Blogs offer economists' thinking on daily living

April 27, 2005|By JAY HANCOCK

AMERICANS ARE an impatient lot, and the $11.7 trillion U.S. economy is already drowning in information. So who would have predicted success for a handful of wonky Weblogs geared more toward telling people how to think about money than what?

But success there is. These Internet sites, some of which get 10,000 readers a day or more, won't directly make you a better stock picker or car buyer. Instead, they offer intelligent people supplying market-oriented commentary on Social Security, sex, Socrates and a thousand other interesting subjects.

Which will make you a better thinker and citizen. Which may make you a better car buyer.

"We actually want to apply the economic way of thinking to what's going on in the world, and that's not just the budget deficit and taxes but divorce rates and anything in the social field," says Alex Tabarrok, a George Mason University economist and co-proprietor of Marginal Revolution, a libertarian-tilted blog begun in 2003 that just registered its 2 millionth visit. (www.marginalrevolution.com)

Recent Marginal Revolution topics included why Starsky & Hutch is more boring to 21st century TV viewers than The Sopranos; how come Western consumers don't buy Chinese music and regulating cell-phone use on airplanes. (Does the cost of hearing your coach-class seatmate talk to his girlfriend for an hour outweigh the benefits of freedom and communication that come with unlimited cell-phone use?)

George Mason tuition is $8,000 a year for out-of-state undergrads, but the considered thoughts of two of its most interesting professors - Tabarrok and co-blogger Tyler Cowen - arrive daily for free on Marginal Revolution. Fairfax, Va.-based Mason, in fact, has become a hub of libertarian economics blogging.

There is Cafe Hayek, co-authored by Don Boudreaux and Russell Roberts and named after the Austrian economist who described how market prices convey economic information far more efficiently than central planners. (www.cafehayek.com) And there are EconLog's Arnold Kling and Bryan Caplan, also at Mason. (http://econlog.econlib. org)

Like all blogs, these link and argue with each other as well as other sites.

Other good, pro-market blogs include Knowledge Problem (www.knowledgeproblem.com), from a Northwestern University economist (with more help from George Mason), and Asymmetrical Information, penned by "Jane Galt," a pseudonym derived from Ayn Rand's Atlas Shrugged (www.janegalt.net).

Yesterday, Jane (actually Economist magazine's Megan McArdle) discoursed on the fact that few Americans think of themselves as rich even though all of us - even welfare mothers - are Bill Gates compared with our ancestors.

Of course, not all good economics bloggers come from the libertarian right. (Or is it left? Sometimes it's hard to tell.) But they all pay attention to market incentives, proper economic measurement, rational consumer behavior and the long-term benefits of growth.

On the left, try University of California at Berkeley economist Brad DeLong (www.j-bradford-delong.net/movable_type; a recent post: "There's Something Very Wrong with the Republican Party").

There is also Max Sawicky, (www.maxspeak.org/mt), an economist with the liberal Economic Policy Institute. Like many blogs, Sawicky's disavows any official connection to his day job.

Economists have long known that societies work best when relevant information is plentiful and cheap. More and more, they are contributing to the cause.

Speaking of economic information, thanks to statistical revisions job-growth figures for Baltimore suddenly don't look so good.

Under the headline, "Job growth sign that city is back on the ascent," this column reported in December that Baltimore was adding employment at its best rate since 1999 and, before that, since 1988. But the picture has become murkier.

Efforts by state and federal economists to improve the payroll-based job-counting process took positions that until recently were credited to Baltimore and assigned them to other parts of the state, says Patrick Arnold, Maryland's director of labor market analysis. Companies with headquarters in the city, it seems, had been reporting hinterlands, branch-office jobs as Baltimore-based.

Revised figures show essentially no Baltimore job growth from the end of 2003 through March. The previous report suggested that Baltimore would end 2004 with 8,000 more jobs than it had a year earlier, or 2 percent.

But that may not be the end of the story. Economists have revised only recent Baltimore figures, so the job tally from a year ago is still artificially inflated. That makes year-over-year growth in the official accounts look weaker than it really is.

Somewhere in between lies the truth, which Arnold and his team are still working on. But here's the bottom line: Any year in which Baltimore doesn't lose 5,000 or 10,000 jobs is a good one.

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