Feeds:
Posts
Comments

Posts Tagged ‘economics’

I love reading Paul Krugman’s NY Times columns and especially the comments that follow because they offer a fascinating glimpse of certain moral principles that are completely alien to my personal philosophy. It is like going into a country where they seem to speak the same language; yet their words mean completely different things than what you are used to.

For instance, in today’s article, PK rages against the practice of high speed trading and certain kinds of financial speculation on the ground that they are socially worthless. But at least he merely suggests higher income taxes to deal with such practices. His commenters go several levels further. They are so — oh so — outraged that some rich people are merely following Capitalism 101 rather than contributing to some “social good” that they want the guys arrested; some go further and demand a popular revolution to fundamentally steer the nation towards social democracy.

Not so long ago, Soviet Russia and countries under its influence measured not just economic activity but everything from art to films according to their social utility in furthering the principles of communism; those that did not pass the test were banned or worse. So the NY Times readers are continuing a worthy tradition.

What can I say? In my universe, freedom — freedom to invest or speculate, to be foolish or smart, to give back to society or be a rich miser — is of far, far greater importance than judging whether the exercise of freedom actually contributes to some social good. So the morality of the NY times commenters with their particular sense of justice and fairness is alien to me. Once upon a time, when faced with such morality, I would rage and scream silently inside at the grotesque sense of entitlement displayed. These days, I am merely amused; it is a bit like going to an alternate universe full of strange creatures.

Advertisements

Read Full Post »

While I am not an expert on global warming, the available literature seems to indicate that when everything is considered, the damage of global warming is probably not as high as the damage of the proposed solutions to global warming. That’s of course not to discount the danger or reality of the phenomenon — global warming is undoubtedly real and very serious — but merely to say that too many proposals will achive very little at too much cost (both in terms of actual GDP and in their effect on the lives and cultures of peoples).  The existence of a serious problem does not mean we should jump and “do something”, we need to analyse whether what we do might actually make our overall lives much worse than if we did nothing.

Here’s Jim Manzi making the case against a carbon tax or similar approach to address global warming.

Read Full Post »

  •  While GM and Chrysler are in their last throes, Ford is trudging on. Obama may have fired GM’s CEO and told Chrysler exactly what to do but he has had no such luck controlling Ford. The company has refused offers of taxpayer life support and believes it can not only survive this recession but in fact prosper. It’s CEO, Mullaly does not hide his admiration for Toyota and believes that in a few years Ford will be viewed on par with the Japanese giant. “I would love people in the future to say, ‘There’s Toyota and Honda and Ford,’ ” says Ford’s North American chief Mark Fields. “We have the goods to do it.”
  • It may be the strangest worm to ever hit the internet. The unknown creators of the Conficker worm have earned praise for their breathtaking sophistication even from the supranational security forces that are currently trying to track them down. So far the worm has done nothing except morph into more sophisticated variants but estimates for the number of infected — and thus controllable — computers range from five to fifteen million. Microsoft has announced a $250,000 bounty for information leading to the identity of the hacker who created it. Everyone only agrees on two things: it is the most complex and brilliant piece of malware written in years and no one knows what it can really do if it’s controller decides to wake it up.
  • Today, the federal excise tax on every pack of cigarettes will jump from 39 cents to $1.01, the single largest federal tobacco tax increase ever. Future plans in the works include outlawing risky sports, putting a 1000% tax on cheeseburgers, and having fines for too little exercise; eventually anything that places a ‘needless burden on society’ will be either banned or taxed to such an extent that everyone will be forced to conduct themeselves in an exemplary manner. Ok, I made up the last sentence. But you get the idea. You see, it is for the sake of the children.
  • Brooke Oberwetter has filed a lawsuit against the U.S. Parks Police officer who arrested her last year. She was arrested while — and apparently because — she was quietly dancing to her iPod during a planned celebration at the Thomas Jefferson Memorial in Washington, D.C.
  • Celebrities are getting strange fantasies involving President Obama and have no qualms about admitting it. “I’ll collect paper cups off the ground to make [Obama’s] pathway clear,” Halle Berry recently told the Philadelphia Daily News, “I’ll do whatever he says.” And in February, author Judith Warner used her New York Times blog to confess that “The other night I dreamt of Barack Obama. He was taking a shower right when I needed to get into the bathroom to shave my legs.”
  • A beautiful piece by former Seattle police chief Norm Stamper on drug legalization.

Read Full Post »

Alex Tabarrok makes a good point:

Notice how the term nationalization confuses the issue.  First, it suggests government ownership of the banks which would indeed be a disaster.  People in favor of free markets will rightly want to avoid any such outcome but ironically it’s the current situation of “wait and see,” and “protect the banker,” which is likely to lead to an anemic recovery and eventual government ownership.  Second, it confuses people on the left who think that nationalization is a way to insure that taxpayers get something on the upside.  That idea is a joke – there is no upside.  Taxpayers are going to have to pay through the nose but the critical point is that the taxpayers must pay the depositors whom they have guaranteed not the banks.

The debate so far has been framed between a “bailout” and “nationalization.” But the public rightly sees the bailout as a way to protect bankers and thus we get pressure for government ownership, which has already happened in part through government control over banker wages.  Bankruptcy in contrast is a normal free market procedure, it emphasizes that the firm has failed and current management should be removed.  Framing the issue in this way, for example, makes it clear that only the depositors should be protected and under reorganization there should be no control over wages on future management (wages are going to have to be high to get anyone to take on the task).  Finally the idea of bankruptcy makes it clear that the goal is to get banks solvent, under new management, and back under private control as quickly as possible.

Read Full Post »

I present below, without comment, a recent interview of Schiff (investor, Austrian economist, accurate predictor of the current crisis) where he talks about the economic crisis and the stimulus. He predicts hyper-inflation worse than anything we have ever seen if we keep going down this path.

Read Full Post »

• Tom Daschle — big government healthcare lord with plenty of tax issues  — is out. Obama admits he screwed up. Refreshing.

• He might actually kill the terrible protectionist clause from the stimulus. I certainly did not expect this. 

• He has selected an excellent nominee for the secretary of commerce post, it’s a Republican who once voted to abolish the position!

These are early days yet. However, so far, from a libertarian viewpoint, Obama has proved to be excellent in the areas Democrats are supposed to be good at (due process, civil rights of detainees) and if his appointments and attitudes are any indication, significantly better than Bush in the areas the Democrats are supposed to be bad at (economics). I would be interested in seeing what stance he takes though if the Dems start pressing more contentious legislation (card check, fairness doctrine).

Read Full Post »

An interesting post from Robin Hanson on the stimulus bill. Here’s an excerpt (emphasis mine):

Wise taxpayers who get stimuli tax rebate checks should mostly save them, realizing that future taxes must rise to pay for those checks.  For similar reasons, wise taxpayers should also spend less upon hearing about government spending increases.  So with wise taxpayers it is not obvious that tax rebates or government spending increases would help much with the downturn. 

The consensus among macro-economists seems to be that people can in fact be fooled by such stimuli, but as Tyler indicates, it is not clear which policies most fool us.  In particular, the more public attention we give to the stimuli, the less they might work.  We might make people realize that they need to compensate via saving, and the more we scare folks into thinking we need huge stimuli, the more we might scare them away from normal economic activity levels.

So should we stop explaining macro-economics during this crisis, and stop saying how desperately we need stimuli?

Read the whole thing. Also, if you are really into it, head over to Marginal Revolution to follow the ongoing Cowen-Krugman argument on stimulus and spending.

Read Full Post »

Older Posts »