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Podcast of the Week

Bueno de Mesquita on Iran and Threats to U.S. Security

Deterrence. Fashionable at the moment for people to think the Israelis will take out the Iranians or that the Iranians are crazy and will attack Israel if they have a chance. Look at world history: very, very large number of international disputes since the bomb was dropped on Hiroshima, many of which rose to the level of wars. Divide world into subgroups depending on possession of nuclear weapons or access to them via allies, etc. and plot probability of their becoming violent, see virtually nothing at the nuclear level; you only get war when there is no nuclear deterrence. Unlikely Iran would be different. Iranian leadership has been in power almost 30 years; little evidence of their irrationality. Shah. Muammar Gaddafi, depicted as irrational, rolled tanks to the border of Libya but didn't go over. Know how to stay in power but don't take undue risks. Much of U.S. foreign policy has been focused on making sure that no one else gets a nuclear weapon that doesn't already have one. Should we be so vigilant? 1982, article joint with William Riker, "Assessing the Merits of Selective Nuclear Proliferation", took positive rather than normative position--how does the world work as opposed to how should it work--to explain mutual deterrence. Why is the U.S. opposed to nuclear proliferation? Answer was that either you believe in deterrence or you believe you are willing to sacrifice deterrence to have the U.S. be in a dominant political position. If we have the bomb and they do not, that's an advantage. Usual argument to oppose it is window dressing.

Can you deter a suicide terrorist?

Is 4Ds (Deterrence, Dissuasion, Defense and Defeat) the best way to deal with terrorism?



Related;
START

How to Manipulate Irrational Voters

The Political Mind: Why You Can't Understand 21st Century American Politics with an 18th Century Mind, by George Lakoff

Or download the podcast

It is good in Down Under

Four year net policy decisions included in each Budget and Growth in government operating expenses


A new architecture for infrastructure


Corporate tax rates in Australia and the OECD 2008

Making provision for future priorities

IMF gives an A+ to Australia's economic management;

10. Fiscal policy focused on medium-term sustainability has delivered a sequence of surpluses that has eliminated commonwealth net debt. This leaves Australia with a strong fiscal position, an enviable situation by international standards. We support the strategy in the latest budget to save the revenue windfall from the commodity driven boom and thereby allow automatic stabilizers to support monetary policy. Saving some of the revenue from the commodity price boom in three new funds will take pressure off monetary policy in the near term and enable increased infrastructure investment over the medium term.

11. The reduction in public spending growth in the latest budget illustrates the government's commitment to help reduce inflation. With the upside risks to the outlook for inflation, more public spending restraint could be required and we encourage the authorities to identify areas where additional spending cuts could be implemented. In addition, positive revenue surprises should be saved to assist monetary policy until it is clear that inflation will decline. Given the uncertainty about how much of the increase in commodity prices will be permanent, saving the additional revenue in the near-term may avoid sharp changes in taxes and spending in the future.

12. The states have increased capital spending and their budget balance has shifted to a small deficit in aggregate, thereby adding stimulus to the economy. This highlights the importance of maintaining restraint at the commonwealth level.

13. To the extent that the improvement in the budget balance is structural, associated with permanently higher commodity prices, this should provide scope to reduce taxes or increase spending over the medium term. The governments' intention to achieve a positive balance over the medium term should increase public net worth, further strengthening the fiscal position. Our analysis suggests that a combination of lower labor and capital income taxes, along with increased public investment, will generate the largest economic gains. The gains from other options such as lower consumption taxes or higher public consumption are not as large. Despite the expected structural improvement in the medium term, significant long-term fiscal challenges remain, particularly in the area of healthcare spending, and early adjustments will be key to preserving fiscal sustainability.

Expert Political Judgment: How Good Is It?

Philip Tetlock at Google

Richard Thaler on Nudge

Nudge: Improving Decisions About Health, Wealth, and Happiness

Related;
Dustin Hoffman’s mental accounting

Policy Talks at Google

Condoleezza Rice & David Miliband


Robert Atkinson, Edwin Garrubbo, Michael Avon, and Google Chief Economist Hal Varian

Random Course

Q: Economists love to analyze markets for goods that are illegal (e.g., drugs, prostitution, etc.). One study showed that the own-price elasticity of the demand for powder cocaine (in absolute value) is 1.2, while the comparable elasticity for marijuana is 0.6. You have probably observed that the federal and state governments punish cocaine suppliers and dealers more severely than they punish marijuana dealers. Give TWO possible (if unlikely) explanations that relate back to demand analysis for this difference in policy.

Introduction to Political Economy: Microeconomics- Charles Moul

Textbooks; Mankiw's Principles of Microeconomics and Landsburg's The Armchair Economist

Course rating: (4 out 10 stars)


*Answer to the above question here.

Great Talks

Some interesting forums from Miller Center for Public Affairs;

The Myth of the Rational Voter: Why Democracies Choose Bad Policies

Does Emotion or Rational Interest Motivate Voters?

The Panic of 1907: Lessons Learned from the Market's Perfect Storm

President Lincoln: The Duty of a Statesman

Globalization and Civilization

The Most Noble Adventure: The Marshall Plan and the Time When America Helped Save Europe

American Theocracy: The Perils and Politics of Radical Religion, Oil and Borrowed Money in the 21st Century

Are Western Leadership Concepts Appropriate in Islamic Cultures? Implications for Global Business Affairs

The Art of Government Relations: When the Co-Equal Branches are Locked in a Power Struggle

Soldier: The Life of Colin Powell

The Way to Win: Taking the White House in 2008

Is Our National Security Bureaucracy Up to the Challenge?

Spoiling for a Fight: The Rise of Eliot Spitzer

Fiasco: The American Military Adventure in Iraq

Mapping the Global Future

The Social Security Reform Debacle: Were Lessons Learned, or Does This Foretell the Future of Other Bush Reform Initiatives?

Room for Growth: President Lincoln's Early Stumbles

American Gospel: God, the Founding Fathers, and the Making of a Nation

Fighting World Hunger

The Battle for the Soul of Capitalism

Managing the Financial War against Terrorists

Martin Van Buren: The Original Party Boss

Marriage: A History

Twilight in the Desert:The Coming Saudi Oil Shock and the World Economy

Andrew Jackson: His Life and Times

What Stalin Knew: The Enigma of Barbarossa

Looking at China

Exporting Reconstruction: Lessons Learned and Lessons Not Learned

Eliot Spitzer and the War Against White Collar Crime

Of Love and War: Roosevelt, Churchill and the Way We Live Now

Faith of Our Fathers: What America's Founders Really Believed