Thursday, May 27, 2010

Thought Provoking Fun

Imagine two cavemen with their families.  Suppose they roam the earth without running into any other members of their kind until one day they happen across one another.  Do the two cavemen decide to live with one another?  If they do, why?  In my experience, libertarians and communitarians answer this question differently.  If you are unfamiliar with typical libertarian and communitarian answers, then you may end up giving an answer that belongs to the opposite end of the political spectrum.  That is, you may consider yourself libertarian or communitarian but support the opposite side with your fundamental beliefs regarding human nature.

Thursday, May 20, 2010

Does Liberal Education Policy Cause Childhood Obesity

The quality of public school breakfasts and lunches is oft bemoaned in the media.  As a recipient of such meals, I can attest to their questionable nutritional value (although they were all very tasty).  The typical narrative is that poor public school food choices contribute to childhood obesity.  The logic here is sound.  Taking in more calories than you expend leads to weight gain. 

However, there is a relationship between liberal education policy and childhood obesity that requires examining.  First, schools are required to provide meals to children and are then asked to do so at the lowest cost possible.  Easy to prepare and cheap food that still tastes good is often the least healthy, most caloric-dense food available with high levels of fat and preservatives.  Second, liberal policy mandates that students whose parents' income falls below a certain level be allowed to consume this food either very cheaply or for free. 

What does this amount to?  Poverty-stricken (often minority) students are given free or cheap food that is blamed for causing childhood diabetes and related ailments.  A class-action lawsuit against liberals should be inevitable since one could interpret their educational policies as an attempt to destroy the lives of poor minority children.

Is there an alternative?  Yes.  Take the value of the school-provided breakfast and lunch and give a non-transferable gift card redeemable only at a local grocer to qualifying families.  It is not too late for the left to halt their war on the poor.

Thursday, May 13, 2010

Growth and Equity

Daniel Henninger's article in today's WSJ was primarily about the Republican party capitalizing on billing themselves as the We're Not Europe Party.  Whether this strategy is optimal, Henninger brings up a good point.  Faust is a character who sells his soul to the devil in exchange for a comfortable, successful life.

As mentioned in a previous blog, Greg Mankiw outlines the tradeoff between economic efficiency and economic equity.  If you want more equity, you must sacrifice efficiency.  Put simply, fairness comes at the expense of growth.  Members of the European Union have long favored equity over efficiency, and the bill must now be paid (paraphrasing Henninger, here).

A great paragraph from Henninger's article:
Barack Obama would never say it is his intention to make the U.S. go stagnant by suppressing wealth creation in return for a Faustian deal on social equity.  But his health system required an astonishing array of new taxes on growth industries.  He is raising taxes on incomes, dividends, capital gains and interest.  His energy reform requires massive taxes.  His government revels in "keeping a boot on the neck" of a struggling private firm.  Wall Street's business is being criminalized.
  I suppose one way to look at what we want our future outlook to be here in the U.S. is to ask a question.  Do we want the future rhetoric regarding U.S. economic output to sound like today's rhetoric about Europe?  Or, do we want it to sound like the rhetoric surrounding Asian growth?

I favor the latter.

Tuesday, May 11, 2010

While Saddened by the hardship and turmoil the Greek debt crisis has spawned, I cannot allow such compelling material for teaching go unnoticed.  So, I am compiling a set of articles from various sources to create a packet for my Econ of Social Issues classes next semester.

I am fascinated by the spectacle of unionized government employees, a huge and primary source of the crisis, protesting in the streets against wage freezes and pension cuts. Instead they want the government to increase tax rates, a wealth destroying activity. So, those who make a living from state revenue are are in the streets arguing for policies that reduce state revenue, yet they hope to maintain the same level of income and pay raises?

That basic economic principles are not exactly mainstream knowledge is the only reason I do not view these protesters in the harshest of lights.

If anyone knows of some great articles I should include in the packet, please let me know.

Wednesday, May 05, 2010

It Never Gets Old

Winning, that is. On a recent lake trip with some of my lifelong friends we made a stop at a miniature golf course. Wagers were made, talent displayed, and improbable shots were in abundance. Despite having doctors, lawyers, entrepreneurs, and...beginner economists in the mix (all seemingly people one would take seriously) there was quite a bit of jubilation and childlike cheer expressed at the successes and failures on the course.

And, when all was said and done, I found that winning at mini-golf is...satisfying. My apologies to the members of the group who were dominated by Michael Garrison.

Tuesday, May 04, 2010


In Monday's WSJ, Mary Anastasia O'Grady summarized the shortages of coffee resulting from a Chavez led takeover of that sector a few years ago.

A telling part of O'Grady article comes when she labels the shortages of coffee resulting from price controls, regulation, and capital controls as predictable.

Are there truly heads of state that think instituting price controls on a product will ensure affordability and adequate supply to meet demand? I believe they do know this. The economics behind price controls is well-established. Even someone displaying a total lack of interest in basic economic principles as Chavez does must have an advisor paying attention to the potential adverse effects of policy.

O'Grady concludes that Chavez knows that his great socialist experiment (yet another) has failed. But he intends to go down with a miserable flair. I agree.