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Why are stocks up today?

The obvious answer is that no one knows for sure. But let’s discuss some options: Bloomberg points to expectations of fiscal stimulus.  But what news do we have today that would make fiscal stimulus more likely?  One can argue that the Georgia election results increased the likelihood of more stimulus, but that information was fully priced in yesterday morning, and indeed mostly priced in Tuesday night (when stock futures declined.) Another possibility is the turmoil...

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Sorry for Whatever

Last week, I posed the following question on Twitter: Why is “I don’t really understand what I did to upset you, but I’m sincerely sorry for whatever it was” so ineffective? If you respond, “Because figuring out how you upset someone is easy,” you are crazy!!! — Bryan Caplan (@bryan_caplan) January 1, 2021 Few of the responses impressed me, but perhaps that’s because I failed to flesh out the hypothetical.  I’m picturing a scenario where: a. The speaker speaks in a...

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Criminal Incentives: A Horrible Illustration

Samuel Little, a man who confessed killing 93 women over four decades, died in a California prison in late December” (Hannah Knowles, “Deadliest Serial Killer in American History Dies at 80, with Police Still Searching for his Victims,” Washington Post, December 30, 2020). He illustrated in a horrible way what Nobel-winning economist Gary Becker taught us: criminals are rational in the sense that they respond to incentives; those who are not rational don’t stay long...

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Betting vs. the Nuclear Option

I have a long-standing dispute with Tyler Cowen about the epistemic value of betting.  To my mind, my position is modest: Bets advance our knowledge by clarifying contentions and raising the price of error.  While isolated bets don’t “prove” anything, they tip the argumentative scales in favor of the winner.  And a long track record of successful betting is a strong sign of reliable judgment.  Furthermore, the refusal to make bets at all shows that deep down, you know...

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Ralph K. Winter Jr. RIP

Catching up on Wall Street Journals from December today, I came across an obit of federal judge Ralph K. Winter. I never met the man although I gather that a number of my friends have. But it’s amazing how one quote can stick out in your memory from over 40 years ago. I remembered that quote and found the publication it was in. Winter wrote “Campaign Financing and Political Freedom” for the American Enterprise Institute in October 1973. I think I was on the mailing...

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890 Thousand Excess Deaths Due to Covid and Lockdowns

We find that shocks to unemployment are followed by statistically significant increases in mortality rates and declines in life expectancy. We use our results to assess the long-run effects of the COVID-19 economic recession on mortality and life expectancy. We estimate the size of the COVID-19-related unemployment to be between 2 and 5 times larger than the typical unemployment shock, depending on race/gender, resulting in a 3.0% increase in mortality rate and a 0.5% drop in life expectancy...

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There are no non-Bayesians in a COVID foxhole

There is some level of danger that pushes even the most stubborn government bureaucracies to start acting semi-rationally. Tyler Cowen has a brilliant new post that clearly demonstrates that the US has not reached that point. But things are much worse in the UK, due to a new variant of Covid-19 that spreads much more rapidly. As a result, the UK has switched to the “first dose first” approach, which is very likely to save lives.  And even if it doesn’t, the approach...

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Gramm’s Post Office Speech: A Critique

Whenever I lecture on privatization, I bring up the following quote from Senator Phil Gramm: And last year, in the darkest hour of the health care debate, when it looked like Bill Clinton was about to convince America that it made sense to tear down the greatest health care system the world had ever known to rebuild it in the image of the post office… Gramm’s opponents angrily denied that Clinton planned to rebuild the health care system “in the image of the post...

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COVID’s effects on Europe

This article by Wolfgang Streeck for the New Left Review will be disturbing to many. But it is an interesting article, and well worth reading. I would take issue with one claim Streeck makes: that the “supranational extension of the debt state” he rightly considers the Corona Recovery Fund to be, does not entail a change in European institutions toward more “solidarity”. These transfers are financed by issuing European debt, but the way in which member states will...

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Sadie Alexander: The First African-American Economist

The Economist has an interesting article on Sadie Alexander, who in 1921 became the first African-American to earn a PhD in economics. Her politics were not easy to pin down in today’s terms, as she favored a mix of Keynesian demand-side stimulus and black self-improvement. Franklin Roosevelt attracted many black votes when he succeeded in boosting the economy after taking office in 1933. However, Alexander did not view his policies as an unmixed blessing: Some...

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