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Friday, June 12th, 2009

Once again, it’s Friday, so it’s time for my weekend reading recommendations.

1. Mirror Neurons. Daniel Lametti explains the importance of mirror neurons in the Scientific American.

2. Iran’s Fissures. Roger Cohen has been prominently writing about Iran for the past year or so – predicting and pushing for a thaw in relations. Now, on the cusp of an important election, Roger Cohen discusses Iran:

Iran, its internal fissures exposed as never before, is teetering again on the brink of change. For months now, I’ve been urging another look at Iran, beyond dangerous demonization of it as a totalitarian state. Seldom has the country looked less like one than in these giddy June days.

3. Yglesian insights. Matt Yglesias’s blog has long been on my must-read list – but he’s offered some especially insightful observations in various contexts about the free market in recent weeks. Here Yglesias speculates about the advantages of non-profit-maximizing corporations in a free market:

After all, profit-maximization is not a natural form of human behavior. I think it’s best understood as a very idiosyncratic kind of pursuit. It happens to be one that’s economically rewarded because with money to invest tend to want to invest it with would-be profit-maximizers. Thus, in fields of endeavor where the ability to raise large sums of capital on reasonable terms is a huge advantage, a profit-maximization impulse winds up being a huge advantage.

In a later post about health care, Yglesias makes a related point:

[P]art of what’s wrong with the world is that the very same people who spend a lot of time cheerleading for free markets and donating money to institutions that cheerlead for free markets—businessmen, in other words—are the very people who have the most to gain from markets being totally dysfunctional. The absolute worst place on earth you can find yourself as a businessman is in the kind of free market you find in an Economics 101 textbook. As a market approaches textbook conditions—perfect competition, perfect information, etc.—real profits trend toward zero. You make your money by ensuring that textbook conditions don’t apply; that there are huge barriers to entry, massive problems with inattention, monopolistic corners to exploit, etc.

4. How to tackle the deficit crisis. Set off by David Leonhardt’s excellent look at the forthcoming deficit crisis, the Opinionsphere quickly took this up as a theme of the week. Noah Millman at The American Scene had the best take on how to tackle the deficit crisis – once we decide to get serious. One of the main ways he suggests is to reform the tax code:

We have an income tax that is riddled with deductions that undermine its purported progressivity, and we rely on increasingly steep progressivity to justify every additional change to said code. A 1986-style reform that eliminated many deductions and lowered rates would not only be a likely booster of the economy, but would probably raise revenue – certainly on the corporate side.

5. China’s Great Game. And of course, the Financial Times reported that China has almost cornered the world market in rare minerals needed for most high tech products. I’m looking forward to some analyst really following up on this and explaining what implications – if any – this has.

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Posted in Barack Obama, Domestic issues, Economics, Financial Crisis, Health care, Iran, Politics, The Opinionsphere | 1 Comment »

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