized power in his homeland in 1948, Vaclav Havel would have been simply a distinguished Central European intellectual.”

Repo Men

Very interesting essay on the “poisonous” combination of Wall Street and Washington (hat tip to Cato’s Dan Mitchell for pointing this article out @…

What ‘Fact Checkers’ Call Lies, I Call Politics

“Last year, PolitiFact, a widely cited “fact-checking” project of the Tampa Bay Times, awarded its “Lie of the Year” to Republicans who said that the health-care law President Barack Obama had signed amounted to a “government takeover” of the field. This year, the uncoveted prize has gone to Democrats who said that Republicans had voted to “end Medicare” by voting for Representative Paul Ryan’s budget… PolitiFact often seems unaware that the same facts can be interpreted in different ways, with neither interpretation qualifying as a lie. Here is a different interpretation of its evenhandedness: PolitiFact was wrong last year and this year — in each case injecting a little poison into the political system in the name of cleaning it up.”

Saving the New Year

The Atlantic’s Megan McArdle explains why we all need to save much more – “…15% of each paycheck into the 401(k) is the bare minimum” – as part of shift away from an unsustainable social model based upon facilitating and promoting consumer debt toward a sustainable social model based upon prudent patterns of spending and consumption…

Where to Save?

Here’s Megan McArdle’s sequel to her “Saving the New Year” essay in which she provides very sound advice about how to implement one’s savings plan…

The Fed’s Mission Impossible

University of Chicago finance professor John Cochrane provides some excellent insights about “too big to fail” and the unintended consequences of the Dodd-Frank financial reform law in this WSJ op-ed.

Margaret Thatcher on the economics and social consequences of income inequality

Here’s a remarkable video of former UK Prime Minister Margaret Thatcher’s last House of Commons speech (recorded 11/22/1990) on the economics and social consequences of income inequality; she also opines presciently about various dysfunctional aspects of the yet-to-be-formed economic and monetary union of various EU member states (i.e., the so-called eurozone; cf. and the European Central Bank (cf. Hat tip to Dan Mitchell (cf.…


Assorted links (12/28/2011)

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

David Keyes: Merry Christmas From Saudi Arabia

“David Keyes writes of the holiday card sent out by Saudi ambassador to the U.S. Adel al-Jubeir—Christmas greetings from a regime that prohibits Christians from worshipping publicly or wearing crosses… Had Jesus been born in Saudi Arabia today, he’d likely be imprisoned, flogged or beheaded.”

Gerald O’Driscoll: The Federal Reserve’s Covert Bailout of Europe

“When is a loan between central banks not a loan? When it is a dollars-for-euros currency swap… This Byzantine financial arrangement could hardly be better designed to confuse observers…the Fed is, working through the ECB, bailing out European banks and, indirectly, spendthrift European governments.”

Holman Jenkins: The Fannie and Freddie Hate Storm

“[T]he SEC’s legal complaint against former executives of Fannie Mae and Freddie Mac is dubious but helps set the record straight… The financial crisis isn’t over, and around the world the problem is not housing but governments whose commitments far exceed their resources.”

Freakonomics » Is There a Rooftop Solar Bubble? And Is It About to Burst?

Sound familiar? “Government efforts to boost affordability and expectations of unsustainably high investment returns generated a boom market that’s destined to crash.”

The Just Distribution of Income and Wealth

“There has been a lot of talk this year, and especially during the holiday season, about the inequities in the distribution of wealth and income. But most of what has been written is quite simple-minded, if the writers mean to convey something more than their own personal preferences for a different distribution.”

Midlife Crisis Economics

“The Obama administration used to like to compare today’s problems to those that led to the Great Depression. But they differ in many ways.”

McGurn: Taxing Kim Kardashian

“[Progressives] will not be swayed because they are not being driven by their economics. They are being driven by their conception of immorality: the idea that millionaires have more than they should—and that any wealth they have is not something they have earned but something the state has allowed them to keep. It says much about the progressive Puritanism of our age that what these folks really find most sleazy about Ms. Kardashian is not her sex tape or her marriage, but that she’s unembarrassed about making money.”

Macro Santa And The Austerity Grinch

“Lock up Santa: The stimulus gifts under the tree come at a heavy price to our children.”

Andrew Lo reviews 21 books on the financial crisis

This article referenced in this will appear in the Journal of Economic Literature (cf. Quoting from the article abstract, “No single narrative emerges from this broad and often contradictory collection of interpretations, but the sheer variety of conclusions is informative, and underscores the desperate need for the economics profession to establish a single set of facts from which more accurate inferences and narratives can be constructed.”

Guest post: Eight thoughts on higher education in 2012

“Today’s guest bloggers offer four causes for concern and four reasons for hope.”

Design Your Own Profession

Way back in 1997, futurist Paul Saffo introduced a concept called “disinter-remediation” (cf. which describes the dynamic process discussed in this article. Not only are existing intermediaries replaced by new ones; the overall level of intermediation in society goes up. Basically, by making it cheaper to be a middleman, the Internet causes more intermediation, not less to occur…

Assorted Links (12/22/2011)

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

The Ron Paul Portfolio

“Ron Paul’s investment strategy isn’t merely different. It’s shockingly different …(Investment manager) Mr. Bernstein says he has never seen such an extreme bet on economic catastrophe. “This portfolio is a half-step away from a cellar-full of canned goods and nine-millimeter rounds,” he says.”

Artist Resale Royalties: Do They Help or Hurt?

“Not only does it not help them, it probably hurts them.”

In Private Enterprise We Trust

NYU law professor Richard Epstein provides a free market critique of Al Gore’s and David Blood’s “A Manifesto for Sustainable Capitalism” (cf.…

Opinion: Football Team Wins, Grades Plummet

“Glen Waddell on a new study that examines the correlation between college students’ grades and their football team’s wins.”  Here’s the paper citation: “Are Big-Time Sports a Threat to Student Achievement?” (by Jason Lindo, Isaac Swensen, and Glen Waddell), NBER Working Paper 17677. PDF available @ Here’s the paper abstract: “We consider the relationship between collegiate-football success and non-athlete student performance. We find that the team’s success significantly reduces male grades relative to female grades. This phenomenon is only present in fall quarters, which coincides with the football season. Using survey data, we find that males are more likely than females to increase alcohol consumption, decrease studying, and increase partying in response to the success of the team. Yet, females also report that their behavior is affected by athletic success, suggesting that their performance is likely impaired but that this effect is masked by the practice of grade curving.”

What Fannie and Freddie Knew

“The Wall Street Journal argues that the SEC shows how the toxic twins turbocharged the housing bubble.”

The Republicans’ Holiday Gift To President Obama

“The link (direct relationship) between longer benefits and a higher unemployment rate has long been well known to economists thanks to international experience and economic research.”

Where the Christians Are

“Conrad Hackett on the size and distribution of the world’s Christian population.” According to the study cited in this video, the total number of Christians worldwide is 2 billion. Total global population is estimated at roughly 7 billion people (cf.

The Payroll Tax-Cut Consensus: Another Keynesian Sand Castle

“It is disheartening that so few conservative economists and politicians explain in a logical and direct way why Keynesian economics has failed over the past few years.”

The Financial Crisis on Trial

“In The Wall Street Journal, Peter Wallison writes that the SEC has fingered Fannie Mae and Freddie Mac, not Wall Street greed.”

Want Growth? Try Stable Tax Policy

“In The Wall Street Journal, John Taylor writes that the payroll tax cut is one of 84 tax provisions expiring this year, 10 times as many as expired in 1999.”

Occupy AARP! or, Our Mothers and Fathers Are Beyond Our Command!

This is completely unsustainable; the longer we kick the entitlement reform can down the road, the worse things get: “In 1970, spending on Social Security and Medicare was one-fifth percent of the budget (blue portion). This portion has since grown to nearly 37 percent of the budget in 2010. By 2030, half of the entire budget will be consumed by payments for senior citizens.”

Assorted Links (12/20/2011)

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

How Economics Saved Christmas

“This take on a Christmas classic was inspired in part by a sermon…and Murray Rothbard’s essay ‘Law, Property Rights, and Air Pollution.’”

Ruining Christmas: An Economist’s Guide

I think the primary takeaway of this article is that it’s important to think carefully about the relationship between good intentions and unintended consequences.  Indeed, as the author notes (see point #5), “Intending to help people isn’t the same as actually helping people… It’s a lifestyle decision that requires getting meaningfully involved in the lives of others.”

The World’s Most Repressive State

Under the so-called “Dear Leader”, crimes against the state included things like listening to a foreign radio broadcast, reading a Bible, or disrespecting a portrait of Kim Jong Il…

The Great Successor

“In The Wall Street Journal, John Bolton writes that in the wake of Kim Jong Il’s death and attempted anointment of his son Kim Jong Eun as his successor, there’s no guarantee that the North Korean military will accept another hereditary ruler.”

Tyranny and Indifference

“In The Wall Street Journal, Global View columnist Bret Stephens writes that the West should heed Václav Havel’s prescription to ‘live in truth.’”

This Is Your Brain On Crony-Capitalism

“And despite the similar name, it’s nothing like actual capitalism.”

Zenith Men’s Defy Xtreme Tourbillon Titanium Chronograph Watch

I think this may very well be the most expensive item offered on Amazon – it’s list price is $145,000, and it is being offered on Amazon for “only” $86,999.99… 

The wages of appeasement

“Obama’s policies toward Russia and Iran failed.”

Photos of the Year 2011

“WSJ editors pick the best photos of the year organized by category, date and location. These photos represent the key moments and defining images of the news in 2011.”

Why Mandated Health Insurance Is Unfair

“In The Wall Street Journal, John C. Goodman writes that there’s an easier way to solve the ‘free-rider’ problem.” This article explains why “There is nothing that can be achieved with a mandate that can’t be better achieved by a carefully designed system of tax subsidies.”

MIT Will Offer Certificates to Outside Students Who Take Its Online Courses

“Millions of learners have enjoyed the free lecture videos and other course materials published online through the Massachusetts Institute of Technology’s OpenCourseWare project. Now MIT plans to release a fresh batch of open online courses—and, for the first time, to offer certificates to outside students…”

Capitalism and the Right to Rise

“In The Wall Street Journal, former Florida Gov. Jeb Bush writes that in freedom lies the risk of failure—but in statism lies the certainty of stagnation.”

Assorted Links (12/19/2011)

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

The ‘God Particle’ and the Origins of the Universe

“Writing in The Wall Street Journal about the Higgs boson, Michio Kaku says that the search for a unifying theory is nowhere near over.”

Twelve Months of Reading

Crowdsourcing reading lists… “We asked 50 of our friends to tell us what they enjoyed reading in 2011—from Mike Allen’s taste for Tebow-ing to Adam Zagajewski’s love of Scottish poetry.”

Fir Real? Christmas Trees in Crisis

“The Christmas tree business faces tough times as more Americans buy fakes or opt for smaller, cheaper trees. To fight back, tree growers are using science to develop more enticing trees.”

Daron Acemoglu on Inequality

“If you’re even a little bit interested in income inequality and how it matters, this Browser interview with MIT economist Daron Acemoglu is a must-read. Acemoglu explains how economists generally think about inequality…”

What Obama Left Behind in Iraq

“In The Wall Street Journal, Fouad Ajami writes that there’s no need to fear the deference of Iraq’s Shiites toward Iran.”

And the Crisis Winner Is? Government

“In The Wall Street Journal, David Malpass writes that from Greece to Washington, D.C., to New York state, there’s no effective mechanism to control government spending.”

The Euro Zone’s Double Failure

“In The Wall Street Journal, Martin Feldstein writes that Europe needs country-by-country fiscal reforms, not a renewed push for political integration.”

The Sparring Partner

“In The Wall Street Journal’s Wonder Land column, Daniel Henninger writes that Mitt Romney needs a sparring partner to make him fit to compete with heavyweight champ Barack Obama—and that’s Newt Gingrich.”

Calling Obama’s Payroll Tax Bluff

“The sparring between Republicans and Democrats over how to pay for an extension of the payroll-tax break is one more sign of how rotten the tax code is and why the entire thing needs to be thrown out and replaced with a system that fosters economic growth instead of endless redistribution of income.”

Happy (Awkward) Holidays

“How come the holidays can bring out the grumps in us? We look at some common sticky situations and offer tips on how to handle them with grace and poise.”

Bain Over Newt Any Day

“This week, Republican presidential hopeful Mitt Romney called on newly minted front-runner and noted historian Newt Gingrich to return the estimated $1.6 million he made providing “strategic advice” to Freddie Mac, the quasi-governmental agency that has done the hard work of making “toxic home mortgages” a forever feature of our national portfolio.”

To Ask or Not to Ask: Experiments in Charitable Giving

“Our recent podcast “What Makes a Donor Donate?” features economist John List, who has concentrated his research on the science of philanthropy. In short, when it comes to convincing people to give, some ways are better than others. But what about just directly asking them?”

Gridlock to the Rescue

“Washington gridlock may turn out to be the salvation of the Obama administration.”

Rare 1787 Gold Coin Sells for $7.4 Million

“A rare 1787 gold Brasher doubloon has been sold for $7.4 million, one of the highest prices ever paid for a gold coin… The Brasher doubloon is considered the first American-made gold coin denominated in dollars; the U.S. Mint in Philadelphia didn’t begin striking coins until the 1790s.”

God’s Quarterback

“He has led the Denver Broncos to one improbable victory after another, defying his critics and revealing the deep-seated anxieties in American society about the intertwining of religion and sports.”

The Free Market versus Crony “Capitalism”

“…perhaps the government must break up the large financial institutions so that they can fail without dragging us all … down with them.”

Financial Regulation: Worse Than a Crime

More on how financial regulation (particularly, Basel risk based capital standards) had the unintended consequence of focusing and exacerbating financial risk, rather than dispersing and mitigating it

America’s New Energy Security

“In The Wall Street Journal, Daniel Yergin writes that thanks to new technology, the U.S. has become less dependent on petroleum imports from unstable countries.”

Global Warming and Adaptability

“In The Wall Street Journal, Bjørn Lomborg writes that any carbon deal to replace Kyoto would have a negligible impact on climate in coming decades…we need to focus first on how we can build more resilient, adaptable communities.”

Employers Say College Graduates Lack Job Skills

“Many employers believe colleges aren’t adequately preparing students for jobs, according to findings of a study presented here on Monday by the Accrediting Council for Independent Colleges and Schools.”

Assorted Links (12/11/2011)

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

Number of the Week: Finance’s Share of Economy Continues to Grow

“8.4%: The financial sectors share of gross domestic product.”

Obama Blames the Rich

“We should endeavor to create the conditions for economic growth, transform education fundamentally, and champion the bourgeois virtues at every opportunity. But President Obama only wants shiny new wrapping paper for his same old proposals — taxes on the rich, infrastructure spending, and regulation. This familiar litany is now supposed to be the answer to complex, decades-long trends. It’s good to know he takes himself so seriously; no one else should.”

How to Save an Unproductive Day in 25 Minutes

“Not only do unproductive days detract from the success of your projects, your team and your organization; they can endanger your own well-being. Here’s how to nip a problem day in the bud.”

Barbarians on the Thames by Theodore Dalrymple

“A postmortem of the British riots…”

A Hayseed Economist Responds To The Times’ Bill Keller

The New York Times calls out market-oriented academic economists for having the audacity to question the mainstream media on the major policy issues of the day; e.g., the “need” for stimulus spending. One of my fellow co-signatories who recently endorsed a Republican plan (see which favors spending cuts, tax cuts and deregulation over so-called “stimulus” responds…

Paying Politicians for Fiscal Discipline

“In The Wall Street Journal, Insead finance professor Theo Vermaelen outlines a modest proposal to compensate legislators with the bonds their country issues.” this is a very clever “incentive compatible” compensation scheme for european politicians!

Basel’s Sovereign-Debt Bubble

“The Wall Street Journal writes that regulations help create systemic risk.” this is an excellent explanation concerning how bank regulation has unintentionally concentrated sovereign debt risks in the european banking system…

The Spirit of Enterprise

“Why are nations like Germany and the U.S. rich? It’s not primarily because they possess natural resources — many nations have those. It’s primarily because of habits, values and social capital. It’s because many people in these countries …believe in a simple moral formula: effort should lead to reward as often as possible.”

Our ‘Financial Repression’ Trap

“In The Wall Street Journal, Kevin Warsh writes that in capitals world-wide, policy makers are deliberately obscuring market prices and preventing informed judgments.”

Tax Rates, Inequality and the 1%

“In The Wall Street Journal, Alan Reynolds writes that those who obsess over income shares should welcome stock market crashes and deep recessions because such calamities invariably reduce ‘inequality.’… Once 2008-2009 are brought into the picture, the share of after-tax income of the top 1% …fell to 11.3% in 2009 from the 17.3% that the CBO reported for 2007.”

Wave Goodbye To Next-Day Mail

“The death of the USPS, tragic though it would be for employees, is not the worst that could happen, though, given e-alternatives. Americans will be able to communicate with each other with or without the first class mail. But anything organized by Benjamin Franklin deserves our respect.”

The Decadent Left

“Better a protest movement that casts itself (however quixotically) as the defender of “the 99 percent” than one that just represents Democratic interest groups.”

The higher ed bubble is bursting, so what comes next?

“Government decides to try to increase the middle class by subsidizing things that middle class people have: If middle class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc… Subsidizing the markers doesn’t produce the traits; if anything, it undermines them. One might as well try to promote basketball skills by distributing expensive sneakers.”

Assorted Links (12/5/2011)

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

Some Bands Try to Play Forex Market

This is a fascinating article about how bands like Metallica and the Red Hot Chili Peppers take foreign exchange rates into account when booking concert tours, and also actively hedge their foreign exchange exposures by using financial derivatives… I’ll definitely use this article as a case study in my financial engineering course at Baylor this coming spring semester!

‘Arab Winter’ Chills Christians in Mideast

“With political turbulence in many Middle Eastern countries, some Christians in the region are worried that the toppling of autocratic rulers could uncork sectarian violence against them and other minority groups.”

Chávez’s 40-Year Plan to Conquer Vice

“Considering that the human condition hasn’t changed much since we got kicked out of the garden, a 40-year plan to conquer vice seems pretty ambitious.” If British historian Paul Johnson were to update his famous (nearly 25-year old) “Heartless Lovers of Humankind” essay (cf., he would certainly have to include Chavez this time around…

The ObamaCare Recusal Nonsense

“In The Wall Street Journal, former Attorney General Michael B. Mukasey writes that the left doesn’t want Justice Thomas to hear the case to decide whether the health-care overhaul is constitutional, while the right thinks Justice Kagan is too biased—but the full court should decide the case.”

Absolute Certainty Is Not Scientific

“In The Wall Street Journalist, ecologist Daniel Botkin says that Global warming alarmists betray their own cause when they declare that it is irresponsible to question them.”

McDonald’s Outsmarts San Francisco Pols

SF Weekly — “Local McDonald’s employees tell SF Weekly the company has devised a solution that appears to comply with San Francisco’s “Healthy Meal Incentive Ordinance” that could actually make the company more money — and necessitate toy-happy youngsters to buy more Happy Meals.”

Are CEOs paid their value added?

“Remember Paul Krugman’s forays into “the wage reflects what the top earners are really worth” topic, and the surrounding debates? Why should this discussion be such a fact-free zone? Why so little discussion of tax incidence?”

‘We Don’t Face Any Good Options’

“Nobel Prize–winning economist Vernon Smith on the financial crisis, Adam Smith’s underrated insights, and his journey from socialist to libertarian.”

A Recipe for Middle-Class Jobs –

“The U.S. desperately needs middle-skill jobs for people who didn’t go to college. Austin, Texas, has an unlikely answer for how to create them: attract high-skilled people, and watch them create new companies and jobs for lower-skilled people as well.” The Wall Street Journal gives a shout-out to Austin today, calling it a “brain hub” and a model for the rest of the nation concerning how to create middle-class jobs!

America the Difficult

“The Wall Street Journal writes about a new study showing that in tax compliance the U.S. ranks 69 of 183 nations.”

Egypt and the Fruits of the Pharaohs

“In The Wall Street Journal, Fouad Ajami writes that the disorder in Cairo is not the result of democracy but rather of a half-century of authoritarianism.”

The Great Global Warming Fizzle

“In The Wall Street Journal, Global View columnist Bret Stephens writes that the climate religion is fading amid spasms of anger and twitches of boredom.”

Europe’s Currency Road to Nowhere

“In The Wall Street Journal, Austan Goolsbee writes that the euro has punished Southern Europe the way China’s currency has hurt the United States.”