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• The Bailout Will Lose Money, and I'm Ready to Bet On It

  http://econlog.econlib.org/archives/2008/10/the_bailout_wil....
  6 hours

  I'm locked and loaded to bet on the bailout. My muse is none another than H.R. 1424, section 134: SEC. 134. RECOUPMENT. Upon the expiration of the 5-year period beginning upon the date of the enactment of this Act, the Director of the Office of Management and Budget, in consultation with the Director of the Congressional Budget Office,

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• China's Unsung Pollution Problem

  http://econlog.econlib.org/archives/2008/10/chinas_unsung_p....
  8 hours

  From Mark Steyn's America Alone: As for the allegedly inevitable superpower of the coming century, if China ever does achieve that status, it will be because the People's Republic learned more from British Hong Kong than Hong Kong ever did from the Little Red Book. Sir John Cowperthwaite, the colony's transformative financial secretary in the

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• Who is a Realist?

  http://econlog.econlib.org/archives/2008/10/who_is_a_realis....
  8 hours

  I did not care for Paul Romer's claim that realists support the Paulson plan, while model-addicted fundamentalists oppose it. In my view, there are realistic reasons to oppose the Paulson plan. First, many "realists" say that we need to boost home prices. But Ed Glaeser argues persuasively that trying to boost home prices is unrealistic

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• What Samuelson Said About Inflation in the 70s

  http://econlog.econlib.org/archives/2008/10/what_samuelson.h...
  9 hours

  New Keynesian economics has been around for so long that it's hard to remember what Old Keynesian economics was like. Here are two quotes (via Garett Jones via Robert Hetzel) from Samuelson to remind us of the days when Dinosaur Keynesians walked the earth: Paul Samuelson embraces reverse causation - inflation usually causes monetary expansion,

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• Monetary Institutions

  http://econlog.econlib.org/archives/2008/10/monetary_instit....
  5 hours

  Mencius Moldbug sent an email asking me to comment on this post, and we have been corresponding back and forth. I should say that monetary theory gives me a headache. Let us think of real investment in terms of a fruit tree. I spend resources planting a fruit tree today, but I won't be able to harvest any fruit for several years

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• My Fantasy Testimony

  http://econlog.econlib.org/archives/2008/10/my_fantasy_test....
  1 hour

  This weekend I typed up "draft testimony" on what caused the mortgage/financial crisis. Like anyone wants to hear it. Anyway, I'll paste it in below the fold. UPDATE: If you follow the links in James Hamilton's post, during his talk (starts around minute 8), he really spells out the difference between what I call Method A and what I call Method

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• An Education Debate

  http://econlog.econlib.org/archives/2008/10/an_education_de....
  6 hours

  It starts with Charles Murray, but we already know what he thinks. And although Kevin Carey's essay will appear later, we know what he thinks, too. I'm curious how Bryan Caplan will weigh in. We know he's a big fan of the signaling model, but presumably he will give us a bit more to chew on, maybe even including some evidence

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• Feynman on Suits vs. Geeks

  http://econlog.econlib.org/archives/2008/10/feynman_on_suit....
  1 day

  Megan McArdle quotes Richard Feynman's analysis of the Challenger disaster. I was drawn to this paragraph in particular: why do we find such an enormous disparity between the management estimate and the judgment of the engineers? It would appear that, for whatever purpose, be it for internal or external consumption,

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• Other People's Money

  http://econlog.econlib.org/archives/2008/10/other_peoples_m....
  10 hours

  Tyler Cowen puts a lot of the blame for the financial crisis on leverage. He links to Robert Frank, who writes, In financial markets, asset bubbles cause real trouble when investors can borrow freely to expand their holdings. To prevent such bubbles, we must limit the amounts that people can invest with borrowed money

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• Is Ignorant Dogmatism Possible? I'm Afraid So.

  http://econlog.econlib.org/archives/2008/10/is_ignorant_dog....
  1 day

  In a forthcoming issue of Critical Review, several of my critics basically say, "Make up your mind, Bryan. Are voters ignorant, or are they dogmatic?" My response: "Both." It may seem strange, but it doesn't take a lot of knowledge to be dogmatic. In fact, the least educated people are often the most dogmatic

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