Incentives always have unintended consequences. Economics is about how humans respond to incentives. Not all responses, however, are intended or even anticipated. Unintended responses to incentives imposed by businesses or governments often outweigh intended effects. In teaching economics, it is…
Category: Other
One simple life saw so many changes
Technological changes in communication and transportation affected our economy enormously in the last century. My mother died Christmas afternoon at age 90, and experiences from her life drive home the impacts of such change on our society. When Mom was…
It’s time for the truth in mutual funds
Capital markets work best when participants have the most accurate information possible. Economic efficiency suffers when some people in a market can deliberately misinform other people. It makes us all poorer. That is why Congress should pass a strong Truth-in-Mutual…
You’re a mean one
There are economists who argue that holiday gift giving may make us less happy — not more. I doubt they are entirely correct, but following their argument provides some interesting insight both into how economists think and into the role…
No credit if they don’t make the grade
Let’s commend Minnesota Attorney General Mike Hatch for raising the issue of abusive credit card lending to college students. What he can do is limited, but Congress should pick up the ball. The problem of college students digging themselves into…
Economist view of booya hoo-ha
Oh, for Pete’s sake. Other Pioneer Press readers may have had the same reaction this week when they learned that St. Paul’s booya kettles no longer are deemed safe and may not be used. Is this another example of what…
Leaders need background in trade realities
President Bush should give copies of Robert Sidelsky’s biography of John Maynard Keynes to Japanese Prime Minister Koizumi and Chinese President Hu Jintao. Then he should read one himself. It’s not that these leaders need to learn Keynesian theory. Sidelsky’s…
Constitution matters to growth
Thank goodness for Benjamin Franklin, Alexander Hamilton and James Madison. That was my reaction on hearing a recent news story about the ongoing constitutional convention in Afghanistan. The story noted a fierce argument over whether the new constitution should guarantee…
Political shifts, maybe, but in right direction
John Maynard Keynes would approve of recent actions by President George W. Bush and Minnesota Gov. Tim Pawlenty. The British economist once was taunted for taking a position on some issue that was at odds with his previous statements on…
Delivering details can be difficult
A Tuesday headline in the New York Times was striking — “Manufacturing at highest level in two decades.” But the implied message seemed at odds with other recent news about this sector. What’s going on? Reading the body of the…