Georgetown University

Economics 309: Economic Problems and Public Policies George Mason University and The Fund for American Studies Capital Semester, Spring 2013 Location:

TBD

Instructor:

Brian Blase

Class Schedule: TBD (See Calendar) Office hours: By appointment.

Course objectives: The general goals of the class are the following: (1) to understand the benefit of markets and how the ‘invisible hand’ aligns self-interested behavior with desired social outcomes, (2) to understand the implications of interference with the price mechanism (3) to understand situations where markets fail and rationales for government intervention to correct market failures and redistribute income, (4) to understand the impact of government on individuals and society, (5) to understand the public choice theory of government, and (6) to be able to use economic analysis to analyze public policy problems. Prerequisites: Students have taken an economics principles courses. Required Texts: The Economics of Public Issues – 17th Edition (2011) Roger LeRoy Miller, Daniel K. Benjamin, and Douglass C. North Economics in One Lesson Henry Hazlitt * Supplemental readings listed below can be found at the following website:

Components of your grade: I. Quizzes: 54% (There will be ten quizzes; each is worth 6% and the lowest one will be dropped.) Each quiz will take approximately 15 minutes of class time. They will be based on class lecture (about 2/3) and readings (about 1/3). Quizzes will be about half multiple choice and about half short answer. There are no make-ups for quizzes. II. Final Exam: 30% III. Out of Class Economic Analysis Assignment: 16% ** Out of Class Activity: Included in your participation grade, students must attend a briefing at the Federal Reserve w hich w ill be organized and staffed by Lily Pascucci. Honor Code: Students are expected to understand and adhere to the honor code of George Mason University. Students may neither give nor receive help from other students or from other sources during exams or quizzes. Also students are obligated to report any violations observed.

CALENDAR Topic 1: Principles Regarding Economic Thinking (January 18th) Russell Roberts – Getting the Most Out of Life: The Concept of Opportunity Cost (http://www.econlib.org/library/Columns/y2007/Robertsopportunitycost.html) Russell Roberts – Incentives Matter (http://www.econlib.org/library/Columns/y2006/Robertsincentives.html) Glen Whitman – Slavery, Snakes, and Switching: The Role of Incentives in Creating Unintended Consequences (http://www.econlib.org/library/Columns/y2007/Whitmanincentives.html) Steven Landsburg – The Economist as Parent and the Parent as Economist Steven Landsburg – The Power of Incentives

Topic 2: Economic Efficiency, Cost-Benefit Analysis, and the Seen and Unseen (January 20th, January 25th) Landsburg – Choosing Sides in the Drug War Landsburg – The Policy Vice Public Issues – Chapter 3 (Flying the Friendly Skies) Public Issues – Chapter 6 (Kidneys for Sale) Hazlitt – The Lesson (Chapter 1) Hazlitt – The Broken Window (Chapter 2) Hazlitt – The Blessings of Destruction (Chapter 3)

Topic 3: Capitalism and Economic Growth/Disparity (January 27th, February 1st) Daron Acemoglu. What makes a nation rich? One economist’s big answer. (http://www.esquire.com/features/best-and-brightest-2009/world-poverty-map-1209) Public Issues – Chapter 4 (The Mystery of Wealth) Public Issues – Chapter 30 (Globalization and the Wealth of America) Henry Hazlitt – The Curse of Machinery (Chapter 7) Henry Hazlitt – Spread-the-Work Schemes (Chapter 8) Henry Hazlitt – Who’s Protected by Tariffs? (Chapter 11) Henry Hazlitt – Saving the X Industry (Chapter 14) Henry Hazlitt – The Function of Profits (Chapter 22) Steven Landsburg – Iowa Car Crop (Chapter 21)

Topic 4: Public versus Private Ownership (February 1st) Public Issues – Chapter 27 (Bye-bye Bison)

Topic 5: Supply and Demand (February 10th, February 22nd) David Henderson – Demand (http://www.econlib.org/library/Enc/Demand.html) Russell Roberts – Where Do Prices Come From? (http://www.econlib.org/library/Columns/y2007/Robertsprices.html) Russell Roberts – The Reality of Markets (http://www.econlib.org/library/Columns/y2005/Robertsmarkets.html) Henry Hazlitt – How the Price System Works (Chapter 15) Public Issues – Chapter 15 (Big Oil, Big Oil Prices?) Steven Landsburg – Why Prices are Good

Topic 6: Price Controls (February 22nd) Public Issues – Chapter 12 (The Effects of the Minimum Wage) Public Issues – Chapter 10 (Bankrupt Landlords, from Sea to Shining Sea) Henry Hazlitt – Government Price-Fixing (Chapter 17) Henry Hazlitt – Minimum Wage Laws (Chapter 18) Michael Munger – They Clapped: Can Price-Gouging Laws Prohibit Scarcity (http://www.econlib.org/library/Columns/y2007/Mungergouging.html)

Topic 7: Taxes and Subsidies (March 1st, March 8th) Greg Mankiw – Remarks at the NBER Tax Policy and Economy Meeting (November 4, 2003) Greg Mankiw – Spreading the Wealth Around: Reflections Inspired by Joe the Plumber http://www.economics.harvard.edu/faculty/mankiw/files/Spreading%20the%20Wealth%20Around.pdf

Public Issues – Chapter 9 (The (Dis)incentives of Higher Taxes) Public Issues – Chapter 23 (Raising Less Corn and More Hell) Hazlitt – Public Works Mean Taxes (Chapter 4) Hazlitt – Taxes Discourage Production (Chapter 5) Landsburg – Why Taxes are Bad (Chapter 7)

Topic 8: Market Failures (March 15th, March 22nd) Clifford Winston on market failure: http://www.econtalk.org/archives/2009/12/winston_on_mark.html# Public Issues – Chapter 28 (Smog Merchants) Public Issues – Chapter 29 (Greenhouse Economics)

Topic 9: Regulation (March 22nd, March 29th) Free to Choose – Chapter 8 (Who Protects the Worker?) Free to Choose – Chapter 7 (Who Protects the Consumer?) Public Issues – Chapter 11 (Why are Women Paid Less?) Public Issues – Chapter 1 (Death by Bureaucrat) Public Issues – Chapter 19 (Keeping the Competition Out) Public Issues – Chapter 26 (The Trashman Cometh) Public Issues – Chapter 31 (The $750,000 Steelworker)

Topic 10: Social Insurance and Redistribution (March 29th, April 5th) Public Issues – Chapter 13 (Immigration, Superstars, and Poverty) Steven Landsburg – The Lessons of the Playground (Chapter 2) Steven Landsburg – Fairness I – The Grandfather Fallacy (Chapter 7) Steven Landsburg – Telling Right from Wrong: The Pitfalls of Democracy Paul Graham – Inequality and Risk (http://www.paulgraham.com/inequality.html)

Topic 11: Public Choice and Political Economy (April 5th, April 12th) Russell Roberts – Pigs Don’t Fly: The Economic Way of Thinking About Politics (http://econlib.org/library/Columns/y2007/Robertspolitics.html) Public Issues – Chapter 2 (Ethanol Madness) Public Issues – Chapter 20 (Mortgage Meltdown) Public Issues – Chapter 21 (The Political Economy of Collapsing Bridges)

Public Issues – Chapter 22 (Is Your Bank Manager Headed to Vegas with Your Money?)

Topic 12: Health Care (April 12th, April 19th) Readings: TBA Topic 13: Key Ideas Wrap-up (April 26th) Quiz Schedule – subject to change Quiz 1: TBD Quiz 2: TBD Quiz 3: TBD Quiz 4: TBD Quiz 5: TBD Quiz 6: TBD Quiz 7: TBD Quiz 8: TBD Quiz 9: TBD Quiz 10: TBD