Economic Rockstar

Connecting Brilliant Minds in Economics and Finance

078: Arnold Kling on the Hidden Story of How Markets Work, the Mortgage Crisis and How We Pay for Health Care

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078: Arnold Kling on the Hidden Story of How Markets Work, the Mortgage Crisis and How We Pay for Health Care

Arnold Kling is a Mercatus Center–affiliated senior scholar at George Mason University and a member of the arnold kling economic rockstarFinancial Markets Working Group.

Arnold specializes in housing-finance policy, financial institutions, macroeconomics, and the inside workings of America’s federal financial institutions. He also is an adjunct scholar at the Cato Institute in Washington, DC.

Arnold has testified before Congress on the collapse of Fannie Mae and Freddie Mac

He has authored five books, including Crisis of Abundance: Rethinking How We Pay for Health Care and Invisible Wealth: The Hidden Story of How Markets Work.

Arnold has published articles in the Economist, the Wall Street Journal, the New York Times, the Atlantic, and Forbes, among others, and he blogs at arnoldkling.com/blog/.

Previously, Arnold served as a senior economist at Freddie Mac and a staff economist on the Board of Governors of the Federal Reserve System.

He started Homefair, one of the first commercial websites on the Internet.

Arnold Kling received his PhD in economics from Massachusetts Institute of Technology.

“If you want to live a good lifestyle, you can find hobbies and interests that don’t cost very much. So it’s not hard to enjoy life. But if you want to make yourself miserable, watch politics.” – Arnold Kling

Economics:

In this episode, Arnold mentions and discusses: information rules, economic information, marginal cost of information, advertising, versioning, bundling, Austrian economics, risk measurement, capital, tax, mortgage-backed securities, loans, bubbles, crashes, excess leverage, marked-to-market, economics of health care, labor, capital, land, institutions.

Economists:

In this episode, Arnold mentions and discusses: Hal Varian, Carl Shapiro, Brad deLong, Tyler Cowen, Paul Krugman, Paul Volker, Douglass North, Robin Hanson, Bryan Caplan, James Buchanan, Adam Smith, F. A. Hayek and Robert Solow.

In this episode you will learn:

  • about Moore’s Law and what it means for the economy.
  • why economists are being lured into the world of start-ups and tech companies.
  • about the power of freemium and why companies need to build up trust to create a loyal customer base.
  • the difference between versioning and bundling.
  • what the future holds for the accessing information online.
  • about Arnold’s company online Homefair and how it was one of the first internet companies.
  • what really went on behind closed doors at Fannie Mae and Freddie Mac that resulted in their demise.
  • why Fannie Mae and Freddie Mac were bailed out.
  • how changing the culture at Freddie Mac caused its collapse.
  • about the state of health care in America today.
  • how Americans are to pay for the higher costs of health care.
  • about the fibre-bubble in the 1990s.
  • why we are richer today than a couple of hundred years ago.
  • why ideas are the foundation to economic growth and prosperity.
  • why nations like Cuba and North Korea are poor (bad institutions).
  • about the work being done at George Mason University.

Where to Find Arnold Kling:

Books:

Links: 

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020: George Magnus on The Age of Ageing, China and the EU

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020: George Magnus on The Age of Ageing, China and the EU

George Magnus is an independent economist, consultant and commentator. He has a distinguished career that started with some teaching assignments but was spent mostly in the financial services industry.UBS INVESTMENT GROWTH

Before going solo in 2012, George was the Senior Economic Adviser at UBS Investment Bank having previously been the Chief Economist for 10 years. In almost 30 years of working experience in the City, he has held senior positions at SG Warburg, Chase Manhattan Bank and Bank of America. He is a well-known and highly regarded economist in the financial community and has won many accolades in professional surveys as one of the top global economists.

George is well known for his commentaries and interviews in newspapers, journals, TV and radio, most notably for the Financial Times, CNBC and Bloomberg.

George, gained widespread acclaim for declaring in early 2007 that we would face a Minsky Moment – or systemic banking crisis – and a decade of slow growth, has extensive experience of writing on, explaining and speaking about the global economy.

His first book, The Age of Ageing: How Demographics Are Changing The Global Economy And Our World was published in 2008. His latest book, Uprising: Will Emerging Markets Shape or Shake the Global Economy was published at the end of 2010, and assesses, in particular, whether China is set to dominate the world system.

Economic Themes:

In this interview, George mentions and discusses: bubbles, crashes, business cycles, demography, pensions, labor, emerging markets, life expectancy, debt-to-GDP, monetary union and fiscal union.

Economists:

In this interview, George mentions: Hyman Minsky, Thomas Malthus, J.K. Galbraith, James Galbraith (son), Thomas Picketty and Michael Pettis.

Influencer:

J.K. Galbraith

In this episode, you will learn: 

  • about bubbles and why we never learn from them.
  • how demographics are changing the world economy through declining fertility and rising life expectancy.
  • about the need for a policy agenda to cope with an ageing society.
  • why age-related commitments and promises such as pensions and health care schemes are unaffordable.
  • why there is a pension crisis to come and how it mimics a Ponzi-scheme.
  • about the fastest ageing country – China – and what problems will exist in the future.
  • if economies can experience positive growth rates if population declines by relying on robotics.
  • how the second machine age may bring problems to those whose jobs have been automated.
  • if there will be a strong Luddite presence in the future given the pace of technological change.
  • about the failure of the BRIC emerging countries to live up to their expectations.
  • if China is all hype.
  • what the real problem is in Europe in terms of its monetary union.
  • why the EU should have started with a fiscal and political union first and then build a monetary union on top.
  • about George Magnus’ band ‘Prisom’ and his love of Led Zeppelin and Pink Floyd.
On China: We have to decide whether reform is hope or hype. In many cases it’s hype. – George Magnus

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