Victor V. Claar's Blog, page 12

If Free Trade Is Good, Why Are We Putting a 35 Percent Tariff on Chinese Tire Imports?

In class just yesterday, we were unlocking the powerful conclusion that free trade between nations increases consumption possibilities for all--beyond what each nation would have available if it isolated itself from the rest of the world.

This happens because, with trade, each nation is free to produce goods and services in which it enjoys a comparative advantage--an ability to produce a good at a lower opportunity cost than others can.

So, for example, a nation like Canada can grow a lot of wh...

Talk about Opportunity Costs at the Margin: Bed-Sharing "Bad for Your Health"

From the BBC:

Couples should consider sleeping apart for the good of their health and relationship, say experts. . . .

One study found that, on average, couples suffered 50% more sleep disturbances if they shared a bed.

Then I'm guessing that letting Malcolm our cat in bed is suicidal.

So You Want to Be Fed Chair After Bernanke? Try Your Hand at This Game!

In case you missed it, President Obama announced the reappointment of Ben Bernanke as chair of the Federal Reserve last week.

Which means you won't be betting the job anytime soon.

Better practice, though. Try your hand at steering our economy by taking charge of our central bank by playing the Fed Chairman Game at the San Francisco Fed's web site.

Are There Really 46 Million Medically-Uninsured Americans?

In another great feature, NPR's Morning Edition took a closer look at the composition of the estimated 46 million medically-uninsured living in America:

. . . are there really 46 million uninsured? It's the current best guess, but it might be off by several million. . . .

Are Doctors More Like Moms Or Mechanics?

NPR's Morning Edition Friday included two wonderful features. The first considers the principal-agent problem applied to medicine: Are doctors looking out for you? Or for themselves?

That is, is your doctor more like your mom or an auto mechanic?

A 300-year-old Example of Quantitative Easing

From the Economist:

"IF FIVE hundred millions of paper had been of such advantage, five hundred millions additional would be of still greater advantage." So Charles Mackay, author of Extraordinary Popular Delusions and the Madness of Crowds, described the "quantitative easing" tactics of the French regent and his economic adviser, John Law, at the time of the Mississippi bubble in the early 18th century. The Mississippi scheme was a precursor of modern attempts to reflate the economy with unortho

Wisdom of Crowds? Or Wisdom of Wombats?

A few years ago, New Yorker financial writer James Surowiecki published The Wisdom of Crowds, explaining that often, "under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them." ABC's 20/20 considered this idea in a recent report, featuring business professor Michael Mauboussin. You can view an excerpt of the report, or read it in its entirety.

But have you heard of a "wisdom of wombats?"

Just like we use special words we already kno

Cash for Clunkers "Crowding Out" Mechanics

As this CNN segment illustrates, auto mechanics are nervous that the crushing of all the clunkers in the CARS program will lead to a drop in the demand for their services.

Embedded video from CNN Video

Higher Education's Disinvestment in Faculty

From Mark Perry's Carpe Diem blog:

The chart above is based on data in the American Federation of Teachers study "The State of the Higher Education Workforce 1997-2007," released in May 2009, and college enrollment data available here. The report presents a troubling picture of the higher education teaching profession because colleges and universities have been "disinvesting" in full-time tenured and tenure-track faculty while at the same time "investing" in more and more administrators, and hiri

Bob Lucas Defends My Profession!

Noble laureate Robert Lucas defends my profession in the Economist:

THERE is widespread disappointment with economists now because we did not forecast or prevent the financial crisis of 2008. . . .