Hispanic Pundit

Links for 2012-05-14 [del.icio.us]

2012-05-15T00:00:00-07:00

Wax's Behavioral Economics of the Family, Bryan Caplan | EconLog | Library of Economics and Liberty
If the welfare state were completely abolished, unprotected unmarried sex would immediately be a lot scarier. And in the medium-run, what's socially typical changes what's socially acceptable. When more of their peers delay child-bearing until marriage, even kids who ignore incentives will revise their behavior out of sheer conformity.
John Derbyshire: Who Are We?—The “Dissident Right”? | VDARE.com
It's just that conservative ideals like self-sufficiency and minimal dependence on government have no appeal to underperforming minorities—groups who, in the statistical generality, are short of the attributes that make for group success in a modern commercial nation. Of what use would it be to them to embrace such ideals? They would end up even more decisively pooled at the bottom of society than they are currently. A much better strategy for them is to ally with as many disaffected white and Asian subgroups as they can (homosexuals, feminists, dead-end labor unions), attain electoral majorities, and institute big redistributionist governments to give them make-work jobs and transfer wealth to them from successful groups. Which is what, very rationally and sensibly, they do.
The Economics of Teenage Pregnancy at Steven Landsburg | The Big Questions: Tackling the Problems of Philosophy with Ideas from Mathematics, Economics, and Physics
We examine teen birth rates alongside pregnancy, abortion, and “shotgun” marriage rates as well as the antecedent behaviors of sexual activity and contraceptive use. We demonstrate that variation in income inequality across U.S. states and developed countries can explain a sizable share of the geographic variation in teen childbearing. Our reading of the totality of evidence leads us to conclude that being on a low economic trajectory in life leads many teenage girls to have children while they are young and unmarried. Teen childbearing is explained by the low economic trajectory but is not an additional cause of later difficulties in life. Surprisingly, teen birth itself does not appear to have much direct economic consequence. Our view is that teen childbearing is so high in the United States because of underlying social and economic problems.
Panics Happen - NYTimes.com
Walter Bagehot knew all about financial crises, which have been a constant feature of modern economies since at least the early 19th century. Just to drive the point home, I thought it might be worth posting Gary Gorton’s chart (pdf) of “panics” before the Fed went into operation:
Economics One: More Evidence on What Is Holding the Economy Back
Here are two charts which show why both increased regulation and policy uncertainty are very significant. The first chart uses data from research by Susan Dudley and Melinda Warren. It takes their series on the number of “full time equivalent” federal employees in regulatory activities and subtracts out the number of Transportation Safety Administration (TSA) workers. (I interpolated the years 2002 and 2003 when TSA was expanding and moving from DOT to DHS). There has been a 25 percent increase just since 2007. And these data barely reflect the increased regulations from the health care and financial reform legislation.
What is austerity? — Marginal Revolution
I could imagine a definition something like this: “the net effect of all government fiscal policies on ngdp, relative to the baseline of a stabilized path for expected ngdp growth.” Or should it read: “…relative to what will happen to ngdp growth in the absence of budgetary changes”? I wonder if some Keynesians have in mind the baseline of “the expansionary policies which I think would be appropriate,” in which case doing less than the Keynesian optimum is always a form of austerity. Angus notes correctly that clear definitions of austerity are hard to come by.

Links for 2012-05-12 [del.icio.us]

2012-05-13T00:00:00-07:00

Breast Milk, Twins, and Outcomes: A Difference-in-Differences Approach, Bryan Caplan | EconLog | Library of Economics and Liberty
The best way to measure the effects of breast feeding.
Ideas: More on Nordhaus and Global Warming
Digging into global warming models.
The Austerity Fairy
Just a few days ago, Krugman was arguing that Europe had tried slashing spending and that we now know that that didn’t work. Now he’s admitting that spending wasn’t slashed but that it really was, even though you can’t see it. You just have to know where to look. This is the man who likes to say the confidence fairy doesn’t exist. I’m afraid it’s the austerity fairy that doesn’t exist.
CONVERSABLE ECONOMIST: Occupational Licensing and Low-Income Jobs
My own guess is that the politics of passing state-level occupational licensing laws is driven by three factors: 1) lobbying by those who already work in the occupation to limit competition; 2) passing laws in response to wildly unrepresentative anecdotes of terrible or dangerous service; and 3) the tendency when setting standards to feel like more is better. But in a U.S. economy which is hurting for job creation, especially jobs for low-income workers, states should be seriously rethinking many of their occupational licensing rules. Many would be better-replaced with lower standards, certification rather than licenses, or even no licenses at all.

Links for 2012-05-11 [del.icio.us]

2012-05-12T00:00:00-07:00

The slashed spending of European governments
Debating the definition of austerity.
Printed Circuit Design & Fab Magazine Online
How to reduce crosstalk 101.

Links for 2012-05-10 [del.icio.us]

2012-05-11T00:00:00-07:00

Eugenics, Malthusianism, and Trepidation, Bryan Caplan | EconLog | Library of Economics and Liberty
My claim is not that, "Malthusianism is false because Hitler believed it." Hitler presumably believed that the sky is blue. My claim, rather, is that Malthusianism is a more dangerous doctrine than eugenics. If the whiff of eugenics leads you to say, "We should be very careful here, because these ideas can easily lead to terrible things," the whiff of Malthusianism should inspire even greater trepidation.
Hispanic voters: The sleeping giant slumbers on « The Enterprise Blog
The simple reality is that Hispanics heavily under-represent themselves in politics when compared to other racial/ethnic groups. As the graphic below (from Resurgent Republic) shows, barely half of Hispanics eligible to vote in 2010 registered, and less than 1 in 3 actually cast a ballot. According to the Pew Research Center, Hispanics had a 49.9% voter turnout rate in 2008. For comparison, in that same year whites had a turnout rate of 66.1% and blacks had a turnout rate of 65.3%.

Links for 2012-05-09 [del.icio.us]

2012-05-10T00:00:00-07:00

Highlights from "Does Technology Drive the Growth of Government?", Bryan Caplan | EconLog | Library of Economics and Liberty
[N]o one of these technological advances serves as the cause of governmental growth. Taken as a group, however, these factors made very large government possible for the first time. To see this, perform a very simple thought experiment. Assume that we had no cars, no trucks, no planes, no telephones, no TV or radio, and no rail network. Of course we would all be much poorer. But how large could government be? Government might take on more characteristics of a petty tyrant, but we would not expect to find the modern administrative state, commanding forty to fifty percent of gross domestic product in the developed nations, and reaching into the lives of every individual daily. Think also about the timing of these innovations. The lag between technology and governmental growth is not a very long one. The technologies discussed above all had slightly different rates of arrival and dissemination, but came clustered in the same general period. With the exception of the railroads an

Links for 2012-05-08 [del.icio.us]

2012-05-09T00:00:00-07:00

Steve Horwitz on Corporate Personhood | Will Wilkinson
Corporations are composed of people. So are unions. So are universities. So are families. The belief that we can somehow “tax corporations” without “taxing people” is the fallacy at the heart of Romney’s exchange. It’s the same with any collective: If we take away union rights, we take away the rights of individual union members. If we strip a university’s accreditation, we also strip credibility from its students and its graduates.
The euro crisis: Yes, there is austerity | The Economist
The spending cuts are there, in spades. Of course, the importance of spending cuts in episodes of austerity derives from the view that they are more likely to "stick" than tax rises, and that they are critical in generating "expansionary austerity". But this is no iron law of fiscal consolidation. Rather, as a recent IMF paper pointed out, it is due to the fact that central banks are more likely to accommodate spending cuts with aggressive easing than they are tax rises.

Links for 2012-05-07 [del.icio.us]

2012-05-08T00:00:00-07:00

Boston Review — Glenn C. Loury: Much To Answer For (James Q. Wilson)
Loury on Wilson.

Food Shortages In Venezuela

2012-05-02T00:01:00-07:00

The New York Times writes:

Venezuela is one of the world’s top oil producers at a time of soaring energy prices, yet shortages of staples like milk, meat and toilet paper are a chronic part of life here, often turning grocery shopping into a hit or miss proposition.

Some residents arrange their calendars around the once-a-week deliveries made to government-subsidized stores like this one, lining up before dawn to buy a single frozen chicken before the stock runs out. Or a couple of bags of flour. Or a bottle of cooking oil.

The shortages affect both the poor and the well-off, in surprising ways. A supermarket in the upscale La Castellana neighborhood recently had plenty of chicken and cheese — even quail eggs — but not a single roll of toilet paper. Only a few bags of coffee remained on a bottom shelf.

Asked where a shopper could get milk on a day when that, too, was out of stock, a manager said with sarcasm, “At Chávez’s house.”

At the heart of the debate is President Hugo Chávez’s socialist-inspired government, which imposes strict price controls that are intended to make a range of foods and other goods more affordable for the poor. They are often the very products that are the hardest to find.

Maybe this is why you don’t see lefties singing the Hugo Chavez praise anymore? Is it time yet for a little “I Told You So”?

Austan Goolsbee Is Blogging

2012-05-01T22:21:48-07:00

His blog can be found here.

Quote Of The Day

2012-05-01T13:13:35-07:00

“Suppose you start a new charity to provide free haircuts for hippies. You only manage to raise the money to pay for three haircuts a year. The Prisoners’ Dilemma might explain why people aren’t more generous with their money in general. But the Prisoners’ Dilemma doesn’t explain why the other charities raise so much more money than yours. If you ask “Why don’t people give more money to my charity?,” the best answer is that people hold your charity in low esteem. Similarly, if total donations to the U.S. government add up to a few million dollars a year, the best explanation is that people see lots of better ways to spend not just their dollars, but their charitable dollars.” - Bryan Caplan, on what people giving so little of their charity money to government says about their views on government efficiency

Quote Of The Day

2012-04-30T00:22:32-07:00

” This sort of giveaway may be good politics, but it’s terrible policy. Extending the programme just one year would cost $6 billion. The measure is promoted as a way of making college more affordable, but it will mainly benefit those well out of school, many of whom are relatively well-to-do, mid-career professionals, such as your indebted correspondent. There is a movement afoot to get the government to forgive student-loan debt entirely, and when compared to this, the cost of the scheme to keep student-loan interest rates low looks quite small. Stilll, it’s bad policy for many of the same reasons it would be bad policy to forgive student loans. If we’re going to hand out this $6 billion next year, it would be better all ’round to hand it to the people who need it most. If we think it more important to spend this dough on education, then we should hand out the $6 billion in the form of scholarships to deserving prospective collegians of modest means, to help them earn their degrees without having to take out any loans at all.” – Will Wilkinson

Quote Of The Day

2012-04-18T17:14:18-07:00

“Second, the argument that elites are generally opposed to government involvement in the economy reveals the very US-centric focus of Krugman and Wells. Even a perfunctory look at recent or distant history (or at our book!) should have been enough to convince one that in most societies, even in the supposedly laissez-faire 19th century Britain, elites work very hard to make the government intervene in the economy — of course, in a very specific way, to support them. It should thus be no surprise that extractive institutions are rarely built on the foundations of laissez-faire economics — think of slavery, labor draft systems such as the mita, government monopolies, institutions such as the “colour bar” in South Africa designed to keep blacks disadvantaged and forced to supply cheap labor, and government corruption.” — Economists DARON ACEMOGLU AND JAMES ROBINSON, blogging at Why Nations Fail

Free Trade And NAFTA

2012-04-10T20:37:41-07:00

Non-economists often debate the merits of free trade and/or NAFTA. But if you ask economists, they are nearly unanimously in agreement in favor of both:

None of the economists surveyed disagreed that the gains to freer trade are much larger than any costs. And only two economists even said that the answer is uncertain. In a space for additional comments, MIT’s Richard Schmalensee declared “If that’s not right, almost all of economics is wrong”.

Economists have emphasized the benefits of free trade for a long time, reflecting the field’s belief in the importance of specialization, comparative advantage, and gains from trade. Indeed, these results are similar to other surveys that show economists strongly supporting free trade.

So why do pundits and voters lag economists in supporting free trade? In his excellent book The Myth of the Rational Voter, Bryan Caplan provides evidence that people suffer from a handful of systematic biases that influence their beliefs, and three of these can help explain why voters are skeptical of trade: anti-market bias, anti-foreign bias, and pessimism bias.

Full post here. Survey here.

Health Care Costs Eat Away Wages

2012-03-13T22:23:40-07:00

A study posted on Tim Taylors blog finds:

“To paint an accurate picture of how health care cost growth is affecting the finances of a typical American family, RAND Health researchers combined data from multiple sources to depict the effects of rising health care costs on a median income married couple with two children covered by employer-sponsored insurance. The analysis compared the family’s health care cost burden in 1999 with that incurred in 2009. The take-away message: Although family income grew throughout the decade, the financial benefits that the family might have realized were largely consumed by health care cost growth, leaving them with only $95 more per month than in 1999. Had health care costs tracked the rise in the Consumer Price Index, rather than outpacing it, an average American family would have had an additional $450 per month—more than $5,000 per year—to spend on other priorities.”

Full post can be found here.

Mobility Correlations

2012-03-01T06:37:01-08:00

Commenting on the mobility/inequality link, Jim Manzi writes:

But what about all the other potential reasons, beyond what their Gini Coefficient was in 1985, for varying levels of social mobility between countries as diverse as Japan, France, and New Zealand?

The most obvious example is just the size of the countries. It’s at least plausible that much bigger countries contain more variety. In fact, if you do something as simple as recreate the Great Gatsby Curve, but use the population of each country as the X-axis, you get a very strong a statistical relationship (log-linear R² = .64). Big countries have higher IGE. Call it the Moby Dick Curve.

Alternatively, we might see that some countries tend to specialize more than others. As a practical example, part of the reason that a country like Finland can have so much equality and social mobility versus America might be that many more of the relatively poorer farmers who trade food for Finnish mobile phones live and reproduce in other countries. If so, then we might see that if we replace the X-axis with exports as a % of GDP, there could be another statistically significant relationship with IGE. Check (R² = .48).

Full article here.

In Praise Of For-Profit Colleges

2012-02-29T12:51:33-08:00

Tim Taylor cites a study showing:

Along with the flexibility to expand enrollments, for-profit higher education has shown considerable flexibility in teaching groups not well-served by traditional higher education. “African Americans account for 13 percent of all students in higher education, but they are 22 percent of those in the for-profit sector. Hispanics are 11.5 percent of all students but are 15 percent of those in the for-profit sector. Women are 65 percent of those in the for-profit sector. For-profit students are older: about 65 percent are 25 years and older, whereas just 31 percent of those at four-year public colleges are, and 40 percent of those at two-year colleges are.” In addition, for-profits are typically non-selective institutions, requiring only a high school diploma or a GED certificate.

Full article here. Of course, long time readers of my blog already know this.

Mobility In Context

2012-02-28T10:39:25-08:00

Brookings Institute Scott Winshop on mobility:

However, evidence on earnings mobility in the sense of where parents and children rank suggests that our uniqueness lies in how ineffective we are at lifting up men who were poor as children. In other words, we have no more downward mobility from the middle than other nations, no less upward mobility from the middle, and no less downward mobility from the top. Nor do we have less upward mobility from the bottom among women. Only in terms of low upward mobility from the bottom among men does the U.S. stand out.

Full article here.