Friday, August 26, 2016

Uwe Reinhardt on Obamacare

The Princeton health economist sees a coming death spiral: "If you got a bunch of Princeton undergrads to design a health care system, maybe they would come up with an arrangement like the marketplaces."

Thursday, August 25, 2016

A Survey of CEA Economists

Not a single one endorses Mr. Trump, says the Wall Street Journal.

Wednesday, August 24, 2016

Summer Readings

Here are some of the books I have read this summer, all recommended.
  1. Nobody's Fool by Richard Russo
  2. Success and Luck by Robert Frank
  3. The Upside of Inequality by Edward Conard
  4. Hillbilly Elegy by J.D. Vance

Friday, August 19, 2016

Big Idea #5

Thursday, August 18, 2016

Why many men aren't working

Wednesday, August 17, 2016

Debunking Scandinavia Envy

Fact of the day: "Danish-Americans have a measured living standard about 55 percent higher than the Danes in Denmark. Swedish-Americans have a living standard 53 percent higher than the Swedes, and Finnish-Americans have a living standard 59 percent higher than those back in Finland."

Tuesday, August 16, 2016

Borjas on Vetting Immigrants

Thursday, August 11, 2016

Big Idea #4

Monday, August 08, 2016

Big Idea #3

Sunday, August 07, 2016

The Scandinavian Fantasy

Saturday, August 06, 2016

News from Amazon

To users of my favorite textbooks: Thank you!  Have a great semester.

Friday, August 05, 2016

My Take on Mr. Trump

This morning, John Harwood of CNBC and the New York Times asked for my view of Donald Trump, which John then summarized on his Twitter feed.  Here is the full answer I gave him:

He will not be getting my vote.

I have Republican friends who think that things couldn't be worse than doubling down on Obama policies under Hillary Clinton. And, like them, I am no fan of the left's agenda of large government and high taxes. But they are wrong: Things could be worse. And I fear they would be under Mr. Trump.

Mr. Trump has not laid out a coherent economic worldview, but one recurrent theme is hostility to a free and open system of international trade. From my perspective as an economics policy wonk, that by itself is disqualifying.

And then there are issues of temperament. I am not a psychologist, so I cannot figure out what Mr. Trump's personal demons are. But he does not show the admirable disposition that I saw in previous presidents and presidential candidates I have had the honor to work for.

Monday, August 01, 2016

Gary Johnson joins the Pigou Club

From an interview with the LA Times.

"I’m open also to the notion of a carbon tax. That it does have an impact, that it ends up being revenue-neutral. I’m not looking at this as a revenue generator, as much as there are costs associated with, there are health and safety issues with carbon."

Sunday, July 31, 2016

Big Idea #2

Friday, July 29, 2016

Anxiety about Globalization

Click here to read my column in Sunday's NY Times.

Wednesday, July 27, 2016

Big Idea #1

The Economist is running a series on six big ideas in economics.  First up: Akerlof and lemons.

Tuesday, July 26, 2016

GDP and Its Discontents

I have a book review in ScienceHere is an ungated version.

Sunday, July 24, 2016

Why did Lehman fail?

Larry Ball has an important new monograph arguing, contra Bernanke, that during the recent financial crisis, the Fed could have saved Lehman Brothers but, unadvisedly, chose not to.  Here, James Stewart of the NY Times covers the Ball piece, and it includes this tidbit:
an internal Fed team assigned to value Lehman’s collateral reached a preliminary finding that the firm was narrowly solvent and the Fed could have justified a loan. But everyone was too busy to listen, and the report was never delivered to Mr. Geithner, Mr. Bernanke or Mr. Paulson. This is consistent with Professor Ball’s findings.

Tuesday, July 19, 2016

Pigou Club News

Tuesday, July 12, 2016

A Quick Note on a Universal Basic Income

Consider an economy in which average income is $50,000 but with much income inequality. To provide a social safety net, two possible policies are proposed.

A.  A universal transfer of $10,000 to every person, financed by a 20-percent flat tax on income.

B.  A means-tested transfer of $10,000.  The full amount goes to someone without any income.  The transfer is then phased out: You lose 20 cents of it for every dollar of income you earn.  These transfers are financed by a tax of 20 percent on income above $50,000.
 Which would you prefer?

I have seen smart people argue as follows: Policy A is crazy. Why should Bill Gates get a government transfer? He doesn’t need it, and we would need to raise taxes more to pay for it.  Policy B is more progressive. It targets the transfer to those who really need it, and the transfer is financed by a smaller tax increase levied only on those with above-average incomes.
But here is the rub: The two policies are equivalent.  If you look at the net payment (taxes less transfer), everyone is exactly the same under the two plans. The difference is only a matter of framing.