Now that baseball season has started up again, I’m much more easily distracted. Nevertheless, here are some econ notes.
– Arnold Kling on Progressive Corporatism. That’s a nice turn of phrase and aptly describes the marriage between big business and big government. The idea that “progressives” were anti-business and pro-consumer is quite false. They have historically been in favor of “the big groups:” big government, big labor, and big business. These “interests” would negotiate, thereby consorting to screw taxpayers, consumers, non-unionized workers, and small businessmen. That was just fine for the old left and I don’t see much of a change with the new left (as opposed to the New Left).
– You cannot effectively spend $634 billion in health care for IT, prevention, and noms. One of the many, many problems of government spending is that it is difficult to stop at the economic margin. Instead, bureaucrats and politicians stop at the points where they do not themselves get any marginal gains. Hence, they will spend $634 billion and waste a significant portion of it in the process.
– The New York Times had an article on Spirit Airlines. It’s about as no-frills as it gets, and David Henderson wonders why it took an airline so long to go this route. I’ve never flown with them nor checked their website, but I’m glad that they exist. I certainly wouldn’t take them on a flight overseas, but from, say, Columbus to Chicago? Absolutely. One of the things I liked about Europe is the number of low-price, no-frills airlines, such as RyanAir and EasyJet. Yeah, you have to pay for water and they play advertisements during the flight, but for the price they charge, I’m willing to put up with that.
– It turns out that one of the counter-neoclassical results of behavioral economics—that “too much choice” can be a bad thing—does not hold in experimental testing, except when you want people explicitly to justify their reasoning. In other words, we use implicit rules to make determinations by aggregating information behind the scenes, and as long as you don’t disturb the little person in your head doing that, things turn out pretty well and it’s nice to have more choices.
– Megan McArdle points out that “green” products generally are inferior in quality to their “non-green” counterparts. By forcing people to adopt green products, it leaves people worse off, due to revealed preferences: those people who prefer the green products (low-flow toilets, new washer/dryer combinations, CFLs, etc.) are free to go out and buy them, whereas people who prefer the “non-green” products cannot.
– Stop the presses! Government analysts may have been wrong in estimating the cost of TARP. You’ll never guess in which direction.
– Scrip in the United States. I’m of two minds regarding this article. On the one hand, I am becoming a fan of free banking and the idea of multiple, competing currencies seems to be a good thing. On the other hand, the actual reasons given in the article are hogwash. The best way to “strengthen the local economy” is not to lock people into it, but rather to produce things that people want.