The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. – F.A. Hayek
Posted in Behavior, Paternalism, Welfare State, You Can't Have it Both Ways on Oct 19th, 2011
Has anyone who has ever written about this topic ever shopped in a grocery store for more than one person? I think I am going to randomly post our family meals up here for all to see, then tell me what you think about the meme, “the poor can only afford calorie dense, fatty, unhealthy, [...]
Posted in Behavior on Sep 22nd, 2011
There are some people who believe that there are limits to how much the receipt of additional income might be able to increase your level of happiness. I am not here to argue that. Rather, my thought for today is simpler: suppose you are one of these folks, do you also think that it would [...]
Posted in Behavior, Taxation, You Can't Have it Both Ways on Aug 17th, 2011
We’ve run several pieces over the years highlighting the inconsistencies among the “Nudge” crowd. I probably unfairly bundle the “libertarian” paternalists with the more hard-core unapologetic paternalists, but these are matters of degree, not kind. The reason for my consternation is that I rarely (never in fact) see a consistent position among these behavioralists to [...]
Posted in Behavior, Health Care on May 26th, 2011
There are two aspects of our future health care needs that individuals need to consider. First, individuals want to protect themselves from the financial devastation that an unexpected and expensive medical condition might cause in their lives. When someone contracts a disease, perhaps a form of cancer, it can seriously reduce someone’s ability to work [...]
Posted in Behavior, Government Gone Wild on May 10th, 2011
Bilk Minnesota taxpayers for at least $300 million. Is there any end to it? Oh, and what’s that sound I hear? Is that a behavioral economist Amber Alert?
Posted in Behavior, Macroeconomics, Politics, You Can't Have it Both Ways on Apr 7th, 2011
It is well known in economics that it does not matter how governments choose to finance their spending. Suppose the government budget is $3.6 trillion. Whether they raise $3.6 trillion in taxes today and borrow none, or raise $2.3 trillion in taxes today and borrow $1.3 trillion or whether they raise no taxes today and [...]
Posted in Behavior, You Can't Have it Both Ways on Apr 4th, 2011
In Bob Frank’s Luxury Fever, he makes the case for a progressive consumption tax on the grounds that we spend lots of our income on goods that do not make us intrinsically happier. These so called positional goods are things like fast cars, fancy barbecues, etc. whose source of value (he argues) comes from the [...]
Posted in Behavior, Education, You Can't Have it Both Ways on Mar 29th, 2011
A standard argument among behavioralists is that goods that are “positional” in nature cause social welfare losses. What the heck does this mean? There are some goods whose value derives partly (or wholly) from how much you have of it relative to other people. Beauty is a positional good. Speed in a running race is [...]
Posted in Behavior, Economics Problems, Economists on Mar 18th, 2011
I recently waded through Veblen’s famous Theory of the Leisure Class. I found it tough reading, far more of a slog than reading Hayek, and on par with reading some of the great philosophers of the late 19th and early 20th century. In an essay that you simply must read, HL Mencken describes the writing [...]
In our last proposal, we floated the idea that we ought to end withholding in paychecks and all forms of taxation and transition to a system where people paid their taxes directly, transparently and regularly. Today, I’d like to amend that change with another change that our legislators seem to think makes sense in private [...]
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