DEBATING HAPPINESS This past Saturday, the Economist magazine inaugurated a series of public debates in New York (economist.com/nydebates) that pitted well-known bloggers Tyler Cowen and Will Wilkinson against top-tier economists Betsey Stevenson and Jeffrey Sachs. The topic was whether “America is failing at the pursuit of happiness.” The executive editor of the Economist and editor in chief of Economist.com, Daniel Franklin, moderated.

Arguing against the proposition were Mr. Cowen of Marginal Revolution (marginalrevolution.com) and Mr. Wilkinson of the Fly Bottle (willwilkinson.net/flybottle), who claimed victory by changing the minds of about one-third of the approximately 400 attendees. Of his victory, Mr. Cowen said on his blog: “The crowd turned, I believe, in part because Sachs pursued attacks on the current administration rather than focusing on the defined topic at hand. He was rendered shrill by the unholy madness of something or other. … Will and I don’t like current policy either, but we looked happy. We were happy. We are happy.”

Mr. Wilkinson couldn’t help but use his blog to get the last blow: “At one point in the main event [Betsey] Stevenson cut me off to express incredulity that welfare benefits didn’t improve the average happiness of the unemployed. … I don’t know what explains the finding, but there are a number of reasons why this isn’t at all implausible. First, as she was arguing, the effect of income on happiness is often weak. Second, surveys show that unemployment is very depressing. It often involves a painful loss of status. … Welfare transfers may do little to boost happiness under those sad conditions. Third, there is a stigma to ‘the dole,’ so the effects of income from welfare transfers may be different from market income. Fourth, generous welfare benefits reduce the incentive to quickly reenter the labor market, which may extend the average depressing period of unemployment.”

The wealth-happiness discussion was followed immediately by a debate on religion and politics. Justin Wolfers of the Wharton Business School spoke on Pascal’s Wager, saying that if one believes in religion then the greatest risk is choosing the wrong one. And how to hedge against such a risk? Mr. Wolfers advises the following: Have lots of children and bring each one up under a different faith. That way, if people don’t get into heaven themselves, at least they will have maximized the chances that one of their children will.

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THE DOLLAR REBOUNDS The dollar rebounded yesterday against most major currencies except the yen, which is the strongest it has been against the dollar since May 2006. David Gaffen at MarketBeat (blogs.wsj.com/marketbeat) quotes Marc Chandler of Brown Brothers Harriman’s explanation of the yen’s recent gains: “What’s happening is that I’d say that everything people were buying they’re now selling, and everything they were selling they’re now buying.” Mr. Gaffen elaborates: “The fact is, selling the Japanese yen has been a pretty lucrative and predictable trade for most of the year, but the predictability has vanished in recent days, and as a result, people have stopped selling the yen against the dollar.” He goes on to explain how such unpredictability has likely affected the behavior of different kinds of investors. For instance, those interested in borrowing Japanese currency at a low cost in order to use that money to buy assets with higher interest rates (such as the Australian and New Zealand dollars) are fearful that the yen might appreciate and thereby hurt their investment. Investors who had previously engaged in such “carry trades” are now worried that the yen will continue to rally against the dollar, and are therefore reducing their holdings in the higher-yielding assets, which they purchased using borrowed yen.