Economics

"'Blame United,' 'Blame Deregulation,' and Other Fallacies"

Yet another very nice piece by Megan McArdle.

Oh, come on, isn’t this just that old right-wing cliché that markets always produce the best outcome? People acting in their own personal self-interest can often make everyone worse off, including themselves.

Collective action problems certainly exist, and that’s one reason we have government. But a collective action problem is not just “something that makes a minority unhappy”; no system makes every single person better off. A true collective action problem is one in which collectively restraining destructive individual instincts can make everyone -- or at least, a substantial majority of people -- better off.

In the airline market, I see no evidence that there is even a large minority of customers who are willing to bear substantially higher costs for the sake of substantially better service.


"The Economics of Aliquippa, PA, and the Evolution of S.L. Price"

John Tamny reviews a recent book on the rise and fall of Aliquippa, PA and the Jones & Laughlin steel mill that was a vital part of the town. In this time of laments from some quarters about the "loss of manufacturing jobs" I was glad to see this bit as it is something I've long thought:

As Price writes toward book’s end about the Jones & Laughlin Steel Company’s (J&L Steel) Aliquippa-based mills that used to employ thousands, “Nobody grew up with the dream to work such jobs.  They were filthy, boring, exhausting grinds, a drain on health, a daily assault on the senses.” Getting right to the point, parents worked in the mills so that their children wouldn’t have to


"The reason government spending is a disaster"

Short piece by John Crudele illustrates why it is so difficult to control government spending. If you try to micromanage--don't spend money on X--the bureaucrats will tend, as here, to redefine X

If, on the other hand, you just take a meat ax to the overall budget of an agency, the agency will respond by cutting the one or two most popular activities it undertakes, sometimes known as the "Washington Monument" strategy. (If you cut money going to the national parks, the Park Service threatens to close the Monument.)

Lesson #1: don't spend the money in the first place.

Lesson #2: if you did, you have to have a lot of guts, guile, and patience to cut.


"California high court sets stage for major pension ruling"

Nice piece to catch you up to date on the potential changes to government pensions in California.

Battle lines are drawn. The unions claim that state and local agencies may not reduce any pension benefits. Pension reformers – and the courts, in recent decisions – say that while a reasonable pension remains a right, that doesn’t stop localities from reducing some things. These cases deal with pension-spiking enhancements and the purchase of airtime – controversial and somewhat limited practices. But the future of pension reform is on the line.


"Hey, Kids! Let's Take A Trip Behind The Veil of Ignorance!"

I was aware that there are sharp criticisms of John Rawls's famed "Veil of Ignorance" thought experiment, but I didn't pay any attention: I have no patience for government design relying on abstractions rather than history. But Pascal-Emmanuel Gobry's piece is terrific fun to read. In a few hundred words he utterly eviscerates the use the Left has made of the idea.