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Economics

March 30, 2015

"Let Us Now Praise Famous Women"

Matthew Continetti does a superb job hammering James Wolcott and by extension all those who so fear and complain about the "very rich". Just terrific.

The character that emerges from McLean’s description of Hobson, I hasten to add, is sympathetic and winning. She was not born to riches and she has overcome the prejudices of others to lead a, by all accounts, successful and committed life. Clearly she is driven, a striver, a networker, a prodigious achiever who not only has lived up to every expectation the meritocracy imposes on young people, but has also flourished beyond them. What fascinates me is how liberal journalists like James Wolcott seem not to make room for Hobson and her milieu in their bilious descriptions of the “very rich.” How enormously wealthy liberal Democrats might as well not exist, how for left-liberal writers the chain of association whose first link is “rich” inevitably includes “conservative” and “Republican” and ends with “bad.”

"What advice do economists with PhDs give to young/poor people? Become customers of colleges where PhD economists teach . . ."

I certainly agree with Mr. Greenspun's last paragraph: the opportunity cost of college is often underemphasized, even neglected

But this is too strong:

Economists, who get paid to teach at colleges, experiment with ways to get more young people from poorer-than-average families to become customers of colleges. Nobody seems to question whether this might be biased and/or misleading advice. . . . When experimenters provide students with advice regarding college they don’t share comparisons regarding other careers. 

The information economists "don't share" is all in the public domain. It's even, for students with a Net connection--and those aren't hard to find these days--at their fingertips. I think a bigger part of the problem is kids aren't seeking enough information. Why that it is seems complicated. 

Link courtesy of Chug Roberts.

"We can thank the Supreme Court for credential inflation"

George Leef nicely makes the case for the 1971 Griggs v. Duke Power decision as the root of the problem.

But it would be nice if there were a test of this. I haven't seen one. 

"The End of Low Hanging Fruit?"

Daron Acemoglu and James Robinson write, in effect, "Not necessarily."

(And guess what? Innovation seems to respond to incentives. Who knew?)

March 23, 2015

Two views on wage stagnation

The Liberal story: Lawrence Mishel, president of the Economic Policy Institute and co-chairman of Americans for Tax Fairness, "Even Better Than a Tax Cut".

The much more accurate story: Benjamin Domenech, publisher of the Federalist, "The Truth About ‘Wage Stagnation’".

For conservatives, this should suggest an opening. But it is also an indication that the pro-growth policy path is not necessarily the old-school supply-side path of individual tax-rate cuts. Instead, the real path toward the kind of growth that will benefit American workers ought to focus more on regulatory and general government reform. The economic problem the nation faces today is an economy increasingly warped by government.

"The Economics of the California Water Shortage"

Alex Tabarrok explains the problem in a single sentence: "California has plenty of water…just not enough to satisfy every possible use of water that people can imagine when the price is close to zero."

See also Victor Davis Hanson's cri de coeur, "The Scorching of California: How Green extremists made a bad drought worse". (Link courtesy of Jorod.)

Related: "19 Reasons California’s Drought Isn’t A Big Deal". (Irony alert.)

Also related: "No, California won't run out of water in a year". (Non-ironic.)

"The Main Challenge Facing the Middle Class"

Robert Samuelson:

What this history teaches is that we have less control over our economic destiny than is often assumed. At every juncture in the chronology, people - including "experts" - did not foresee the next major change. In the early 1960s, they didn't anticipate high inflation; in the late 1970s, they didn't expect its demise. In this respect, the surprise 2008-2009 financial crisis was typical.

The same ignorance inhibits what we can do for the middle class. Government - a.k.a., politicians - can address some middle-class wants by redistributing income from the rich through tax breaks and subsidies. But this approach has limits and not merely because the rich will resist.

"A federal agency’s laundromat worker belongs to the 1 percent"

The title seems to be wrong. But some of the substance of the article remains.

Laundry operations services worker Joseph Bryant topped the list for 2010 through 2013 (the data’s available from 2010 to 2014), pulling in $115,443 from the Veterans Health Administration in Los Angeles in 2013.  But Bryant isn’t alone as a federal employee laundering his way into the upper middle class.   Across a variety of agencies and locations, and multiple job titles, cleaning fabrics can produce above-average income across the country.

March 18, 2015

"Have Americans Officially Given Up on Washington?"

"Poll results reveal an overwhelming preference for stronger local leadership, and less federal input."

See also "Poll: Americans understand federal government is worthless, prefer local and state."

A small amusement: the next time a Liberal asserts that we absolutely must have the federal government do X, Y, or Z, reply that suppose, for the sake of argument, the government does need to do X, Y, or Z, but why must it be the federal government? The answer is almost guaranteed to be good for laughs.

 

March 17, 2015

"Detroit Is Dying Because GM Stuck Around, New York City Booms Because Nabisco Did Not"

John Tammy:

When depressed U.S. cities are talked about in the media, the explanation for their decrepitude is nearly always described through the prism of a departed industry, a natural disaster, or overseas competition.  Pittsburgh is allegedly a shadow of its former self because the steel industry is no longer vibrant,  Galveston, TX supposedly never recovered from a hurricane back in 1900, Flint, MI and Detroit are depopulated because the U.S. car industry has been eclipsed by more efficient global producers, and then Selma, Alabama’s limp economy was recently reported in the New York Times as a function of still-healing scars from the 1960s Civil Rights struggles.

The problem with the diagnoses offered up is that they don’t measure up to the most basic of logical and observable realities.  Particularly the industry explanations for a city’s demise.  Indeed, the departure or decline of already established forms of work would far more likely signal an economic renaissance whereby the economy of a city evolves with the times, with abundant wealth the result.

Mr. Tammy's forthcoming book get a nice review here.

Finally, an elegantly rendered book that makes the dismal science engaging, with real-world examples from Hollywood, rock ‘n roll, and sports, including actor Ben Affleck,  the Rolling Stones’ Keith Richards, and the Dallas Cowboys. Real life stories of people struggling with the real life consequences of government officials who too often view the economy in the abstract.

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