Economics Archives
September 05, 2007
Eco-remorse and eco-enslavement
Feeling guilty about your two-week break in Barbados, when you flew thousands of miles and lived it up with cocktails on sunlit beaches? Well, offset that guilt by sponsoring eco-friendly child labour in the developing world! Let an eight-year-old peasant pedal away your eco-remorse…
"Is carbon-offsetting just eco-enslavement?" by David Cameron, Spiked, September 3, 2007
Posted at 03:37 PM · Comments (0) · TrackBack (0) · Categories: Economics
July 11, 2007
Humor - Oh, he was serious!
This brings to mind the theory that the apparent collapse of Communism was a plot to lull the West into a false sense of security.
"A Creative Conspiracy Theory," by Bryan Caplan, July 10, 2007
Posted at 07:07 AM · Comments (0) · TrackBack (0) · Categories: Economics , Ignorance , Politics
April 24, 2007
"Why I Am Not An Environmentalist"
But in the 25 years since the first Earth Day, a new and ugly element has emerged in the form of one side's conviction that its preferences are Right and the other side's are Wrong. The science of economics shuns such moral posturing; the religion of environmentalism embraces it.
Economics forces us to confront a fundamental symmetry. The conflict arises because each side wants to allocate the same resource in a different way. Jack wants his woodland at the expense of Jill's parking space and Jill wants her parking space at the expense of Jack's woodland. That formulation is morally neutral and should serve as a warning against assigning exalted moral status to either Jack or Jill.
The symmetries run deeper. Environmentalists claim that wilderness should take precedence over parking because a decision to pave is "irrevocable." Of course they are right, but they overlook the fact that a decision not to pave is equally irrevocable. Unless we pave today, my opportunity to park tomorrow is lost as irretrievably as tomorrow itself will be lost. The ability to park in a more distant future might be a quite inadequate substitute for that lost opportunity.
A variation on the environmentalist theme is that we owe the wilderness option not to ourselves but to future generations. But do we have any reason to think that future generations will prefer inheriting the wilderness to inheriting the profits from the parking lot? That is one of the first questions that would be raised in any honest scientific inquiry.
Another variation is that the parking lot's developer is motivated by profits, not preferences. To this there are two replies. First, the developer's profits are generated by his customers' preferences; the ultimate conflict is not with the developer but with those who prefer to park. Second, the implication of the argument is that a preference for a profit is somehow morally inferior to a preference for a wilderness, which is just the sort of posturing that the argument was designed to avoid.
It seems to me that the "irrevocability" argument, the "future generations" argument, and the "preferences not profits" argument all rely on false distinctions that wither before honest scrutiny. Why, then, do some environmentalists repeat these arguments? Perhaps honest scrutiny is simply not a part of their agenda. In many cases, they begin with the postulate that they hold the moral high ground, and conclude that they are thereby licensed to disseminate intellectually dishonest propaganda as long as it serves the higher purpose of winning converts to the cause.
. . .
Suggesting an actual solution to an environmental problem is a poor way to impress an environmentalist, unless your solution happens to feed his sense of moral superiority
"Why I Am Not An Environmentalist: The Science of Economics Versus the Religion of Ecology," by Steven E. Landsburg, excerpt from The Armchair Economist: Economics & Everyday Life
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August 13, 2006
Inexpensive food - "a considerable historical achievement"
But critics of cheap food forget that its attainment is a considerable historical achievement. Most of human history involved a constant struggle to find enough food. The battle against hunger was the norm. This is still true in much of the developing world, where the World Bank estimates that 815million people ate too little to meet their daily energy needs in 2002 (13). So to have achieved a situation where, at least in the developed world, food scarcity is virtually eliminated is a tremendous achievement. As well as being good in itself, it also allows people to spend more time on other things rather than struggling to meet their most basic needs.
"Why people hate fat Americans: Today's attacks on obese Yanks are motivated by a broader unease with affluence," by Daniel Ben-Ami, Spiked, September 9, 2005
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December 09, 2005
Improperly discounting future risks ...
Improperly discounting future risks against current gains is a vice not confined to executives of large corporations.
"I know! If we want to reduce abortions, let's keep women from getting pregnant in the first place!" by Jane Galt, Asymmetrical Information, December 5, 2005
Posted at 08:21 AM · Comments (0) · Categories: Economics
November 29, 2005
College Debt
Federal policy isn't keeping pace with reality. Soaring education costs and inflation have not been met with aid increases. Caps on federal student loans have forced students to seek private loans, which were up from $1.1 billion in 1995-96 to $10.6 billion in 2003-04.These loans have much higher, often predatory, interest rates.
"Burying College Grads in Debt," by Elana Berkowitz and John Burton, Campus Progress, on AlterNet, November 28, 2005.
via TalkLeft
Isn't the main reason college tuition is soaring is because there is too much cheap 3rd-party-payor (i.e., federal) money sloshing around the student aid world? So if we followed Berkowitz and Burton's prescription, the consumers of college (students and their parents) woud be even more removed from the costs, and we'd increase the amount of money in the system, leading to even more inflation of college tuition? Sounds like health insurance....
Posted at 06:22 AM · Comments (0) · Categories: Economics
November 05, 2005
Hummers
Tim Iacono, who blogs at The Mess That Greenspan Made, took a lot of pics of many unsold Hummers in southern California ...
... the scuttlebutt was that inventory had been building for months now and the local Hummer dealer had panicked. He had begun storing his Hummer inventory at an undisclosed location, far from the dealer showroom so as not to spook jittery, prospective buyers with the mounting number of unsold H2s and H3s. . . .When the counting was done, there were about 150 H2s in lot #2, for a grand total of around three hundred Hummers, just looking for someone to love them.
"Hummer Overfloweth," November 3, 2005
"The H2 is the ultimate poseur vehicle. It has the chassis of a Chevy Tahoe and a body that looks like the original Hummer; i.e. it's a Chevy Tahoe in disguise."
To be entirely fair, most folks are not in a budgetary position for putting a $140,000 vehicle into their garage. This immediately places the Hummer H1 into a category all its own. Approaching the civilianized military utility truck from this perspective allows one to better understand what this vehicle is all about.Buyers in this price range don't particularly care that they can purchase four full-sized Fords for the same money; nor do they care about overall practicality. They want to make a statement. Analyze the people all you want, but rest assured the Hummer H1 makes a very big statement.
"Real-Worlders Need Not Apply," By Harold Osmer, LACar.com, September 5, 2005
Southern California Hummer Owners Group
"HUMMERs in Action," slide show
Posted at 12:07 PM · Comments (0) · Categories: Economics
October 29, 2005
"What's the Difference Between Regular and Discount Gas?"
A joint study done by ABC News and the Maryland State Comptroller's office examined the difference between name brand and generic gasses. Chemists at the Maryland Fuel Testing Laboratory conducted a battery of tests: they verified that the gas was formulated correctly for the season; checked for contaminants like excessive sediments or diesel accidentally mixed with the gas; and they ran the gas through an elaborate engine to ensure that the gas was all the same 87 octane level.Here's some good news for consumer: Regular and discount gas are basically the same.
"By and large, it's one and the same," said Bob Crawford of the Maryland Fuel Testing Lab. "You will find results will almost mirror each other. There are going to be slight variations but gasoline is gasoline."
"What's the Difference Between Regular and Discount Gas?" ABC News, October 29, 2005
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September 23, 2005
Quick quiz
1) From Russell Roberts (no relation):
What proportion of the American labor force earns the minimum wage or less and what is the standard of living of the average American today relative to 100 years ago?
2) If you placed
one penny on the first square of a chess board, two pennies on the second square, four on the third, etc.how much would you have after doubling the pennies on the 63rd (the next-to-last) square of the chessboard?
3) Are disasters good for the economy?
You can click "Continue reading..." after jotting down your answers ...
1) Less than 3% of the American population earns the minimum wage or less, and "the average American is at least five and maybe 30 times better off than we were in the good old days." That's 500% to 3000% better off ... "Knowledge Deficit," Econoblog, The Wall Street Journal, September 21, 2005
2) The power of compounding means you'd end up with $92,000,000 billion ... and that's real money, even in Washington ... it's also why you want to start saving early in your working life ... "Economic Growth," by Paul M. Romer, The Library of Economics and Liberty
3) As Martin Wolk and Bob McTeer explain, those who answer "Yes" are succumbing to Frédéric Bastiat's "fallacy of the broken window."
Posted at 09:59 AM · Comments (0) · TrackBack (0) · Categories: Economics
September 17, 2005
What "Little House on the Prairie" can teach us about Structural Unemployment
Asymmetrical Information has a succinct post about the differences between "structural unemployment" and "cyclical unemployment" ...
What that means is that when the industrial composition of our economy changes, because machines can do some jobs better than people (word processors instead of secretaries), because other countries can do some things better than we can (Chinese-manufactured electronics), or simply because some markets got overcrowded (telecoms and web retailers), it takes a lot longer for employment to adjust than it used to, because workers' skills are very specific to their old industries or jobs. This sort of unemployment is known as "structural unemployment", as opposed to "cyclical unemployment", which happens when companies lay off workers they expect to rehire in the future as a result of temporary downturns in demand.
"Structural Unemployment," by Jane Galt, Asymmetrical Information, September 16, 2005
And reading through the comments, you can see the many different jobs people have held ...
Jobs I've held since the age of 14: dishwasher, pizza maker, cashier, grocery store bag boy and stocker, construction laborer, gas station attendant, micro-business owner (lawn mowing, snow shoveling), janitor, freelance legal researcher, taxi owner and driver, law clerk, attorney, CLE administrator, editor (print and electronic), managing editor, new product developer, trainer, marketer, manager, consultant, publisher ... and the occupations I gave some thought to and took some preliminary steps towards include financial planner, college professor, and carpenter.
With three children, I'm coming to believe that the only thing college is good for is (increasingly bad) signaling that the holder of a degree is somewhat literate (not numerate, however), and can probably communicate in spoken, although not necessarily written, form.
When we hire people, we always ask candidates what kind of customer service jobs they have held. It is amazing to me how many candidates think that a couple of years during their teens or twenties of learning to deal with people by being a waiter/waitress, hostess, cashier, retail store clerk, laborer, telemarketer, etc., are not relevant to their abilities. Because we see that the folks who have held unskilled labor type entry level jobs dealing with people are often more tolerant, better listeners, not so arrogant, more easily trainable, and become better colleagues.
Posted at 09:02 AM · Comments (0) · TrackBack (0) · Categories: Economics
September 05, 2005
Price gouging?
If you cap the price (as some people are making noises about), rationing will take the form of queuing: people will have to wait in long lines for gasoline. This sounds just fine to some activists and academics, apparently ones with a lot of time on their hands. The rest of us, who do not think it would be fun to live in the Soviet Union, recognize that, painful as it may be, prices are in general a better way to allocate scarce resources than lines.
"In praise of price gouging," by Jane Galt, Asymmetrical Information, September 1, 2005
With the whole country bemoaning the rise in the average price of gas, a far more economically surprising change has been almost overlooked: The massive rise in the variance of the price of gas. Before the hurricane, the spread between the highest and lowest price of gas in Northern Virginia was about 10 cents. Now a half hour drive to Manassas revealed a four-fold increase in the spread, with prices ranging from $2.99 to $3.39.
"Gas Price Variance Up!" by Bryan Caplan, EconLog, September 5, 2005
Note to politicians of the world: For the last time, if you want supplies to flow to disaster areas, let prices rise!
"Bush's Hate Speech," by Bryan Caplan, EconLog, September 1, 2005
Posted at 10:21 PM · Comments (0) · TrackBack (0) · Categories: Economics
August 18, 2005
"High-priced housing faces risks"
Interesting list in USA Today
Fifty-three metropolitan areas representing 31% of the total U.S. housing market are considered extremely overvalued and confront a high risk of future price corrections, a study conducted by National City Corp. says. The study determines a market extremely overvalued if prices are 30% above where the study estimates they should be based on historic price data, area income, mortgage rates and population density.
DC is # 49 at 31% overvalued. Denver is 116 at 16%.
Posted at 11:39 AM · Comments (0) · TrackBack (0) · Categories: Economics
August 13, 2005
Follow up to NYT Tipping Op-Ed
A Guy in New York noted an op-ed in the NYT last week, "To Tip or Not to Tip - NYT Op-Ed."
Joanne Jacobs has an interesting post about the author of a letter to the editor that appeared the next day, "Consistency"
Posted at 01:36 PM · Comments (0) · TrackBack (0) · Categories: Economics
August 12, 2005
Record Oil Prices?
Steve Verdon points out that
the "record" isn't a really a record. Sure it is a record in nominal dollars, but this is like looking at your paycheck and saying you are rich because you are earning so much more than you did 25 years ago. You see, 25 years ago the price of oil was just under $40/barrel. So what is $40 from 1980 worth today? Ninety four dollars and 42 cents.
the difference between inflation adjusted dollars and nominal dollars ... there's a link to a good chart in the article ...
Posted at 02:32 PM · Comments (0) · TrackBack (0) · Categories: Economics