Economics

"The one thing Trump and Clinton agree on is infrastructure. This economist thinks they’re both wrong."

Excellent point by Harvard economist Edward Glaeser.

“My biggest fear is that we’re not actually going to fix the biggest problems we have,” he says of these proposals. “Instead we’ll just end up with more highways in North Dakota or more white elephant projects that deliver little value.”

It’s not that Glaeser is against infrastructure. America’s roads and airports are vital, and they really do need upgrades. But the way the federal government currently addresses these issues is badly flawed. Congress hands large checks to states, which often just build shiny new roads rather than fixing existing ones. Instead of targeting urgent needs, federal spending often goes toward questionable projects like Detroit’s little-used monorail or California’s troubled high-speed rail or roads and interchanges of dubious value. Infrastructure spending is rarely evidence-based; few projects go through rigorous cost-benefit analysis.

 


"Here’s a Money-Saving Idea for St. Louis"

St. Louis is planning to expand its light rail system and Andrew B. Wilson has a few comments.

At an estimated cost of about $19,000 per vehicle, it would possible to give new compact cars to all MetroLink riders — to include today’s 44,000 daily riders, plus the estimated 15,000 future riders from the planned expansion.

(Perish the thought! Doesn't Mr. Wilson know that cars are the enemy?)


"The Flawed Logic Of Inflation"

I don't know whether the author's argument is correct--it's macro, after all--but this assertion is quite true:

Why do the Federal Reserve and many economists want more inflation? Based on commonly held perspectives among economists and commentators in the financial media, one would think that inflation was something vital to the proper functioning of our economy. Long forgotten, though only a short time ago, inflation as seen in the 1970s and 1980s, was enemy #1 of the U.S. economy.


A "market failure"? Really??

Bruce Schneier, a "long-time computer-security researcher," wrote about last week's big DDoS attack on the Net as follows:

What this all means is that the [internet of things] will remain insecure unless government steps in and fixes the problem. When we have market failures, government is the only solution. The government could impose security regulations on [internet of things] manufacturers, forcing them to make their devices secure even though their customers don't care. They could impose liabilities on manufacturers, allowing people like Brian Krebs to sue them. Any of these would raise the cost of insecurity and give companies incentives to spend money making their devices secure.

I'm sorry, but I don't see it as a "market failure" requiring government as "the only solution". The company that was attacked, Dyn, seems to be a private, for-profit company. If so, it would seem to have plenty of incentive to address the problem, as would other companies providing similar services.  It's true that the problem may well be big enough and difficult enough that cooperation among these firms is necessary. But much as it would surprise some Liberals, private firms are quite capable of doing exactly that.

Note that another computer security guy, Brian Krebs, has a much more reasonable proposal, a proposal likely, after some time, to work:

. . . to address the threat from the mass-proliferation of hardware devices such as Internet routers, DVRs and IP cameras that ship with default-insecure settings, we probably need an industry security association, with published standards that all members adhere to and are audited against periodically.

The wholesalers and retailers of these devices might then be encouraged to shift their focus toward buying and promoting connected devices which have this industry security association seal of approval. Consumers also would need to be educated to look for that seal of approval. Something like Underwriters Laboratories (UL), but for the Internet, perhaps.