Yes it’s from Fox but the footage speaks for itself…
Don’t let Scott Sumner tell you otherwise. The meat from my latest Mises CA post:
Regardless of the usefulness of (nominal) GDP as an economic statistic, Scott Sumner (and perhaps some of his fellow Market Monetarists) are incorrect when they lead their readers to believe that this is a “raw” empirical fact, which requires no conceptual judgment calls by the economist (the way that real GDP requires an adjustment for the “price level”). In the real world, you could give two teams of economists the same data on nominal expenditures in an economy, and they would come up with different answers for “nominal GDP” if they weren’t allowed to communicate with each other. That’s because the dividing line between “final” and “intermediate” goods and services is somewhat arbitrary.
For example, in a textbook treatment they would say that if a baker buys flour that is completely turned into bread and sold to his customers, then the expenditure on the flour doesn’t count in GDP. But if that same baker buys a new oven, then the expenditure counts in GDP as part of investment. But what about the fact that a fraction of the oven depreciates during the year, and effectively “turns into” the loaves of bread, in terms of accounting? This is the distinction between fixed and working capital, but the proper way to apply it in the real world is somewhat arbitrary. I am quite sure that the average fan of Market Monetarism has not thought through the subtleties involved.
Note that this complication affects the equation of exchange, too. People routinely thinkMV=PQ involves multiplying the number of dollars by the amount of times a dollar bill turns over, on average. But if you want the “Q” on the right hand side to refer to GDP–which economists usually mean–then you have to talk about the velocity regarding a final good or service. In other words, “How many times does the average dollar bill change hands, in a transaction that involves a final good or service?” That makes “V” much weirder than it already is, as a variable to be used in a discipline that ostensibly embraces methodological individualism rather than mindless aggregates.
One of the great things about Tom Woods’ recent exposition of one of Thomas Aquinas’ proofs of God, is when Tom makes a crucial distinction: Aquinas was not making a chronological argument, saying that at some point in the past, a First Mover must have set everything in motion in order to explain today’s state of the universe. On the contrary, Tom explained, Aquinas showed that God needed to exist in order to support the universe at every moment.
This links up nicely, I think, with my view on miracles and physical law. I don’t think it makes sense to say, “Usually the universe unfolds according to the mechanical laws of physics, but every once in a while God intervenes to accomplish His will.” That is nonsensical both on scientific and theological grounds.
As an added bonus, this notion of God being outside of time itself–rather than creating everything “in the beginning” and then moving through time with us–also resolves a standard paradox that Mises brought up. According to Mises, the notion of an acting omnipotent being makes no sense, because action requires unease and an omnipotent being would have eliminated all uneasiness in one fell swoop.
Right, I agree. But I think a better framework for thinking about this is to view God deciding on the entire history of the physical universe first, then willing it all into being. From His perspective, the events in Genesis are happening at the same moment as the events in Revelation. It’s not that God first creates the world, then watches unfolding events to make sure they go the way He planned. No, He directly wills every moment of existence into reality, all in one fell swoop (from His perspective).
This also resolves the standard skeptic taunt of, “If God is so smart, why did he have to reboot his creation with the flood?” I agree that’s a deep issue, but it’s not that God was surprised by what happened. He knew all along that He would flood the Earth. To suggest otherwise is like saying, “George Lucas had to rewrite the script once Anakin turned to the dark side.”
Last thing, for those of you who don’t like me veering off into my own conjectures rather than staying tied to Scripture: Notice that my perspective above makes perfect sense for a being who introduces Himself as “I AM.” When I was younger, that phrase struck me as odd. But that’s because I was (like Mises) viewing God as a really powerful being operating inside the constraints of time. Once you fully appreciate the significance of a being identified as “I AM,” Mises’ critique wilts away.
I realize I am biased since I can’t stand his monetary policy views, but does anyone else find these remarks from Scott Sumner a bit…unsettling?
There are degrees of dishonesty. When I say I support policy X, I actually do support that policy. I could pass a lie detector test. But when I first started blogging I would occasionally use arguments or data that I knew was slightly misleading. Not false, but slightly questionable. Or data that could be interpreted in another way. For a worthy cause–the greater truth. I had been doing this my entire life in face-to-face discussions, and almost always got away with it. But the blogging world was different. Within a few months I discovered that I almost never got away with it. So I stopped doing it, or at least stopped as much as I could. (I’m sure I still err now and then.) I did not stop because I am a highly moral person. I stopped because it was counterproductive. I was getting hammered in comment sections, and had to repeatedly backtrack. Ever since 2009, whenever I write a post I try to make my argument defensible, if people were to challenge the accuracy or relevance of my supporting evidence. I see other bloggers who also do this, and some that don’t. If you are famous and don’t respond to commenters then you can get away with cutting lots of corners. But in the long run I believe that honesty is the best policy.
I suppose it depends what Sumner means by “slightly questionable,” but I’ve read the above a few times now and it sure sounds like he’s saying, “I used to use misleading tactics to get people to agree with me, but I’ve since stopped because I got caught so many times misleading people.”
From the comments of Tyler Cowen’s shrugging over GruberGate, John Schilling writes:
If open discourse involves lying, hypocrisy, and open contempt for other participants, and if promoting open discourse requires not calling people out on their lying, hypocrisy, and contempt lest we frighten them away or shame them into silence, I am unconvinced of the value of this “open discourse”.
Or possibly it’s a class thing – it’s OK to lie to the contemptable [sic] masses, and we should promote open discussion among us elites about how and why we are lying to the contemptible masses, we all do it, so the real hypocrisy would be calling out another of the elite for doing the same. And don’t go blabbing to the masses about any of this, that’s Just Not Done.
Several people in the comments were (understandably, in my view) reacting harshly to Cowen’s post, but this guy John crystallized it quite nicely (and with more civility than some of the others).
Actually, that’s a bit presumptuous. Let’s just call it a case against rent control, which I wrote for the Freeman. An excerpt:
There are further, more insidious problems with rent control. With a long line of potential tenants eager to move in at the official ceiling price, landlords do not have much incentive to maintain the building. They don’t need to put on new coats of paint, change the light bulbs in the hallways, keep the elevator in working order, or get out of bed at 5:00 a.m. when a tenant complains that the water heater is busted. If there is a rash of robberies in and around the building, the owner won’t feel a financial motivation to install lights, cameras, buzz-in gates, a guard, or other (costly) measures to protect his customers. Furthermore, if a tenant falls behind on the rent, there is less incentive for the landlord to cut her some slack, because he knows he can replace her right away after eviction. In other words, all of the behavior we associate with the term “slumlord” is due to the government’s policy of rent control; it is not the “free market in action.”
Based on progressives’ reaction to the US/China pledge. Details here.
Remember in my latest video where I pretend to be a sharp economist advising the elites on how to bamboozle the American public while ramming through their unpopular agenda?
With that in mind, watch the opening 20 seconds of this, then skip ahead and let it play from 3:05 onward. (HT2 Glen Whitman)
Speaking of Gruber, David R. Henderson reminds us of some of his previous eyebrow-raising moments.