Monthly Archives: June 2007

Mankiw Does It Again

The Washington Post reports:

Mitt Romney is happy to get Greg Mankiw’s economic advice — except when it’s economic advice conflicting with immigration advice the Republican presidential contender has also received.

Highlighting the challenge a far-flung campaign faces when it comes to message discipline, Romney has had to distance himself from his top economics adviser after Mankiw — a Princeton-trained economist now teaching at Harvard — voiced his support for an immigration bill Romney strongly opposes.

The title of this post is tongue-in-cheek. Of course we all remember the ridiculous Mankiw-outsourcing extravaganza where he was raked over the coals for saying something that is largely accepted among economists. Mankiw responds to the latest non-story:

No sensible voter would think less of a candidate who has advisers who sometimes disagree with him. But a sensible voter should think less of a candidate who has no advisers who ever disagree with him.

Indeed.

I am not really sure that anyone votes for candidates based on their advisers — other than Arnold Kling. If I were inclined to do so, I would likely vote for Obama.

Tyler’s Secret Blog

Tyler Cowen has a secret blog and he is willing to tell you the site address so long as you pre-order his book. The book is taking off, getting as high as #220 on the Amazon bestseller list. The feedback that Tyler has received regarding the secret blog is quite amusing. Here are my favorites:

3. Most people sent in proof of purchase, and were keen to have me look at it, even though I did not ask for it.

4. People asked very earnestly whether it was permissible to show the secret blog to their spouse (it is).

5. Some people wrote me long emails, with complex economic arguments, as to why I should give them the blog for free. But they weren’t willing to simply lie and get the site address.

American Productivity

Austan Goolsbee has written a fascinating piece in The New York Times:

To explain the experience in the United States, one would have to believe that Americans have some better way of translating the new technology into productivity than other countries. And that is precisely what Professor Van Reenen’s research suggests.

His paper “Americans Do I.T. Better: U.S. Multinationals and the Productivity Miracle,” (with Nick Bloom of Stanford University and Raffaella Sadun of the London School of Economics) looked at the experience of companies in Britain that were taken over by multinational companies with headquarters in other countries. They wanted to know if there was any evidence that the American genius with information technology transfers to locations outside the United States. If American companies turn computers into productivity better than anyone else, can businesses in Britain do the same when they are taken over by Americans?

And in the huge service sectors — financial services, retail trade, wholesale trade — they found compelling evidence of exactly that. American takeovers caused a tremendous productivity advantage over a non-American alternative.

When Americans take over a business in Britain, the business becomes significantly better at translating technology spending into productivity than a comparable business taken over by someone else. It is as if the invisible hand of the American marketplace were somehow passing along a secret handshake to these firms.

Read the whole thing.

Health Care Reform

Arnold Kling writes:

My reading of Douglass North is that real health care reform in the United States will not happen because of some wonk’s clever plan. It will not happen as a result of an election. It will only happen when we change some of our beliefs about health care.

Read the whole thing.

Corn Laws

Eric Phillips looks at the repeal of the Corn Laws:

Enacted in the Importation Act of 1815, the Corn Laws were tariffs on various types of grain that shielded British agriculture, a sector dominated by powerful landowners, from foreign competition and forced consumers to pay higher prices. The duties created a classic case of the phenomenon of concentrated benefits and dispersed costs.

In other words, while consumers and the economy as a whole may have suffered significantly because of the legislation, each individual consumer only faced slightly higher prices, making it difficult to rouse political action. Each individual landowner on the other hand, owed much of his livelihood to the protective tariffs and could call on his class’s substantial political and economic power to guard their vested interests.

Nonetheless, Richard Cobden’s Anti–Corn Law League achieved victory when conservative Prime Minister Robert Peel seemingly committed political suicide by splitting with the Tory party and switched his formerly protectionist views in favor of the repeal of the import duties, which was secured in the Importation Act of 1846. The novelty of this outcome has led to the emergence of a large historiography that has attempted to analyze how the complex interplay of interests and ideology contributed to the free traders’ victory in 1846.

Read the whole thing.

Bill Gates and Charity

Robert Barro wrote an excellent op-ed in The Wall Street Journal yesterday:

Bill Gates is the richest man in the world, helped create a revolutionary computer software company, and earlier this month collected an honorary degree from Harvard University. But he may not understand the vital role wealth creation plays in society.

In collecting his degree, Mr. Gates delivered a commencement address that focused not on the information age, the rise of personal computers or the relentless efficiency his software has brought to nearly every industry. Instead, he focused on his own personal philanthropy. His implicit theme was that so far what he has accomplished may have been good for him and Microsoft shareholders, but it has been no great contribution to society. He suggested that with a personal fortune of about $90 billion (including what he has transferred to his foundation) it is time for him to give something back.

I find this perspective hard to understand. By any reasonable calculation Microsoft has been a boon for society and the value of its software greatly exceeds the likely value of Mr. Gates’s philanthropic efforts.

[...]

Mr. Gates’s plan is, instead, to use the Bill and Melinda Gates Foundation to reduce world poverty, with an emphasis on advances in health. This is a noble goal. But it will likely just supplement the much larger existing programs of aid and debt relief that have been carried out for many years by international organizations and governments. These programs have, at best, a checkered record. Although Mr. Gates is probably smarter and more motivated than the typical World Bank bureaucrat, he likely won’t do much better.

‘Irrational’ Interview

Nick Schulz has posted a great interview with Bryan Caplan about his new book, The Myth of The Rational Voter

“Gotcha”

Spence Bachus tries to sneak in a “gotcha” question on Radley Balko during the Congressional hearings on internet gambling. Hilarity ensues.

In The Mail

Tyler Cowen has e-mailed me to remind me that his book is coming out soon. Here is the link:

Discover Your Inner Economist, by Tyler Cowen.

The Law

Frederic Bastiat’s superb essay “The Law” is now available in print from the Mises Institute.