Job interview tips, and mistakes

From Craig Newmark

Private property under attack in Venezuela

This is a fast moving train wreck.

Hugo Chávez, the country’s leftist president, has been on a nationalisation spree, seizing everything from steel companies and bottle makers to housing schemes. ...

Polls suggest that most Venezuelans disapprove of the nationalisations and firmly support private property. But Mr Chávez seems to be following the advice of Alan Woods, a Welsh Trotskyist who has become an informal adviser. Mr Woods, who is better known in Caracas than Cardiff, publicly urged the president to respond to his electoral setback by “accelerating the revolutionary process”, expropriating land, banks and the main industries. Venezuelans had better brace themselves for more nationalisation, scarcity and economic decline.

Incentives matter -- dump your sick employees into the govt. exchange

Marginal Revolution blogs that President Obama's health care bill gives employers incentives to offer healthcare plans that are designed to induce ONLY THE LEAST HEALTHY employees to opt for coverage on the exchange. Employers would find this profitable because:

(i) they would avoid any penalty under the "employer mandate,"

(ii) their health care costs would decrease substantially by virtue of reducing coverage and shedding high-cost employees,

(iii) high-cost employees would not be much worse off, as they could acquire coverage on the exchange with no medical underwriting or preexisting conditions.

Based on the plan designs I have seen, this looks like what employers are demanding from the insurance companies.

Incentives Matter - Professor Edition

Nice post on the Organization and Markets blog noting a recent study that looks at how professor research productivity responds to extrinsic incentives.

Save a balding, middle-aged, fat guy.

...by taxing his health care benefits.

Colleague Larry van Horn eats poorly and doesn't exercise to illustrate the moral hazard associated with subsidized health care. Nice video of Larry interviewed on the big problems of health care

Now Larry is blogging for Forbes.

The real meaning of Thanksgiving

John Stossel gives us another lesson that you won't learn in high school:

When the Pilgrims first settled the Plymouth Colony, they organized their farm economy along communal lines. The goal was to share everything equally, work and produce.

They nearly all starved.

Why? When people can get the same return with a small amount of effort as with a large amount, most people will make little effort. Plymouth settlers faked illness rather than working the common property. Some even stole, despite their Puritan convictions. Total production was too meager to support the population, and famine resulted. Some ate rats, dogs, horses and cats. This went on for two years.

"So as it well appeared that famine must still ensue the next year also, if not some way prevented," wrote Gov. William Bradford in his diary. The colonists, he said, "began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery. At length after much debate of things, [I] (with the advice of the chiefest among them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves. ... And so assigned to every family a parcel of land."

The people of Plymouth moved from socialism to private farming. The results were dramatic.

"This had very good success," Bradford wrote, "for it made all hands very industrious, so as much more corn was planted than otherwise would have been. ... By this time harvest was come, and instead of famine, now God gave them plenty, and the face of things was changed, to the rejoicing of the hearts of many. ... "

Peter Klein has some commentary, as does the revisionist NY Times:

Elections have consequences: it is time to reduce the deficit

The proposal from the Chairman of the deficit reduction commission has the benefit of broadening the tax base, and reducing the marginal rates.  This is a huge step in the right direction.  Our current tax system is way too inefficient.

... the chairmen of President Obama’s deficit reduction commission, have taken at hard look at these tax expenditures — and they don’t like what they see. In their draft proposal, released earlier this month, they proposed doing away with tax expenditures, which together cost the Treasury over $1 trillion a year.

Such a drastic step would allow Mr. Bowles and Mr. Simpson to move the budget toward fiscal sustainability, while simultaneously reducing all income tax rates. Under their plan, the top tax rate would fall to 23 percent from the 35 percent in today’s law (and the 39.6 percent currently advocated by Democratic leadership).

I still don't like the term "sustainability" because it can mean almost anything. However, in this context, it almost makes sense.

You cannot stop the blunders of one government program...

...by putting another one on top of it.  Twelve minute interview of Richard Epstein, who helped me come out of the libertarian closet at the Univ. of Chicago.

oops

Vice President Gore now thinks corn ethanol subsidies were a mistake:

"First generation ethanol I think was a mistake. The energy conversion ratios are at best very small. ...

He explained his own support for the original programme on his presidential ambitions.

"One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president."

If he had only read this blog.  Now can Senator Gore get President Obama to give up his addiction to ethanol?

---------------POST FROM TWO YEARS AGO-----------------------------

Tuesday, February 26, 2008

A tale of two senators

In this blog, we have attacked ethanol subsidies for their perverse effects (they encourage energy consumption--not conservation--and are worse for the environment), yet we have them because supporting them is the easiest way to win the Iowa caucuses. This is the traditional route that Senator Obama took through the primaries. Senator McCain took the road less traveled. From David Brooks column, "The Real McCain"

In 2000, McCain ran for president and reiterated his longstanding opposition to ethanol subsidies. Though it crippled his chances in Iowa, he argued that ethanol was a wasteful giveaway. A recent study in the journal Science has shown that when you take all impacts into consideration, ethanol consumption increases greenhouse gas emissions compared with regular gasoline. Unlike, say, Barack Obama, McCain still opposes ethanol subsidies.

DISCLOSURE: I am supporting McCain

Were Hayek and Von Mises right?

The Economist seems to think so:

A one-paragraph explanation of the Austrian theory of business cycles would run as follows. Interest rates are held at too low a level, creating a credit boom. Low financing costs persuade entrepreneurs to fund too many projects. Capital is misallocated into wasteful areas. When the bust comes the economy is stuck with the burden of excess capacity, which then takes years to clear up.

• Were interest rates held too low? The case seems self-evident for Ireland and Spain, where the European Central Bank was setting a one-size-fits-all monetary policy. Many people would also argue that the Federal Reserve kept rates too low. Some lay the housing boom of 2003-06 at the Fed’s door,

• Was capital misallocated? Again most people would accept that too many houses and apartments were built in Ireland and Spain, as well as individual American states like Florida and Nevada. In some places these dwellings may sit idle for a while, keeping downward pressure on property prices.

• Economists who would not describe themselves as Austrian have reached conclusions that chime with Hayek. Carmen Reinhart and Kenneth Rogoff, in their book “This Time is Different”, argued that past financial crises have been followed by long periods of sluggish growth.