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…

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