Assorted Links (5/31/2012)

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

The Righteous Mind: Why Good People Are Divided by Politics and Religion

“Why can’t our political leaders work together as threats loom and problems mount? Why do people so readily assume the worst about the motives of their fellow citizens?” I am looking forward to reading social psychologist Jonathan Haidt’s new book entitled “The Righteous Mind: Why Good People Are Divided by Politics and Religion”. Here’s’s description of this book: “His (Haidt’s)starting point is moral intuition—the nearly instantaneous perceptions we all have about other people and the things they do. These intuitions feel like self-evident truths, making us righteously certain that those who see things differently are wrong. Haidt shows us how these intuitions differ across cultures, including the cultures of the political left and right. He blends his own research findings with those of anthropologists, historians, and other psychologists to draw a map of the moral domain, and he explains why conservatives can navigate that map more skillfully than can liberals. He then examines the origins of morality, overturning the view that evolution made us fundamentally selfish creatures. But rather than arguing that we are innately altruistic, he makes a more subtle claim—that we are fundamentally groupish. It is our groupishness, he explains, that leads to our greatest joys, our religious divisions, and our political affiliations. In a stunning final chapter on ideology and civility, Haidt shows what each side is right about, and why we need the insights of liberals, conservatives, and libertarians to flourish as a nation.”

Is Free Enterprise Social Darwinism?

Earlier today, I attended a luncheon at the Texas Public Policy Foundation Texas Public Policy Foundation featuring Dr. Arthur C. Brooks, who is the president of the American Enterprise Institute.  I highly recommend watching the video “Is Free Enterprise Social Darwinism?” (the answer is “no”) and also to the audio of today’s luncheon presentation at TPPF here (video is forthcoming (this coming Monday, June 4) at  Quoting from his inspiring new book “The Road to Freedom” (entitled so in obvious deference to Hayek’s famous tome “The Road to Serfdom”), “If not money, then what do people really crave? The answer is earned success, the ability to create value with your life or in the lives of others. It does not come from a lottery check or an inheritance. It doesn’t even mean earning a lot of money… To earn your success is to define and pursue your happiness as you see fit. It’s the freedom to be an individual and to delineate your life’s “profit” however you want. For some, this profit is measured in money. But for many, profit is measured in making beautiful art, saving people’s souls, or pulling kids out of poverty.”

The Clash of Economic Ideas: The Great Policy Debates and Experiments of the Last Hundred Years

“The Clash of Economic Ideas interweaves the economic history of the last hundred years with the history of economic doctrines to understand how contrasting economic ideas have originated and developed over time to take their present forms. It traces the connections running from historical events…”  This will be my personally assigned reading during my upcoming summer vacation. I am looking forward to becoming better a better informed citizen and scholar; wish me luck!

Hunter Baker on Secularism

I’d like to give a “shout out” to the latest Research on Religion podcast on the topic of secularism (defined here as a “…an ideological position wherein religious practice and discourse must be removed from public visibility, either physically in terms of the display of religious symbols… or rhetorically in terms of how religious ideas influence policy”). IMHO, Research on Religion (located at (as well as Econtalk @ provide some of the best continuing education (particularly for people interested in the social sciences and public policy) that money can’t buy!

Putting the ‘Insurance’ Back in Health Insurance

“If we really want to make health insurance affordable and accessible to everyone, we need to go back to basics, and understand all of the government-induced distortions that have made health insurance look nothing like actual insurance.”  This Forbes article applies basic economic concepts such as are taught in principles of risk management and insurance courses in colleges and universities to explain how to make health insurance affordable and accessible. It would appear that the author may have read the “famous” August 2009 blog posting entitled “My preferred approach for reforming health insurance…”, which is located at :-).

Living within your means is so inconvenient

GMU economist Russ Roberts’ latest on the Eurozone crisis – excellent analysis, with a tip of the hat to Charles Dickens and Adam Smith…

Meet Robert Mugabe, the New Friendly Face of the United Nations

“Feckless UN bureaucrats have tried to ban Dante and give Mt. Rushmore back to the Native Americans. Now comes news that serial human rights violator and war criminal Robert Mugabe has been appointed as an International Envoy for Tourism.”

The Bain Ads Are About Spending

“In The Wall Street Journal, Business World columnist Holman Jenkins writes that the Obama campaign ads against Romney and Bain Capital are an attempt to divert attention from the need for government fiscal restraint.”

Subpar Obama Recovery: 6.5 Million Jobs Below Average

“President Obama has touted recent job growth as a sign of “extraordinary progress.” But the U.S. economic recovery has been the worst since World War II.”

Mirror, Mirror, on the Wall, Which President Is the Biggest Spender of All?

A financial columnist named Rex Nutting recently triggered a firestorm of controversy by claiming that Barack Obama is not a big spender. Here’s Cato’s take on this claim…

It’s time to drop the college-for-all crusade

“A focus on what is best for each student.”

Do Organic Consumers Shop Exclusively at the Jerk Store?

“A new study examines the connection between organic food marketing and anti-social behavior.”  While the title of this article seems a bit over the top, the article nevertheless provides some interesting and thought provoking perspectives on food marketing…

Renewable Energy Can’t Run the Cloud

“In The Wall Street Journal, Robert Bryce writes that data centers for companies like Google and Facebook now consume about 1.3% of all global electricity.”

Four More Years?

Quoting from this article by the former Governor of Delaware Pete du Pont, “The president many people felt would unite the country has instead used one wedge issue after another to divide our people along the lines of income, race, sex and class. This setting of one group against another is part of the re-election process and prospects. It may lead to a more difficult, divisive, and nastier election than we have seen in a while. And that may in turn mean an more difficult time for whoever is president in 2013.”

The Law Firm Business Model Is Dying

“In The Wall Street Journal, the Brookings Institution’s Clifford Winston and Robert W. Crandall write that rules adopted to protect the legal profession from outside competition are actually stifling it.”  This is a fascinating article which explains how regulatory barriers hamstring not only the legal profession, but also many other sectors of the economy. Quoting from this article, “…deregulation of transportation that began during the late 1970s enabled motor, air and rail carriers to reduce costs and, particularly in the case of railroads and airlines, to regain market share by offering consumers lower prices and better service.”

Number of the Week: Half of U.S. Lives in Household Getting Benefits

“Cutting government spending is no easy task, and it’s made more complicated by recent data showing that nearly half of the people in the U.S. live in a household that receives at least one government benefit.”

The History Boys

“The Wall Street Journal on Obama’s fiscal blowout that never happened, according to Obama.”  The temptation for politicians of all stripes to play fast and loose with statistics for the purpose of bolstering weak arguments can be breathtaking at times; as Mark Twain once famously remarked (with a tip of the hat to British PM Benjamin Disraeli), “”Lies, damned lies, and statistics”… (cf.,_damned_lies,_and_statistics) .

The Liberal Legal Meltdown Over ObamaCare

“In The Wall Street Journal, Michael W. McConnell writes that if supporters of mandatory insurance were as confident of its merits as they claim to be, they would offer legal arguments, not moral accusations.”

Memorial Day and the American Bible

“In The Wall Street Journal’s Houses of Worship column, Stephen Prothero writes that Americans disagree, but we share a collection of core texts that ‘we the people’ regard as authoritative.”

Vulture Capitalism? Try Obama’s Version

“In The Wall Street Journal, Potomac Watch columnist Kimberley Strassel writes that a profit-driven economy is preferable to one run by political favoritism.” Interesting commentary by Kim Strassel on the important differences between private equity and “public” equity…

The Service Patch

“As college graduates consider their career prospects, they should think about how to be as much as they think about what to be.”

A Mess the 45th President Will Inherit

“The Wall Street Journal reports that taxpayers now stand behind derivatives clearinghouses.”  Here is some more important information about the policy train wreck known as Dodd-Frank. Specifically, Dodd-Frank “…authorizes the Federal Reserve to provide “discount and borrowing privileges” to clearinghouses in emergencies. Traditionally the ability to borrow from the Fed’s discount window was reserved for banks…”

Why Oil Prices Will Keep Falling

“In The Wall Street Journal, Nansen Saleri writes that oil will cost less in the future because energy extraction technologies will overcome bad policies and geopolitical risks.” I can’t help but wonder what in the world happened to all the greedy speculators who just one month ago were driving oil prices up (see…

Greece’s False Austerity

“In The Wall Street Journal, David Malpass writes that the best outcome would be for Greece to stay in the euro, reduce government spending, and ask Europe for a mix of loans and gifts as it downsizes its government.”

Dodd-Frank’s Too-Big-to-Fail Dystopia

“In The Wall Street Journal, Peter J. Wallison writes that the government is expanding crony capitalism to insurers, securities firms and other non-banks.”  It’s official: thanks in no small part to Dodd-Frank, the US system of free enterprise is at risk due to Dodd-Frank’s codification of the “SIFI” (“systematically important financial institutions”) designation…

Prostate Testing and the Death Panel

“In The Wall Street Journal, venture capitalist Tom Perkins notes that a free economy leads to life-saving innovations, while a highly taxed and overregulated economy leads to government agencies that discourage their use.”

A Tutorial for the President on ‘Profit Maximization’

“In The Wall Street Journal, Emory University economist Paul Rubin reminds us that profits provide the incentive for firms to do what consumers want.”  Paul Rubin provides a particularly clear explanation of the conceptual linkage which exists between the notions of profit maximization and maximization of social welfare in this short WSJ op-ed…

Free to Choose

One of the first books that I ever read on the topic of economics was “Free to Choose: A Personal Statement“, published in 1980 by Milton and Rose Friedman. As the Free to Choose Wikipedia article notes, “This book maintains that the free market works best for all members of a society, provides examples of how the free market engenders prosperity, and maintains that it can solve problems where other approaches have failed.” Anyway, Free to Choose deeply influenced me when I read it as a beginning graduate student, and I am delighted to see that a Values & Capitalism blogger named Kurt Jaros is “walking” his readers through the entire book. Here’s a list of blog postings that he has contributed so far, along with brief summaries provided by Mr. Jaros (source:

“Free to Choose

This Christmas I asked for and received Free to Choose by Milton and Rose Friedman. I’ve been a big fan of Milton for a while now, be it reading some articles online or watching YouTube videos of him.

The Power of the Market: Part 1

A couple weeks ago I wrote about the introduction to Free to Choose by Milton and Rose Friedman. In this post, I will explore some of the points from the first chapter, “The Power of the Market.” Friedman begins the chapter by explaining the difference between a command and a voluntary economy.

The Power of the Market: Part 2

Some people think the free market is full of greedy men who respond to monetary stimuli. But this isn’t the essence of a market (despite some types of those men acting within the free market).

The Tyranny of Controls

In the second chapter, Friedman writes on the role of government as it relates to trade. He makes a strong case for free trade, and specifically focuses on international trade. However, the same principles ought to be applied to domestic trade.

The Tyranny of Controls: Part 2

In my previous post I explained why the government should not regulate tariffs due to their harmful consequences toward consumers and innovation. This is part five of a book series on Free to Choose by Milton Friedman.

The Anatomy of Crisis

In my previous post, I shared Milton Friedman’s thoughts on why international trade is bad for an economy. This is part six of the series on “Free to Choose” by Milton Friedman. Often times in our political discussions with friends and colleagues we want to play the role of doctor and figure out what the source of pain is. We can both agree on what the symptoms are, but we may have different answers for the cause.

Cradle to Grave

In my previous post, I summarized Friedman’s beliefs about the Federal Reserve, its proper role, and how its failure is what leads us to economic problems (not capitalism). In his following chapter, “Cradle to Grave,” Friedman explains how the welfare state began to take off during the FDR administration.

Cradle to Grave: Part 2

In my previous post I began to discuss the shift of public perception about the role of government in America from one that merely protects the individuals to one that also provides for the individuals. Although he does not use the term, Friedman considers Social Security to be a Ponzi scheme.”

Assorted Links (5/23/2012)

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

Hope and Poverty

“Is there a role for hope in poverty alleviation programs?  According to a recent speech by economist Esther Duflo, there is. Duflo looked at a BRAC program in West Bengal; program participants were given a “small productive asset” (a cow, a goat, or some chickens) and a small stipend to encourage participants not to immediately eat the animal. The results were significant…”

Toxic Charity: Lessons from Bob Lupton

“Repeatedly offering charity to the poor can create dependency, rather than breaking the cycle of spiritual and physical poverty, writes Peter Greer, president and CEO of HOPE International.”

Risk intelligence: how gamblers and weather forecasters assess probabilities.

“Humans are useless at assessing probabilities. But against the odds, Dylan Evans has tracked down the handful of people who rate as geniuses on the intelligence scale he calls risk quotient.”

The New Holy Wars

“’Economics and environmentalism are types of modern religions.’ So says author Robert H. Nelson in this analysis of the roots of economics and environmentalism and their mutually antagonistic relations in the twentieth and twenty-first centuries.”  I am looking forward to reading this book. I found out about it from listening to a compelling and thought-provoking Research on Religion podcast (see in which host Tony Gill interviews the book’s author, Prof. Robert Nelson, who is a professor of public policy at the University of Maryland and a Senior Fellow at The Independent Institute.

Taxation: The People’s Business

“Thomas Sowell has a column about Andrew Mellon’s book Taxation: The People’s Business, recently reprinted by the University of Minnesota. The Mellon tax cuts inspired the Kennedy tax cuts, which inspired the Reagan tax cuts.”

How the Recovery Went Wrong

“In The Wall Street Journal, Harvey Golub writes that of the 11 recoveries in the last 60 years, this one is at or near the bottom in job growth and every other economic indicator.”

Charting Fun with Krugman

“In a few recent blog posts at the New York Times, Paul Krugman used bar graphs and tables in an attempt to establish the superiority of his views over those of the Austrian School of economics. Yet, as I’ll show in this article, I can use Krugman’s own data to demonstrate the exact opposite…”

Church of the Holy Contraception

“The institution most successful in imposing its worldview on others is called the Democratic Party.”

Glass-Steagall Wouldn’t Have Prevented the JPMorgan Loss or the Financial Crisis

“Andrew Ross Sorkin pokes a liberal sacred cow: A meme around Glass-Steagall has been created, repeated so often that it has almost become conventional wisdom: the repeal of Glass-Steagall led to the financial crisis of 2008. And, the thinking goes, has become almost religious for some people, that if the law were reinstated, we would avoid the next crisis.”

Milton Friedman Sound Recordings Digitized

“More than two hundred fifty audiotapes in the Milton Friedman papers are available for listening after having been digitized by Hoover’s audio lab.”  I can’t wait to listen in… 🙂

Market Logic vs. Moral Value?

“The May issue of Boston Review has a special forum on “How Markets Crowd Out Morals,” with a lead essay by Michael Sandel. Sandel’s essay is, like his recent Atlantic essay, based on his new book. In it, he argues that market logic crowds out moral value in a variety of ways.”

Dim Views of Big Business, Government

Voters have little confidence in Wall Street, large corporations or the news media, according to a new Wall Street Journal/NBC News poll.

Libertarian Caring

“We value liberty at the expense of caring. That’s the takeaway about libertarians from Jonathan Haidt’s compelling new book, The Righteous Mind: Why Good People are Divided by Politics and Religion.”  Here’s the Cato Institute’s response to Haidt’s thesis: “Do libertarians value liberty at the expense of caring and fairness? At Aaron Powell argues the answer is no. Rather than limiting other concerns, he says, “liberty is the best way to maximize all other concerns…so we can better go about making the world a happier, healthier, richer, and more caring place.”

Ring of Fire Eclipse: 2012

“A rare annular eclipse – a ring of sunlight as the new moon, passing between Earth and sun, blocks most, but not all, of the sun’s disc. It is striking to see. Differing from a total solar eclipse, the moon in an insular eclipse appears too small to cover the sun completely, leaving a ring of fire…”  This is a wonderful photoessay from our friends at the “Big Picture” (which is a Boston Globe online photography offering)…

Why the Bishops Are Suing the U.S. Government

“In The Wall Street Journal, Harvard Law Professor Mary Ann Glendon says that the main goal of the contraception mandate is not to protect women’s health—it’s to conscript religious organizations into a political agenda.”

As an insurance economist, I am dumbounded by the notion (advanced by the Obama administration) that by mandating that insurers pay for a scheduled benefit (in this case, “free” contraception), that this somehow relieves consumers of the financial responsibility associated with said benefit (Professor Glendon does an excellent job in this article explaining why the HHS sterilization, abortifacient and birth-control insurance mandate directed toward insurers does not relieve consumers of moral responsibility). It’s axiomatic that insurance prices reflect the expected value of future claims costs; thus, the costs of any and all mandated benefits are reflected (other things equal) in the form of higher insurance prices, which implies that consumers bear the full financial responsibility of the mandate. While it is true that insurers write the checks, they do so as intermediaries in the entire process.

The Dumbing Down of Joe Biden

“In The Wall Street Journal, Main Street columnist William McGurn writes that as the punch line for late-night television jokes, the vice president relieves comics from having to tell any jokes at Mr. Obama’s expense.”

Cory Booker’s Apostasy

“If the (Obama) campaign is going to successfully demonize Mitt Romney as a marauding capitalist, it can’t have fellow Democrats defending capitalism.”

The Age of Innocence

“It’s no wonder Europe and the United States are facing debt crises and political dysfunction at the same time.”  This is a somewhat depressing article that rings true. Quoting from it, “The American decentralized system of checks and balances has transmogrified into a fragmented system that scatters responsibility. Congress is capable of passing laws that give people benefits with borrowed money, but it gridlocks when it tries to impose self-restraint.”

How Change Happens

“Private equity is not where we need to be focusing our critical lenses. Is this what the presidential race is going to be about?”  Quoting from David Brooks’ latest column about private equity, “Forty years ago, corporate America was bloated, sluggish and losing ground to competitors in Japan and beyond. But then something astonishing happened. Financiers, private equity firms and bare-knuckled corporate executives initiated a series of reforms and transformations.”

Let Us Now Praise Private Equity

Quoting from this NRO article, “Every presidential candidate has to defend himself against accusations of wrongdoing — an affair, abuse of office, campaign-finance impropriety, and so forth… But the allegation against Mitt Romney is extraordinary: He stands accused of doing his job too well.”

Douthat On Orthodox Christianity’s Implications for Markets

“This conversation between Ross Douthat and William Saletan on Slate is required reading for any thoughtful Christian. It reviews themes in Ross’s new book, “Bad Religion,” which I’m now about to buy.”

Competition Is Killing Higher Education (Part 1)

“Competition, we are constantly told, encourages individuals, institutions and companies to take the risks necessary for innovation and efficiency. But in higher education, competition often discourages risk taking, leads to overly cautious short-term decisions, produces a mediocre product for the price, and promotes excessive spending on physical plants and bureaucracies.”  This is an excellent real world example of a “winner take all” game…

Three Views of the ‘Fiscal Cliff’

“In The Wall Street Journal, Edward Lazear writes that it’s the tax increases we have to fear—spending cuts won’t hurt the economy.”  Quoting from this article, “Christina Romer, President Obama’s first chairwoman of the President’s Council of Economic Advisers, and David Romer document the strong unfavorable effect of increasing tax rates on economic growth (American Economic Review, 2010). They report that an increase in taxes of 1% of gross domestic product lowers GDP by almost 3%. The evidence on government spending also suggests that high spending means lower growth… Swedish economists Andreas Bergh and Magnus Henrekson (Journal of Economic Surveys 2011) survey a large literature and conclude that an increase in government size by 10 percentage points of GDP is associated with a half to one percentage point lower annual growth rate.”

Finally, I close in noting that the empirical results referenced above are consistent with UCSD economist Valerie Ramey’s empirical finding (see that “… government spending does not appear to stimulate private activity”.

Bain Capitalism 101

“The Wall Street Journal asks in an editorial how a rapacious company could manage to get repeat business for 29 years?”

Game Theory and Business Economics

“Game theory is mainly concerned with predicting the outcome of games of strategy in which the participants have incomplete information about the others’ intentions.”  This blog posting from the UK provides a number of recent examples of game theory in action; e.g., currency interventions by central banks, over-fishing of the oceans, doping in professional sports, solar panel trade wars, the ongoing Eurozone sovereign debt crisis, etc… Good stuff!

Market Failure: The Case of Organic Food

Quoting from this article, “Maybe the health benefits of organic food really do justify a 30-50% price premium. But nothing high on Google Scholar (see inspires confidence in this position. Major literature reviews in 2009 (see, 2003 (see, and 2002 (see report that (a) there’s little solid evidence about the health benefits of organics, and (b) existing evidence reveals little health benefit of organics.”

College Presidents vs. College Football Coaches

Quoting from the blog posting referenced above: “1. A new list of the highest-paid public university presidents in 2011, from today’s Chronicle of Higher Education (see; E. Gordon Gee at Ohio State University is No. 1 at almost $2 million. 2. USA Today’s list of the highest-paid college football coaches in 2011, mostly at public universities (see Mack Brown at Texas is No. 1 at more than $6 million (with maximum bonus).”

Family Ties, Inheritance Rights, and Successful Poverty Alleviation: Evidence from Ghana

Here’s an interesting NBER paper on the implications of law and culture for the alleviation of poverty…

Assorted Links (5/20/2012)

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

Number of Those Working Past 65 Is at a Record High

“While the number of workers over the traditional retirement age has risen, those 55 and under are doing worse.” Signs of the times – people who have jobs are not retiring, and people who don’t have jobs (the so-called “chronically unemployed”) are claiming Social Security Disability Insurance at a historically unprecedented rate (see…

A Little Bit Indian

“Why Elizabeth Warren’s embarrassment is a scandal for academia.”

Banks Need More Capital, Not More Rules

“In The Wall Street Journal, Allan Meltzer writes that the U.S. economy can’t grow unless investors are free to finance risky assets.” Also see Mark Steckbeck’s posting entitled “The Solution to Too-Big-To-Fail is Not Bailing Out Big Banks” (@ which follows up Professor Meltzer’s WSJ essay with a simple thought experiment illustrating the self-regulating incentive effects associated with increasing bank capital requirements.

Notable & Quotable

“Historian Lord Acton on power and moral judgment, 1887—including the coinage that absolute power corrupts absolutely.”

What’s at Stake in the Wisconsin Recall Election

“In The Wall Street Journal’s Cross Country column, Christopher M. Toner writes that what unions really want is legal standing to sue employers and prevent any changes—in wages, hours or other conditions of employment—unwanted by their members.”  Intrade currently puts the odds of Governor Scott Walker winning the upcoming recall election at nearly 90% – see

The Weekend Interview with Abigail Thernstrom: The Good News About Race in America

“In The Wall Street Journal, Jason Riley interviews Civil Rights Commission co-chairwoman Abigail Thernstrom, who says the 1965 Voting Rights Act has been a huge success. So why are black activists keen to press the discrimination button on issues like voter ID?”

The Saverin Savonarolas

“In The Wall Street Journal, Business World columnist Holman Jenkins writes about the Facebook founder who encountered America’s ‘content-free outrage’ machine when he renounced his citizenship.”

Is Austerity to Blame for Europe’s Economic Woes?

“From Nobel laureate Paul Krugman to the free-market-friendly Economist magazine to former Treasury Secretary Lawrence Summers, all sorts of experts are charging that financial austerity measures are killing the great economies of Europe.”  These “experts” “…criticize cutting government spending in a weak economy ignore academic research showing that significant spending cuts, structural reforms to entitlements, and loosening labor regulations are proven ways to reduce debt loads and get countries moving again.”  

Destroying Latin America: Journalist Mary O’Grady on Populism, Protectionism, and Prohibition

“The inequality produced by liberty: This, for the socialist, is the soft underbelly of pro-market rationale and the best place to attack,” says Mary O’Grady, who covers Latin America for the Wall Street Journal. She goes on to say (and I agree), that the socialist argument against inequality “… is the intellectual stream that prevails in Latin America, and it’s the reason the region can not hope to reach its potential any time soon.” Hat tip to my friend Spencer Case for pointing this video out to me.

6 cups a day? Coffee lovers less likely to die, study finds

“Coffee drinkers who worry about the jolt of java it takes to get them going in the morning might just as well relax and pour another cup. That’s according to the largest-ever analysis of the link between coffee consumption and mortality, which suggests that latte lovers had a lower risk of death during the study period.”

Notable & Quotable

“Actor Will Smith on French TV discussing new President Francois Hollande’s proposal to tax high-earners at 75%.”  Hat tip to my Baylor colleague Dave VanHoose for pointing this article out to me…

Tom Frost: The Big Danger With Big Banks

“In The Wall Street Journal, Tom C. Frost writes that taxpayer safety nets such as the FDIC should be available only to banks that are in the loan business, not those in the investment business.”  Mr. Frost basically calls for an end to TBTF (too big to fail); quoting from the article, “…by protecting people from the consequences of their errors, the bailouts raised the risk that the same errors will be made in the future.” QED!

Obama walks fine line in bashing Romney, courting Wall Street

“For President Barack Obama’sre-election team, it’s sort of like threading a needle.”

The mathematics of history

“What can mathematics say about history? According to TED Fellow Jean-Baptiste Michel, quite a lot. From changes to language to the deadliness of wars, he shows how digitized history is just starting to reveal deep underlying patterns.”

C.S. Lewis’s Lesson on Enterprise

“In a sort of ghastly simplicity we remove the organ and demand the function. We make men without chests and expect of them virtue and enterprise. We laugh at honour and are shocked to find traitors in our midst.”—C.S. Lewis, “The Abolition of Man”

Highest and Cheapest Gas Prices by Country; Relative to Income, U.S. Has Very Affordable

According to this “affordability” list of 55 countries, the US comes in at #50! :-)…

Assorted Links (5/15/2012)

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

Jonathan Haidt Answers Your Questions About Morality, Politics, and Religion

Quoting from this Freakonomics interview with University of Virginia psychology professor Jon Haidt, “Once I lost my feelings of repulsion and anger toward conservatism I discovered a whole world of ideas I had never encountered.”

Is Free Enterprise Really Based on Greed?

“In his book “The Road to Freedom”, Arthur Brooks demonstrates how earned success, true fairness and helping those in need are the foundation of the moral case for free enterprise.”  I am looking forward to the upcoming luncheon in Austin (scheduled for May 31) featuring Dr. Art Brooks, who is president of the American Enterprise Institute. If y’all are interested in attending, the registration for this event is located at…

Jerry Brown vs. Chris Christie

“In The Wall Street Journal, Main Street columnist William McGurn writes that more states are realizing that the road to fiscal hell is paved with progressive intentions.”  It’s important to say no because saying yes will very quickly take us down the same fiscal and economic road that the EU is currently traveling!…

Saying No to State Bailouts

“In The Wall Street Journal, Congressman Kevin Brady and Senator Jim DeMint write that Congress must make plain that American taxpayers will not protect states from the consequences of their economic policies.”

Europe’s Brain-Dead Right

“In The Wall Street Journal, Global View columnist Bret Stepehns writes that nobody should be surprised if voters also give Angela Merkel and David Cameron the boot at the next ballot.”

Losing Money Isn’t a Crime

“In The Wall Street Journal, Yale Law Professor Jonathan Macey writes that J.P. Morgan lost $2 billion and will learn from the experience—which regulators rarely do.”

Obama’s ‘Vampire’ Capitalists

“The Wall Street Journal says write the President a check and escape eternal damnation.”

Lifetime airline passes: Fly anywhere, any time, for life

“IN THE early 1980s, American Airlines, strapped for cash, decided to start selling passes for unlimited first-class travel for life. At the time, the passes cost $250,000 (around $600,000 in today’s dollars), with a companion ticket available for an extra $150,000 and discounts for older people. The Los Angeles Times explains what happened next…”

The Leverage Cycle: Cause and Cure for the Current Crisis

Yale economist John Geanakoplos discusses his “leverage cycle theory” in the context of the global financial crisis of 2008-????; hat tip to Greg Mankiw (…

The Tyranny of Clichés

“In “Politics and the English Language,” George Orwell says that a writer can avoid the heavy lifting of making an original or insightful argument by simply turning his pen on autopilot and fueling it with “ready made” clichés.” Interesting essay from NRO’s Jonah Goldberg on the “meaning” of “social justice”…

Read to your kids (and teach them about money)

“The latest EconTalk episode is David Owen talking about how to teach your kids about money. It’s based on his book, The First National Bank of Dad.”

‘Taxmaggedon’ Is a Real Threat

“In The Wall Street Journal, former Treasury Secretary John Snow writes that next year’s scheduled increases on dividends and capital gains will retard investment and derail the recovery.” Look’s like we may be “toast”…

The Dimon Principle

Quoting from this WSJ article, “It’s worth noting that once upon a time a $2 billion banking loss was a problem for the bank, not politicians. But in the Dodd-Frank world, the biggest banks have become more or less regulated utilities. One tragedy of J.P. Morgan’s trading loss is that it will become an excuse to give regulators even more power, when what taxpayers really want is a system that ends too-big-to-fail banks, not a plan to revive them.”

Winning the News Cycle, Losing the Race

“The Obama White House has worked to change the subject to social issues. But in a pocketbook election, it helps to focus on pocketbook anxieties.”

College Graduates Face a Long Job Hunt

“Most graduating college students will leave school this spring without a job offer despite an uptick in hiring by on-campus recruiters.”

Disabled Americans Shrink Size of U.S. Labor Force

Apparently Americans are claiming Social Security Disability Insurance, or SSDI, in record numbers. This helps to explain (at least in part) the shrinking labor force participation rate. See the Washington Post article “Jobs report shows effects of the incredible shrinking U.S. labor force” at; this article notes, among other things, that “If the same percentage of adults were in the workforce today as when Barack Obama took office, the unemployment rate would be 11.1 percent (rather than the current 8.2% rate, according to the US Bureau of Labor Statistics).”

Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

Interesting Bloomberg article about how the co-founder of Facebook, Eduardo Saverin, has renounced his American citizenship, a decision apparently motivated (at least in part) by US income tax considerations. The article notes that “Besides helping cut tax bills stemming from the Facebook, the move may also help him avoid capital gains taxes on future investments since Singapore doesn’t have a capital gains tax.”…

The FDR Lesson Obama Should Follow

“In The Wall Street Journal, Arthur Herman writes that Roosevelt reluctantly unleashed industry to win World War II, thereby laying the groundwork for America’s economic recovery.”

Stimulus Spending Keeps Failing

“In The Wall Street Journal, Harvard economist Robert J. Barro asks: If austerity is so terrible, how come Germany and Sweden have done so well?”

The Great Human-Rights Reversal

“In The Wall Street Journal, Wonder Land columnist Daniel Henninger writes that the Democratic left has conceded human rights to the conservatives.”

Big &#%!ing Joker

Interesting article by NRO’s Jonah Goldberg about Vice President Joe Biden; particularly concerning the VP’s tiresome “…literally, not figuratively” rhetoric…

What the Greek Left Wants

“In The Wall Street Journal, Takis Michas writes that Greece’s left wing wants no reform, but they do want to tax the rich and blackmail Germany.”

America and the Value of ‘Earned Success’

“In The Wall Street Journal, Arthur Brooks writes that societies that enable individuals to earn rewards based on their effort and merit are happier than those that don’t.”  Quoting from this article, “All surveys show that most Americans still embrace our free enterprise system—today. The crucial test is whether the country is willing to support the hard work and policy reforms that will sustain it. The cost of failing this test will be more human than financial. In our hands is the earned success—and thus the happiness—of our children and grandchildren. The stakes in the current policy battles today are not just economic. They are moral.”

Who Shoulders the Burden?

Here’s a short video with economist Steve Horwitz that reminds us who sends the check to the government isn’t the same as who’s actually burdened by the tax; while it is true that taxed corporations write the check, the actual incidence of corporate taxation occurs in the form of lower wages for workers and higher prices for goods and services for consumers…

Chronicle of Higher Education Fires Blogger For Challenging Seriousness of Black Studies Depts.

Quoting from this article, “Over at the Chronicle of Higher Education… contributor Naomi Schaefer Riley has been fired for a post questioning the intellectual seriousness and validity of black studies departments.” The title of her post is “The Most Persuasive Case for Eliminating Black Studies? Just Read the Dissertations” (see

Assorted Links (5/8/2012)

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

‘Fair Trade? Its Prospects as a Poverty Solution’

“Fair Trade is an enormously popular idea in Christian and secular circles alike. Who, after all, could be against fairness? Victor V. Claar, however, raises significant economic and moral questions about both the logic and economic reasoning underlying the fair trade movement. In this monograph, Claar suggests that, for all its good intentions, fair trade may not be of particular service to the poor, especially in the developing world.”

xkcd: Every Major’s Terrible

Humor alert: xkcd provides us with a clever cartoon essay concerning how “Every (college) major is terrible”; he suggests that his essay be sung to the tune of Gilbert & Sullivan’s “Modern Major-General’s Song” from their 1879 comic opera The Pirates of Penzance (go to for a listen…); apparently someone has already taken xkcd up on his suggestion (see…

Supermoon: the perigee moon of 2012

Here’s the Big Picture’s photoessay about Supermoon – photos from all over the world!

Why Colleges Don’t Teach the Federalist Papers

“In The Wall Street Journal, Peter Berkowitz writes that at America’s top schools, graduates leave without reading our most basic writings on the purpose of constitutional self-government.”  The extent to which public education as well as “higher” education has been dumbed down during the course of a generation is remarkable. I attended a rather “average” public high school back in the 70’s and recall reading the Federalist Papers as part of a required course in “Civics”…

‘Paycheck Fairness’ Will Mean a Pay Cut for Men

“In The Wall Street Journal, Carrie Lukas writes that wage discrimination is already illegal—but so what? Get ready for another phony debate about the ‘war on women.’”

Don’t Worry (About GDP), Be Happy

“In The Wall Street Journal, James Bovard writes that with the economy slow and joblessness high, the feds want a new way to measure well-being.”  This is sort of the academic equivalent of “Economists Gone Wild”…

Hollande’s European Reality Check

“In The Wall Street Journal, Matthew Kaminski writes that despite its election of a Socialist president, expect France to keep its commitment to Germanic discipline when the chips are down.”

Of Course 70% Tax Rates Are Counterproductive

In today’s WSJ article entitled “Of Course 70% Tax Rates are Counterproductive”, Cato’s Alan Reynolds is quite critical of the Fall 2011 Diamond and Saez Journal of Economic Perspectives article entitled “The Case for a Progressive Tax: From Basic Research to Policy Recommendations” (available from It all comes down to a rather technical discussion concerning the reliability of econometric estimates of the elasticity of taxable income (ETI), which refers to the sensitivity or responsiveness of taxable income to changes in marginal tax rates. As Reynolds points out in his article, you can pretty much drive a Mack truck through the range of empirical estimates of ETI as they vary widely. If taxable income is indeed not all that sensitive to increases in marginal tax rates (Diamond and Saez claim an estimate for ETI = 0.25 in their paper), then you can obtain (as Diamond and Saez do) so-called “socially optimal” tax rates of 73%-83% on the top 1% which would raise tax revenues while having a neutral effect on overall economic growth. On the other hand, if ETI is higher than .25, then the Diamond-Saez marginal tax rate recommendations could have the exact opposite effect – i.e., they could potentially cause substantial losses in tax revenue while reducing economic growth. Reynolds notes that compared with other public finance academic studies, the Diamond-Saez ETI of 0.25 represents a “lowball” estimate. In fact, other studies indicate ETI estimates ranging from 0.62 (from a 2004 paper by Saez) to 1.99 (from a 2000 public finance book edited by Michigan economist Joel Slemrod). Selecting the midpoint of this range (1.3), the application of the Diamond-Saez methodology would then imply a substantially different policy recommendation – in that case, the so-called “socially optimal” tax rates would be more like be 33.9% for all taxes, and below 27% for the federal income tax.

After reading these articles, I am reminded of the famous quote “It is better to be vaguely right than exactly wrong.”

To the Class of 2012

“In The Wall Street Journal, Global View columnist Bret Stephens advises graduates: Tone down your egos, shape up your minds.”

It’s All Your Money: Taxpayers may be on hook for US Postal Service losses

Quoting from this article, “The USPS is losing up to $25 million dollars a day. Until now, taxpayers have not been on the hook for its mounting losses, but that could be about to change. A bailout recently approved by the Senate would appropriate $34 billion in federal money.” On an annual basis, this is equivalent to a lost of more than 9 billion per year ($25,000,000 x 365 = $9,125,000,000)…

Paul Krugman and the European Austerity Myth

From Cato Institute, “Notwithstanding claims by Paul Krugman and other fans of big government, government spending hasn’t been “slashed” in Europe. Which is unfortunate since that’s exactly what’s needed.”

EU Voters Nix Austerity, Though It’s Not Been Tried

“Elections in France, Greece and Italy brought new political parties to power that reject budget austerity. Unfortunately, data show there’s been little austerity at all in the EU.”

Obama’s lost cause

“Having lost his ability to inspire, what is Obama’s appeal?”

Paul Ryan’s Cross to Bear

Hat tip to my friend Kevin Stuart for pointing this article out… I particularly like and appreciate the following quote from this article, “…a “serious but respectful discussion” would have to concede… that conservative Republicans advancing market-oriented answers are as serious about their moral case as liberal Democrats are about theirs.”

The 2012 Pelosi GTxi SS/RT Sport Edition

Here’s an advance look at GM’s car of the future – The 2012 Pelosi GTxi SS/RT Sport Edition…

Divider in chief

“Obama stirs fear and resentment to win votes.”

The War Against The Young

“An analysis of recent jobs figures at reveals a disturbing development: the biggest beneficiaries from the economic recovery are Boomers, while everyone else is getting the shaft.”

Julia’s Circle of Life

Here’s Iowahawk’s parody (source: of the Obama-Biden campaign’s narrative entitled “The Life of Julia” (source:…

Rory Sutherland: Perspective is everything

Rory’s TED Talks are highly entertaining, and they also provide important insights into behavioral economics (for more information about behavioral economics, see…

The Case Against the Paycheck Fairness Act

Quoting from this article, “An analysis of more than 50 peer-reviewed papers, commissioned by the (U.S.) Labor Department, found that the so-called wage gap is mostly, and perhaps entirely, an artifact of the different choices men and women make—different fields of study, different professions, different balances between home and work.”

Memo to the Youth Vote

“In The Wall Street Journal’s Wonder Land column, Daniel Henninger asks: Unless they plan to be union lifers, what’s in an Obama vote for young Americans?”

Notable & Quotable

Quoting from this article, “For the better part of 100 years, and especially in the past five, we have socialized the risks of high finance. All too often, the bankers who take risks don’t themselves bear them. By all means, let the capitalists keep the upside. But let them bear their full share of the downside.By all means, let the capitalists keep the upside. But let them bear their full share of the downside.”

‘Press 9 for More Options’

Quoting from this article, “Putting people on hold for five or 10 or 30 minutes is the antithesis of the philosophy that the customer is king. It’s the height of rudeness. It is telling your customers: Our time is more valuable than yours, so we are going to make you wait and wait and converse with a computer. And by the way, stop rubbing salt in the wounds with the intermittent “your call is important to us,” or “you’re a valued customer,” and “we apologize for the inconvenience.” All lies.”

Pastors Call a Truce on ‘Sheep-Stealing’

“In The Wall Street Journal’s Houses of Worship column, Naomi Schaefer Riley writes in Charlotte, churches are cooperating in an experiment to attract twenty-somethings.”

Who the hell is Julia and why am I paying for her whole life?

In the article referenced below, columnist David Harsanyi writes: “What we are left with is a celebration of . . . how a woman can live her entire life by leaning on government intervention, dependency and other people’s money rather than her own initiative or hard work. It is, I’d say, implicitly un-American, in the sense that it celebrates a mindset we have–outwardly, at least–shunned.”

The ‘Crucify Them’ Presidency

“In The Wall Street Journal, Potomac Watch columnist Kimberley Strassel writes that Al Armendariz, the EPA official who resigned in disgrace this week, was no outlier among the Obama administration’s regulators.”

College Grads Need Jobs, Not a Lower Loan Rate

“In The Wall Street Journal, Andrew Biggs writes that young workers who enter the labor force in a recession suffer years of lower wages.”

How to Muddy Your Tracks on the Internet

Good advice from the Personal Tech section of the New York Times… “It’s probably impossible to cloak your online activities fully, but there are steps you can take to make them harder to follow.”

Romney’s Former Bain Partner Makes a Case for Inequality

“A former partner of Mitt Romney’s at Bain Capital argues that more income inequality is good for the economy.”

The Campus Tsunami

“What happened to the newspaper and magazine business is about to happen to higher education: a rescrambling around the Web and online learning.”

How to define a manufacturer: Corporate tax cuts spark controversy

“President Barack Obama wants to drop the corporate tax rate from 35% to 28% and move manufacturing to a special category, with a 25% rate. Reuters columnist David Cay Johnston warns this could cause a rush of “manufacturers” looking to take advantage of the lower rate.” (Hat tip to Greg Mankiw (…

The Scream’ Fetches $119.9 Million

“One of the art world’s most recognizable images, Edvard Munch’s The Scream, sold for a record $119,922,500 at auction in New York City.”

Assorted Links (5/2/2012)

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

Obama losing rock star status with young

“Michael Barone on polls showing the Obama enthusiasm deficit among young voters.”

Can Obama Run on His Foreign-Policy Record?

“In The Wall Street Journal, Fouad Ajami writes that the American people may demand more than the killing of bin Laden and the hunting down of Somali pirates.”

Smackdown: Ron Paul vs. Paul Krugman on the role and scope of government in the economy

“Ron Paul – “Governments aren’t suppose to run the economy, people are suppose to run the economy.” Paul Krugman – “I’m a believer in capitalism.””

A New Age for the Catholic Church in Cuba? From Survival to Planting Seeds

This posting by UNC-Chapel Hill sociologist Margarita Mooney provides a fascinating history of the Catholic Church in Cuba since the Cuban Revolution of 1959. I also highly recommend listening to the related “Research on Religion” podcast located at…

Forgot Algebra

“It’s weird how proud people are of not learning math when the same arguments apply to learning to play music, cook, or speak a foreign language”.

Time to make a moral case for free enterprise

This article is excerpted and adapted from AEI president Arthur Brooks’ book “The Road to Freedom: How to Win the Fight for Free Enterprise”.

Taylor on monetary and fiscal policy history

“The latest EconTalk is John Taylor giving his take on the last four decades of fiscal and monetary policy in the United States.” This non-technical, 1 hour-long presentation of the economics of fiscal and monetary policy by Stanford economist John Taylor also provides a very interesting historical narrative of the last 50 years of American economic and political history!

Sitting Out Obama

Quoting from this article NRO’s Victor David Hanson, “The president has investors scared stiff… the more the government seems to take over private enterprise — the car bailouts, the mortgage industry, student loans, wind and solar partnerships — the more private enterprise is frightened of being the next small guitar company or the next Chrysler creditor.”

Virginia Could Be an Energy Power—If Only Washington Would Let It

“In The Wall Street Journal, Gov. Bob McDonnell writes that in 2010, Virginia was poised to become the first on the East Coast permitted to produce oil and natural gas offshore—then politics intervened.”

Obama and the bin Laden Bragging Rights

“In The Wall Street Journal, former U.S. Attorney General Michael Mukasey writes that it is hard to imagine Lincoln or Eisenhower claiming such credit for the heroic actions of others.”

Education Is the Key to a Healthy Economy

“In The Wall Street Journal, George P. Shultz and Eric A. Hanushek write that if we fail to reform K-12 schools, we’ll have slow growth and more income inequality.”

Government doesn’t give tax cuts, it takes more or less taxes

“To make a balanced decision you need to incorporate the harm done by taking money from someone.” Interesting and informative points on the economics of tax cuts from Stanford University’s Keith Hennessey.

While Syria burns

“Obama stands idly by and embarasses the nation.” The latest missive from the Washington Post’s Charles Krauthammer…

Chile’s Cautionary Lesson for Americans

“In The Wall Street Journal, Americas columnist Mary Anastasia O’Grady writes that a free economy is at risk when a demand for equality is not answered by a defense of liberty.”

Stop Telling Students to Study for Exams

According to this Chronicle of Higher Education article, I should refrain from telling my students to study for their upcoming final exam, since by so doing I apparently “… communicate to students that the process of intellectual inquiry, academic exploration, and acquiring knowledge is a purely instrumental activity—designed to ensure success on the next assessment.” My bad!

The President Has a List

“In The Wall Street Journal, Potomac Watch columnist Kimberley Strassel notes Barack Obama’s attempts to intimidate contributors to Mitt Romney’s presidential campaign.”

Does Government Have a Revenue or Spending Problem?

“People say the government has a debt problem. Debt is caused by deficits, which is the difference between what the government collects in tax revenue and the amount of government spending. Every time the government runs a deficit, the government debt increases. So what’s to blame: too much spending, or too little tax revenue? Economics professor Antony Davies examines the data and concludes that the root cause of the debt is too much government spending.”

The President’s Incoherent Economic ‘Philosophy’

“Whatever he’s for, apparently it’s not a free-market economy.” Quoting further from this article, “The key (to long-term economic growth) is to embrace a strong free-market economy with stable monetary policy, free trade, low marginal tax rates, a tight rein on government entitlement promises and regulations, and narrow deficits. The president’s plan touches on none of this. He has proposed no serious tax reform or deficit-reduction package. He is, at best, reluctant to promote free trade, for fear of offending his union base. And, on entitlements, he has taken the largest expansion in a generation and piled that on top of the unaffordable programs already on the books.”

How the Fed Favors The 1%

“In The Wall Street Journal, Mark Spitznagel writes that the Fed doesn’t expand the money supply by dropping cash from helicopters—it does so through capital transfers to the largest banks.”

God and Man in Tennessee

“By politicizing our faith, lawmakers are ignoring Tennessee’s true religious roots and threatening the liberties they claim to protect.”