18 May 2016

Lara-Murphy Show: How Governments Use Inflation as a Hidden Tax, Part 1

Inflation, Lara-Murphy Show 5 Comments

This will probably seem like Romper Room stuff to many of you, but for whatever reason Carlos’ idea to use Caesar as the launching-off point struck me as very powerful to connect with the average person. I first saw Carlos give a public talk on fractional reserve banking and open market operations, but he started out talking about Caesar literally debasing the currency.

18 May 2016

Power to the People

Economics, Libertarianism, Shameless Self-Promotion 98 Comments

My latest at FEE. I quote a socialist with approval! (Really.) Here’s the conclusion:

The advocates of political intervention think that they ensure “consent of the governed” through the institution of democracy. But both history and theory show the naïveté of that belief. Suppose we had retained the medieval guild system, but with the tweak that the numbers of new entrants would be ultimately controlled by politicians who were elected every four years. Would that have solved the problem and given us a free labor market where people can choose their career paths?

In this world, it is impossible to have “total freedom” in the sense of being subject to no one else’s will — your behavior will necessarily affect others, and vice versa. But the institutions of private property and money allow for voluntary exchanges, with price signals communicating the information everyone needs to adjust his or her behavior. The system is not perfect, but it is the only coherent way to retain a meaningful sphere of individual autonomy while receiving feedback from others.

16 May 2016

Murphy Twin Spin

Contra Krugman, Shameless Self-Promotion, Trump 7 Comments

==> Hey, every Contra Krugman episode is a thing of beauty, but I really liked this most recent one, where we take on Krugman talking about Trump talking about a Treasury default.

==> And here’s the accompanying blog post I did, to show why Krugman/Yglesias in 2012 were stressing salutary mechanisms over fears of a Treasury default that for some reason they don’t mention today in the context of Trump. (And vice versa, the stuff they’re saying today–to show what a nutjob Trump is–were never mentioned back in 2012 when some people were worried about a “bond vigilante” attack.)

==> And here’s a bonus link: Michael Malice does a good job on Tom’s show talking about Trump vs. Clinton.

15 May 2016

I Go Deep on Twitter

Religious 9 Comments

I realized that most of what I pump out on social media is cynical humor, and so I thought I should keep it real for a bit.

Let there be peace on Earth /
And let it begin with me…

15 May 2016

I Took Down My Brad DeLong vs. John Cochrane Post

DeLong, Noah Smith 84 Comments

Well shoot, I still think Brad DeLong was very unfair to John Cochrane when he said that in his Cochrane’s WSJ op ed, Cochrane “draws this curve:” and then posts a curve that DELONG drew, not Cochrane. That’s the upfront, gripping part of the post, and when I first read it, I too was stunned that Cochrane had (allegedly) done that.

Later on in the post, DeLong posts computer code and says “Play with the R-code if you want to see how much a more flexible functional form wants to say that the U.S. has the optimal “Business Climate.” I confess I didn’t look very carefully at this. I thought DeLong was saying (I’m paraphrasing), “Even if you use other functional forms, you can’t make the ‘best-fit’ line go through the point Cochrane needs, if you’re using levels of per capita income on the y-axis.”

But alas, I should’ve looked more carefully. DeLong at that point (again, the bottom of his post) *does* finally switch to log income, which is what Cochrane actually used in his WSJ post. (Cochrane explains why he did that, in his blog response to DeLong.)

So, I still would’ve had a nice little blog post had I looked more carefully at what DeLong did with that code. To wit: Rather than simply reproduce the actual graph Cochrane used, instead DeLong (a) first tells us he drew a graph that he did not, and (b) then gropes around with computer code to make it work better (?), leading the reader to believe that DeLong is searching for a way to figure out where Cochrane could possibly be coming from.

So anyway, I took down the first post, because I had so badly misunderstood that component about the computer code that it was easier just to remove it. My apologies for the confusion I added.

Last thing: I realize it sounds like I’m making excuses, but guys, cut me some slack. I don’t read DeLong’s blog anymore, or Cochrane’s for that matter. The whole reason I even stumbled on this dispute was that I (foolishly) follow Noah Smith on twitter, and this is the tweet that alerted me to DeLong’s blog post:

Noah on DeLong

So I went into this thinking–and Salim Furth confirmed–that DeLong had eviscerated Cochrane, both logically and with computer code. This is why I didn’t carefully parse DeLong’s computer code to see that far from writing code that “annihilates Cochrane’s main graph,” I think actually what happened is that DeLong’s code came closer to explaining Cochrane’s main graph (though still not sure what he was doing with it–I think Daniel Kuehn and Noah Smith came to opposite conclusions about what DeLong was demonstrating with that code).

What did we learn, kids?

#1) Never be really smug, because in case you make an innocent mistake you end up looking like an idiot. (I’m referring to myself in the previous post.)

#2) Economists are dangerous.

#3) I need to unfollow Noah Smith on Twitter. I’ve known this for a while but this is pushing me to act. I’ve hit rock bottom.

#4) I made Daniel Kuehn’s weekend.

13 May 2016


Scott Sumner 17 Comments

In a world, plagued by tight money, one man


13 May 2016

Vox Climate Wonk Tells Us There Will Be No Carbon Tax Deal

Climate Change, Shameless Self-Promotion 4 Comments

My latest at IER. An excerpt:

And thus we see that David Roberts, with the enthusiasm of someone living in a Disney movie, wants the U.S. federal government to create “a whole new world.” Anyone who thinks a supply-side carbon tax deal will work with guys like this is delusional. Just read what the progressives are actually writing publicly about the limits of a carbon tax.


11 May 2016

Uh Oh a Trump Administration Might Botch a Middle Eastern Invasion

Trump 11 Comments

Tyler Cowen linked to this (unintentionally?) hilarious Politico story:

Top Republican political leaders aren’t the only ones shunning their party’s presidential nominee — a vast number of highly skilled managers and policy experts, veterans of recent GOP administrations who would normally be expected to fill key positions for a new White House, are also vowing to sit out a Donald Trump presidency.

…[T]he absence of policy veterans in a new administration would have a substantive effect on the running of government.

POLITICO interviewed nearly five dozen Republicans over the past two weeks — people with experience working in government and who understand how Congress can enact, or shred, a new president’s agenda — and heard the same sentiment expressed repeatedly….

“I would never serve in a Trump administration,” said James Capretta, a former Office of Management and Budget official under George W. Bush. “The person at the top is unfit for the presidency. He’s made that very clear with his behavior.”

Added Matt McDonald, another Bush OMB veteran: “I wouldn’t vote for Trump, much less work for him. I don’t agree with half his ideas, and the other half I don’t really believe what he said.”

One former Republican official who worked in the Environmental Protection Agency put it this way: “You’d have to worry about your future career and the way you’re perceived in these things. You just kind of think of how he deals with people. Would you really want to work for him?”


Remember, the George W. Bush administration didn’t just involve invading another country on the basis of incompetence and/or lies. It also involved:

==> A doubling of the federal debt held by the public (adding some $3.4 trillion over 8 years),

==> “No Child Left Behind”  (big increase in federal involvement in local schools) and Medicare Part D (arguably biggest expansion in welfare state since LBJ), which is estimated to cost some half a trillion dollars over its first ten years,

==> The Energy Independence and Security Act of 2007, which increased auto mileage requirements and jacked up the ridiculous biofuels requirements (which you have probably heard described as the “ethanol mandate”).

==> The creation of the TSA.

==> The Sarbanes-Oxley Act of 2002, which President Bush explained when signing that it was “the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt. The era of low standards and false profits is over; no boardroom in America is above or beyond the law.” (So just to be clear, this is the reason there have been no false reports of profits on Wall Street since 2002.)

==> Oh and let’s not forget, (partially) nationalizing banks.

You can see why “true conservatives” should be alarmed that the experts in implementing the above policies have their principles and won’t play ball with Donald Trump.

STANDARD DISCLAIMER: I don’t like Donald Trump and think he will be an awful president if elected.