| While A.I.G. continues to dominate the news, it’s worth reading this 2002 Economist article, which cast doubt on the insurance giant’s early forays into the derivatives market. Back then, A.I.G. argued that “derivatives play an important part in reducing the company’s overall risk.” By 2009, those same investments had left the company so badly damaged that it posed a . . .
We wrote a column a while back about a variety of powerful unintended consequences.
One example was the Americans With Disabilities Act, and we told the story of a Los Angeles orthopedic surgeon named Andrew Brooks. When a deaf patient came to him for a consultation, he realized that the A.D.A. required him to hire a sign-language interpreter for each visit if that’s what the patient wanted.
A friend at another university tells me that his school is banning the sale of bottled water on campus, as the university administration is bothered by the pollution produced by plastic water bottles.
Presumably, they figure that bottled-water consumers will switch to tap water, as tap water is bottled water’s closest substitute. I wonder — aren’t bottled soft drinks a closer substitute? Don’t people want the convenience of a container at their desk rather than an occasional drink at the water cooler (or a cup to be filled at the water cooler)?
Photo: freeparking Paul Kimelman lives in Alamo, Calif., and is C.T.O. of the Texas-based microcontroller company Luminary Micro. He is the sort of blog reader we are very fortunate to have. He writes to us now and again with such interesting queries that they’re worth putting up on the blog in their entirety. Here’s his latest: I was speaking with . . .
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 . . .
As prices go, “free” is an interesting one. Dan Ariely plays with the idea in his book Predictably Irrational, as does Seth Godin — and Chris Andersen has gone so far as to suggest that “$0.00 is the Future of Business.” There are, of course, a lot of different kinds of “free.” Giving away a free razor or a free . . .
Times columnist Nick Kristof recently highlighted economic research showing that climate change may be driving up the rate of executions of suspected witches in East Africa. Tough times in the Congo may have been behind the recent witchcraft panic there, where police arrested 13 people accused of using black magic to shrink men’s penises. University of Chicago economist Emily Oster . . .
Tonight at 10 p.m. E.D.T., ABC will broadcast a Barbara Walters special about longevity — or, really, super-longevity — that tries to sort out the many medical, social, and economic ramifications. I was interviewed for the show and apparently I appear toward the end of the hour. Most of the questions I was asked concerned the consequences, unintended and otherwise, . . .
I love stories about the unintended consequences of rising commodity prices. (Here’s one, and here’s another.) Now Susan Saulny writes in the Times about another strange trend driven by high commodity prices: the rampant theft of cars’ catalytic converters, which contain trace amounts of platinum, palladium, and rhodium. Levitt and I heard about this several months ago when we were . . .
Some towns promote good citizenship even though it doesn’t pay off. Dallas discovered this when the traffic light cameras monitoring its busiest intersections worked so well that the city had to decommission more than one-fourth of them. Dallas had anticipated an annual $14.8 million for red-light-running fines, money essential to keeping the cameras running — before people stopped running lights . . .
Hats off to North Carolina residents, who, for almost a year now, have cut their water consumption by a third in response to a record drought. Now, the residents of Charlotte-Mecklenburg County are getting a hefty reward for their sacrifice: they’ll be paying more for their water. Perhaps ticked-off residents shouldn’t be surprised: less spending on water has left Charlotte . . .
Dubner and Levitt recently wrote a column discussing the unintended consequences of legislation intended to help the neediest segments of society. Few movements for change have met with as many unintended consequences as the efforts, both in the public and private sector, to combat global warming. Take biofuels (another topic Dubner has addressed here and here). Hailed as the darling . . .
We recently published a column describing a few instances of the law of unintended consequences — specifically, what happens when well-meaning legislation winds up hurting the parties it is designed to help. I thought it was a pretty good column. But I see now where it could have been better. Alex Tabarrok, writing on Marginal Revolution, addresses the law of . . .
Read the Column » Consequences of Employment Protection? The Case of the Americans with Disabilities Act By Daron Acemoglu and Joshua D. Angrist Prosbol: A Study in Tannaitic Jurisprudence By Solomon Zeitlin Preemptive Habitat Destruction Under the Endangered Species Act By Dean Lueck and Jeffrey Michael Is the Endangered Species Act Endangering Species? By John List, Michael Margolis, Daniel Osgood . . .
Please say hello to a new guest blogger, Sudhir Venkatesh, a professor of sociology and African-American studies at Columbia. You may remember him as the grad student who embedded himself with a Chicago crack gang, which we wrote about in “Freakonomics,” and you may also remember this blog Q&A. On Jan. 10, Venkatesh will publish a memoir about his research, . . .
We posted an item the other day from a reader who kept landing on General Motors’ Web site when he went to use his Gmail account; he wondered if many Gmail users did the same, and subsequently wound up buying cars. We don’t have an answer to that question, but the whole scenario is starting to look a bit less . . .
Dan Hamermesh, on his Economic Thought of the Day blog — it is excellent, and always fun — wrote this recently: A disaster has occurred in Germany: The staple drink – beer – is rising in price. The reason is that there is a worldwide shortage of barley, a major ingredient in the brew. This has pushed up the price . . .
I had the pleasure of visiting Dubai for the first time last week. The city is a wonderful example of unintended consequences; because it had the misfortune of almost running out of oil, it was forced to create other ways of generating income. It has since made huge investments in both tourism and the financial sector. Although I didn’t get . . .
South Africa has had, for the last dozen years, what may be the world’s most difficult driver’s license exam. It’s an exercise in extremely defensive driving. Test examiners take off points for, among other things, failure to check all mirrors every seven seconds. An applicant can fail instantly if he lets his car roll backwards even an inch when stopping . . .
Some Red Sox fans are doubly happy this week: not only did their team win a World Series, but they also get a rebate on the furniture they bought during a special Red Sox incentive deal last spring. Hopefully none of them got a brown couch whose color is described, on its tag, with the use of the n-word. That’s . . .
Video The Americans with Disabilities Act was considered landmark legislation. Here’s a summary of the law from the Department of Justice Web site: The Americans with Disabilities Act gives civil rights protections to individuals with disabilities similar to those provided to individuals on the basis of race, color, sex, national origin, age, and religion. It guarantees equal opportunity for individuals . . .
There were two fascinating page-one articles in yesterday’s Wall Street Journal that reinforce why it is so hard to predict the future. “U.S. Farmers Rediscover the Allure of Tobacco,” by Lauren Etter, is about how tobacco farming has spiked in the U.S. in the three years since federal tobacco subsidies ended. Although the U.S. tobacco/cigarette industry has taken a few . . .
The rising price of corn due to ethanol demand will have a variety of unintended consequences. As noted earlier on this blog, it might even make Americans skinnier, since food manufacturers may start using a cheaper (and less fattening) substitute for corn syrup. Along these same lines, I heard a story not long ago at an event full of bankers . . .
We have blogged occasionally about different pieces of the global-warming puzzle (see here, here, and here), and we touched on the subject briefly in a New York Times Magazine column. It is an extraordinarily interesting issue, to say nothing of its importance and complexity, in part because there are so many foundational economic principles at play: not just supply and . . .
A few months back I met a remarkable man named Gene Sit. He is a money manager in Minneapolis, with more than $6 billion under management, but that is not what makes him remarkable. He was born to a wealthy family in late 1930s China and, in the lawless years after World War II, was kidnapped and held for ransom . . .
The introduction of new pay-by-weight trash charges in Ireland seems to have produced a strange and troubling effect: an increase in burn victims at St. James Hospital in Dublin. Huh? The theory is that people wanted to avoid having to pay for all their trash so instead they burned it in their backyards. Gary Finnegan, editor of Irish Medical News, . . .
The media has been abuzz lately over a new research paper by Dr. Paul Winchester of the Indiana University School of Medicine. It purports to find that babies conceived between June and August in Indiana perform worse on standardized tests. I can believe that this conclusion might be true. Fifteen years ago, economists Josh Angrist and Alan Krueger found that . . .
Jon Tester, the new senator from Montana, posts his daily appointment schedule on his website for all the world to see. According to this A.P. article by Mary Clare Jalonick, such transparency is “fulfilling a promise the Democrat made in his campaign against Republican Sen. Conrad Burns last year. Burns attracted heat for his relationship with Washington interests — most . . .