Monday, October 29, 2012

David Henderson Demonstrates Britain's Willingness to Watch People Die

Socialized Medicine Can Kill, David Henderson | EconLog | Library of Economics and Liberty

On Losing Arguments/Making Enemies

If you want to lose an argument/make an enemy, conduct yourself as follows.

@FabiusMaximus01: Hi I'm going to cite an article in The Economist magazine that uses a flawed measure of inequality to promote a narrative that supports redistribution of wealth policy.

@MikeDGarrison (the hero of this story): That article ignores existing redistribution of income in the form of social programs, educational subsidies, food stamps, medicaid, and any and all other forms of assistance the lower quintiles receive.  Also, as a share of overall consumption, the consumption of the poor has NOT diminished compared to the rich in roughly 40 years.

@FabiusMaximus01: 1) Analysts do not ignore the transfers of wealth.  2) The top 1% don't want to consume anymore, and the rest of us 99% can't afford to consume anymore because of how poor we are.  Also, the 1% invest their earnings which makes income inequality worse.  Muhaha, see what I did there.  I quoted an article and you responded to the article, but then I made the whole thing about the job of "analyst."  Now, I know that "analyst" is a term used to describe about 45% of all jobs on the planet, but I don't care, I'm just going to change the topic and make the discussion about "analysts" not what I actually mentioned in my initial tweet.  See what I did there?  See how great I am? 

@MikeDGarrison The article in The Economist made it clear that they were referring to shares of income.  Plus, my reference on consumption refers to an actual study by two economists.  Here is their article. 

@FabiusMaximus01: Hahahahahahaha, the WSJ?????  You actually read that silly filth?  They're propagandists, they represent the man!!!!  I get all of my econ information exclusively from Paul Krugman, Brad DeLong, and Nouriel Roubini!  I only need 140 characters to completely refute what two respected economists have to say.

@MikeDGarrison:  Ok, go ahead.

@FabiusMaximus01: Go ahead what?

@MikeDGarrison: Refute them.

@FabiusMaximus01: I did, I said that they wrote for the WSJ!

@MikeDGarrison: That's not a refutation.  That's like saying 2 + 2 does not equal 4 because the mathematician that figured it out was a Jew. 

@FabiusMaximus01: He probably know you can't trust Jews right?

@MikeDGarrison: We're done here.

Note: Some of the twitter exchanges may have been modified to reflect authorial intent.

Friday, October 26, 2012

The Tyranny of Utility

Dwight R. Lee has a good article reviewing Gilles Saint-Paul's book, "The Tyranny of Utility."

Basically, using "utility" as a measure of happiness, many politicians are trying to limit your freedom because it's in your best interest but you're too stupid to know it.

Most behavioral scientists and politicians probably underweight the disutility felt by people who know they're being controlled.

Wednesday, October 24, 2012

"You Lie. You Lie. You Lie Shamefully. You tell Koch lies!!!"

This exchange between Don Boudreaux and an anonymous opponent was mirthful.

See here.

Trade Deficits Are Fine

Why people fuss about running a trade deficit continues to baffle me.

Cafe Hayek — where orders emerge

John Taylor and Paul Krugman Combat

John Taylor, a potential Federal Reserve chairman if Romney is elected, has a great blog at Economics One.  Most recently, Taylor pointed out how slow the recovery from the 2007-2009 recession is relative to other post-financial crisis recoveries.  See his simple and easy to understand post about it here. 

Paul Krugman, in probably the least emotional and angry response he's ever written, sees the potential Taylor's argument has to make President Obama and liberal administration of the economy look bad and responds with an accessible criticism here.

Lastly, Taylor responds to Krugman's critique and one can clearly see that Taylor's original characterization of how weak and slow this recovery has been still stands.  See here

I greatly enjoyed the interchange between these economists and look forward to future bouts.  My favorite part was how level-headed and reasonable Krugman came across.  A welcome change from his standard behavior.

Thursday, October 11, 2012

Leaders and Followers

During the Presidential Debates on Domestic Policy, I live-tweeted some thoughts, and retweeted those of others'.  In short order, a former student shared his opinion on the differences in leadership skills between the two candidates.  He believed Barack Obama to be the better leader and would vote based on that.  Now, for the record, I disagree wholeheartedly.  But, for the purpose of laying out principles and examining them, suppose Obama is a fantastic leader.  Is leadership a good quality?

Points in favor of leadership as a positive quality.
1) You can convince others to take a certain course of action.
2) You can rally individuals around a cause.
3) You can bring individuals with differentiated interests and goals together to work toward an objective.

Points against leadership as a positive quality.
1) You can convince others to take a certain course of action.
2) You can rally individuals around a cause.
3) You can bring individuals with differentiated interests and goals together to work toward an objective.

Leadership is only positive when the goal of the leader leads to good consequences.  Leadership is awful, a tragedy, when the leader's goals lead to negative consequences.  Human history is filled with examples of morally repugnant men and women who possessed great leadership qualities.

I've never craved a leader to follow.  My twitter debate opponent made the points: "I prefer focus over ADD.  I've had indecisive leaders before and they suck."  I joked back and referenced that Hitler was very focused.  What a great leader he was.  Should we look back at Caesar, Stalin, or any of history's other dictators and view them favorably in light of their leadership skills?  No.  What we do instead is look at what a tragedy it was that enough people were willing to follow these leaders to allow them to carry out their disastrous policies and plans.

Is Obama an abhorrent tyrant comparable to Hitler?  No.  But his policies have negative consequences both intended and unintended.  Some people may find him charismatic and a strong leader, but I view these traits as negative, because I believe his goals are wrongheaded, based on empirically tested and failed ideologies, or purely punitive on a social-class that this country relies heavily on for funding its activities.

Wednesday, October 10, 2012

Growth Slowing, Jobs Growing?

There is a lot of confusion.  Democrats are excited about the jobs numbers.  Republicans are dubious.

Here are some facts:
1) The economic news from around the world is bad.  Most pundits and economists see growth slowing around the world and the possibility of a world recession increasing only three years after our previous recession.
2) For an economy to add jobs, it has to be growing.
3) For an economy to add enough jobs to decrease unemployment by a full half-percent, it has to be growing fast.
4) Our economy is not growing fast.

So, what's the scoop?  The BLS counts part-time workers as employed.  For every single person who works part time for a political campaign, and works even 1 hour per week at $7.50, that person no longer counts as unemployed.  Also, the Labor Force Participation Rate dropped to its highest rate since 1981.  When the LFPR goes up, unemployment looks better because people that are not participating in the labor force do not count as employed or unemployed. Note:

Unemployment% =        [Employed / (Employed + Unemployed)] 
When you decrease the denominator in a fraction, the value of the fraction increases. 

To understand why the American public is so skeptical, look at the following logic:
1) State and Local govt increased workers by the highest amount in 20 years.
2) Overall, 873,000 workers were added in September, the largest 1 month increase since 1983 when the economy was hot.
3) These numbers would be impressive even if we were in a strong expansionary phase.
4) We are in a weak expansion, very weak, and the world is bordering on recession.
5) Conclusion: Either one believes that the economy added one of the largest increases in jobs in the past quarter-century despite being moribund, slow, bad, etc.  Or, you believe there is an explanation that doesn't require you to suspend common-sense.  That other explanation is: there was a massive increase in part-time campaign workers and LFPR rose to a quarter-century high. 

The last sentence is not a right-wing conspiracy theory.  It is a sentence that every journalist covering economics should have written or uttered.  But, journalism isn't known for its strong academic credentials or fact checking skills, ironically.

Tuesday, October 09, 2012

The Latest Unemployment Numbers Demystified

John B. Taylor explains here why recent employment pessimism is not a conspiracy theory, but a good look at numbers and what they mean.  Which is what any journalist should be doing...which is why, kids, if you want to become a journalist, hold yourself to a very low standard, and vote Dem.  Otherwise, no one will hire you.

Monday, October 08, 2012

Does The Economist Magazine Have a Response

I enjoy The Economist, but their recent article on how great of a paradise Detroit is for artists, urban planners, entrepreneurs, and others seems rather silly in light of this.

Enter At Your Own Risk: Police Union Says ‘War-Like’ Detroit Is Unsafe For Visitors « CBS Detroit

Tuesday, October 02, 2012

What He Said

From Jon Jellema of UC Berkeley:

Class stratification produces division of labor and specialization by providing rules for the separation of the larger population into subpopulations based on culturally-specific determinations of superiority and inferiority. Regardless of whether values like honor or purity are eventually replaced by pecuniary success as the basis of class divisions, this division into subpopulations, once crystallized, encourages the transmission of group-specific skills, behaviors, and information. Not only does this facilitate specialization and the decentralized coordination of information relevant to production, but also the formation of group identity and the creation of markets for the wares or symbols associated with groups, all of which promote economic development.
 An interesting summary of the benefits of specialization of labor and information transfer within that specialization.