unpaid thoughts on the dismal science


Friday, September 06, 2002  
Paul Krugman's latest column, "The Bully's Pulpit", starts off with some Orwell:
War is peace. Freedom is slavery. Ignorance is strength. Colin Powell and Dick Cheney are in perfect agreement. And the Bush administration won't privatize Social Security.
So Social Security Privatization is Social Security Nationalization? Not quite, Krugman invokes his Orwell and goes on to decry the effort to find a new name for privatization, but never sticks closely to his starting analogy. I'm not a big fan of privatization, but PK is hung up on the search for a more palatable name. Social Security privatization advocates like to call it Social Security Choice, but that's hardly the same thing as saying "war is peace".

I'm posting late in the day, so the usual suspects have already taken a whack at PK's latest. See Matthew Hoy, Rhetorica, Christopher Heiser, Demosthenes, Argmax.com, John Quiggin, Brad Delong (with a follow-up here) and Random Jottings. Check Blogdex for more in a day or so.
10:19 PM

Thursday, September 05, 2002  
More on the World Summit on Sustainable Development (WSSD) in Johannesburg from Ron Bailey in "Powell Booed":
Powell pulled no punches. "The best formula for development is freedom," he declared. Powell turned to the growing famine in South Africa's northern neighbor, Zimbabwe. Drought and economic mismanagement are surely factors in the famine there, but he also pointed out, "The lack of respect for human rights and the rule of law have exacerbated these factors to push millions of people toward the brink of starvation."

Curiously, it was at this point that the activists started hooting and chanting. It is nearly beyond belief that any reasonable person would support the expropriation of farms by Zimbabwe's Robert Mugabe, a dictator who is in power because he stole the last election; but the activists did just that. Even UN Secretary General Kofi Annan declared, "There can be no lasting solution to the current problems unless the Government of Zimbabwe implements a phased and fully funded land reform program." Annan added that any land reform program should be "run according to the rule of law."

10:14 PM

 
Steve Chapman says that baseball's problem is that it has too much socialism in it. Read "Ladies and Gentlemen, Your New York Devil Rays!".
8:41 PM

 
Jeff Madrick says "Devotion to Free-Market Makes for Ineffectual Policy". Sigh. If only there were some devotion to free market principles by those in goverment. Oh, well. Madrick starts off his piece by critiquing the words and actions of the government official in charge of managing the money supply, Alan Greenspan. Apparently, poor performance by a government institution, the Federal Reserve Board, is an indication that the free market doesn't work. Huh?

Madrick moves on to the work of Nobel Laureate George Akerlof, who has many interesting things to say about market processes. Unfortunately, Madrick is quick to leap off onto his own agenda:
As for savings, much economic theory argues that people save rationally over their lifetimes for retirement. But behavioral economists show that people systematically procrastinate they spend today and plan to save tomorrow.

This may seem obvious. But consider how far Social Security privatization has gotten, based largely on the new classical view of rational human behavior. Proponents argue that if people are deprived of Social Security as a safety net, almost all of them will save adequately for retirement, no matter their level of income. There is no basis in human observation or economic history for this conclusion. For many people, especially with lower incomes, saving is very difficult.
This is a clever slight-of-hand on Madrick's part. Virtually all proponents of Social Security privatization still favor forcing people to save for their retirement, they just believe in individual accounts instead of the current ponzi scheme. Whatever one thinks of Social Security privatization, it is simply a lie to say that it will result in no savings.
7:59 PM

Wednesday, September 04, 2002  
Ron Bailey reports in "Greens Wilt" that chastened environmentalists are leaving the Johannesburg summit empty-handed. Whew! Thank goodness for that!
9:56 PM

 
Walter Williams examines "Freedom of Association".
6:33 AM

 
Thomas Sowell questions, who are "'Friends' of blacks"?
6:31 AM

Tuesday, September 03, 2002  
Missed this from a few days ago, but spotted it via Great Questions of Economics. "A Guardian of Jobs or a 'Reverse Robin Hood'?" is a fine article about the Export-Import Bank. It is hated by those on the right:
"We already regard Ex-Im as the poster boy for the anti-corporate-welfare movement," said Stephen Moore, an analyst at the Cato Institute, a Washington research group that promotes free trade. "It's a huge amount of money that goes to the wealthiest corporations. There is no rationale for the government to be involved in this."
and those on the left:
"Is this the best way to create U.S. jobs?" asked Representative Bernard Sanders, the Vermont independent and one of the few Congressional critics. "Absolutely not. Export-Import is generous with taxpayer dollars and we get nothing in return. It's vulgar. At a time when we are having a real crisis in this country and are losing jobs, Ex-Im is sending them overseas. Yet these are the most important corporations in the United States and they get what they want in Washington."
And yet it lives on.
10:03 PM

 
Ron Bailey continues his daily reports from Johannesburg on the World Summit on Sustainable Development with "Reality Check for Redistributionists".
9:48 PM

 
Paul Krugman says Greenspan is "Passing the Buck".
12:08 PM

Monday, September 02, 2002  
Happy Labor Day everyone! I haven't been posting today because I've been watching a new DVD set (The Simpsons - The Complete Second Season) and working on another section of my website, Choosing a College, an e-text of a book that I got permission from the author to post online. It had already been up for a while, but this weekend I decided to move to the new template I'm using for all my web pages now. It still needs a little work, but it was good enough to post. Enjoy!
10:57 PM

Sunday, September 01, 2002  
Leon Louw says "Poverty today is truly miraculous":
Mud oozed between the village woman's toes, as she made her way between the shanty houses. Not plain mud, but mud containing rotting garbage, human and animal faeces, urine, and years of decaying vegetation. She milked an emaciated cow.

The stench in this small village in north India was appalling. A gaunt man vomited from the window of a dilapidated bus. Children sat in wet dung and urine making dung pats to dry for fuel; a man rummaged in a garbage heap, like the pig and goat nearby, for whatever might be edible.

This sort of poverty is miraculous. Ghastly, but miraculous, and perhaps the most extraordinary accomplishment of modern governments. Poor countries are the world's true "economic miracles", not post-war Germany, Hong Kong, Taiwan, Korea, Singapore, Botswana or Mauritius.

Prosperity in such countries is no "miracle". It is the natural outcome of relative economic freedom. If there are "economic miracles", they are backward countries, where governments have succeeded in preventing prosperity. India is a nation of manifestly energetic and enterprising people. If left alone, they would prosper. This was clearly demonstrated when India implemented modest pro-market reforms and the country was rewarded with one of the world's highest growth rates.
Go read the whole thing. Spotted on Liberty Log.
5:29 PM