Archive for the ‘Political economy’ Category

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Recommended reading

December 31, 2016

Daniel Bier, writing at Learn Liberty, has compiled a list of books he recommends.

I’ve removed his summaries for each of the books, so you may want to RTWT. It’s brief.

13 books every well-rounded libertarian should read

There are books that every libertarian should read and books every libertarian has read, but those circles don’t perfectly overlap. Here are 13 diverse book recommendations for well-rounded thinkers.

Economic Sophisms – Frederic Bastiat […]

Basic Economics + Applied Economics – Thomas Sowell […]

Beyond Politics: The Roots of Government Failure – Randy Simmons […]

The Problem of Political Authority – Michael Huemer […]

The Myth of the Rational Voter – Bryan Caplan […]

The Theory of Moral Sentiments – Adam Smith […]

The God of the Machine – Isabel Paterson […]

No Treason: The Constitution of No Authority – Lysander Spooner […]

Radicals for Capitalism – Brian Doherty […]

Democracy in America – Alexis de Tocqueville […]

The Moon Is a Harsh Mistress – Robert Heinlein […]

One Day in the Life of Ivan Denisovich – Aleksandr Solzhenitsyn […]

I’ve read about half of these. I give the list +1 for One Day in the Life of Ivan Denisovich, for The Moon Is a Harsh Mistress, and for anything written by Thomas Sowell, who once said, "It takes considerable knowledge just to realize the extent of your own ignorance." I’ll allow that Twain himself couldn’t have put that one any better.

But I give the list -1 for Paterson’s The God of the Machine. What an incredibly odd read that is. I found Paterson’s use of pseudo-technical terms to describe economic relationships both tedious and distracting. So I’d say read one of Russell Roberts’ books instead.

The older books on this list (Bastiat’s, Smith’s, and Spooner’s) are available for little or nothing to Kindle readers.

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Trade, automation, and employment

December 17, 2016

This is sort of a rambling post about items I’ve come across recently that are loosely related.

ReasonTV released this clip this week.

This pretty much confirms what I’ve read about NAFTA. And that’s one reason I’ve never been happy about Trump’s bashing free trade agreements, NAFTA in particular.

Trade’s not a case of one-side-wins-while-the-other-side-loses. Trade works to mutual advantage: that’s why people engage in it, after all.

The only point I can take from Trump’s comments is that the U.S. is big enough to gain concessions by threatening to stop trading so freely. (He may be correct about that but I think it would be a bad idea.)


Being a free trade kind of guy, I was more than a little surprised to read about Stephen Moore’s turn to "the Dark Side."

If you know anything about Moore’s background, his new position is a fundamental shift for him. (For example, the Wikipedia article about him says, "Moore is known for advocating free-market policies…")

But read this whole thing to find out why Moore now backs Trump’s approach to trade and the economy.

Welcome to the Party of Trump

I stirred up some controversy last week when I told a conference of several dozen House Republicans that the GOP is now officially a Trump working-class party. For better or worse, I said at the gathering inside the Capitol dome, the baton has now officially been passed from the Reagan era to the new Trump era. The members didn’t quite faint over my apostasy, but the shock was palpable.

I emphasized that Republicans must prioritize delivering jobs and economic development to the regions of the country in the industrial Midwest — states such as Michigan, Pennsylvania, Ohio, Indiana, Wisconsin, Iowa, and Missouri. These are places that, for the most part, never felt the meager Obama recovery and where blue-collar Reagan Democrats took a leap of faith this election and came back to the Republican party for the first time since 1984. The GOP will be judged in 2018 and in 2020 on whether they deliver results for this part of the country and for the forgotten middle-class men and women (“the deplorables”) whom Democrats abandoned economically and culturally. This is all simply a political truism.

What roused the ire of some of my conservative friends was my statement that “just as Reagan converted the GOP into a conservative party, with his victory this year, Trump has converted the GOP into a populist, America First party.”‎

One friend lamented that I must have been drunk when I said this.

No. I meant exactly what I said, but I will clarify. […]


And here’s an interesting TED Talk by David Autor, professor of Economics and Associate Head of the MIT Department of Economics. It was published at the end of last month.

Prof. Autor has some explanations for the fact that the more we automate, the more people we have working. There are more jobs, not fewer.

Near the end of the clip, he makes a good point about the influence of culture on the employment picture.

Update 12/19/16:

I ran across an interesting post at pseudoerasmus that goes into detail on Prof. Autor’s topic. Despite its mocking tone and focus on conspicuous consumption, I think it’s a pretty fair explanation of how employment can increase despite increasing automation. (It doesn’t have a lot to say about people working in fields that weren’t even possible before automation enabled them, unfortunately.)

The emptiness of life will save us from mass unemployment

I don’t I have much to add to the debate about the dystopian robot future scenario envisioned by many people. But I do think the nightmare scenario is less mass unemployment than a kind of revamped neo-mediaevalism. I’m not predicting that, so much as saying that’s the worst-case scenario. {Edit 28/12/2016: This was written more than 2 years ago as a half-joke to mock trends in luxury consumption more than anything else.}

In the past 250 years, technological progress has not caused unemployment because human wants have been infinite. Every time productivity (output per unit of input) rises, the implied extra income in the economy still gets spent on something (at least when there isn’t a recession), and extra work gets created to produce that something. In other words, fewer inputs may be used to make one unit of output, but more output always gets desired / created. (OK, that sounds Say’s Law-ish, but please be patient.)

Environmentalists understand keenly that when energy prices fall, people frequently just drive more or fly more, or the savings get spent, ultimately, on something else that uses energy. Productivity growth produces the same effect. Which is why, as of now, we’ve never had permanent mass unemployment from technological displacement.

After the basic needs of food and shelter are satisfied, people go in search of other fulfillments — more caloric, varied, and exotic diets; more living space to fill with ever more stuff; 58 changes of clothes instead of 2 per year; more leisure in the form of vacations and entertainment; and ever more marginal extensions of life expectancy. That’s all very obvious.

But as people get wealthier, they demand not only more quantity of stuff, but also ever more trivial and even imaginary increments to the quality of goods and services. How else to explain the market for, say, honey in a jar that’s ‘raw’, unfiltered, unpasteurised, ‘fair-trade’, non-GMO, single-country-origin, single-bee-colony, and single-flower-species? […]


Finally, I learned yesterday that the Cato Institute has a session scheduled next month with the author of Men Without Work: America’s Invisible Crisis. From the descriptive blurb at Amazon:

Today, nearly one in six prime working age men has no paid work at all—and nearly one in eight is out of the labor force entirely, neither working nor even looking for work. This new normal of “men without work,” argues Eberstadt, is “America’s invisible crisis.”

I have to wonder if all these people are really unemployed or whether some of them are simply working off the books in the underground economy.

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Check back in 12 years

December 10, 2016

This is interesting news, particularly since it’s being privately funded and the benefits are non-directed.

A Privately Funded Experiment in a Universal Basic Income
Dozens of villages in Kenya will soon be receiving payments.

A U.S.-based group is preparing a pilot program in Kenya that will test the effects of a universal basic income—the increasingly popular concept of giving virtually everyone in a community unconditional payments on a regular basis. Unlike past large-scale experiments of this sort, this one is being run and funded privately.

The organization behind the effort is GiveDirectly, a charity whose work in Africa is based on the idea of giving people cash without restrictions on how the money can be spent. (The underlying anti-paternalist principle is that the needy know their needs better than outsiders do.) That outlook led naturally to an interest in the basic income, and so the organizers conceived a randomized control trial:

• In one set of villages, every adult will receive monthly payments equivalent to 75 cents a day for two years.

• In another set of villages, every adult will receive such payments for 12 years.

• In yet another set of villages, the adults will receive a single lump-sum payment equivalent to what the two-year group will be receiving.

• The last set of villages is the control group, so they don’t get any money at all.

The aim here, GiveDirectly’s Ian Bassin explains, is “to isolate the effects of what most people consider a ‘basic income’—that is, a permanent payment over time—from something resembling more traditional temporary supports. For example, when someone knows they have a long-term, guaranteed floor below which they cannot fall, do they take more risks like starting a business or going back to school? And does that security produce greater overall returns?” […]

The good news is that this isn’t a USAID program. The problems with government-to-government aid in Africa have been pretty well documented.

Even private aid to Africa has its pitfalls. When the price of clothing or shoes goes to $0, that puts the local textile and shoe makers right out of business.

I have to wonder what happens when these GivingDirectly programs end. Or, if they’re continued indefinitely, at what point their participants become ineligible because of income or assets.

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A few interesting essays

August 8, 2016

I found all three of these to be pretty interesting reads. They’re loosely related. Since they’re too long to excerpt in a way that does them justice, I suppose you’ll have to take on faith my recommendation that your read them. (Then again, you can stop reading at any time, right?)

From The Breakthrough, a forecast for world population:

The Politics and Ecology of Zero Population Growth

Having calmed down from the overblown twentieth-century fears of overpopulation, the world has yet to grapple with the end of population growth–and even de-population–that will occur this century. As Paul Robbins observes, global population growth rates peaked in the 1970s, and if current trends continue, some countries could see their citizenries substantially depleted in the coming decades. As native populations in Germany and the United Kingdom dwindle, replaced by immigrants from rapidly growing countries in Africa and Asia, a surge in nationalism and cultural upheaval is already apparent. What comes next depends on how governments and civil society this radical new order of things. […]

At The American Interest, Jonathon Haidt writes about nationalist movements. It reminded me a little of what Matt Taibbi said about Brexit: “The reaction to Brexit is the reason Brexit happened.”

When and Why Nationalism Beats Globalism
And how moral psychology can help explain and reduce tensions between the two.

What on earth is going on in the Western democracies? From the rise of Donald Trump in the United States and an assortment of right-wing parties across Europe through the June 23 Brexit vote, many on the Left have the sense that something dangerous and ugly is spreading: right-wing populism, seen as the Zika virus of politics. Something has gotten into “those people” that makes them vote in ways that seem—to their critics—likely to harm their own material interests, at least if their leaders follow through in implementing isolationist policies that slow economic growth. […]

Finally, Jonathon Rauch writes at The Atlantic:

How American Politics Went Insane
It happened gradually—and until the U.S. figures out how to treat the problem, it will only get worse.

It’s 2020, four years from now. The campaign is under way to succeed the president, who is retiring after a single wretched term. Voters are angrier than ever—at politicians, at compromisers, at the establishment. Congress and the White House seem incapable of working together on anything, even when their interests align. With lawmaking at a standstill, the president’s use of executive orders and regulatory discretion has reached a level that Congress views as dictatorial—not that Congress can do anything about it, except file lawsuits that the divided Supreme Court, its three vacancies unfilled, has been unable to resolve.

On Capitol Hill, Speaker Paul Ryan resigned after proving unable to pass a budget, or much else. The House burned through two more speakers and one “acting” speaker, a job invented following four speakerless months. The Senate, meanwhile, is tied in knots by wannabe presidents and aspiring talk-show hosts, who use the chamber as a social-media platform to build their brands by obstructing—well, everything. The Defense Department is among hundreds of agencies that have not been reauthorized, the government has shut down three times, and, yes, it finally happened: The United States briefly defaulted on the national debt, precipitating a market collapse and an economic downturn. No one wanted that outcome, but no one was able to prevent it.

As the presidential primaries unfold, Kanye West is leading a fractured field of Democrats. The Republican front-runner is Phil Robertson, of Duck Dynasty fame. Elected governor of Louisiana only a few months ago, he is promising to defy the Washington establishment by never trimming his beard. Party elders have given up all pretense of being more than spectators, and most of the candidates have given up all pretense of party loyalty. On the debate stages, and everywhere else, anything goes. […]

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Say no more, Donald. Say no more…

June 28, 2016

The good news is that Donald Trump has finally spouted enough nonsense that I can tune him out completely with the knowledge I won’t be missing anything worthwhile. He’s said something so incredibly obtuse that he’s hit the firewall: no more packets allowed from that address.

Here’s a report about a recent Trump speech in Pennsylvania.

Donald Trump targets globalization and free trade as job-killers

MONESSEN, Pa. — While attacking Hillary Clinton and other career politicians, Donald Trump took aim Tuesday at two other prominent election targets: globalization and free trade.

“Globalization has made the financial elite who donate to politicians very, very wealthy … but it has left millions of our workers with nothing but poverty and heartache,” Trump told supporters during a prepared speech targeting free trade in a nearly-shuttered former steel town in Pennsylvania.

In a speech devoted to what he called “How To Make America Wealthy Again,” Trump offered a series of familiar plans designed to deal with what he called “failed trade policies” — including rejection of the proposed Trans-Pacific Partnership (TPP) with Pacific Rim nations and re-negotiation of the North American Free Trade Agreement (NAFTA) with Canada and Mexico, withdrawing from it if necessary. […]

Trump’s remarks on free trade are pretty unequivocal evidence he should never be president. He shouldn’t even be mayor of a major U.S. city. Dogcatcher? Maybe.

The man would be a positive danger to the global economy. And as economic questions go, so go political questions. See Smoot-Hawley Tariff Act if you need an historical reminder.

Mr. "Art of the Deal" thinks the global economy is a zero sum game? Bzzt! Sorry, Don, but the 18th century is long gone, my man.

Mr. "Think Big and Kick Ass" supposes he has a better handle on NAFTA than Presidents Reagan, G.H.W. Bush, and Clinton – plus, of course, the U.S. House and Senate? He’s ready to reverse the Republican party’s policy of 30-plus years?

Yeah, right… what a maroon. Not meaning to insult anybody, but I sincerely hope that no one I know votes for Trump.

Somebody should send Mr.Trump a copy of The Wealth of Nations – or, better yet, read it aloud to him to make sure he hears it.

Maybe there’s an illustrated version that he’d understand.


Let’s Make the Constitution Great Again!

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Anyone need the services of a former MEP?

June 24, 2016

Daniel Hannan argued that voters should fire him from his job as MEP by voting for Brexit. He got his wish.

Can this cat talk or what? What an orator! His closing lines here are by Tennyson:

“Though much is taken, much abides; and though
We are not now that strength which in old days
Moved earth and heaven, that which we are, we are”

I don’t know whether Brexit was a good move or not. I hope it was because Mr. Hannan makes such good sense on other, related topics. ‘Twould be a pity if he were wrong about this one.


Update 2: The headline of Matt Taibbi’s Rolling Stone piece says it all:

The Reaction to Brexit Is the Reason Brexit Happened
If you believe there’s such a thing as “too much democracy,” you probably don’t believe in democracy at all

In 1934, at the dawn of the Stalinist Terror, the great Russian writer Isaac Babel offered a daring quip at the International Writers Conference in Moscow:

“Everything is given to us by the party and the government. Only one right is taken away: the right to write badly.”

As a rule, people resent being saved from themselves. And if you think depriving people of their right to make mistakes makes sense, you probably never had respect for their right to make decisions at all.

This is all relevant in the wake of the Brexit referendum, in which British citizens narrowly voted to exit the European Union. […]

Update: Here’s an interesting column about Brexit at Hit & Run.

‘Who Rules Over You?’ Is Democracy’s Most Important Question
If there shouldn’t have been a Brexit referendum, should there even be elections?

The Washington Post headline bluntly declares “Brexit is a reminder that some things just shouldn’t be decided by referendum.” [Sounds like Mr. Hannan quoting Jean-Claude Juncker, doesn’t it? Ed.]

Writer Emily Badger, whose focus is generally on urban policy, brings up American ballot initiatives—particularly those in California — as an example of how referendums can lead to bad outcomes, or rather outcomes that certain people don’t like.

After talking about a handful of Brits who publicly regret their vote (keep in mind that millions of people voted to leave), Badger points out correctly that public referendums can be used to undermine democratic institutions, both purposefully by special interest groups ranging from public sector unions to private corporations by directing taxes and government programs in their directions and by simple and not-so-simple unintended (or unpublicized) consequences.

Still, even when making this point, Badger commits some possibly unconscious biases to print when she writes about California, “Back in 1978, California voters generously decided in a ballot measure to cap their own property taxes in a way — amending the state constitution — that has hobbled ever since California’s ability to generate revenue and create reasonable housing policy.” The bold emphasis is mine to point out that her idea of a problematic referendum seems to inherently be anything that restrains the authority of the state. California’s ability to generate revenue has most assuredly not been hobbled even with this one restriction. It’s got some of the highest taxes and fees in the country. She uses “hobbled” to describe the idea that there are limits to what the state of California can afford to do, assuming that these are things that should be done.

But what should also be obvious during this entire “populist” vs. “elites” political battle happening both in the United States and Europe is that representative democracy under legislators has also led to taxes and government programs being directed to interest groups and all sorts of unintended or unpublicized consequences. And it’s an issue that some these same people do not want to seem to deal with. Instead, we get the “uneducated poor people voting against their own self-interest” arguments, like we see about Wales.

These responses are of the “These communities get more money from the European Union than they pay in” vein. We have seen similar arguments about American states who get more “money” from the federal government than they pay in taxes. Such an argument ignores the fact that these targeted communities don’t actually get more “money” than what they pay into the pool; what they get is more government administration and programs put together by various interest groups that tend to direct these subsidies to those with the right connections (in other words—”elites”). […]

The question of who rules over you is an elemental, central component of having a democratic republic. Treating Brexit like it’s just some complicated but very broad referendum is ignoring the nature of the question behind it. If British citizens shouldn’t get to vote whether to be in the European Union because they don’t “understand” all the issues involved, then why should they even get to vote on their legislators? Indeed, why have them vote at all?

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Ruining Cuba

April 9, 2016

Here’s an recent op-ed by Natalie Morales in Flood Magazine that’s both interesting and snarky. I found her advice about clothing amusing, for one thing. It reminds me of the post in January about "North Korea with palm trees."

Please Stop Saying You Want to Go to Cuba Before It’s Ruined

Editor’s Note: Natalie Morales’ Op-Ed was written before President Obama announced his intention to travel to Cuba and is not in any way intended to be a response to the president’s remarks.

Just last week, I was at my friend Michaela’s house dropping off a bag of stuff I’m sending to my family in Cuba. Her husband, Fred, is visiting Havana and was kind enough to be my courier. Among the things I sent with Fred were two packages of Cuban coffee. Yes, that’s right: I’m sending Cuban coffee to Cuba. It’s absurd and hilarious and I got a real kick out of telling everyone I came across that day about it. This is because Cuban coffee is too expensive for the average Cuban to buy in Cuba. […] I, on the other hand, buy it for three bucks at Target.

Coffee is just one of the things my family in the States sends to my family in Cuba. Usually, monthly, we send money, medicine or syringes for the diabetic aunt (since the hospital doesn’t have any unused disposable ones), baby clothes, adult clothes, shoes, or food (there’s a website for Americans to buy food that is sent to Cuba, but at an absurd upcharge). They cannot survive without our help. For many Cuban-American families all over the States, this is just a regular part of life, another bill to pay each month.

Here’s a terse explanation of why: a doctor, a lawyer, or another similar profession that is considered to be high-earning everywhere else in the world will make about twenty to thirty dollars per month in Cuba. Yet shampoo at the store still costs three dollars. This is because everything is supposed to be rationed out to you, but the reality is that they’re always out of most things, and your designated ration is always meager. […] That’s good ol’ Communism in practice.

Now, knowing this, picture me at any dinner party or Hollywood event or drugstore or press interview or pretty much any situation where someone who considers themselves “cultured” finds out I’m Cuban. I prepare myself for the seemingly unavoidable “Ooh, Cuuuuuba” — as if the country itself were somehow a sexy woman or delicious food — followed by the inevitable, “I have to go there before it’s ruined!” I try to be polite, because I am aware that, oftentimes, people who think they are very thoughtful are the least thoughtful. So I ask, “What do you mean by ruined?” and they always say, “You know, it’s so cool looking! It’s stuck in time! They have all the old cars and stuff… Everything’s gonna change soon!”

So depending on the situation […], I will say some version of this: "What exactly do you think will ruin Cuba? Running water? Available food? Freedom of speech? Uncontrolled media and Internet? Access to proper healthcare? You want to go to Cuba before the buildings get repaired? Before people can actually live off their wages? Or before the oppressive Communist regime is someday overthrown?" […]

If you want to go to Cuba, I want you to go. I do. But can I ask a favor? Be aware of what’s going on there. Try, if you can, to stay in people’s homes — casas particulares — instead of hotels. They’ll take much better care of you, the food will be much better, and you’ll be putting a little less money into Castro’s tourism pocket. When you go, ask the people to tell you what’s really going on… not the version they’re supposed to tell you. […] Also, for God’s sake, please don’t wear a fucking Che t-shirt.

H.T. Jeff G

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Plain & simple

March 6, 2016

Here’s a good cartoon about minimum wage laws from Redpanels.

how-the-minimum-wage-works-comic

Via Carpe Diem


As an interesting side light, here’s a chart from Pew Research that appeared at BusinessInsider recently.
Fed-Min-Wage-1938-2014

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They’re paying the piper in Venezuela

February 16, 2016

Here’s the start of a recent article about Venezuela in the Wall Street Journal. It’s behind their paywall, of course.

Venezuela’s Collapse Brings ‘Savage Suffering’
Dying infants, chronic power outages and empty shelves mark the world’s worst-performing economy

CARACAS, Venezuela—In a hospital in the far west of this beleaguered country, the economic crisis took a grim toll in the past week: Six infants died because there wasn’t enough medicine or functioning respirators.

Here in the capital, the crisis has turned ordinary life into an ordeal for nearly everyone. Chronic power outages have prompted the government to begin rationing electricity, darkening shopping malls. Homes and apartments regularly suffer water shortages.

Rosalba Castellano, 74 years old, spent hours this week in what has become a desperate routine for millions: waiting in long lines to buy whatever food is available. She walked away with just two liters of cooking oil.

“I hoped to buy toilet paper, rice, pasta,” she said. “But you can’t find them.” Her only choice will be to hunt for the goods at marked-up prices on the black market. The government, she said, “is putting us through savage suffering.”

The National Assembly, now controlled by the opposition, declared a food emergency on Thursday—an attempt to spur the government of President Nicolás Maduro to, among other things, ease price controls that have created shortages of everything from medicine to meat.

“The people are being left without the ability to feed themselves,” said lawmaker Omar Barboza.

Inflation in this oil-rich country is expected to hit a world’s-worst 700% this year, according to the International Monetary Fund. The economy shrank by 10% last year and is expected to decline another 8% this year, according to the IMF, the worst performance in the world. And there is no end in sight. […]

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How do we get these bozos off the bus?

January 13, 2016

Kevin Williamson writes about a new program at Fannie Mae (FNMA).

The Committee to Re-Inflate the Bubble strikes again.

In lieu of the usual complex regulation larded with special-interest favoritism, here is a simple mortgage rule that could and probably should be adopted: No federally regulated financial institution shall make a mortgage loan without the borrower’s making a down payment of at least 20 percent derived from his own savings.

Period, paragraph, next subject.

Instead of doing that, we are sprinting flat-out in the opposite direction, with government-sponsored mortgage giant Fannie Mae rolling out a daft new mortgage proposal that would allow borrowers without enough income to qualify for a mortgage to count income that isn’t theirs on their mortgage application.

The Committee to Re-Inflate the Bubble strikes again: We’ve just legalized mortgage fraud. […]

In his article, Williamson refers to an op-ed at Investor’s Business Daily that Jeff G passed along last week.

Fannie Mae Rolls Out Easy Mortgage, Catering To High-Risk Immigrants

Subprime 2.0: The White House is rolling out a new low-income mortgage program that for the first time lets lenders qualify borrowers by counting income from nonborrowers living in the household. What could go wrong?

The HomeReady program is offered through Fannie Mae, which is now controlled by Obama’s old Congressional Black Caucus pal Mel Watt. It replaces the bankrupted mortgage giant’s notorious old subprime program, MyCommunityMortgage.

In case renaming the subprime product fails to fool anybody, the affordable-housing geniuses in the administration have re-termed “subprime,” a dirty word since the mortgage bust, “alternative.”

So HomeReady isn’t a subprime mortgage program, you see, it’s an “alternative” mortgage program.

But it might was well be called DefaultReady, because it is just as risky as the subprime junk Fannie was peddling on the eve of the crisis.

At least before the crisis, your income had to be your own. But now, as a renter, you can get a conventional home loan backed by Fannie by claiming other people’s income. That’s right: You can use your apartment roommate’s paycheck to augment your qualifying income. Or your abuela.

You can even claim the earnings of people who are not occupants, such as your parents, under this program. […]

This program is brain dead. I don’t even rent to people with a 45% debt-to-income ratio; it’s too risky. And FNMA wants to write mortgages for them at that ratio? And with only 3% down? And based on income from who-knows-where?

I’d say this is some kind of spoof but it appears to be legitimate news. Ready for the next bail-out, bro?

I wonder who really said, "Insanity is doing the same thing over and over again and expecting different results."

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Like a North Korea with palm trees

January 12, 2016

That’s one tourist’s take in this article from The New Yorker.

Shopping in Cuba
In the markets and shops of Cuba, handicrafts are in ample supply but certain mundane provisions are not.

A Spanish-English dictionary, sunscreen, insect repellent, a towel, chocolate ice cream: these are the items that eluded me during a recent trip to Cuba. For all the hoopla about the island’s opening and the more than three million tourists who swamped it last year, Cuba is no country for shoppers. The more mundane the object of desire, the more exasperating it can be to find.

I’m not saying that these common items are completely unavailable in Cuba—I’m sure they are for sale somewhere on the island—but I couldn’t locate them. And I did look. […]

Having been a foreign correspondent in Eastern Europe in the nineteen-nineties, and more recently in China, I have some experience with Communist and post-Communist countries. In Cuba I saw elements of many of them, from Albania to Vietnam. Like Prague in the nineteen-nineties, Havana’s old city is swarming with tourists who gaze at the faded splendor of its Belle Époque architecture. Private restaurants inside these elegant wrecks, called paladares, beckon tourists with creative meals made out of the few ingredients available locally, mostly chicken, pork, cabbage, rice, and beans.

But Cuba also looks to me like a North Korea with palm trees. To be sure, Cuba has evolved politically, investing in education and health care rather than weapons of mass destruction. But the economic fundamentals in these last bastions of Communism are much the same. Like North Korea, Cuba maintains a distribution system in which citizens pay a low cost for inadequate rations of staple foods. […]

H.T. Jeff G

As the author points out, el socialismo cubano is more humane than some of the Asian and European variants. But, still, economic central planning has yet to work as well free markets (to the best of my knowledge).

It makes you wonder about the motives of people who keep imposing that planning on others, doesn’t it?

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How to make a sandwich

September 17, 2015

This is along the lines of “I, Pencil.” But instead of just talking about the principles of division of labor and comparative advantage that are typically involved, Mr. George sets out to actually make himself a sandwich from scratch.

‘From scratch’ in this case means raising or securing all the different foods that will go into his sandwich as directly and as personally as he can. He gets his hands dirty, in other words.

(This is a series of 14 short videos; you’ll need to click to see the next one as each one ends.)

Luckily for him, he’s not a BLT fan like I am.

Via Carpe Diem

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Economics humor

April 26, 2015

I know… sounds like an oxymoron, doesn’t it?

Via CoyoteBlog

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You can’t blame the wreck on the train

March 21, 2015

It looks like the Venezuelan government is still fighting that toilet paper conspiracy, among others.

Fetch me my lance, Sancho!

Venezuela To Start Fingerprinting Supermarket Shoppers

Back in August, when we wrote about the latest instance of trouble in Maduro’s socialist paradise, we cautioned that as a result of the economic collapse in the Latin American nation (and this was even before the plunge in crude made the “paradise” into the 9th circle of hell), Venezuelans soon may need to have their fingerprints scanned before they can buy bread and other staples. This unprecedented step was proposed after Maduro had the brilliant idea of proposing mandatory grocery fingerprinting system to combat food shortages. He said then that “the program will stop people from buying too much of a single item”, but did not say when it would take effect. […]

Unfortunately for the struggling Venezuelan population, the time has arrived and as AP reported over the weekend, Venezuela “will begin installing 20,000 fingerprint scanners at supermarkets nationwide in a bid to stamp out hoarding and panic buying” as of this moment. […]

On Saturday, President Nicolas Maduro said that seven large private retail chains had voluntarily agreed to install the scanners.

Last month the owners of several chains of supermarkets and drugstores were arrested for allegedly artificially creating long queues by not opening enough tills.

It gets better: Maduro also accused Colombian food smugglers of buying up price-controlled goods in state-run supermarkets along the border.

For the first time in recent history the economists who say the effort is bound to fail, are right. They blame Venezuela’s rigid price controls that discourage local manufacturing and the recent slide in world oil prices that has further diminished the supply of dollars available to import everything from milk to cars.

As BBC further adds, in January the hashtag #AnaquelesVaciosEnVenezuela (“Empty shelves in Venezuela”) became a worldwide Twitter trend, with over 200,000 tweets as Venezuelans tweeted pictures of empty supermarket shelves around the country.

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What are they thinking? (2)

November 1, 2014

What are those silly oil producers and speculators thinking? They’re driving the price down again.

Yes, Virginia, there is a global market in oil. And since oil is about as fungible as any good can be, its price isn’t controlled by the US President, or the US Congress, or even the big US oil companies.

I don’t know the cause of the decrease in oil prices recently but I strongly suspect the increase in US oil production, which is at a 30+ year high, has something to do with it.

In fact, if the global price of oil drops very much more, it’ll be so low that some fracking operations may be operating at a loss.

And removing those fracking sources may cause an upward price adjustment as supply contracts. You can look it up.

Someone said once about US stock market prices, "I believe they will fluctuate." And so will the price of oil, no matter what the politicians may say or do in their misguided attempts to control it — or to demonize the people producing and selling it.

Video via Carpe Diem


Update (1/25/15):

Here’s some follow-up on my original remark (3 months ago) about fracking operations shutting down due to falling oil prices. This article at Business Insider appeared last Friday, Jan. 23rd.

The Number Of US Oil Rigs Has Dropped Almost 20% From Its October High

The Baker Hughes US oil and gas rig count is out, and it shows yet another weekly decline.

In the wake of tumbling oil prices, Baker Hughes, the $25 billion oil services company that publishes out the weekly rig count, announced Tuesday that they would be laying off 7,000 employees over the next few months.

BHP, an Australian mining giant, also said this week that they would shut down 40% of their US shale drilling rigs by the end of their fiscal year.

the-number-of-us-oil-rigs

I expect oil & gasoline prices to rise again in the coming year, perhaps in a few months.

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What he said (4)

August 24, 2014

Jeff sends a link to this post by Kevin Williamson at NR’s The Corner. (It’s the whole post, since it’s not easily excerpted.)

In the Wrong Business, Part 247

The school board of Centinela Valley Union High School District in Los Angeles County is firing its superintendent, Jose Fernandez.

He was paid $750,000 a year. 

That’s three-quarters of a million dollars a year — not to manage some sprawling big-city school system (which would be questionable enough) but to oversee five schools and an independent-study program in the suburbs. 

But not to worry: He was previously paid only about a half-million a year. As the Los Angeles Times reports, “Fernandez’s unusually high compensation was in part the result of a one-time payout of $230,000 he used to increase his pension credits, which would give him a higher annual pension upon his retirement.”

So they were paying him an outrageous sum of money today in order to pay him an even more outrageous sum in the future.

These thieves are why we’re broke.

Amen, brother.

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What happens when your tax rate is too high?

August 8, 2014

For one thing, you get nonsense-on-stilts like this:

The United States Needs Corporate ‘Loyalty Oaths’

Big corporations are fleeing for lower tax rates abroad. With reform legislation going nowhere, it’s time to think creatively and institute newfangled ‘non-desertion agreements.’

Do none of these people ever think…

– about the incentives companies are reacting to?

– that corporations are just groups of people; like school boards or the local Lions Club (except with better financial savvy)?

– that the idea of taxing corporations is sort of nonsense to begin with?

Corporate taxes are paid by customers (people), or by reduced earnings to shareholders (people), or by reduced salaries and benefits to employees (people), or by reduced reinvestment — causing job and opportunity losses (to people).

economic-patriotism

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Tax Day Is Coming

April 12, 2014

There’s a little bit of strong language in this clip.

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A little Bitcoin humor

March 7, 2014

Here’s a pair of funny videos about the things Bitcoin fanatics say.

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Just name one

March 3, 2014

Don Boudreaux puts up a good challenge at Cafe Hayek. (My emphasis.)

Minimum Wage, Maximum Folly – Again

Scott Sumner understandably wonders why exceedingly high rates of youth unemployment in economies with minimum-wage statutes are seldom explained as being at least in part a consequence of minimum-wage statutes, despite empirical evidence consistent with this explanation.

Pres. Obama insists that raising the hourly U.S. national minimum wage by 39.3 percent – from its current $7.25 to $10.10 by July 2016 – will have (as described by two members of Mr. Obama’s Council of Economic Advisors, Jason Furman and Betsey Stevenson) “little or no negative effect on employment.” Furman and Stevenson and the Administration dispute the Congressional Budget Office’s findings that this proposed hike in the minimum wage will put hundreds of thousands of low-skilled workers out of jobs. So here’s a challenge that I (and others) have posed before but believe to be sufficiently penetrating to pose again. This challenge, of course, is posed to supporters of this hike in the minimum wage: Name some other goods or services for which a government-mandated price hike of 39.3 percent will not cause fewer units of those goods and services to be purchased. Indeed, name even just one such good or service.

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