Almost Classical

Yesterday, I reminded my undergraduate economics students that modern economics, with its quantitative bias, is not about what is "fair" in life. While we can use economics to identify what isn't "fair" and how to better allocate resources, at its core economics is the study of efficiently allocating scarce resources. Math is not moral; it is an amoral aspect of economics that should be informed by philosophical inquiries. For example, quantitative economics can answer when a person is "unproductive" and "inefficient" within the system. But, economics does not answer if it is moral to reallocate resources from the unproductive to either the currently or potentially productive members of a community. Raw numbers tell us the money spent on extending the last year or two of life might be best spent on educating the young. But is that the right way to approach problems? Economic models do not tell us if stock market gains driven by low inter...

Where's the inflation? Where's the run-up in bond rates? Despite high debt, unsustainable long-term social spending, unfunded pension liabilities, and numerous other fiscal challenges, the U.S. bond market is strong and interest rates remain low. Companies are facing increasing energy costs, unstable global situations, falling unemployment, rising minimum wages in larger cities, and a regulatory landscape that has shifted. The Tea Party and the Occupy movements aren't exactly in the mood to reform corporate taxes, and the politicians reliant on both extremes aren't going to collaborate to improve the business climate in any meaningful way. (Yes, there are areas of agreement among most economists, across the political and theoretical spectrum, that good policy isn't good politics.) If business costs and risks are rising, prices should be rising. With all levels of government fiscally unsound (and ungovernable), bond vigilantes should be circling. In theory,...

The "one percent" of income earners, and even the one-tenth of top one percent, might be the only segment in the United States that has caught up to pre-recession income and growth levels. Though I never support wealth redistribution, clearly the opportunity curve is… broken. If the middle and upper-middle class cannot advance, it's unlikely the economy can move forward for all citizens. Even in the richest 3%, there's a growing wealth gap Robert Frank | @robtfrank Friday, 5 Sep 2014 | 3:13 PM ET CNBC.com America's millionaire population hasn't grown significantly in 10 years, according to new government data, suggesting that not everyone at the top is benefiting from the recovery. The latest Surveys of Consumer Finance from the Federal Reserve paints the familiar picture of widening income inequality in America. The wealthiest 3 percent of households control 54.4 percent of the nation's wealth, up from 51.8 percent in 2009. But the gains are hi...

I'm really tired of the canard that money suddenly has an outsized influence in politics. Plenty of studies show that money follows likely winners, but doesn't determine the winners of elections. More importantly, this September 7, 2014 column by Senators Tom Udall of New Mexico and Bernie Sanders of Vermont ignores the most basic of all questions… http://www.politico.com/magazine/story/2014/09/the-threat-to-american-democracy-110683.html In 2010, the Supreme Court issued a disastrous 5-4 opinion striking down major parts of a 2002 campaign-finance reform law in Citizens United v. Federal Election Commission. This case and subsequent rulings, including McCutcheon v. FEC, have led to the explosion of outside money in elections through so-called super PACs. In the 2012 election, we quickly saw the results — 32 major super PAC donors combined to give more money than the millions of ordinary Americans who donated less than $200 each to Barack Obama or Mitt Romney. More than 60 pe...

Eligible citizens in the United States don't vote. A majority of 18 to 25-year-old voters have little faith in government and no desire to serve in public office. Personally, I don't blame them. I was engaged until about 2006. My disengagement is as much a statement as my direct participation was. Too often, though, partisans can't understand that not being engaged is a rhetorical choice. What if a person truly believes that both major parties are horrible for the United States and the world? The notion of voting for the "lesser of two evils" still requires voting for evil. A pacifist I know explained it this way: She cannot, for any reason, vote for any president or party that is likely to take any military action. This is a deep religious conviction. How would she express this conviction? Voting for a minor party doesn't change the outcome, and no major media outlets cover those candidates. I deeply object to policies of the two major parties. I ...

No matter what states try, election participation is falling. This doesn't correspond to voter ID laws, narrow voting windows, or anything else. States with vote-by-mail (Oregon) and at-will absentee voting (California) also have abysmal voting rates. If voter turnout is key, why is it so low? - Pittsburgh Post-Gazette : Taken together, just 15 percent of the voting-age population cast ballots -- or 18.2 million people out of 122.8 million eligible. Turnout was 17 percentage points lower than the most recent high-water mark of 32 percent in 1966. Democrats were down 14.5 points from their 1970 high, or 20.9 percent of eligible citizens, and Republicans were down 5 points from their 1966 high of 13 percent. Why? Because most of us know… our votes don't really count. States and districts are increasingly polarized. States are not gerrymandered, so we can't blame redistricting for partisanship in the United States Senate. When did California last have a Republican senator? ...

Readers know that I find Richard Florida 's insistence that cities are in almost all ways "better" than suburbs and rural regions simplistic at best. His analyses depend on his (and similar scholars') definitions of what is "best" for humans and what variables don't matter as much. What we weight as important in such analyses reflects biases. Florida seldom acknowledges that cities mask social problems (income inequality, mental stress, concentration of power) and drive away some hypersensitive, great minds. Cities are inhospitable to those who need reflective space. Imagine my pleasant surprise when The Atlantic  ran a story reflecting the experiences and observations of my wife and me. The smartest people we know leave cities for more relaxed lives in the country (or exurbs). Where Do the Smartest People Move? - CityLab : The most interesting finding here (below, far right) is that once income was taken into account, people who moved from the city...