The Unbroken Window

Is there any better quote to capture how some people feel about the way the world works. WTC responders are in line to scoop up $657 million in damages to be paid by NYC and the companies that worked to clean up the WTC site.

Is it really plausible that anyone was unaware of the health [...]

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Per capita GDP in the United States is roughly $47,000.
Per capita personal income is about $39,880.

Let’s think about the kind of tax system we have in the U.S.
What kind of effective marginal tax rates do you think a family faces that has per capita income below half of per capita GDP in the country or [...]

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When I teach intermediate microeconomics I talk a little about the history of conscription in the United States and then help the students understand how to model out the true economic costs of raising a military via a draft versus raising a military of volunteer soldiers.
Some of my students, in particular those with family in [...]

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I am usually a fan of randomized experiments. But not this one:
This paper analyzes a randomized tax enforcement experiment in Denmark.  In the base year, a stratified and representative sample of over 40,000 individual income tax filers was selected for the experiment.  Half of the tax filers were randomly selected to be thoroughly audited, while [...]

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I am opposed to coercive redistribution on both moral and practical grounds. However, suppose a bleeding-heart were to convince me that it is “just” to stick a gun in my face and force me to part with my earnings, and further, that they were to decide how to be charitable on my behalf and that [...]

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The economic reasoning behind why rules like the minimum wage or living wage laws are not so helpful is irrefutably solid. But no amount of sound economic thinking seems to work for my students, and that certainly also applies to popular notions of the way the world works. In times like those, perhaps it is [...]

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Moral and Social Constraints to Strategic Default on Mortgages by Luigi Guiso, Paola Sapienza, Luigi Zingales – #15145 (AP CF)
Abstract:
We use survey data to study American households’ propensity to default when the value of their mortgage exceeds the value of their house even if they can afford to pay their mortgage (strategic default). [...]

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It has become tiresome reading the multitude of blatherings about how the recent financial crisis is a failure of capitalism. John Bogle’s piece in Tuesday’s WSJ is particularly troubling.
The malfeasance and misjudgments by our corporate, financial and government leaders, declining ethical standards, and the failure of our new agency society reflect a failure of capitalism. [...]

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Thus says the Lord when opining about the tax breaks the rich get when they donate to a charity. For example, take two people, one in the 35% income tax bracket and another in the 20% income tax bracket and consider the “benefits” they get when they make a $100 charitable contribution.
If each of the [...]

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Many people believe that no one should make more than the President of the United States. In fact, the fine folks on Capital Hill are making limits to executive compensation a major feature of their reform proposals. So, just how much does the President make? His salary is $400,000. But is that really the only [...]

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