Econtalk Archives, 2012

Tammy Frisby of Stanford University's Hoover Institution talks with EconTalk host Russ Roberts about the likelihood of U.S. tax reform in the near future. Frisby reviews the changes in tax policy over the last 30 years focusing on the changes of the 1980s, looking at both the economics and politics of past changes. The conversation then turns to the present and the possible changes that might be coming as the Bush tax cuts expire on January 1, 2013.

Josiah Ober of Stanford University talks with EconTalk host Russ Roberts about the economy of ancient Greece, particularly Athens. Ober notes that the standard view of ancient Greece is that it was very poor. Drawing on various kinds of evidence, Ober argues that Greece was actually quite successful, and that the average citizen of ancient Athens lived quite well by ancient standards. He suggests two possible explanations for Greece's economic success--an openness of the political process that reduced transaction costs and encouraged human capital investment or innovation and cross-fertilization across Greek states. The conversation also explores the nature of evidence for understanding antiquity and the prospect for future discoveries pertaining to ancient Greece.

Scott Atlas, Senior Fellow at Stanford University's Hoover Institution and author of In Excellent Health, talks with EconTalk host Russ Roberts about the U.S. health care system. Atlas argues that the U.S. health care system is top-notch relative to other countries and that data that show otherwise rely on including factors unrelated to health care or on spurious definitions. For example, life expectancy in the United States is unexceptional. When you take out suicides and fatal car accidents, factors that Atlas argues are unrelated to the health care system, the United States has the longest life expectancy in the world. A similar change occurs when measuring infant mortality--foreign data do not include as many at-risk births as in the United States and the measure of a birth is not comparable. In a number of other areas including cancer survival rates, access to hip replacement surgery and waiting times to see a physician, Atlas argues that the United States is also at or near the top. The discussion concl

David Brady, Professor of Political Science and the Graduate School of Business at Stanford University and a senior fellow at Stanford's Hoover Institution talks with EconTalk host Russ Roberts about the November elections in the United States. Brady argues that while the economy favors the challenger, Mitt Romney, current polling data gives a slight edge to President Obama in both the popular vote and the electoral college. The data all suggest that House will stay Republican and the Senate will either go slightly Republican or be tied. Brady also discusses why this may change over the next few months, the importance of the independent vote, and Romney's strategy in choosing a running mate.

Gary Taubes, author of Why We Get Fat, talks with EconTalk host Russ Roberts about why we get fat and the nature of evidence in a complex system. The current mainstream view is that we get fat because we eat too much and don't exercise enough. Taubes challenges this seemingly uncontroversial argument with a number of empirical observations, arguing instead that excessive carbohydrate consumption causes obesity. In this conversation he explains how your body reacts to carbohydrates and explains why the mainstream argument of "calories in/calories out" is inadequate for explaining obesity. He also discusses the history of the idea of carbohydrates' importance tracing it back to German and Austrian nutritionists whose work was ignored after WWII. Roberts ties the discussion to other emergent, complex phenomena such as the economy. The conversation closes with a discussion of the risks of confirmation bias and cherry-picking data to suit one's pet hypotheses.

Nobel Laureate Joseph Stiglitz of Columbia University talks with EconTalk host Russ Roberts about the ideas in his recent book, The Price of Inequality. Stiglitz argues that the American economy is dysfunctional, benefitting only those at the very top while the bulk of the workforce sees little or no gain in their standard of living over recent decades. Stiglitz blames this result on deregulation and the political power of the financial sector and others at the top. He wants an increase in regulation and the role of government in the economy and a more transparent Federal Reserve Bank that he blames for coddling the financial sector. The conversation also includes a discussion of the Keynesian multiplier.

Luigi Zingales of the University of Chicago and author of A Capitalism for the People talks with EconTalk host Russ Roberts about the ideas in his book. Zingales argues that the financial sector has used its political power to enhance the size of the sector and the compensations executives receive. This is symptomatic of a larger problem where special interests steer resources and favors based on their political influence. Zingales argues for a capitalism for the people rather than a capitalism for cronies or the politically powerful. The conversation concludes with a plea by Zingales to his fellow economists to speak out against behavior that is legal but immoral--lobbying Congress for special treatment that exploits others to benefit one's own industry, for example.

Enrico Moretti of the University of California, Berkeley and the author of the New Geography of Jobs talks to EconTalk host Russ Roberts about the ideas in his book. Moretti traces how the economic success of cities and the workers who live there depends on the education of those workers. Moretti argues that there are spillover effects from educated workers--increased in jobs and wages in the city. He uses changes in the fortunes of Seattle and Albuquerque over the last three decades as an example of how small changes can affect the path of economic development and suggests a strong role for serendipity in determining which cities become hubs for high-tech innovation. The conversation concludes with Moretti making the case for increasing investments in education and research and development.

Jim Manzi, author of Uncontrolled, talks with EconTalk host Russ Roberts about the reliability of science and the ideas in his book. Manzi argues that unlike science, which can produce useful results using controlled experiments, social science typically involves complex systems where system-wide experiments are rare and statistical tools are limited in their ability to isolate causal relations. Because of the complexity of social environments, even narrow experiments are unlikely to have the wide application that can be found in the laws uncovered by experiments in the physical sciences. Manzi advocates a trial-and-error approach using randomized field trials to verify the usefulness of many policy proposals. And he argues for humility and lowered expectations when it comes to understanding causal effects in social settings related to public policy.

Jonah Lehrer, staff writer for The New Yorker and author of Imagine: How Creativity Works, talks with EconTalk host Russ Roberts about the science of creativity. They discuss focusing vs. ignoring as a way to solve problems, the potential for computer-based creativity, how W. H. Auden used drugs to improve his poetry, Bob Dylan, Steve Jobs, and the creative power of mindless relaxation. The conversation closes with a discussion of what policies might increase creativity.

Ed Yong, science writer and blogger at "Not Exactly Rocket Science" at Discover Magazine, talks with EconTalk host Russ Roberts about the challenges of science and science journalism. Yong was recently entangled in a controversy over the failure of researchers to replicate a highly-cited and influential psychology study. He discusses the issues behind the failed replication and the problem of replication in general in other fields, arguing that replication is under-appreciated and little rewarded. After a discussion of the incentives facing scientists, the conversation turns to the challenges facing science journalists when work that is peer-reviewed may still not be reliable.

Lawrence H. White of George Mason University and author of The Clash of Economic Ideas talks to EconTalk host Russ Roberts about the economists and their ideas of the past one hundred years. They discuss Keynes and Hayek, monetary policy and the Great Depression, Germany after the Second World War, the economy of India, and the future of monetary policy.

Nobel Laureate Ronald Coase of the University of Chicago talks with EconTalk host Russ Roberts about his career, the current state of economics, and the Chinese economy. Coase, born in 1910, reflects on his youth, his two great papers, "The Nature of the Firm" and "The Problem of Social Cost". At the end of conversation he discusses his new book on China, How China Became Capitalist (co-authored with Ning Wang), and the future of the Chinese and world economies.

David Owen, author of The First National Bank of Dad, talks with EconTalk host Russ Roberts about how to educate our children about money and finance. Owen explains how he created his own savings accounts for his kids that gave them an incentive to save and other ways to teach them about postponing gratification, investing, keeping money in perspective and other life lessons. The conversation closes with a discussion of the value of reading to your kids.

David Schmidtz of the University of Arizona talks with EconTalk host Russ Roberts about the work of John Rawls and Robert Nozick. The conversation covers the basic ideas of Rawls and Nozick on inequality and justice and the appropriate role of the state in taxation and property rights.

John Taylor of Stanford University's Hoover Institution talks with EconTalk host Russ Roberts about his new book, First Principles: Five Keys to Restoring America's Prosperity. Taylor argues that when economic policy adhere to the right basic principles such as keeping rules rather than using discretion, then the economy thrives. Ignoring these principles, Taylor argues, leads to bad economic outcomes such as recessions, inflation, or high unemployment. Taylor illustrates these ideas with a whirlwind tour of the last half century of American economic policy and history. The focus is on monetary and fiscal policy but Taylor also discusses health care reform and other policy areas. The conversation closes with a look at the likelihood that economic policy will change dramatically after 2012.

Tyler Cowen of George Mason U. and author of An Economist Gets Lunch, talks with EconTalk host Russ Roberts about food, the economics of food, and his new book. In this wide-ranging conversation, Cowen explains why American food was once a wasteland, the environmental impacts of plastic and buying local, why to stay away from fancy restaurants in the central city, and why he spent a month shopping only at an Asian supermarket while living in Northern Virginia.

David Autor of MIT talks with EconTalk host Russ Roberts about the Social Security Disability Insurance (SSDI) program. SSDI has grown dramatically in recent years and now costs about $200 billion a year. Autor explains how the program works, why the growth has been so dramatic, and the consequences for the stability of the program in the future. This is an illuminated look at the interaction between politics and economics and reveals an activity of government that is relatively ignored today but will not be able to be ignored in the future.

Richard Burkhauser of Cornell University talks with EconTalk host Russ Roberts about the state of the middle class. Drawing on recently published papers, Burkhauser shows that changes in the standard of living of the middle class and other parts of the income distribution are extremely sensitive to various assumptions about how income is defined as well as whether you look at tax units or households. He shows that under one set of assumptions, there has been no change in median income, but under a different and equally reasonable set of assumptions, median income has grown 36%. Burkhauser explains how different assumptions can lead to such different results and argues that the assumptions that lead to the larger growth figure are more appropriate for capturing what has happened over the last 40 years than those that suggest stagnation.

Eugene White of Rutgers University talks with EconTalk host Russ Roberts about the regulation of banks and financial crises. White argues that most regulation tries to limit the choices of banks to restrain them from making choices that create instability or fragility. A better approach, White argues, is to change the incentives facing bankers so that they would be encouraged to make prudent choices without the need for top-down monitoring. He shows how in the 19th century various regulations and market results encouraged stability and prudence while some regulations made the system more fragile. White discusses the lessons for the current crisis and what might be done to improve the current state of regulation.