1. University of Chicago Nobel Laureate James Heckman talks with John Cassidy of the New Yorker about, among other things, how Milton Friedman’s true legacy is, ultimately, as an empiricist in search of explanations that fit the data, and not as a dogmatic theorist (H.T. Ryan Avent):
When Friedman died, a couple of years ago, we had a symposium for the alumni devoted to the Friedman legacy… One woman got up and said, “Look at the evidence on 401k plans and how people misuse them, or don’t use them. Are you really saying that people look ahead and plan ahead rationally?” And Lucas said, “Yes, that’s what the theory of rational expectations says, and that’s part of Friedman’s legacy.” I said, “No, it isn’t. He was much more empirically minded than that.” People took one part of his legacy and forgot the rest. They moved too far away from the data.
2. Leigh Caldwell offers a very evenhanded and reasonable assessment of how the general empirical beliefs of left-leaning and right-leaning economists differ. I would only add that you could agree with many points on one side of the debate, but also find them trumped by one important single point from the other side:
If you think the problem of government knowledge is less important than the problem of sticky prices, you’re more likely to tend leftwards. If you think transaction costs are less important than labour incentives, you may tend right. At our current level of understanding of economic theory, I’d argue that these are basically empirical questions.
3. Felix Salmon argues persuasively that you should not donate money to Haiti. I am convinced:
The last time there was a disaster on this scale was the Asian tsunami, five years ago. And for all its best efforts, the Red Cross has still only spent 83% of its $3.21 billion tsunami budget — which means that it has over half a billion dollars left to spend. Not to put too fine a point on it, but that’s money which could be spent in Haiti, if it weren’t for the fact that it was earmarked.
5. Highly unpersuasive arguments in favor of temporarily exempting unions from the Cadillac health tax:
The argument for temporarily exempting union plans makes sense, at least in principle. Many unions really did accept generous health benefits, in lieu of wage increases, on the theory it was worth more to their members.
It makes sense “in principle”?… What principle might that be? The principal that no policy should ever harm union members?