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Rognlie Challenges Piketty

March 25, 2015 at 1:33 pm

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The Economist reports on a 26-year-old MIT graduate student who has found some problem's with Thomas Piketty's book on income inequality:

Although the paper began its life as a 459-word online blog post comment, several reputable economists regard it as the most serious and substantive critique that Mr Piketty's work has yet faced...if housing wealth is the biggest source of rising wealth then a more focused approach is called for. Policy-makers should deal with the planning regulations and NIMBYism that inhibit housebuilding and which allow homeowners to capture super-normal returns on their investments.

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Walmart's Wind

March 25, 2015 at 10:07 am

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Walmart has removed the windmills from the parking lot of its Worcester, Mass. store (which may actually be in Millbury, Mass.), the Worcester Telegram and Gazette reports. Walmart's environmental efforts were the subject of a book review here a few years ago.

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For This We Need Republicans?

March 24, 2015 at 11:44 pm

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From a New York Times news article about health care legislation making its way through Congress:

For years, Congress has had to settle for temporary patches to prevent deep cuts in Medicare payments to doctors, like a 21 percent cut scheduled to take effect April 1 if Congress does not intervene.
The House measure would permanently remove the threat of such cuts, and would require some higher-income Medicare beneficiaries to pay higher premiums, a change Republicans hail as a major reform.

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Visa Favoritism

March 24, 2015 at 10:52 pm

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One of the themes here is that the more complex and onerous the regulation, the more likely it is to lead to corruption when people try to get around it. Limited government leads to honest government, is one way to put it, while big government leads to favoritism, influence-peddling, and shakedowns. The immigration bureaucracy is no exception in this regard, and a good argument for more open immigration and simpler immigration law is to reduce the opportunity for special treatment of the sort outlined in this Washington Post article about a new report by the inspector general of the Department of Homeland Security.

The Post article talks about how Terry McAuliffe — the Bill Clinton pal who is now governor of Virginia — asked a top Homeland Security official to speed visas for potential investors in GreenTech Automotive, his electric car company. Other prominent Democrats also got special treatment, the Post reports:

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Amazon's Tax Breaks

March 23, 2015 at 11:38 pm

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The Boston Globe has a report on how the internet retailer Amazon has negotiated state and local tax breaks for two warehouses in Massachusetts. Last year, Amazon got $600,000 in state tax credits and $2.89 million in local tax breaks for a facility in Stoughton, Mass. The second facility, in Fall River and Freetown, Mass., will benefit from $11.6 million in real estate and personal property tax breaks, along with a still undisclosed state tax credit.

I'm all for lower taxes in Massachusetts, but it would be nice if the cuts or breaks went to all taxpayers rather than to big companies with the clout to negotiate for them.

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Cruz Announcement Speech

March 23, 2015 at 10:42 pm

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The transcript of Senator Cruz's speech at Liberty University announcing his presidential candidacy is up at the Washington Post's site and it is worth a look. I was struck by how Cruz was influenced by John F. Kennedy. Here is Mr. Cruz:

What is the promise of America? The idea that -- the revolutionary idea that this country was founded upon, which is that our rights don't come from man. They come from God Almighty.

And here is Kennedy's inaugural address:

the same revolutionary beliefs for which our forebears fought are still at issue around the globe--the belief that the rights of man come not from the generosity of the state but from the hand of God.

From a policy point of view, the most intriguing thing I noticed in the Cruz speech was his tax policy:

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How Netanyahu Is Like Obama, Biden, Gore, and Clinton

March 23, 2015 at 10:25 pm

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The Israeli prime minister is the topic of my column this week. Please check it out at the New York Sun (here), Reason (here), and Newsmax (here).

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Regulation Lags Technology

March 20, 2015 at 10:58 am

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Two news articles in today's Times business section are good illustrations of the same idea — technology moves faster than regulation, and regulation slows the diffusion of technology.

The first example is electric-car maker Tesla's announcement that a remote software update "would give Tesla's Model S sedans the ability to start driving themselves, at least part of the time, in a hands-free mode that the company refers to as autopilot." The Times reports that "some industry experts said serious questions remain about whether such autonomous driving is actually legal and are skeptical that Model S owners who try to use autopilot would not run afoul of current regulations."

The second example is a story about the Federal Aviation Administration finally granting the online retailer Amazon limited approval to test drones for use in delivering packages. The Times reports:

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The One Article You Need To Understand the Israeli Election

March 18, 2015 at 12:51 am

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The one article you need to understand the Israeli election isn't by any of the usual suspects on the topic — not Jeffrey Goldberg, not Elliott Abrams, not Seth Lipsky, not Bret Stephens, not Jodi Rudoren, not Tom Friedman, not Nahum Barnea, not Eli Lake, not Charles Krauthammer, as shrewd as their various insights may be from time to time. No, it's by Juan Linz, who died in 2013 and who was the Sterling professor of political and social science at Yale. The article, "The Perils of Presidentialism," appeared in 1990 in Journal of Democracy, and it has to do with the structural differences between a presidential democracy like the one we have in America and a parliamentary democracy like the one that exists in Israel.

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Preet's Revolving Door

March 17, 2015 at 1:56 pm

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A news article in the New York Times notes the departure to the law firm WIlmerHale of the head of "an elite Wall Street task force" in the office of the U.S. Attorney for the Southern District of New York:

Mr. Sahni is the latest Wall Street prosecutor to switch sides. Over the last year, nine prosecutors have departed the Wall Street task force at the United States attorney's office, most joining big law firms. Marc P. Berger, the former chief of the Wall Street unit, landed at Ropes & Gray.

The job-hopping reflects the natural flow of the so-called revolving door, the metaphorical portal that turns prosecutors into defense lawyers and vice versa. It is a cycle playing out around the legal world, as the demand for white-collar specialists grows from Wall Street banks facing an ever-growing amount of government scrutiny.(Emphasis added.)

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MIT Economics

March 17, 2015 at 1:39 pm

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David Warsh's column this week is about the rise of the MIT economics department. One explanation (among many):

its willingness to appoint Jewish economists to senior positions, starting with Samuelson himself. Anti-Semitism was common in American universities on the eve of World War II, and while most of the best universities had one Jew or even two on their faculties of arts and sciences, to demonstrate that they were free of prejudice, none showed any willingness to appoint significant numbers until the flood of European émigrés after World War I began to open their doors. MIT was able to recruit its charter faculty – Morris Adelman, Max Millikan, Walt Rostow, Paul Rosenstein-Rodin, Solow, Evsey Domar and Franco Modigliani were Jews – "not only because of Samuelson's growing renown," writes Weintraub, "…but because the department and university were remarkably open to the hiring of Jewish faculty at a time when such hiring was just beginning to be possible at Ivy League Universities."

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Pardon Hillary

March 16, 2015 at 9:10 pm

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Professor Ronald Rotunda, writing in the Wall Street Journal, says Hillary Clinton may have violated 18 USC 1519, committing the federal crime of "anticipatory obstruction of justice," by deleting her emails from when she was Secretary of State.

J. Christian Adams, writing at PJ Media, says that if Secretary Clinton signed the standard "separation statement" when she left the department, she may have violated 18 USC 1001 by falsely stating to the government that she'd returned all work-related documents. (Update: The State Department says there is no record of her signing that separation agreement.)

Republicans are doubtless salivating over the prospect of keeping the Hillary email deletion story alive for the next two years via various legal maneuvers.

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Al Gore Is Right

March 16, 2015 at 7:17 pm

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From a New York Times article about what Al Gore is up to these days:

that is the point of those slides on his laptop. In 1980, one shows, consultants for AT&T projected that 900,000 cellphones might be sold by 2000. In fact, there were 109 million by then. Today there are some seven billion. "So the question is: Why were they not only wrong, but way wrong?" he says. He presses a button, and up pops an old photo of a young Al Gore with a helmet of hair and an early mobile phone roughly the size of one of Michael Jordan's sneakers.
The same kind of transformation that turned those expensive, clunkers into powerful computers in every pocket is happening now in energy, he says, with new technology leapfrogging old infrastructure. "It's coming so fast," he says. "It's very, very exciting."

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De Blasio Shakes Down Collegiate

March 16, 2015 at 4:39 pm

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The demand by Mayor De Blasio for $50 million — and maybe more — for "affordable housing" as a condition for letting Collegiate School build a new building in Manhattan is the subject of my column this week. Please check it out at the New York Sun (here), Reason (here), and Newsmax (here).

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Bogle's Son

March 13, 2015 at 9:47 am

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John Bogle Jr., the son of Vanguard index fund pioneer John Bogle, runs a long-short hedge fund, BloombergMarkets magazine reports in its April issue:

Bogle Jr., 54, has a sense of humor about the tension that comes from being an active fund manager and the son of the most famous advocate of passive investing. At an event honoring his father in 2012, he joked about some of the rules his dad taught him. "Always wear a wool tie in preference to silk, lest you be thought of as being flamboyant or be mistaken for an active fund manager or, worse, a hedge fund manager," he said.

The most important lessons the younger Bogle says he learned from his father have nothing to do with the market. He remembers visiting Vanguard headquarters on weekends, when the only person they'd encounter was the night security guard. "And my dad would know him by name, and he'd ask him about his kids and wife by name," he recalls.

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