Economics Roundtable

May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

Click on the image to get a bigger version.


Jobs

The best summary of the state of our economy is the graph (below) of employment as a fraction of population for people over 16 years old. The decrease is large, but the most troubling feature of the graph is the flat trend .


Click on the image to get a bigger version.


Graph-of-the-Year Candidates

Donald Marron likes European interest rates. Click on the image to get a bigger version. Can you find three distinct subperiods?

Brad DeLong favors the U.S. gdp gap.


Remember M1?

Money Supply M1 growth is now over 20% per year over a 12 month lag. M1 growth has touched 20% before, but not with excess reserves of $1.6 trillion. Where is M1 headed?


Click on the chart for a larger version.


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- Recent Entries


September 16, 2014, 3:03 am, 1335520
The national flag of China flutters behind a fence of the headquarters of the National Development and Reform Commission (NDRC) in Beijing, in this July 12, 2013 file photo.


September 16, 2014, 2:44 am, 1335519
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September 16, 2014, 2:44 am, 1335518
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September 16, 2014, 2:05 am, 1335516

Too little, too late on the excess burdens of taxation: Cecil Bohanon, John Horowitz, and James McClure show that public finance textbooks do a very poor job of illuminating the excess burdens of taxation and incorporating such burdens into the analysis of the costs of government ...


September 16, 2014, 2:04 am, 1335515
(September 16, 2014 02:19 AM, by David Henderson) I'm a big fan of Vanguard. All of my IRA-type assets are in Vanguard funds. And when I mistakenly claimed in a Wall Street Journal that John (Jack) Bogle, who started Vanguard, had learned from work by Eugene Fama, Bogle... (0 COMMENTS)


September 16, 2014, 1:03 am, 1335491

Federal Reserve Chairwoman Janet Yellen‘s calendars, obtained by The Wall Street Journal under an open records request, provide a glimpse into how the most powerful economic policy maker in the world spends her time. You can read the original documents — annotated by Journal reporters ...


September 16, 2014, 1:03 am, 1335490

TUESDAY

Bank of Japan Governor Haruhiko Kuroda speaks in Osaka at 0535 GMT. Australia’s central bank releases minutes of its September policy meeting at 11:30 a.m. local time Bank of Russia releases a monetary policy report Fed begins a two-day policy meeting in Washington. Join our live, video Spreecast discussion with Jon Hilsenrath and ...


September 16, 2014, 1:03 am, 1335489

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, September 15, 2014:

Sign up for the newsletter.

Highlights

Hilsenrath’s Take: Dollar Doomsayers Have Gotten the Fed All Wrong Fed Sizes Up Alternate Rate ...


September 16, 2014, 1:03 am, 1335488

When a country’s economy grows too slowly, the standard short-term remedies are to increase government spending, cut taxes or reduce interest rates. When none of those options is available, governments often resort ...


September 16, 2014, 1:03 am, 1335487

One of the flashpoints in the debate over the widening income gap has been answering the question, “So what?” What is the real impact of separating wages for the wealthiest Americans and everyone else?

Standard and Poor’s Ratings Services offered a new answer Monday, arguing that a rising share ...


September 16, 2014, 1:03 am, 1335486

Bruce Bartlett brought my attention to this article, which Mark Thoma mused was “The Stupidest Article Ever Written”. From The Inflation Debt Scam, by Paul Craig Roberts, Dave Kranzler and John Williams:

To understand how risky the rise of debt is, nominal debt must be compared to real ...


September 16, 2014, 12:44 am, 1335485
The White House said tougher financial-sector rules were making the country safer -- a message delivered on the six-year anniversary of the collapse of Lehman Brothers.


September 16, 2014, 12:44 am, 1335484
Salim Furth: An examination of Thomas Piketty’s principal claims and the critical responses.


September 16, 2014, 12:34 am, 1335483

The NCAA, a quasi-governmental regulatory cartel, prohibits colleges from paying athletes. So colleges employ a variety of schemes to offer unofficial “pay.” Meanwhile, the NCAA ensures there is no functioning job market for athletes at that level, and no competition to which students ...


September 16, 2014, 12:34 am, 1335482
Teaser:

On ...


September 15, 2014, 10:34 pm, 1335462
Teaser:

In ...


September 15, 2014, 9:33 pm, 1335460
Price Deflation Hits Italy First Time in 55 Years

The Italian National Institute of Statistics (ISTAT) reports that consumer price inflation declined by 0.1% from August 2013 to August 2014.

Italian consumer prices fell 0.1 percent year-on-year in August of 2014, matching preliminary estimates. The country’s ...


September 15, 2014, 9:03 pm, 1335450
Container traffic gives us an idea about the volume of goods being exported and imported - and possibly some hints about the trade report for August since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at ...


September 15, 2014, 8:44 pm, 1335449

Using aggregate data can bias estimates of exchange rate pass-through by ignoring heterogeneity in price adjustment across sectors. This column uses micro-level price data to estimate pass-through for South Africa, using actual CPI weights to reflect changes in consumption bundles. The result is a micro-based estimate of pass-through with aggregation ...


September 15, 2014, 8:44 pm, 1335448
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September 15, 2014, 7:33 pm, 1335447

Eagles running back LeSean McCoy stirred up some controversy about a week ago when he ate at the Philadelphia burger joint PTY (“Home of America’s Craaaziest Burgers”) with three friends and left a $0.20 tip on a $61.56 bill ...


September 15, 2014, 6:44 pm, 1335408
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September 15, 2014, 6:44 pm, 1335406
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September 15, 2014, 6:44 pm, 1335407
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September 15, 2014, 6:44 pm, 1335405
THIS week: The latest economic news from China, Banco Santander's future after the death of its executive chairman, and a new study on bankers' pay


September 15, 2014, 6:35 pm, 1335404

For all the talk of political gridlock, it is amazing how quickly a state legislature can act when $1 billion in unexpected corporate tax refunds are at stake. The lawmakers are in Michigan. And their pistons were fired up following an unfavorable state Supreme Court decision in a lawsuit brought by ...


September 15, 2014, 5:33 pm, 1335402

By Rebecca Friedman

In a recent Chicago Fed Letter, Scott Brave and Thomas Walstrum discuss a business conditions survey that the Chicago Fed has been conducting in conjunction with the Beige Book since March 2013. To measure economic activity in the Seventh District, they construct a set of diffusion ...


September 15, 2014, 5:23 pm, 1335401

Timely data on the economic health of individual states recently came from the U.S. Bureau of Economic Analysis (BEA). The new quarterly state-level gross domestic product (GDP) series begins in 2005 and runs through the fourth quarter of 2013. The map below offers a look at how states have ...


September 15, 2014, 5:03 pm, 1335314

One of the flashpoints in the debate over the widening income gap has been answering the question, “So what?” What is the real impact of separating wages for the wealthiest Americans and everyone else?

Standard and Poor’s Ratings Services offered a new answer Monday, arguing that a rising share ...


September 15, 2014, 4:44 pm, 1335313
Salim Furth: An examination of Thomas Piketty’s principal claims and the critical responses.


September 15, 2014, 4:05 pm, 1335310

Thanks to translator Matin Pedram, Rothbard’s Power and Market is now available in a Persian translation.

Front:

Back:


September 15, 2014, 4:05 pm, 1335309

Following ONS definitions, the official Scottish Executive figures give public sector employment in Scotland as 580,000 in 2012, having fallen slightly from its peak of 600,000 in 2009 (see Table 1). The 2012 figure represents 23.5 per cent of the total employed population. But there is good reason to ...


September 15, 2014, 3:33 pm, 1335305
War and peace factions are at odds in Ukraine.

The war factions claim Putin cannot be trusted but the peace factions have finally had enough of war. The likely loss of Mariupol within weeks was simply too much to take.

One thing is certain, more killing will only ...


September 15, 2014, 3:33 pm, 1335304

One has to be struck by how the markets are choosing to turn a blind eye to the ill-winds of political change that continue to blow through Europe. One also has to be struck by how markets fail to be link Europe’s political fragmentation to its very poor economic performance ...


September 15, 2014, 3:03 pm, 1335243
Just an update ... during the recession, I wrote about the troubles in Las Vegas and included a chart of visitor and convention attendance: Lost Vegas.

Since then Las Vegas visitor traffic recovered to a new record high in 2012, although visitor traffic was down slightly in ...


September 15, 2014, 2:44 pm, 1335242
The White House said tougher financial-sector rules were making the country safer -- a message delivered on the six-year anniversary of the collapse of Lehman Brothers.


September 15, 2014, 2:44 pm, 1335241
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September 15, 2014, 2:44 pm, 1335240
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September 15, 2014, 2:44 pm, 1335239
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September 15, 2014, 2:05 pm, 1335238

As has been done for several years, the Mises Institute hosted our annual Auburn University Economics Graduate Student Reception on Friday at our campus next to Auburn University. It was organized by Jonathan Newman (Summer Fellow 2014, Mises U Alum, and Economics Doctoral Student at Auburn).


September 15, 2014, 2:05 pm, 1335236

…the relation between the strength of constitutional educational rights and the quality of education is negative and statistically significant.

That is from Sebastian Edwards and Alvaro Garcia Marin, the paper is here.


September 15, 2014, 2:05 pm, 1335237

1. Daniel Drezner on the history of the gold standard.

2. Comparing the mental abilities of Scrabble and crossword champions.

3. Shabbat plus cell phones: “In the future I would definitely like a day of rest without technology,” said the teenager…

4. “full rationality ...


September 15, 2014, 2:04 pm, 1335235
(September 15, 2014 01:49 PM, by David Henderson) Last week, I posted here and here about Larry Summers's excellent talk in which he advocated removing the ban on U.S. oil exports. I then remembered that when I was the Senior Economist for Energy Policy with President Reagan's Council... (0 COMMENTS)


September 15, 2014, 1:33 pm, 1335231

The Wealth Building Home Loan (WBHL), a new approach to home finance, opened to rave reviews at the American Mortgage Conference held September 8-10. Six leaders of national stature made favorable comments from the podium. Lewis Ranieri, considered the “godfather” of mortgage finance, in his keynote address praised ...


September 15, 2014, 1:33 pm, 1335230

The Tax Foundation has put together a Tax Competitive Index, which finds “the United States has the 32nd most competitive tax system out of the 34 OECD member countries.”

Tax Foundation

Here are few key ...


September 15, 2014, 1:33 pm, 1335229

1. Who’d a-Thunk It? Socialist (and beauty-obsessed) Venezuela has a shortage of breast implants?  “Unable to find the devices in doctors’ offices, some women are turning to the Venezuelan equivalent of the bartering website Craigslist, where sellers post pictures of black market implants of unknown origin sitting in ...


September 15, 2014, 1:03 pm, 1335168

TUESDAY

Bank of Japan Governor Haruhiko Kuroda speaks in Osaka at 0535 GMT. Australia’s central bank releases minutes of its September policy meeting at 11:30 a.m. local time Bank of Russia releases a monetary policy report Fed begins a two-day policy meeting in Washington. Join our live, video Spreecast discussion with Jon Hilsenrath and ...


September 15, 2014, 1:03 pm, 1335167

When a country’s economy grows too slowly, the standard short-term remedies are to increase government spending, cut taxes or reduce interest rates. When none of those options is available, governments often resort ...


September 15, 2014, 1:03 pm, 1335166

"A key observation of the paper is that journalists and expert commentators overstate the extent of machine substitution for human labor and ignore the strong complementarities":

Polanyi's Paradox and the Shape of Employment Growth, by David Autor, NBER Working Paper No. 20485, September 2014 [open link]: In 1966, the ...


September 15, 2014, 1:03 pm, 1335165
Excerpts from a note by Goldman Sach's chief economist Jan Hatzius: Q&A on "Why Renege Now?"

Q: You expect the phrase “considerable time after the asset purchase program ends” to remain in the statement. Many others don’t; what are they missing?

A: Many are missing the distinction between ...


September 15, 2014, 12:44 pm, 1335164
The White House said tougher financial-sector rules were making the country safer -- a message delivered on the six-year anniversary of the collapse of Lehman Brothers.


September 15, 2014, 12:44 pm, 1335163
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September 15, 2014, 12:44 pm, 1335161
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September 15, 2014, 12:44 pm, 1335162
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September 15, 2014, 12:44 pm, 1335160

Interesting op-ed on digital wallets by Edward Castronova and Joshua Fairfield in the NYT. I'm a little more skeptical. Thoughts follow the break.

(1) We already live in a world of digital currency.

Thanks to fractional reserve banking and electronic records, most currency and transactions are electronic ...


September 15, 2014, 12:34 pm, 1335159
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September 15, 2014, 12:04 pm, 1335153
(September 15, 2014 11:45 AM, by Art Carden) It's happened. A few weeks ago I finally bought Minecraft for the kids (the Pocket Edition for mobile devices is only about $7). We're still learning the ins and outs of the game, and early going has meant periodic frustration... (0 COMMENTS)


September 15, 2014, 11:33 am, 1335152

A complex story in the Guardian about California Almond production, water, drough and government regulation provides great fodder for an introductory microeconomics class (oh, and it provides good coverage for our favorite Aguanomist, David Zetland):

Touted as the ultimate superfood and an essential ingredient ...


September 15, 2014, 11:33 am, 1335151
Here is a MP3 fileof my recent Cal State Long Beach University Lecture (from 9/9/14) titled "How Will Los Angeles Adapt to Climate Change? An Economist's Perspective". The podcast starts about 2 minutes into my talk and you will need to click Music Player for Google Drive to listen ...


September 15, 2014, 11:03 am, 1335089

TUESDAY

Bank of Japan Governor Haruhiko Kuroda speaks in Osaka at 0535 GMT. Australia’s central bank releases minutes of its September policy meeting at 11:30 a.m. local time Bank of Russia releases a monetary policy report Fed begins a two-day policy meeting in Washington. Join our live, video Spreecast discussion with Jon Hilsenrath and ...


September 15, 2014, 11:03 am, 1335087

When a country’s economy grows too slowly, the standard short-term remedies are to increase government spending, cut taxes or reduce interest rates. When none of those options is available, governments often resort ...


September 15, 2014, 11:03 am, 1335088

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, September 15, 2014:

Sign up for the newsletter.

Highlights

Hilsenrath’s Take: Dollar Doomsayers Have Gotten the Fed All Wrong Fed Sizes Up Alternate Rate ...


September 15, 2014, 11:03 am, 1335086
From the Fed: Industrial production and Capacity Utilization

The index of industrial production edged down 0.1 percent in August, and the index for manufacturing output decreased 0.4 percent; the declines were the first for each since January. The gains in July for both indexes were revised down. The ...


September 15, 2014, 10:44 am, 1335085
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September 15, 2014, 10:44 am, 1335084
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September 15, 2014, 10:44 am, 1335082
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September 15, 2014, 10:44 am, 1335083
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September 15, 2014, 10:35 am, 1335081

Nick Cohen has brilliantly described how the arts and media are becoming dominated by public school products to the exclusion of people like us. This makes the irrational class-hating part of me - which is the biggest part - want to take up arms. ...


September 15, 2014, 10:04 am, 1335079
Paul Krugman has taken aim at the profession here and here. It is not just being wrong sometimes… by Sandwichman at Econospeak writes: Economists: Lawyers? Shysters? Touts? “Basically, a lot of economists use the tools of science to accomplish literary– or lawyerly — goals.” — Noah Smith, Economics Isn’t ...


September 15, 2014, 9:33 am, 1335073

Ever since Bagehot, central banks acting as lenders of last resort have tried to distinguish banks that are illiquid, who should be eligible for a loan, from banks that are insolvent, who should not. The challenge persists. As one analyst put it recently: “Liquidity and solvency are the ...


September 15, 2014, 9:33 am, 1335072

The great economic lesson of the 1980s supply-side revolution is that taxes matter. But what are the nuances of that lesson, and how should that lesson by applied to the modern American economy? Politicians and pundits typically offer extreme versions of how tax reform would affect growth, either that it ...


September 15, 2014, 9:03 am, 1335011

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, September 15, 2014:

Sign up for the newsletter.

Highlights

Hilsenrath’s Take: Dollar Doomsayers Have Gotten the Fed All Wrong Fed Sizes Up Alternate Rate ...


September 15, 2014, 9:03 am, 1335010
From the NY Fed: Empire State Manufacturing Survey

The headline general business conditions index rose thirteen points to 27.5, a multiyear high. The new orders index moved up three points to 16.9, and the shipments index advanced two points to 27.1. ...

Employment indexes showed a slight ...


September 15, 2014, 8:44 am, 1335009
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September 15, 2014, 8:36 am, 1335008
The trend in recent years of securitizing more of the world’s market betas offers investors, in theory, better odds for enhancing risk-adjusted returns. Providing access to a broader set of low and even negatively correlated assets moves us closer to … Continue reading →


September 15, 2014, 8:35 am, 1335007

Shutting down talk of a shutdown… The House is expected to vote on a continuing resolution to fund the government—including the IRS—through December 11. The resolution would include an extension of the Internet Tax Freedom Act, which bars states from taxing Internet access. Unless Congress acts, the law ...


September 15, 2014, 8:34 am, 1335006

A scandal erupted when the Chinese people learned their leaders were flying first class and staying in five-star hotels. Problem solved!

The Economist (“When is first class not first ...


September 15, 2014, 8:05 am, 1335003

Dylan Matthews summarizes the The Case for Open Borders drawing on an excellent interview with Bryan Caplan. Here is one bit from the interview:

Letting someone get a job is not a kind of charity. It’s not a welfare program. It’s just the government leaving people alone to go ...


September 15, 2014, 8:04 am, 1335002
(Don Boudreaux)

… is from pages 11-12 of Hayek’s 1948 collection, Individualism and Economic Order; in particular, it’s from one of Hayek’s most profound and important essays, namely, his December 1945 Finlay Lecture in Dublin, “Individualism: True and False”:

 [Adam] Smith’s chief concern was not so much with what man might occasionally ...


September 15, 2014, 7:33 am, 1334996

No doubt riches and fame await some of these kids.

(Link courtesy of M. Mace.)


September 15, 2014, 7:33 am, 1334998

Daniel J. Mitchell, senior fellow at Cato:

I very rarely feel sorry for statists. After all, these are the people who think that their feelings of envy and inadequacy justify bigger and more coercive government. . . .

But I nonetheless feel sorry for statists when ...


September 15, 2014, 7:33 am, 1334999

My money's on Illinois. But it'll be close.

More: Jeffrey Dorfman, "Public Pensions Are Still Marching To TheirDeath".

If Detroit makes other cities and states face reality and adjust their pension plans to economic reality rather than political agendas, at least Detroit’s poor employees and retired ...


September 15, 2014, 7:33 am, 1334997

I'd like to think so, but I have my doubts. (Irving Kristol memorably labeled Republicans "The Stupid Party".)

Chamorro-Premuzic notes that millennials are more likely to highly value freedom and independence, and to overestimate their own talents and to underestimate the difficulties inherent in entrepreneurial endeavors.


September 15, 2014, 7:23 am, 1334995

Currency substitution occurs when a country uses another currency without any official backing and without a Central Bank – instead of using its own currency.

For example, Panama uses the US Dollar as its currency. Even though it has no formal currency union with the UK. Jersey uses Sterling unofficially too.

The ...


September 15, 2014, 6:44 am, 1334948

Elizabeth Green, author of the new book Building a Better Teacher: How Teaching Works (and How to Teach it to Anyone), talks with EconTalk host Russ Roberts about the art of teaching and the history of various reforms, mostly failed, trying to improve teaching in ...


September 15, 2014, 6:04 am, 1334947
(Don Boudreaux)

George Leef weighs in at Forbes against the abominable practice of civil asset forfeiture.  A slice:

One of the worst cities for civil asset forfeiture is Philadelphia, where, as we read in this Philadelphia Inquirer story, officials file thousands of forfeiture petitions yearly, confiscating some $6 million in cash and ...


September 15, 2014, 5:33 am, 1334944

"Get Ready for the New England Power Shortage".

In a hell-bent campaign to rid itself of any form of dirty, messy “non-renewable” energy, New England has been closing down coal and oil plants for the last decade. In 2000, 18 percent of New England’s electricity came from ...


September 15, 2014, 5:33 am, 1334943

"Why More MBAs Are Becoming Entrepreneurs Straight Out Of Business School".

A decade ago, nearly all b-school grads flocked to traditional corporate jobs in finance and management.

Today, however, a growing number of newly minted MBAs decide to start their own businesses orgo to ...


September 15, 2014, 5:23 am, 1334942

Question and answers on the difficulty of switching from non-renewable energy sources, such as fossil fuels. (from – finding alternatives to fossil fuels)

photo Dean

Readers Question: ...


September 15, 2014, 5:03 am, 1334886

Federal Reserve Chairwoman Janet Yellen‘s calendars, obtained by The Wall Street Journal under an open records request, provide a glimpse into how the most powerful economic policy maker in the world spends her time. You can read the original documents — annotated by Journal reporters — or ...


September 15, 2014, 5:03 am, 1334885

Because it is always fun to make fun of poorly timed stock market-related headlines, we thought we'd start this week by sharing an instant classic, which we captured for posterity on the Wayback Machine on Tuesday, 9 September 2014:

Morning ...


September 15, 2014, 5:03 am, 1334884

September 15, 2014, 5:03 am, 1334883

What "accounts for the terrible performance of Western economies since 200"?:

How to Get It Wrong, by Paul Krugman, Commentary, NY Times: Last week I participated in a conference organized by Rethinking Economics... And Mammon knows that economics needs rethinking...

It seems to me, however, that it’s important to ...


September 15, 2014, 4:05 am, 1334880

A black market for an Ebola treatment derived from the blood of survivors is emerging in the West African countries experiencing the worst outbreak of the virus on record, the World Health Organization said.

The United Nations health agency will work with governments to stamp out the illicit trade ...


September 15, 2014, 3:33 am, 1334876
A Barclays' survey of over 2,000 individuals with a net worth over $1.5 billion contains some pretty interesting results.

Those in China and Singapore are most likely to leave their country, while those in the US and India were most likely to stay.

Please consider


September 15, 2014, 2:44 am, 1334838
A market for blood? Many Americans, used to being rewarded for a donation with a warm feeling of talking to WPTV of West Palm Beach, Florida.
public service rather than cold cash, ...


September 15, 2014, 2:05 am, 1334836

I had not known of these:

The Indo-Bangladesh enclaves, also known as the chitmahals (Bengali: ছিটমহল chitmôhol), sometimes called pasha enclaves, are the enclaves along the Bangladesh–India border, in Bangladesh and the Indian


September 15, 2014, 2:04 am, 1334835
(September 15, 2014 01:20 AM, by Bryan Caplan) Martin Gilens' Affluence and Influence argues that when America's rich disagree with their fellow citizens, American democracy heeds the rich. His evidence is hardly airtight, but by the standards of social science, it's fairly compelling. To me, he provides an... (0 COMMENTS)


September 15, 2014, 12:44 am, 1334819
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September 15, 2014, 12:44 am, 1334818
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September 15, 2014, 12:35 am, 1334817

The work of economist Anders Chydenius, which predates Smith’s The Wealth of Nations, provided a radically free-market voice for Scandinavia in the 18th century as Chydenius battled against mercantilists and those who thought government well-suited to plan economies with laws and edicts.


September 15, 2014, 12:05 am, 1334816

We all have regrets. But if you find yourself consistently ruing your past decisions, maybe it’s best to rethink your rashness.

Writing in the Financial Times this weekend, Richard McGregor gives some perspective on Americans’ change of heart for wars.

In the wake of a triumph in WWII, in 1950 65% ...


September 15, 2014, 12:04 am, 1334815
By David Zetland at Aguanomics, author of Living with Water Scarcity How should your community manage its water? MB asked one last question after my AWRA seminar: You said that each location should decide which system/structure they think is best for their context, but in the places you’ve traveled or ...