Hi all,
Apologies for the delayed release. In this week's issue: more Caplan, reflections on the Israeli election, kidney waste, rodent orgies, Albertan separatism, and a quiz for readers.
Enjoy.
In this essay, Caplan discusses the obstacle that nominal wage rigidity (the idea that wages don’t adapt completely fluidly in response to changes in supply/demand) presents to typical free-market arguments that downplay the importance of unemployment. In doing so, he makes good points about the importance of employment for one’s sense of identity, as well as the wide variety of pernicious regulations that decrease employment.
Here, Caplan reviews much of the scholarship around the negative impacts of zoning regulations on the availability of housing. If you’re already immersed in that debate, you’ll find much of it familiar; if not, definitely check out the sources that Caplan/Glaeser cite. For me, the most notable part of this post was its contestation of the argument (that I’ve made in the past) that differences in housing prices are heavily influenced by natural shortages of land, e.g. metro areas being constrained by water or hills.
This post argues that “constructive” free-market reforms such as Social Security privatization, school choice, and Medicare vouchers pose a major risk of political backlash if they “go wrong”, i.e. produce negative outcomes for some or all of the affected groups, and that therefore libertarians should focus simply on controlling spending. I don’t really buy this argument; I think it underestimates the tribal nature of politics and would be just as likely to result in policy backlash following any negative effects.
The waste described in this article is, like so many elements of healthcare regulation in the US, infuriating, and underscores the value that would be added by legal markets in kidneys (as opposed to the donor-only model we have now).
This is your humor post for the week. The best quote: “Mustering all that energy and ejaculate ultimately costs them their lives — but for an animal that weighs less than a light bulb, this may not be such a bad strategy.” Also, shoutout to Chris Dickman, another entry in the books for nominative determinism.
I had previously been aware of Alberta's vast oil wealth, but not of the massive federal redistribution of this wealth to the rest of Canada and the ensuing resentment by Albertans towards the eastern provinces. This post does a good job exploring the political economy of the situation, and provides another entry in favor of Scott Alexander's archipelago model.
For those of you not familiar with the structure of Israeli government, their Prime Minister (both the head of government and the chief executive) is elected by a majority coalition of their unicameral parliament (the Knesset). This typically means that, after an election, parties with similar enough interests will agree to cooperate together to achieve common goals.
Following the election in April of this year, the incumbent PM Benjamin Netanyahu failed to form a majority coalition, leading to a second round of elections last Tuesday. In this election, both Likud (Netanyahu's center-right party) and Blue and White (the main center-left party) lost seats, with a variety of smaller parties gaining. Most notable of these is Yisrael Beiteinu, the secular right-wing party that prompted the most recent election by breaking away from Netanyahu's coalition over its opposition to the influence of ultra-Orthodox Jewish parties over the direction of the country. It remains to be seen what sort of coalition (if any) will form under the new balance of power, but I personally hope that YB's success will spur a shift towards fewer religious strictures on the non-Orthodox majority. For a quick encapsulation of the policies of the various parties, check here, though note that at least one of these squares is of questionable accuracy (YB does support a two-state solution, albeit one slightly different from most other parties).
What caused the spike around 1960 in the linked graph? Answer here. Commentary to follow once responses are in.