Assorted Links (2/25/2013)

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

The Critics Are Wrong About the Future of Free-Market Health Care Reform

“Douglas Holtz-Eakin and Avik Roy outline a market-based plan for entitlement reform and universal coverage that builds on a reformed version of Obamacare’s subsidized insurance exchanges.” In their “all-purpose rebuttal” to Matthew Yglesias, Paul Krugman, et al., Douglas Holtz-Eakin and Avik Roy provide a way forward which has as its end result “… a health-care system that resembles a slightly less-regulated version of Switzerland’s.”

Voters Grow Weary of Washington’s Drama

No kidding (about growing weary). Consider the following quote from this article, “After two years of creating and then resolving a series of budget showdowns, lawmakers are losing the power to summon concern—or even much interest—among the public, voters here say. “It just happens so often, it’s white noise to me,” said Eric Jones, general manager and partner of the Glenn Jones Ford dealer in Casa Grande…”

Noonan: Government by Freakout

“Obama’s scare tactics aren’t much of a long-term strategy, argues Peggy Noonan.” This is what it feels like these days – it seems like we are averaging at least one major fiscal crisis per month…

ObamaCare and the ’29ers’

“The Wall Street Journal reports how the Affordable Care Act’s new mandates are already reducing full-time employment.” Here’s a case study of the law of unintended consequences at work!

The Hollywood Tax Story They Won’t Tell at the Oscars

“In The Wall Street Journal’s Cross Country column, Glenn Harlan Reynolds writes that it’s easy to demand higher levies on the ‘rich’ when your own industry gets $1.5 billion in government handouts.” I am a big fan of the author of this article, Glenn Reynolds who blogs at Instapundit and is a law professor at University of Tennessee – check out this week’s Econtalk episode entitled “Glenn Reynolds on Politics, the Constitution, and Technology” @!

Generational Theft Needs to Be Arrested

“In The Wall Street Journal, Geoffrey Canada, Stanley Druckenmiller and Kevin Warsh write that a Democrat, an independent and a Republican can agree—government spending levels are unsustainable.”

The Shaky Science Behind Obama’s Universal Pre-K

AEI scholar Charles Murray and his assessment of the social science behind the Obama Administration’s universal Pre-K policy proposal…

Bad history, worse policy: How a false narrative about the financial crisis led to the Dodd-Frank Act

At an event on Tuesday, panelists joined AEI’s Peter Wallison and Alex Pollock to discuss Wallison’s new book “Bad History, Worse Policy: How a False Narrative about the Financial Crisis Led to the Dodd-Frank Act” (AEI Press, January 2013). This panel discussion from an American Enterprise Institute event that occurred last week provides insightful analysis of the so-called Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (AKA “Dodd-Frank”). The bad news is that Dodd–Frank effectively codifies notions of too-big-too-fail (“TBTF”) and bailouts into the foundations of our financial system.

Obamacare: Nothing to Brag About

“The president’s health-care law increasingly does less and costs more.”

U.S. CEO to France: “How Stupid Do You Think We Are?”

“Instead of investing in France, the U.S. tire maker Titan is “going to buy a Chinese tire company or an Indian one, pay less than one Euro per hour and ship all the tires France needs,” its CEO said.” This is priceless – particularly the copy of the actual letter sent by Titan’s CEO to French industry minister Arnaud Montebourg that is attached to this article – well worth reading!

How Scientists Sank the U-Boat

“Marc Levinson reviews Stephen Budiansky’s Blackett’s War: The Men Who Defeated the Nazi U-Boats and Brought Science to the Art of Warfare.” This is a fascinating book review which describes, among other things, how WW II led to the development of operations research (a field which involves the application of statistical analysis to decision-making) and related fields such as game theory. To this day, these disciplines profoundly affect how decisions are made and strategies formulated, not only in the military but also myriad other public and private sector settings. I might have to read this book (that is, after I finish reading Andrew Roberts’ superb book about WWII entitled “The Storm of War” (cf.…

The Minority Youth Unemployment Act

“The Wall Street Journal says in an editorial that a higher minimum wage will most hurt President Obama’s most loyal supporters.” This article calls to mind the famous Thomas Huxley quote, “The great tragedy of Science: the slaying of a beautiful hypothesis by an ugly fact” (the “beautiful hypothesis” here being the claim made by the Obama administration that “…modestly raising the minimum wage increases earnings and reduces poverty without measurably reducing employment”).

I was impressed that this article references the highly cited 2006 monograph by Neumark and Wascher which looks at more than 100 (mostly peer reviewed) academic studies on the minimum wage and notes that the vast majority (85%) of these studies “…find a negative employment effect on low-skilled workers.” The article goes on to note, among other things, that “…the minimum wage has nothing to do with poverty or unemployment. It’s a political play to reward unions and box in Republicans. The minimum wage polls well because Americans naturally want everyone to make more money, and the damage in foregone jobs isn’t obvious.”

The Art and Politics of ‘Zero Dark Thirty’

“In The Wall Street Journal, Matthew Kaminski interviews the man behind the film about the hunt for bin Laden talks about how he combined facts with imagination and calls his Senate critics ‘intellectually dishonest.'”

On locavorism

While I am interested in a fairly wide variety of public policy issues, my knowledge about many (perhaps most?) things tends to be somewhat superficial, and locavorism is no exception. What little I do know about locavorism comes primarily from a recent article written by a pair of agricultural economists entitled “The Locavore’s Dilemma: Why Pineapples Shouldn’t Be Grown in North Dakota” (available from and from the following 3 “EconTalk” (fairly recent) podcasts which address various aspects of locavorism:

1. “David Owen on the Environment, Unintended Consequences, and The Conundrum” (@,
2. “Cowen on Food” (@, and
3. “Lisa Turner on Organic Farming” (@ ).

These podcasts (and article) provide examples concerning how eating local food can at times be environmentally better (and tastier :-)) than non-local food. They also enumerate myriad examples in which this is clearly not the case – i.e., lots of times locavorism can be environmentally worse than eating non-local food. I guess it all “depends”…

P.S.: This posting came about as a result of a conversation that I had recently had about locavorism with a friend who reminded me of the famous 1st episode of Portlandia located at in which locavores Peter and Nance ask their waitress about the chicken (named “Colin”)…

Assorted Links (2/15/2013)

Here’s a list of articles that I have been reading, podcasts that I have been listening to, and videos that I have been watching lately:

Obama’s Executive Death Warrants

“Can a president really serve as judge, jury and executioner over any American he deems a security threat?”

From His Very First State of the Union Utterance, President Obama Got It Wrong

By Roger Pilon

“Not since FDR have we had a president with so little appreciation for our basic constitutional system, or so little understanding of basic economics.”

Obama’s Minimum Wage Plan

“President Obama’s new proposal to raise the federal minimum wage would bad for workers and the economy, but the administration seems to be ignoring the large body of theory and evidence on the issue.” Cato (correctly) notes that “President Obama’s plan to raise the minimum wage ignores 70 years of economic research.”

Four Key Questions for Health-Care Law

“The success or failure of the Affordable Care Act relies on what employers, individuals and states do in the next few years. David Wessel takes a look at what each will do.”

Small Acts, Big Love

“University of Rochester study finds people who put their spouses needs first make themselves happier too.”

Freakonomics Radio – How to Think About Guns

“No one wants mass shootings. Unfortunately, no one has a workable plan to stop them either.” This is definitely worth spending thirty minutes listening to. Freakonomics is really good at exposing the “the hidden side of everything” – particularly unintended consequences of public policy initiatives…

Minimum Wage Wars Round 23

“President Obama has proposed increasing the federal minimum wage from $7.25 to $9. Since the demand for low-skilled labor is quite elastic, this will kill off a few jobs that would otherwise have been created. Not very many, because relatively few people would otherwise be paid between $7.25 and $9 anyway (in an economy with an average wage of about $20/hour); but this is a job-killing idea.”

State of the Union 2013: AEI scholars respond

AEI President Arthur Brooks writes, “What did AEI scholars think of the president’s State of the Union address? Watch this quick video for play-by-play commentary on a variety of issues from entitlement and immigration reform to minimum wage hikes and gun control.”

Households On Foodstamps Rise To New Record

“Since Obama’s first inauguration, the US has generated 841,000 new jobs through November 2012. That number is dwarfed by the 17.3 million new food stamp and disability recipients added to the rolls over the same time period.”

So God Made a Fawner

“Paul Harvey’s ad was terrific, Peggy Noonan write, but Steve Kroft’s interview was shameful.”  Peggy Noonan opines that the Fourth Estate is in a particularly bad state these days…

When Species Extermination Is a Good Thing

“Foundations tied to Bill Gates and Jimmy Carter report progress.” Interesting article by Matt Ridley, author of The Rational Optimist and various other tomes. He’s sort of in a similar category as writers like Malcolm Gladwell and Michael Lewis…

Work Disincentives, Still Crazy After All These Years

“Economist Art Laffer writes that, in the spirit of Jack Kemp, a pro-growth agenda is needed for America’s pockets of poverty.”  Dr. Laffer runs the numbers and finds that “…People with low incomes who receive various forms of welfare subsidies in any number of states—with and without children, whether married or not—face enormous disincentives in trying to improve their lives by working.”

Dr. Benjamin Carson’s Speech at the National Prayer Breakfast (February 7, 2013)

“Pediatric neurosurgeon targets political correctness in National Prayer Breakfast speech.” Besides being a gifted and inspiring speaker, Dr. Carson is also an accomplished neurosurgeon who is famous for his ground-breaking work separating conjoined twins (see For the Wall Street Journal’s take on Dr. Carson’s speech, see “Ben Carson for President” @

Bernie Movie – Map of Texas

“Carthage, TX resident describes the ‘5 States’ of Texas.”  This is a succinct and highly informative explanation of Texas for non-Texans!

Should States Participate in the Medicaid Expansion?

As my Baylor colleague, economics professor James Henderson notes, “Only 18 states have agreed to expand the Medicaid program according to Obamacare guidelines. Is it a mistake to decline federal funding to expand a flawed program or should states accept the Faustian bargain? Short-run gain will likely translate into long-run pain for state budgets.”

Seidman on the Constitution | EconTalk

I listened to this EconTalk episode earlier this week, which involves a lively debate (featuring a prominent constitutional law professor) concerning whether the US Constitution should be relied upon to guide the process by which laws and public policies are enacted. The official description of this podcast (taken from the EconTalk website) is as follows:

“Louis Michael Seidman of Georgetown University talks with EconTalk host Russ Roberts about the United States Constitution. Seidman argues that the we should ignore the Constitution in designing public policy, relying instead on the merits of policy regardless of their constitutionality. Seidman defends his position by citing examples in the past where constitutionality has been ignored and says it would be better to recognize our disdain for the Constitution in a transparent way. In this lively conversation, Roberts pushes back against these ideas, citing the limits of reason and the dangers of using popular sentiment to determine policy.”

US federal government indebtedness relative to US GDP: an historical perspective

I think most people understand that the United States has a debt problem, but I am not sure all that many people necessarily understand the magnitude of this debt. According to the website, US federal government debt (as of Monday, February 4) stands at $16.48 trillion (source: Since US GDP (as of Q4 2012; see is $15.83 trillion, this implies that the US debt to GDP ratio currently stands at more than 100%.

Using the resources cited in the previous paragraph, one can determine US debt totals and debt to GDP ratios at various points in recent history. On the day that George W. Bush was first inaugurated (January 20, 2001), US federal government debt stood at $5.73 trillion, and the US debt to GDP ratio at the time was 57%. By the time that President Bush’s second term came to an end (on January 20, 2009), US federal government debt had grown by $4.9 trillion (to $10.63 trillion), and the US debt to GDP ratio stood at 74%.  Since President Obama first took office on January 20, 2009, US federal government debt has grown by an additional $5.85 trillion, going from $10.63 trillion to $16.48 trillion.

Thus, the Obama administration (after one full term plus two weeks into a second term in office) accounts for 5.85/16.48 = 35.5% of the current national debt, President Bush’s two administrations account for 4.9/16.48 = 29.7% of the current national debt, and the previous 42 presidents cumulatively account for 5.73/16.48 = 34.8% of total US federal government debt.

The graph below (source: shows the US debt to GDP ratio over the period 1966-2012. I don’t about y’all, but the fact that this ratio is accelerating as we move through time is very disconcerting. Economists Carmen Reinhart and Ken Rogoff note that episodes in world history where debt ratios exceed 90% are not only rare, but also impede economic growth (see “Debt and growth revisited” (source:

Debt ratio, 1966-2012