Almost Classical

American economist James Buchanan won the 1986 Nobel Prize in Economics. (Photo credit: Wikipedia ) Democracy in Chains  by Historian Nancy MacLean was worthy of a few online posts earlier this summer, when I first read a loaned copy and was pained by how often the text misstated economic theories associated with libertarians (and some conservatives). As a historian, she makes the all too common  mistake of conflating the "radical right" (named on the book's cover) with standard, rather unexceptional and mundane, free-market economic models and theories. She presents common knowledge and well-known debates over theories within economics as some sort of secret plot to destroy democracy when, in fact, the people and theories she discusses seek to protect minority rights and freedoms from an easily manipulated government. I didn't post my columns to my blogs because others, including the economists and political scientists from perspectives other than the Chica...

Minwage3 (Photo credit: Wikipedia ) Researchers at the University of Washington, asked by Seattle to study the increase in the city's minimum wage have some difficult news for the city and previous research on wages : Seattle’s Minimum Wage Hike May Have Gone Too Far | FiveThirtyEight : The study is far from the last word on the impact of Seattle’s law, let alone the $15 minimum wage movement more generally. Indeed, just last week another study used similar methods to reach seemingly the opposite conclusion: A report from the Institute for Research on Labor and Employment at the University of California, Berkeley, found that Seattle’s minimum wage, “raises pay without costing jobs,” as a press release on the study announced.   The UW study was the most data-complete study of its kind. The UW researchers work in only one of four states with complete hourly wage data. The other studies? Done in states that required "estimating" and "models" in the more e...

Map of U.S. Minimum Wage laws (Photo credit: Wikipedia ) Minimum wage debates tend to overstate the estimated and real effects of any changes to the minimum wage in the Unites States. Most studies show a minor increase in a place with wages already rising  has no significant effect on employment. But, there is a cost when wages rise quickly and there is an effect when wages fail to keep pace with the cost of living. The problem is that the minimum wage is not, contrary to any mythologies, the income of most adults with full-time work. As the debates below suggest, there is a limit to what a local economy can bear in terms of wage growth. At the same time, we know that low wages also reflect jobs that can be or will be automated away in many instances. We are in a new era of creative destruction, with no real plan for the displaced workers without skills. Allow me to provide an example of how silly on all sides the debate on wages is. Mark Perry gets the facts right in hi...

The Statue of Liberty front shot, on Liberty Island. (Photo credit: Wikipedia ) It's hard, really hard to make it big in America. Well, yes, success takes work, especially if you are trying to start a business, but some in the media and within academia seem to want to convince their audiences that unless you are born wealthy and white, there's almost no hope at all of living the American Dream. The United States does have widening inequality. There are complex explanations for this, including the fact that our wealthy are wealthier (on average and at median) than the wealthy elsewhere. Income inequality, which isn't the same as wealth inequality , is also increasing for many complex reasons. But, there are actual signs that more people can and do start businesses. You wouldn't know that, though, based on how some present research data to the public. The following article from Quartz ( The Atlantic ) is so flawed, statistically and philosophically, it demonst...

When a scholar makes a mistake, he or she should admit it and do whatever must be done to revise the research involved. Often, mistakes teach a great deal. Also, nothing bothers me more than when a scholar won't explore challenges to his or her assumptions. Be honest, and search for the best approximation of "truth" possible. What if "austerity" doesn't withstand scholarship? For some progressives, liberals, socialists, et al, any evidence against austere budgets would be welcomed. That's why the following story has been trumpeted in left-leaning media. And they still miss some of the points. (But, that is partisanship.) The problem is, "austerity" is defined many ways. The paper at the center of this debate suggests reducing public deficits and long-term debt by quickly cutting spending and raising taxes — a combination many reject, including me, because there are no such "quick and easy" solutions to long-term fiscal imbalanc...