Economics

"Are rising prices, interest rates and exchanges rates a good thing?"

Scott Sumner posts an excellent exposition of a point from simple economics:

The questions . . .

Would it be a good thing if interest rates rose?
Would it be a good thing if copper prices rose?
Would it be a good thing if the dollar appreciated?

. . . are all basically meaningless. In all three cases, the prices never change for no reason at all. In each case the real question is whether the thing that causes the price to change makes us better off or worse off.


"He Tried to Warn Us"

Hayek had  politicans' number:

Rise of the Unscrupulous and the Uninhibited

“Why the Worst Get on Top” is the title of Chapter 10 of The Road to Serfdom (1944), and it lays out the problem. In describing the dilemma of the collectivist who cannot implement his plans without inflating his authority, Hayek’s concern is not with planning so much as with power. He cautions that the supposedly gentle and compassionate morality that induces collectivism does not correspond to the morality of those who run it:

Just as the democratic statesman who sets out to plan economic life will soon be confronted with the alternative of either assuming dictatorial powers or abandoning his plans, so the totalitarian dictator would soon have to choose between disregard of ordinary morals and failure. It is for this reason that the unscrupulous and uninhibited are likely to be more successful in a society tending toward totalitarianism.


"NC has a budget surplus. Should it fund tax cuts or ‘better schools and a stronger middle class’?"

This could be a result of many factors, but Republican political control of the state probably helped.

“Even as the majority of other states face revenue shortfalls and budget crunches, Republican state leaders’ tax cuts and disciplined spending have generated a $552 million revenue surplus for North Carolina – making us one of just four states in the country expecting surpluses,” Berger said in a news release.


"No escaping Downs' Law"

They just never learn:

Some years ago, Anthony Downs elaborated and popularized the idea with his "Law of Peak Hour Congestion."  Here is a nice summary. Without pricing, extra road capacity will simply attract traffic from other sources (other modes, other routes, other times of day, new trips, etc.). Congestion will not be "solved." The idea is simple -- and the lesson has been ignored a thousand times. Officials are loathe to price but love building things. This is "bi-partisan". Crony capitalism is non-denominational.