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In my Defining Ideas article last month, “The Draft Is Still a Bad Idea,” I made the case against a traditional draft to obtain military manpower. A related proposal is for a universal draft of young people, male and female, that would give them a choice between military and civilian service. That kind of draft .. MORE
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Finance
Consider the following thought experiment. The government imposes a tax of $1000 on all bankers. One the very same day, the government authorizes a new spending program, a $1000 subsidy to all bankers. How should we think of this combined policy? To me, it’s a nothingburger. Economists used to view reserve requirements as an implicit .. MORE
Books: Reviews and Suggested Readings
In his book Intuition Pumps and Other Tools for Thinking, Daniel Dennett’s first intuition pump is to extol the virtues of boldly making mistakes. He describes it in this way: Sometimes you don’t just want to risk making mistakes; you actually want to make them – if only to give you something clear and detailed .. MORE
Business Economics
My urologist, in his guidelines for preparing me for a biopsy, told me to use a Fleet enema before the procedure. So I went to CVS and found on the shelf the CVS version, which was, of course, cheaper than the Fleet brand. How did CVS make it clear that this was a substitute, besides .. MORE
Economics of Health Care
Earlier this year, our dog spent a few weeks in a lot of pain and on a lot of painkillers because a car hit her and broke her pelvis (she’s fine and has gotten back to dragging me all over our local park every day). Taking care of her made me wish going to the .. MORE
Business Cycles
What is the relationship between immigration and the business cycle? Before answering that question, let’s look at some evidence from Statista: [The chart shows apprehensions and expulsions, but the data is widely believed to be highly correlated with successful undocumented migration.] There seems to be a modestly pro-cyclical pattern to the data on undocumented migration. .. MORE
Economic Education
How do I get students to think about the topic of human capital? I ask them, what is the single most valuable resource in the world? Oil, water, air? “People” is usually a tentative answer, indicating uncertainty about the meaning of a resource. Once it is established that a resource is anything that produces goods .. MORE
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In the last 5 weeks, I’ve written two articles on the draft for the Hoover Institution’s on-line publication Defining Ideas. The first made the case against the military draft; the second made the case against universal national service. In responses on the Defining Ideas site, some commenters argued that one advantage of the draft is .. MORE
Books: Reviews and Suggested Readings
How should we think about the problem of unanticipated consequences? And what are the implications for the possibility of unintended consequences regarding top-down, technocratic policy initiatives that aim to mitigate targeted social problems? For example, I’ve occasionally heard it argued that we shouldn’t be too worried about unanticipated consequences of interventions, because unanticipated consequences don’t .. MORE
Books: Reviews and Suggested Readings
Economics education has major problems. Doctoral programs are churning out applied mathematicians and statisticians with little to no knowledge of price theory. At the undergraduate level, social control (“market failure!”) and activism (“inequality!”) have replaced careful reasoning about markets and politics. Very few programs instill in students an appreciation for the power and universality of .. MORE
Our new model incorporates several innovative features: For example, rather than using a representative household, it features a demographically accurate synthetic population with millions of households (matching age, education, race, and consumption habits). Instead of using a representative firm, we model the behavior of tens of thousands of the largest firms, in one-to-one correspondence with .. MORE
Armen Alchian (1914-2013) was an economist’s economist. How his mind worked and why it so impressed his peers is illustrated perfectly by an episode from his time at the Rand Corporation in the 1950s as the Cold War was ramping up. Both the United States and Soviet nuclear programs were cloaked in secrecy. As the .. MORE
A Liberty Classics Book Review of Against Politics: On Government, Anarchy, and Order, by Anthony de Jasay.1 We cannot be against politics, especially in a democratic regime; isn’t that obvious? In his 1997 book Against Politics: On Government, Anarchy, and Order, Anthony de Jasay led a frontal charge against this commonly accepted idea. He argued .. MORE
A Book Review of The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness, by Jonathan Haidt.1 When an academic writes a book for a popular audience, one of their main goals is to have an impact on the world. Jonathan Haidt’s new book The Anxious Generation is clearly .. MORE
In that case, would it be reacting to the market, or to Sahm's Rule?
Scott Sumner, August 7