Monthly Archives: November 2007

The Coase Theorem and Internet Sites

Steven Levitt discusses the Coase Theorem, the internet, and some interesting results.

Performance Enhancing Drugs

Our friend J.C. Bradbury has posted the abstracts of some papers regarding the effects of performance-enhancing drugs on athletic performance.

Quote of the Day

Family heirs, [Warren Buffett] says, have already won an “ovarian lottery,” and thus should not be “rewarded” by the tax system. Mr. Buffett, however, doesn’t explain why the lack of theft is considered to be a “reward.”

Karen DeCoster

The Concise Encyclopedia of Economics

This…

post made my day.

Quote of the Day

“A big theme of Democratic thinking is the need to spread the benefits of capitalism more broadly. Middle-class anxiety is real. Support for liberal trade is collapsing. The answer, Democrats say, is shared prosperity: the rewards of globalisation should go not just to the shareholder class, but to workers too. Quite right. But does this spreading have to be mediated exclusively through higher taxes and higher spending on welfare programmes? Is there not a good liberal case for widening the shareholder class as well?”

Clive Crook

Bold Thinking?

Robert Shiller says that it is time for bold thinking in regards to housing:

The public response to the housing downturn of 1925-33 provides an important lesson in what government and private institutions can accomplish. Back then, people weren’t content with temporary palliatives. They were thinking big, and revolutionary changes were made in real estate institutions. Without those fundamental changes, the Great Depression would have been much worse than it was, and we would be in a more vulnerable situation today…

…our reaction to the current crisis is anemic in comparison. The “Super S.I.V.” rescue plan, instigated in October by Henry M. Paulson Jr., the Treasury secretary, in an effort to prevent a meltdown of the market for so-called structured investment vehicles, will be less than a tenth the size of the Federal Home Loan Bank System that is still with us from the 1925-33 debacle.

I am not sure that adding more bureaucrats in Washington classifies as “bold thinking.” Similarly, this quote is a bit troubling:

The radical financial innovations of the 1930s were possible because the real estate crisis and other economic problems of the Depression created a sense of urgency. Innovation, after all, tends to come in troubled times.

My thinking is more in line with Robert Higgs, who presents somewhat of a different thesis.