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May 2005

Thomas Sowell, doing what he does:

A reader recently suggested this formula: Monopoly plus discretion minus accountability equals corruption. That kind of corruption can be found not only in the mainstream media but also in two of our most important institutions, the public schools and the federal courts.

Both the schools and the courts flatter themselves that their job is to change society. So does much of the media. But what qualifies these people to be world-changers? They are usually poorly informed about science, uninformed about history and misinformed about economics.

Joel Spolsky writes that people should be careful buying bonds with prepayment options:

Most bonds sold to investors at retail by full service brokers are disguised to look like they pay a lot of interest when the truth is that the high interest rates never really compensate you for the option you're implicitly selling.

This is not a coincidence. It's by design. All else being equal, the people who sell these bonds love to sneak in prepayment options because it enables them to make it look like you're getting a higher rate of return.

Russell Roberts interviews Greg Mankiw.

Roberts: Although I would alarm you by pointing out that in a lot of those high school classes they spend a lot of time playing a stock market game which encourages people to invest their money in short-term, high-risk ways.

Mankiw: There is a question of what they are teaching and it's not always what an economist wants them to be teaching. And I think what we definitely need to do as a profession is to provide more guidance for those high school teachers. I've talked to high school teachers and principals. There's a shortage of people in high schools who teach economics. One of the reasons is that since they haven't traditionally taught economics, if you were expecting to be a high school teacher, you wouldn't have thought to major in economics. That should change, but it will take years.