Cash poverty is a poor measure of deep poverty in the USA

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Lifting productivity: what I’d do

Pretty good list

croaking cassandra

When, a week or so ago, I wrote about how our political (and bureaucratic) leaders appeared to have given up hope, and to have lost any serious interest in turning around New Zealand’s dismal long-term productivity performance (and even worse short-term performance), and linked to my recent speech on such themes, a few commenters asked what policies I would implement, given the option.  One was specific enough to invite a “top 10 policies” list.

In what follows, I’m not suggesting that all these proposals are equally important.  It is also worth recogising that some are designed to directly improve economic performance, at least one is primarily about compensating some potential losers who might otherwise be a roadblock in the way of overdue reform, and some at improving confidence in our political system and associated institutions.   Part of what needs to accompany any significant reform package is a strong accepted…

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Did US ever default? It did in 1930s..

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Mostly Economics

Prof Sebastian Edwards of UCLA says most believe US has never defaulted but it did in 1930s:

One of the most pervasive myths about the United States is that the federal government has never defaulted on its debts. Every time the debt ceiling is debated in Congress, politicians and journalists dust off a common trope: the US doesn’t stiff its creditors.

There’s just one problem: it’s not true. There was a time, decades ago, when the US behaved more like a “banana republic” than an advanced economy, restructuring debts unilaterally and retroactively. And, while few people remember this critical period in economic history, it holds valuable lessons for leaders today.

In April 1933, in an effort to help the US escape the Great Depression, President Franklin Roosevelt announced plans to take the US off the gold standard and devalue the dollar. But this would not be…

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How are interest rates determined? Böhm-Bawerk vs. the Neoclassical School

Mostly Economics

Jesús Huerta de Soto discusses the differences in two schools:

Neoclassical economists believe that capital supply and demand jointly determine the interest rate in equilibrium, that subjective considerations of time preference determine supply, but that entrepreneurs determine demand based on the marginal productivity of capital (that is, based on predominantly objective considerations). This approach parallels the one that Marshall developed to explain price determination in the market, and that Böhm-Bawerk and the Austrian school reject and emphasize that when entrepreneurs demand funds, they act as mere intermediaries for workers and owners of factors of production, who are the final demanders of present goods in the form of wages and rents, and in exchange they transfer to entrepreneurs the ownership of future goods of greater value (which will only become available when the process of production concludes).

Consequently, from the perspective of Austrian economists, both sides – the supply of…

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Cake Wars: Is the Indiana RFRA Coverage Skirting The Difficult Questions Of Conflict Between Anti-Discrimination Law and Free Exercise?

JONATHAN TURLEY

Wedding_cake_with_pillar_supports,_2009This week, I appeared on the CNN special addressing the Religious Freedom Restoration Act (RFRA) in Indiana. While I have been a long-standing supporter of same-sex marriage, I raised concerns over the dismissive treatment of religious concerns over the scope of anti-discrimination laws and how they may curtail free exercise of religion. I have previously written both columns and academic work on this collision between the two areas of law. In the program, I raised an example of the growing conflicts that we discussed earlier on this blog of a bakery that refused to make a cake deemed insulting to homosexuals while other bakers are objecting to symbols that they view as insulting to their religious views. This issue also came up with an advocate for LGBT rights on the show:

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Kahneman’s Time Interview Fails to Allay Concerns About Behavioral Law and Economics

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Truth on the Market

TOTM alumnus Todd Henderson recently pointed me to a short, ten-question interviewTimeMagazine conducted with Nobel prize-winning economist Daniel Kahneman.  Prof. Kahneman is a founding father of behavioral economics, which rejects the rational choice model of human behavior (i.e., humans are rational self-interest maximizers) in favor of a more complicated model that incorporates a number of systematic irrationalities (e.g., the so-called endowment effect, under which people value items they own more than they’d be willing to pay to acquire those same items if they didn’t own them). 

 I’ve been interested in behavioral economics since I took Cass Sunstein’s “Elements of the Law” course as a first-year law student.  Prof. Sunstein is a leading figure in the “behavioral law and economics” movement, which advocates structuring laws and regulations to account for the various irrationalities purportedly revealed by behavioral economics.  Most famously, behavioral L&E calls for the imposition of default rules…

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Welcome to “Free to Choose?: A Symposium on Behavioral Law and Economics”

Truth on the Market

Welcome!

The rise of behavioral economics, and in turn, behavioral law and economics, has been one of the most significant developments in either field in a remarkably short period of time.  In 2010, Nudge is a household name, “libertarian paternalism” is (a hotly debated) a term of art, and behavioral economics has taken made its way from articles, journals and popular books and into the policy and regulatory landscape.  In the United States, Cass Sunstein — one of the godfather’s of the Nudge — heads OIRA, the Consumer Financial Protection Bureau is founded on a behavioral approach to consumer credit envisioned by Elizabeth Warren and Oren Bar-Gill, and behavioral economics appears to have gained traction within the Obama administration.  But behavioral law and economics is not a phenomenon limited to the United States.  Indeed, a “Nudge Unit” has been created in David Cameron’s cabinet.

To give some…

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George Mason University, the Koch Brothers, and Academic Bias

International Liberty

I received my Ph.D. from George Mason University in Fairfax, VA, and I have very fond memories of that experience, including interactions with great economists such as James Buchanan and Walter Williams.

But not everyone has favorable views of GMU’s market-friendly program. There’s a group, UnKoch My Campus, that pretends to be horrified that the school has attracted contributions from philanthropists such as Charles Koch and David Koch.

In a column for the Washington Post, Steven Pearlstein opines about the ostensible controversy.

Thanks to a group of courageous and persistent students, George Mason University was recently forced to acknowledge that it had accepted millions of dollars from billionaire Charles Koch and other conservatives under arrangements that gave the donors input into several appointments at the university’s famously libertarian economics department. These arrangements violated traditional norms meant to insulate academic institutions from donor influence… The story fits neatly into the…

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