Marginal Revolution

Economists Have Abandoned Principle

Alex Tabarrok

The title is from Oliver Hart and Luigi Zingales writing in the WSJ:

Practically every day the government launches a massively expensive new initiative to solve the problems that the last day's initiative did not. It is hard to discern any principles behind these actions. The lack of a coherent strategy has increased uncertainty and undermined the public's perception of the government's competence and trustworthiness.

By principle, Hart and Zingales mean economic principle such as intervening only when market failure in the technical sense is an issue.  Bankruptcy, for example, is not the end of the world (As you may recall I have been pushing the idea of speed bankruptcy for which the FDIC has developed significant expertise.)  For example,

...what would have been so bad about letting Bear Stearns, AIG and Citigroup (and in the future, General Motors) go into receivership or Chapter 11 bankruptcy? One argument often made is that these institutions had huge numbers of complicated claims, and that the bankruptcy of any one of them would have led to contagion and systemic failure, causing scores of further bankruptcies...

...This argument has some validity, but it suggests that the best way to proceed is to help third parties rather than the distressed company itself. In other words, instead of bailing out AIG and its creditors, it would have been better for the government to guarantee AIG's obligations to J.P. Morgan and those who bought insurance from AIG. Such an action would have nipped the contagion in the bud, probably at much smaller cost to taxpayers than the cost of bailing out the whole of AIG. It would also have saved the government from having to take a position on AIG's viability as a business, which could have been left to a bankruptcy court. Finally, it would have minimized concerns about moral hazard. AIG may be responsible for its financial problems, but the culpability of those who do business with AIG is less clear, and so helping them out does not reward bad behavior.

Insurance markets in everything

Tyler Cowen

If only.  But now we have insurance in insurance:

For these economically uncertain times, the UnitedHealth Group has a “first of its kind” product: the right to buy an individual health policy at some point in the future even if you become sick.

Called UnitedHealth Continuity, the product is not actual medical insurance, but is aimed at people who may have insurance now but are worried they may lose it — and may not be able to obtain replacement insurance on their own. They may expect to retire early, for example, before they qualify for Medicare. Or they are worried about the possibility of losing their job and their health coverage.

People who are already sick will generally not be eligible for the new product. Those who do pass a medical review, will pay 20 percent each month of the current premium on an individual policy to reserve the right to be insured under the plan at some point in the future.

There is also a politics angle: by buying such a policy you are betting against comprehensive health insurance reform under Obama.  Here is a previous MR post on a related market.  Here is a post on why private health insurance doesn't work better than it does.  And don't forget Alex's book on Entrepreneurial Economics, which promoted a version of this idea some time ago.

For the pointer I thank both Michael Buckley and Davis King.

Joe the Plumber and his favorite books

Tyler Cowen

Joe reads economics:

The Theory of Money and Credit (Ludwig von Mises): "It brought monetary theory into the mainstream of economic analysis. It is important reading for these troubled times."

My theory is that someone in Ron Paul's camp told him to say that.  Here is the full list of his favorite books.  Here is my source.  Here is an on-line version of TOMAC.  Scrolling through it a bit, it is more readable than my recollection and it remains one of the better 20th century books on monetary theory.

The Capital Strike

Alex Tabarrok

Roosevelt went on in later weeks to speculate that the slowdown in investment was not economically explicable but was, rather, part of a political conspiracy against him, a "capital strike" designed to dislodge him from office and destroy the New Deal...In a reprise of his tactics in the "wealth tax" battle of 1935 and the electoral campaign of 1936, Roosevelt loosed Assistant Attorney General Robert Jackson, along with Ickes, to give a series of blistering speeches in December 1937.  Ickes inveighed against Henry Ford, Tom Girdler and the "Sixty Families,"...Left unchecked, Ickes thundered, they would create "big-business Fascist America - an enslaved America."  For his part, Jackson decried the slump in private investment as "a general strike - the first general strike in America - a strike against the government - a strike to coerce political action."  Roosevelt even ordered an FBI investigation of possible criminal conspiracy in the alleged capitalist strike, but it revealed nothing of substance.

(From David M. Kennedy's Freedom from Fear (p. 352) in The Oxford History of the United States.)

A group of capitalists go on strike to protest a government that is confiscating their wealth. The government vows to force them back to work and sets agents on their trail. Hmmm.....seems like there could be a novel in that.

Hail Garett Jones!

Tyler Cowen

From the comments, Garett Jones writes:

Here’s a simple neoclassical explanation for the high G (government purchases)–>Low Y (GDP) relationship: 

More high-paying government jobs–>
More people waiting in line for those good jobs–>
Less private-sector employment. 

Queuing for good Davis-Bacon jobs is what creates the problem. 

It’s a new twist on the Cole and Ohanian story of high wages worsening the Depression, and Quadrini and Trigari told it in the Scandinavian Journal of Economics as well as here...

There is more at the first link.  I am pleased to report that I have the honor of sharing a corridor with Garett Jones.

Advertising markets in everything

Tyler Cowen

Tom Farber gives a lot of tests. He's a calculus teacher, after all. So when administrators at Rancho Bernardo, his suburban San Diego high school, announced the district was cutting spending on supplies by nearly a third, Farber had a problem...

"Tough times call for tough actions," he says. So he started selling ads on his test papers: $10 for a quiz, $20 for a chapter test, $30 for a semester final.

San Diego magazine and The San Diego Union-Tribune featured his plan just before Thanksgiving, and Farber came home from a few days out of town to 75 e-mail requests for ads. So far, he has collected $350. His semester final is sold out.

Here is the story and I thank Hunter Amor Williams for the pointer.

Writing to Peter Singer about Down syndrome

Tyler Cowen

I liked this Michael Bérubé post; here is an excerpt:

...in the 1920s we were told that people with Down syndrome were incapable of learning to speak; in the 1970s, we were told that people with Down syndrome were incapable of learning how to read.  OK, so now the rationale for seeing these people as somewhat less than human is their likely comprehension of Woody Allen films.  Twenty years from now we’ll be hearing “sure, they get Woody Allen, but only his early comedies—they completely fail to appreciate the breakthrough of Interiors.”  Surely you understand my sense that the goalposts are being moved around here in a rather arbitrary fashion...

You’re looking for things people with Down syndrome can’t do, and I’m looking for things they can.  We each have our reasons, of course.  But I don’t accept the premise that cognitive capacity is a useful criterion for reading some people out of the human community, any more than you would accept the premise that we should grant rights to animals on the basis of whether humans think they do or don’t taste good with barbeque sauce.

Greg Mankiw writes my post for me

Tyler Cowen

He quotes Blanchard and Perrotti, neither of whom is a follower of Milton Friedman:

...we find that both increases in taxes and increases in government spending have a strong negative effect on private investment spending. This effect is consistent with a neoclassical model with distortionary taxes, but more difficult to reconcile with Keynesian theory: while agnostic about the sign, Keynesian theory predicts opposite effects of tax and spending increases on private investment. This does not appear to be the case.

There is much more here and do read the whole thing.  The bottom line is that the evidence for the Keynesian effects of fiscal policy is far from overwhelming.  Keynesian results cannot be ruled out but we simply don't understand the short-run dynamics of cycles very well.  So why should we be so convinced it is time to spend $1 trillion or more? 

Addendum: On this post comments seem to be working.  Sorry again for the troubles.

Leave your comments here on Keynes and money wages

Alex Tabarrok

This is Tyler, not Alex, but typepad is again not accepting comments on my posts for technical reasons.  Typepad, please clear up this problem!

In the meantime, you can leave your comments here.

Changes in money wages

Tyler Cowen

And what Keynes had to say then is as valid as ever: under depression-type conditions, with short-term interest rates near zero, there’s no reason to think that lower wages for all workers — as opposed to lower wages for a particular group of workers — would lead to higher employment.

Suppose that wages across the US economy had been, say, 20 percent lower than they actually were. You might be tempted to say that this would make hiring workers more attractive. But to a first approximation, prices would also have been 20 percent lower — so the real wage would not have been reduced. So how would lower wages lead to higher demand for labor?

Well, the real money supply would have been larger — but the normal channel through which this might increase demand, lower interest rates, was blocked by the zero lower bound. Yes, there would have been a slight Pigou effect: real private sector wealth would have been higher, because cash under the mattress (or wherever) was worth more. But on the other hand, real debt burdens would also have been higher, probably exerting a contractionary effect. Overall, there’s no good reason to think that lower wages would have helped raise employment.

That is Paul Krugman and also here.  That is correct but note the argument requires lower wages for all workers, exactly as Krugman states.  He does not go through a change in wages for only some workers and indeed that scenario is very different and not necessarily Keynesian.  When unemployment is present, lower wages for some workers can stimulate renewed employment and -- depending on elasticities -- possibly greater purchasing power as well or at least not proportionally diminished purchasing power.  (Each worker earns less but there are more workers employed.)  There won't in general be much of a deflation.  The hiring of some workers can also lead to an upward spiral in production, employment, and again purchasing power, as outlined by W.H. Hutt in his books on Keynes. 

Krugman and others wish to argue that the New Deal years were ones of recovery; that is fine but it increases the chance that the Hutt scenario and not the Keynes scenario would apply at that time.

The simplest version of the Keynesian argument on money wages also relies on labor as the primary source of marginal cost (true in many but not all sectors) and lack of market power for retail prices, among other assumptions about market structure.  Yet another scenario is that some nominal wages fall and entrepreneurs (with some market power) invest more in response and hold retail prices relatively steady.

I believe Keynes's "falling nominal wages-falling prices-constant real wages-constant unemployment" scenario does hold for some of the 1929-1932 period and indeed I have argued as such in print.  But once we get into the Roosevelt era, we have government propping up some wages above market-clearing levels and thus higher than necessary unemployment.  Note that the Roosevelt policies applied only to some workers and by no means to all or even most workers, which again suggests the Hutt analysis is more relevant than the Krugman/Keynes analysis.

Krugman asks why Keynes's point, presented in 1936, is not more widely recognized today.  But the limitations of Keynes's argument -- including its reliance upon particular assumptions about cost and market structure -- were pointed out by Jacob Viner in...1937 (see pp.161-162 JSTOR). 

Viner, I might add, was hardly a laissez-faire denialist.  He favored an active government response to the depression, and he admits Keynes's results can hold but needn't hold.  He is the one who stakes out the sophisticated middle ground, not Keynes.  So we're still trying to catch up to 1937, not 1936.

Addendum: It turns out I am blogging chapter 19 of the General Theory; I am looking forward to our forthcoming book club too much!

The Next Crisis

Alex Tabarrok

It's not just Social Security and Medicare which are underfunded.  State governments have vastly underfunded public pensions.  Here is the abstract to a new NBER paper, The Intergenerational Transfer of Public Pension Promises by Novy-Marx and Rauh. 

The value of pension promises already made by US state governments will grow to approximately $7.9 trillion in 15 years. We study investment strategies of state pension plans and estimate the distribution of future funding outcomes. We conservatively predict a 50% chance of aggregate underfunding greater than $750 billion and a 25% chance of at least $1.75 trillion (in 2005 dollars). Adjusting for risk, the true intergenerational transfer is substantially larger. Insuring both taxpayers against funding deficits and plan participants against benefit reductions would cost almost $2 trillion today, even though governments portray state pensions as almost fully funded.

It's official.

Alex Tabarrok

It began (pdf) in December 2007.

Assorted links

Tyler Cowen

1. The world's "most unanswered" music questions.

2. Secular Right blog

3. Most popular Japanese phrases of 2008.

4. From economics to Mahler; his recording is good although my favorite 2nd remains Stokowski with the LSO.

5. French list: 20 best books of the year

NYU Austrian economics blog

Tyler Cowen

Thinkmarkets.wordpress.com, featuring Mario Rizzo, Roger Koppl, Sanford Ikeda and others.

On another front, typepad is working (once again) on re-enabling comments on my posts.  In the meantime, go leave some comments over there.

Interpreting the Monetary Base Under the New Monetary Regime

Alex Tabarrok

The monetary regime has changed and, as a result, many people are misinterpreting the recent increase in the monetary base.  Paul Krugman, for example, posts the picture at right.  His interpretation is that the tremendous increase in the base shows that the Fed is trying to expand the money supply like crazy but nothing is happening, i.e. a massive liquidity trap.  (Krugman is not alone in this interpretation, see e.g. this post by Bob Higgs).  Thus, Krugman concludes, Friedman was wrong both about monetary history and monetary theory. 

Krugman's interpretation, however, neglects the fact that the monetary regime changed when the Fed began to pay interest on reserves.  Previously, holding reserves was costly to banks so they held as few as possible.  Since Oct 9, 2008, however, the Fed has paid interest on reserves so there is no longer an opportunity cost to holding reserves.  The jump in reserves occurred primarily at this time and is entirely under the Fed's control.  The jump in reserves does not represent a massive attempt to increase the broader money supply.

Here's a bit more background.  When no interest was paid on reserves banks tried to hold as few as possible.  But during the day the banks needed reserves - of which there were only $40 billion or so - to fund trillions of dollars worth of intraday payments.  As a result, there was typically a daily shortage of reserves which the Fed made up for by extending hundreds of billions of dollars worth of daylight credit.  Thus, in essence, the banks used to inhale credit during the day - puffing up like a bullfrog - only to exhale at night.  (But note that our stats on the monetary base only measured the bullfrog at night.) 

Today, the banks are no longer in bullfrog mode.  The Fed is paying interest on reserves and they are paying at a rate which is high enough so that the banks have plenty of reserves on hand during the day and they keep those reserves at night.  Thus, all that has really happened - as far as the monetary base statistic is concerned - is that we have replaced daylight credit with excess reserves held around the clock.  The change does not represent a massive injection of liquidity and the increase in reserves should not be interpreted as evidence of a liquidity trap.

Addendum: (For the truly wonkish.)  If you want more, see my earlier post on excess reserves, posts by Jim Hamilton, and David Altig, and especially two very useful Fed articles, Keister, Martin, and McAndrews (n.b. the last section) and Ennis and Weinberg.

New MR book club - Keynes's *General Theory*

Tyler Cowen

Greg Mankiw wrote:

If you were going to turn to only one economist to understand the problems facing the economy, there is little doubt that the economist would be John Maynard Keynes. Although Keynes died more than a half-century ago, his diagnosis of recessions and depressions remains the foundation of modern macroeconomics. His insights go a long way toward explaining the challenges we now confront.

I will go through the book, chapter by chapter, with an eye toward a deeper understanding of what Keynes wrote and why it is, as Greg says, so important.  I'm not yet sure what kind of pace I can maintain but order your copy here, now.  The Kindle version is only $3.96.  We'll do chapters 1 and 2 by next Monday, eight days from now.

The Cassandra Hunt

Tyler Cowen

Kevin Drum comments, here is Brad DeLong, and Matt Yglesias, and Arnold Kling; they make good points all around.  There aren't nearly as many Cassandras as you think, once you require more of a person than "having called" the housing bubble.  A simple question is what financial stocks a person had shorted as of, say, November 2007, or for that matter July 2007, and no "my wife wouldn't let me" is not an adequate comeback.  And if you're afraid of an unhedged position or margin call just buy some puts.

I plead fully guilty to not having been a Cassandra.  Oddly, I published an entire book in the late 1990s -- Risk and Business Cycles(cheaper on Kindle)  -- on how excess risk and correlated errors could cause an economy to explode; I'll tell you more about that soon.   But if anything when it came to running commentary (on this blog, most of all) I was an anti-Cassandra.  First, I was too influenced by the relatively mild housing bubble collapse of the late 1980s.  Second, I did not understand how much fragility the extant degree of leverage implied.

Cassandra's gift was in fact the source of continual pain and frustration.  That's one reason why not so many people are Cassandras.

Fischer Black insisted in the mid-90s that the law of large numbers did not apply to individual economic forecasts of sectoral shifts and thus such errors could not be expected to "cancel out" in the aggregate.  Not so many people believed him and in retrospect the failure of people to take Black seriously on this point is further evidence that the point is indeed correct in many situations.

Addendum: The end of this Kevin Drum post nails it.

Law and Literature reading list, Spring 2009

Tyler Cowen

The Five Books of Moses, edited and translated by Robert Alter.

Billy Budd and Other Tales, by Hermann Melville.

The Metamorphosis, In the Penal Colony, and Other Stories, by Franz Kafka.

Smilla’s Sense of Snow, by Peter Hoeg.

The Art of Political Murder: Who Killed the Bishop? By Francisco Goldman.

In the Belly of the Beast, by Jack Henry Abbott.

Borges and the Eternal Orangutans, by Fernando Verrissimo.

Glaspell’s Trifles, available on-line.

Great Short Works of Leo Tolstoy, by Leo Tolstoy.

Sherlock Holmes, The Complete Novels and Stories, Sir Arthur Conan Doyle, volume 1.

Out: A Novel, by Natsuo Kirino.

I, Robot, by Isaac Asimov.

Moby Dick, by Hermann Melville, excerpts, chapters 89 and 90.

Year’s Best SF 9, edited by David G. Hartwell and Kathryn Cramer.

Pale Fire, Vladimir Nabokov.

Blindness, by Jose Saramago.

We also will view a small number of movies -- most of all Sia -- and perhaps I will add a Henning Mankell novel as well.

Market Design blog

Tyler Cowen

It's new and it's being run by the Nobel-worthy Al Roth of Harvard.  Visit it here.

The need for reliable information

Tyler Cowen

I very much agree with this sentiment of Mark Thoma's:

There has been much debate about whether the financial crisis is driven by lack of liquidity or from fears about lack of adequate capital and solvency, but I'm starting to think a third component is important as well, the complete breakdown of traditional information flows, and a loss of confidence in the models used to evaluate that information. Markets need information to work properly, and the information financial markets need is not available.

Here is more.  I do not wish to suggest that we abolish currency and T-Bills, but the deeper (and less stable) the private demand for these assets the harder it is to generate socially useful information from the trade in other assets.  Maybe today we're in a world where the 1980 Grossman-Stiglitz paradox of information partly holds.  It's not that the status quo price is already efficient, but rather no one gathering information feels they could benefit from swapping with the noise traders and so in turn not enough information is gathered.

Fiscal policy poll

Tyler Cowen

What are the times in history -- whether in the U.S. or elsewhere -- when a large-scale application of expansionary fiscal policy has been effective in raising a country out of a recession or depression?

I've already discussed World War II and the United States, so whether or not you agree with me there is no need to mention that episode again.  I'm not (yet) looking for a debate rather I am conducting an opinion poll.  Over the next few weeks or months I hope to investigate some of the cases you mention and see what is the verdict of history.

Assorted links

Tyler Cowen

1. Good French meals: not in France

2. Color pies of movies

3. Markets in everything: a tunnel complex in central London

4. Video of giant squid

5. Paul Krugman: What to Do

6. Amity Shlaes on the Depression

No way would I go bungee jumping

Tyler Cowen

Peter, a loyal MR reader, ran text from this blog through some kind of on-line Myers-Briggs contraption and came up with the following (under the fold)...

Continue reading "No way would I go bungee jumping"

One very bad economic indicator

Tyler Cowen

A Wal-Mart employee in suburban New York died after he was trampled by a crush of shoppers who tore down the front doors and thronged into the store early Friday morning, turning the annual rite of post-Thanksgiving bargain hunting into a Hobbesian frenzy.

Here is the story.

Questions that are rarely asked

Tyler Cowen

Richard Green writes to me:

If the likes of Hitchcock and others could turn works that were mediocre in literature into great films, I wonder what mediocre films could have been great literature.

The point is not to come up with a list (though some of you will) but rather to ponder what we can learn about literature as a medium.  He continues:

...literature adapted from films is almost (and this is a hedge because my experience says invariably) hack work, rushed and held in the lowest regard...Is it because literature is the elder medium, and has a higher status which would prevent condescension to recognising a prior from another medium? Is it because creation is more personal to a individual writer than the inevitable collaboration of film, and so they are loath to allow others' work in?

Movies need (at least) a plot and a script and that can be taken from a book, with results of varying quality of course.  But I do not have an equal understanding of which factor of production is scarce to writing a good novel.  Do professional writers benefit more from showing originality in creating a world and also creating a language?  There is plenty of fan fiction based on Star Trek and the like but few professional writers take this same tack.

A simple default hypothesis is that movies are more powerful and more real than books.  So a movie based on a book won't necessarily be overwhelmed by its source but a book based on a movie will be.  Of course there are many books adapted from oral tales so maybe it is the addition of the pictures that is so overwhelming.  I know only a few books adapted from paintings, most notably Gert Hofmann's excellent Der Blindensturz.

Sentences to ponder

Tyler Cowen

No rational regulator concerned with substantive transparency would approve of common stock, if it were a novel investment vehicle. It guarantees no cash flows whatever, its "control rights" are so weak for most purchasers that representations thereof should be viewed as fraudulent. Empirically common stock behavior is very weakly coupled to the performance and health of the firms that stocks fund. The only instrument in wide use more substantatively opaque than common stock is fiat money.

Here is more, interesting throughout.

How many Obamas are there?

Tyler Cowen

According to databases, there might be fewer than 20 Obama families in the United States, compared with more than 11,000 Clintons and 60,000 Bushes...

Many of these people are being treated like VIPs.  But they are not mostly from Kenya:

Nicanor, like most of the Obamas in this area, is a native of Equatorial Guinea. The name is common there -- much more so than in Kenya, in fact, where the president-elect's father was from -- and Guineans wonder whether they can make their own claim to a branch of the president-elect's family tree. There are also a few Obamas of Japanese decent.

Here is a listing of all appearances of the word or name Obama, which includes lots from Japan, including a cable TV station.  Here is the only known Obama in the UK.

Now that Brian Cowen (read the section of that link on "public image") is Prime Minister of Ireland...

Assorted links

Tyler Cowen

1. Prices, Poverty, and Inequality: Why Americans are Better Off Than You Think, by Christian Broda and David E. Weinstein.  The full text is free on-line at the link.

2. The economics of Scientology.

3. 5, 322, and $4250 are the relevant numbers in this story of a journal run amok.  Shocking (or is it?).

4. NYT 100 Notable Books.  It's an OK enough list and you can think of these as the mainstream picks.

5. Questions about bagels.

Betting markets in everything

Tyler Cowen

Markets on whether InTrade will continue to exist.  The numbers are here.

These markets are run by...InTrade.

I've been looking for markets in the probability of an India-Pakistan nuclear exchange (did the probability of a detonation just go up?) but I have to find one.

I thank Blake Johnson for the pointer.

Facts about the Chinese slowdown

Tyler Cowen

Why then is China slowing so sharply? Simple, real estate investment has hit a wall. After growing at 20% y/y for a long time, real estate investment stalled – with a y/y growth rate of around 0% (Figure 5). That means that China is in turn producing more steel and cement than it needs, and producers of steel and cement are cutting back. That in turns hurts iron ore exporters…

This though is very much a result of China’s own policy choices. Rather than allowing the real exchange rate to appreciate back when China was truly booming (05-late 07/ early 08), China’s policy makers opted to rely on administrative curbs on credit growth. That left China more exposed to global slump in demand – as it kept exports up by limiting real appreciation even as it credit curbs limited the amount of froth in the real estate market back when China was booming and real interest rates were negative. China invested a lot in real estate, but it is no Dubai. But China’s policy makers still look to have slammed the brakes on a bit too hard. Rather than slowing gradually, real estate investment fell off a cliff

That's a Brad Setser summary of work from the World Bank.  Here is much more, very interesting throughout, although I doubt if there was a much smoother path than what was chosen.  It is also argued that the low price of oil means China will have no problem keeping up its purchases of U.S. Treasury securities.

Addendum: Yes comments are working again...

The Life and Times of Raul Prebisch 1901-1986

Tyler Cowen

The author is Edgar J. Dosman and this is a clear winner for most neglected book of the year.  It is a very good economic and intellectual history of Argentina, a first-rate history of economic thought on the idea of import substitution, and an excellent biography, all at the same time.

It cost me $40 and I haven't regretted it.  Every page is full of content.  It's not easily excerpted but on Thanksgiving here is one bit I enjoyed:

Raúl and Adelita were now impatient to get home; they had been away for a full three months, but there was no escaping the boredom of wartime travel in the Americas, with one uncomfortable and bumpy flight after next and numerous stopovers -- Miami, Mexico, Panama, Lima, Santiago, and finally Mendoza, where they boarded a train for the last leg to Buenos Aires.

You can buy it here.  And if you agree with Dani Rodrik more than you agree with me, you may like the book more yet.

Here is some background information on Raúl Prebisch.

Comments on Prebisch and other matters of the day

Alex Tabarrok

This is Tyler here, not Alex.  For some reason Typepad denies the comments function to my posts only.  If you would like to leave comments on the Prebisch post, or other matters of the day, please use the comments section to this entry.  I do hope the problems are resolved soon and like Alex I wish you all a happy Thanksgiving.  You should be grateful for what you have received in life but also think what you might do in the year to come to assist others.

Happy Thanksgiving

Alex Tabarrok

I have a great many things to be thankful for and will be reflecting on them today. I wish all our readers the very best.

The Mumbai attacks

Tyler Cowen

If you don't already know, one place to follow very rapid updates is on this Twitter feed.

Justin Wolfers throws down the gauntlet -- Paul Krugman will judge

Tyler Cowen

Tyler Cowen has laid down the gauntlet to the Marginal Revolution readers, pointing them to our contest to caption the infamous Bush-congratulates-Krugman photo, and urging them to “see if you can beat their readers.”

I’m also excited to announce that we have a very special guest judge: Nobel Laureate Paul Krugman has agreed to pick the winning entry.

Freako readers, add your entry here; Marginal Revolters, try here.

And Tyler, I’m willing to bet on my readers; are you interested in a side bet?

The link is here.  If Justin (and indeed Paul) is willing to count the MR entries that already have been created (here and here) and since Typepad comments are currently down leave new ideas here, I'll bet Justin dinner at the restaurant of the choice of the winner, U.S. only.  Justin, are we on?

I am sorry that comments are down for some posts

Tyler Cowen

I believe Typepad is working on it.  In the meantime, you can leave comments on the stifled posts here.  But only if you wish.  Don't go snooping.