Image: cambodia4kidsorg Economists are notorious for making bad predictions. There are endless examples, but the first one that comes to mind is a book written by economist Kevin Hassett and co-authors entitled Dow 36,000. The title was their prediction of where the Dow Jones Industrial Index should be based on fundamentals. The book came out in the year 2000 with . . .
Take a look at this story reported at espn.com about the Portland Trail Blazers and Darius Miles. The Trail Blazers declared Miles medically unfit to play and released him. If he had played two more games with the team, his $18 million salary over the next two years would count against the Trail Blazers for the salary cap and they . . .
With macroeconomic issues taking center stage, it is not clear that other issues, like crime, will get much attention in the Obama administration. Personally, however, I think it is an excellent time to reflect on our current approach to fighting crime. The United States has enjoyed a great deal of success over the last 15 to 20 years in reducing . . .
The American Economic Association meetings are taking place. There is a young economist whom I have never met, but who is doing some really interesting research. So I wrote him and asked if he wanted to get together over a beer to talk about his work. The first sentence of his response was: I would really like to be very . . .
In recent years, the federal government has taken various actions to make it harder to bet on sports over the internet. That’s lucky for me, because when I used to bet on football, one of the key pieces of information I used was whether or not a team was a home underdog. For whatever reason, bettors don’t like to bet . . .
Nothing grabs headlines like dire warnings about homicide trends. And there is no criminologist better at garnering headlines than James Alan Fox, whom you might remember from Freakonomics for the ominous reports he produced about juvenile homicide for Attorney General Janet Reno in the 1990’s, even as crime began to plunge. James Alan Fox is baaaack with a new report . . .
On Bloomberg.com, John Lippert presents an interesting and extremely well-reported article on the financial crisis’s impact on the thinking of Chicago economists. It does a nice job of capturing the multifaceted nature of the institution, with people on all sides of the issues. I absolutely love the following excerpt, which better captures what it is like to hang around with . . .
Anyone who pays short-run capital gains tax this year is either really lucky or really dumb.
CNBC delves into the Bernie Madoff story tonight at 9 p.m. E.S.T. For those intrigued by white-collar crime, this should be quite an interesting show. I’m still struggling to understand how a fund that claims to have $17 billion in assets can have defrauded investors for $50 billion. Had he also borrowed $33 billion that he will never repay, so . . .
If you believe what you read, then the answer to that question is that they are both examples of one of economics’ most illusive objects: Giffen goods. But don’t always believe what you read.
A Giffen good is a product or service for which demand rises with price. In other words, if you hold everything else constant, but the good gets more expensive, the quantity consumed will increase.
Arne Duncan is expected to be announced as the next secretary of education later today. Freakonomics readers will remember Arne as the hero of our chapter on teacher cheating. He was head of the Chicago Public Schools when Brian Jacob and I were investigating how teachers and administrators were doctoring standardized test sheets. With seemingly nothing to gain and much . . .
Books on economics have become far more popular in recent years, with Freakonomics being one example. Fantasy books are also rising in popularity, with my beloved Harry Potter books leading the charge. It is perhaps not surprising that someone would try to weave these two strands of literature together. Daniel Abraham‘s novelette The Cambist and Lord Iron: A Fairytale of . . .
You can find the whole document of the complaint against Blagojevich here. The more interesting stuff comes in the second half of the document. I bet there are a lot of anxious folks out there studying the document to see if they might appear as Contractor A or Consultant 3 or Senate Candidate 5. Not all of the pseudonyms in . . .
I recently saw a remarkable short documentary entitled Smile Pinki. It tells the story of two poverty-stricken young children (one a girl named Pinki) in India who are born with clefts and have the opportunity to receive free surgery to fix their condition. It is incredibly moving. I’m not the only one who feels that way — the movie is . . .
I’m pretty sure Manny Pacquiao is a better fighter than Los Angeles Police Chief William Bratton. But who is the better crime fighter? At least for one day, it appears that Pacquiao wins that title as well.
Imagine for a moment that you are a stay-at-home mom with a workaholic husband, five kids between the ages of two and nine, a new dog, and almost no babysitting help. What would you do? How about start up a new business? That’s what Jennifer List, wife of my colleague and co-author John List, did. The result is Seven Smooches. . . .
Congratulations to my friend Amy Finkelstein who just won the Elaine Bennett Prize. The prize is given every other year to the most outstanding young female economist by the American Economic Association. Our careers have many parallels. Like me, Amy was an undergraduate at Harvard, got her Ph.D. at M.I.T. with Jim Poterba as her advisor, and then spent three . . .
Economic historian Price Fishback, who recently guest blogged about the original Home Owners’ Loan Corporation, is back for an encore. This time, he tackles the issue of whether the New Deal and World War II are good examples of Keynesian stimuli. If you want to see these sorts of issues tackled in greater detail, check out Newdeal2. I always thought . . .
I often get emails from blog readers asking me to shed light on some issue that, in the mind of the email writer, is a pressing social or economic issue. Sometimes it is a big issue like immigration or the financial crisis. More often it is something less mainstream, like election fraud or an unusual application of incentives. And then . . .
Eric Oliver is a colleague of mine at the University of Chicago. He is the author of the absolutely fantastic book Fat Politics: The Real Story Behind America’s Obesity Epidemic. He has some new and interesting insights on the “Bigot Belt,” which he has generously written up for the Freakonomics blog. The Bigot Belt By Eric Oliver A Guest Post . . .
More and more people are calling for the government to create a Home Owners’ Loan Corporation (HOLC) modeled after the New Deal version that went by the same name. The first person I heard suggesting this was economist Alan Blinder in a startlingly prescient New York Times Op-Ed piece back in February of this year. More recently, Hillary Clinton has . . .
As an economist, I am supposed to have something intelligent to say about the current financial crisis. To be honest, however, I haven’t got the foggiest idea what this all means. So I did what I always do when something related to banking arises: I knocked on the doors of my colleagues Doug Diamond and Anil Kashyap, and asked them . . .
My son Nicholas, age 5, recently discovered the internet. Last week I got him an account at Club Penguin, a website for kids. Since then, he has spent hours at a time on Club Penguin. He refuses to come to meals. He throws tantrums if forced to stop. Even when enticed with activities he used to find enjoyable, like terrorizing . . .
I was reading a bedtime story to my daughter Sophie when I stumbled upon the following haiku by Jack Prelutsky, told from the perspective of a mouse: If not for the cat, And the scarcity of cheese, I could be content. Perhaps I am just a sucker for the word scarcity, but there was something in this haiku that really . . .
Jason Felch and Maura Dolan of the Los Angeles Times recently wrote a fascinating piece about a controversy that has arisen regarding the use of DNA in identifying criminal suspects. The article starts like this: State crime lab analyst Kathryn Troyer was running tests on Arizona’s DNA database when she stumbled across two felons with remarkably similar genetic profiles. The . . .
Photo: Bogdan Suditu Princeton economist Alan Blinder recently proposed a new government program he christened “Cash for Clunkers” in an article in The Times‘s Business section. Under the program, the government would buy back old cars at above market prices and scrap them. According to Blinder, this would accomplish a policy trifecta: 1) help the environment by getting the most . . .
Alex Tabarrok over at Marginal Revolution has an interesting post on media coverage of the recent Science paper that argued against gender differences in math test scores. Tabarrok says that the media misreported the story and Larry Summers is still right.
I almost never read business books anymore. I got my fill of them years ago when I was a management consultant before I went back and got a Ph.D. Last week, however, I picked up Good to Great by Jim Collins. This book is an absolute phenomenon in the publishing world. Since it came out in 2001, it has sold . . .
I spent three years at Harvard in the Society of Fellows. I had no obligations there except to spend my Monday nights eating fancy meals in the company of some of the world’s most brilliant thinkers: Nobel Prize-winning scientist Amartya Sen, philosopher Robert Nozick, etc. Dinner was always accompanied by expensive wine from the society’s wine cellar. Photo: Rhett Redelings . . .
You want to listen to Freakonomics Radio? That’s great! Most people use a podcast app on their smartphone. It’s free (with the purchase of a phone, of course). Looking for more guidance? We’ve got you covered.
Stay up-to-date on all our shows. We promise no spam.
