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Tag Archives: public policy myths

COVID-19 policy: your costs will be ignored unless you speak up

It is a fact that, despite requirements to the contrary, Federal health professionals do not consider the costs of health-enhancing rules and regulations in their normal course of operations.  Jerry Ellig has documented this fact in his regulatory report cards where he shows that the cost-benefit analysis from HHS (the Federal department making health policy) consistently ranks as one of the worst agencies in terms of considering costs as part of its regulatory impact analysis.  (Using...

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Cowen and Cochrane are confused about price controls

Tyler Cowen and John Cochrane think that the minimum wage traces out a labor demand curve.  It does not.  There are many ways that a competitive labor market can comply with the minimum wage, and cutting employment is only one of them.  E.g., change the composition of compensation, change the work schedule, change the location of employment, etc. So labor demand could be wage-elastic but a socially costly minimum wage have no effect (or even a positive effect) on employment in a...

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Monopolies are unhealthy, but high taxes make the disease worse

Copyright, TheHill.comTaxes are necessary to fund worthy government activities, but taxes come with side effects. The side effects can be especially harmful in an economy where businesses enjoy monopoly power.People and businesses individually attempt to reduce their tax burden by doing less of the activities taxed at high rates and more of the activities tax at low rates or by doing activities that aren't taxed at all.If the primary activities hit with high rates were unpleasant --...

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Read here to feel the Joy of Voting

The economic analysis of voting primarily takes voting as instrumental: like a bank account, a vote is supposed to be nothing more than a means to an end. A few of us have argued against this: e.g., Geoffrey Brennan, Bryan Caplan, and recently Becker and Mulligan, but that is a small minority. Another way to appreciate the same point is to see what actual Catalan voters had to say last weekend: The polling station workers thought that if they had computers with older technology they...

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Machine proves Paul Krugman wrong about the recession

Click for short video Click for short videoFor more on the two "sides" to this argument, seeThe Redistribution Recession (2012, esp., Figure 11.1: At least half of the reduction in labor was a result of public policies that redistribute). Paul Krugman's blog entry Nov 2012. Use the machine yourself.See more examples of economics questions answered by machine.

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Getting rid of ACA subsidies is easy, politically and economically

The conventional wisdom is that creating a subsidy program creates a sense of entitlement that, via political pressures, prevents it from being phased out later. This wisdom applies, perhaps, to a number of federal programs.But the Affordable Care Act's premium assistance subsidies (technically, they are "tax credits" administered with the personal income tax) are different because, unlike beneficiaries of Social Security, Food Stamps, and so many others, a recipient of a premium assistance...

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The media has been in the bag for Clinton, Obama, and Lincoln too

Even just in my own areas of expertise -- labor markets and health care -- it is easy to see how reporters and editors of "the news" have been promoting Democratic-party policies.  It's not just convenient ignorance about how incentives work.  Many times they know very well but are silent about it for fear of blemishing the narrative, even while proclaiming to their readers that they tell the whole story. But this is nothing new.  As Harold Holzer found, Lincoln alternately pampered,...

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Ransoms and Credible Public Policy: Brief Lecture Notes

For more than 20 years I have been using hostage ransom as my primary example of a "credible public policy" issue, the analysis of which were advanced by the important papers by Kydland-Prescott and Stokey.The Obama administration has generously made the lecture (linked here in powerpoint) more interesting. I am a bit embarrassed, however, that the lecture assumed that the terrorists would receive $100,000 cash per hostage -- that appears to be underestimated by factor of 1000. But that is...

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