Nick Rowe has another zany post. Nick is not personally taking a stand on the minimum wage debate. However, he argues that for those economists who do think employment effects will be minimal (or even positive) from hiking the minimum wage, the theoretical argument they usually give to explain the result would also mean that if the central bank raised interest rates, then this too would promote employment.
So, if I were to extend Nick’s analysis, this means that we shouldn’t see the same economists (a) supporting low interest rate policies and (b) supporting a hike in the minimum wage. And yet, that doesn’t seem to be what’s happening. It’s almost as if people pick and choose their economic assumptions (monopsony in low-skill labor markets, in this case) depending on their impact on preferred policy moves…
They key point in all of this is that Manzi was not denying, say, that all existing life forms have a common ancestor. Rather, he was pointing out that Coyne (and many others discussing the “findings” of evolution) take these results and then derive a far more sweeping conclusion, having to do with the “meaning” or “significance” of it all, particularly its relationship to common religious or spiritual attitudes.
To epitomize what I mean, here’s an excerpt from Manzi’s second piece:
In my post, I said that Coyne claimed in his review that “evolution through natural selection demonstrates that there is no divine plan for the universe. Coyne, in his reply to me, says this about it:
[Coyne:] Wrong! What I have said repeatedly is that there is no evidence for a divine plan for the universe.
Well, here is the first paragraph of Coyne’s review [of another writer's book], which I quoted in my post [Bold added by Manzi]:
[Coyne:] Over its history, science has delivered two crippling blows to humanity’s self-image. The first was Galileo’s announcement, in 1632, that our Earth was just another planet and not, as Scripture implied, the center of the universe. The secondand more severelanded in 1859, when Charles Darwin published On the Origin of Species, demolishing, in 545 pages of closely reasoned prose, the comforting notion that we are unique among all species, the supreme object of God’s creation, and the only creature whose earthly travails could be cashed in for a comfortable afterlife.
He doesn’t say that there is no evidence for it, but that Darwin demolished this notion.
As I say, this beautifully illustrates what happens all the time in these debates: An atheist familiar with evolutionary biology will say things like, “The findings of Galileo and Darwin destroyed the Christian’s notion of self-importance” and then when a Christian objects, the atheist will retreat to, “Oh I never said you couldn’t believe in God, what’s your deal? We’re talking about mechanical properties here; there’s no philosophical ‘meaning’ involved. Don’t you understand the boundary lines between science and religion?”
So in conclusion, it is NOT correct for people to say things like, “Murphy denies evolution.” (I don’t see that anymore on my Wikipedia page. Now it appears that my career consisted of 50% writing some books and testifying to Congress, and 50% betting David R. Henderson that there would be double-digit inflation. I guess as with organisms, so too with Wikiepedia entries: I can only hope for incremental improvement.)
Rather, when I write on evolution as it’s discussed in the public arena in the United States, I am pointing out that the atheist/agnostic commentators often smuggle in a lot more than they are admitting, perhaps than they are even realizing.
Some people in the comments were wishing we could boil down David’s excellent analysis into a pithy statement, and in the comments of a later post one guy got the point backwards, so let me repeat here what I said to clarify. The point David made was (in my words)
(1) just because workers might be better off by choosing to work less under ObamaCare than by continuing to work the same amount under ObamaCare,
(2) doesn’t mean that they are better off under ObamaCare than without it.
That’s a very obvious point, but it requires you to think of three things at once. The people saying the ACA “obviously” benefits the workers who are choosing to reduce work hours are only looking at the two things contained in point (1).
I hadn’t read this WSJ piece on Casey Mulligan until the persistent von Pepe sent me Cochrane’s blog treatment of it. Since I already knew Mulligan’s basic points, I didn’t think I’d get much out of it; after all, the CBO itself cited Mulligan’s research in the footnotes when explaining why it drastically increased its estimate of the negative supply-side effects of the Affordable Care Act (ACA aka ObamaCare).
But what I didn’t realize was just how well they were going to put their fingers on what has really annoyed me about the blogosphere reaction to the CBO’s updated numbers. Here’s the WSJ article:
Mr. Mulligan thinks the CBO deserves particular credit for learning and then revising the old 800,000 number, not least because so many liberals cited it to dispute the claims of ObamaCare’s critics. The new finding might have prompted a debate about the marginal tax rates confronting the poor, but—well, it didn’t.
Instead, liberals have turned to claiming that ObamaCare’s missing workers will be a gift to society. Since employers aren’t cutting jobs per se through layoffs or hourly take-backs, people are merely choosing rationally to supply less labor. Thanks to ObamaCare, we’re told, Americans can finally quit the salt mines and blacking factories and retire early, or spend more time with the children, or become artists.
Mr. Mulligan reserves particular scorn for the economists making this…argument…
A job, Mr. Mulligan explains, “is a transaction between buyers and sellers. When a transaction doesn’t happen, it doesn’t happen. We know that it doesn’t matter on which side of the market you put the disincentives, the results are the same. . . . In this case you’re putting an implicit tax on work for households, and employers aren’t willing to compensate the households enough so they’ll still work.” Jobs can be destroyed by sellers (workers) as much as buyers (businesses).
He adds: “I can understand something like cigarettes and people believe that there’s too much smoking, so we put a tax on cigarettes, so people smoke less, and we say that’s a good thing. OK. But are we saying we were working too much before? Is that the new argument? I mean make up your mind. We’ve been complaining for six years now that there’s not enough work being done. . . . Even before the recession there was too little work in the economy. Now all of a sudden we wake up and say we’re glad that people are working less? We’re pursuing our dreams?”
The larger betrayal, Mr. Mulligan argues, is that the same economists now praising the great shrinking workforce used to claim that ObamaCare would expand the labor market.
He points to a 2011 letter…signed by dozens of left-leaning economists including Nobel laureates, stating “our strong conclusion” that ObamaCare will strengthen the economy and create 250,000 to 400,000 jobs annually….
“Why didn’t they say, no, we didn’t mean the labor market’s going to get bigger. We mean it’s going to get smaller in a good way,” Mr. Mulligan wonders. “I’m unhappy with that, to be honest, as an American, as an economist. Those kind of conclusions are tarnishing the field of economics, which is a great, maybe the greatest, field. They’re sure not making it look good by doing stuff like that.” [Bold added.]
And now here’s Cochrane, following up on the above commentary:
The rhetoric of our national conversation is strangely asymmetric…Imagine if, say, a Republican congressman said how great it was that lower and middle income people were quitting their jobs, so they could become artists. He would be pilloried as completely out of touch with the realities of life in middle America. What, has he been hanging out with former President Bush too much?
There are a hundred disincentives to work in America right now. Job lock was a big problem with our employer-based health insurance system, and I’ve written against it too arguing for a system based on portable individual insurance. But as economists, we are supposed to look at overall distortions, understand that employer and employee distortions contribute equally, and that jobs represent two-sided matches. The idea that the full effect of government policy was to induce too many people to work is just silly. [Bold added.]
Here’s my challenge to people who want to say that the above is totally unfair, and that the reaction to the CBO report has nothing to do with politics: Can anybody point me to an economic analyst whose name I would recognize, who (a) publicly argued that one of the virtues of the ACA is that it would reduce the long-run employment of labor, particularly among low-income people; and (b) did so before the ACA was passed into law?
If that’s not possible, let me give you an easier request: Can anyone find me an example of an analyst whose name I have heard, who typically supports progressive policies, and who, at any time prior to the CBO report, made the case that low-income people were working too many hours? I imagine you might find something “near” this in the inequality discussions, but even there, I bet it would be saying stuff like, “The bottom 20% have only captured x% of the income gains over the last decade, even as their work week has risen by y%.” Yet that’s not the same thing as saying all things considered, low-income people are selling more of their hours to employers than is economically optimal.
Final thing: I’m not laying down the above as a rhetorical gauntlet; I’m genuinely asking. I will be very surprised if anyone finds an example of the first challenge, but maybe somebody made this point during the debate and I missed it.
==> Mario Rizzo on libertarianism vs. classical liberalism.
==> James Caton Jr. has some problems with the Hayekian triangle.
==> Tabarrok vs. Cowen on immigration. Winner: Tabarrok.
==> Pamela J. Stubbart explains the difference between living in suburbs and a big city.
==> A good interview with me on hard-core voluntary society stuff. I am not sure exactly where I come in; I’m definitely in the middle third if you want to move the pointer around.
==> Free Advice reader David Mahler has published a short volume on his transition from evangelical Christianity to agnosticism.
==> Why don’t commercial planes have parachutes for everybody? Thinks look like a job for marginal analysis!
==> Kind of old news at this point, but the Jeopardy guy Arthur Chu has some neat (but in retrospect obvious) strategies, including playing defense on Daily Doubles.
==> William F. Buckley Jr. dismissed libertarians as focusing on the demunicipalization of garbage collection while he and the other conservatives contained the communists. OK, if you aren’t sure about Buckley’s judgment, try this quote from 1964:
The Beatles are not merely awful; I would consider it sacrilegious to say anything less than that they are god awful. They are so unbelievably horribly, so appallingly unmusical, so dogmatically insensitive to the magic of the art that they qualify as crowned heads of anti-music, even as the imposter popes went down in history as “anti-popes.”
(I think he also wrote that Princess Diana was the most beautiful woman who had ever been photographed, but I can’t find that now.)
(I used to do a mean impression of Dana Carvey doing Johnny Carson.)
OK, it turns out that people attempting suicide with nail guns–even with multiple shots–is not as unheard-of as some of us thought.
Frequent commenter and thorn in my side Ken B. points us to this example of a guy who apparently attempted suicide by shooting himself 8 times in the head with a nail gun.
Now in my defense, even in this case, the guy had a history of “psychiatric care” and the document says, “Penetrating head injury with nail-gun use is sometimes seen, but cases with multiple nails are rare.” So even on its own terms, if the particular CEO under investigation did indeed kill himself with 7 or 8 nail gun shots to the torso and head (and especially if he hasn’t been in and out of clinics, which we don’t know either way), then it is still an extremely unusual case.
But, Ken B. is right that the coroner’s report is not as patently absurd as I had made it out to be. (I had toyed with saying that this very admission makes me long for a nail gun, but that would be in poor taste I’m thinking.)
Don’t get me wrong, kids, I still think there is something sinister afoot in the financial sector. All I’m doing in this post is letting everyone realize that nail-gun suicide attempts are a real thing.
I really had decided I was going to lay off Krugman for a while, but this one was too much. In light of the 5th anniversary of the Obama stimulus package, Krugman is claiming that he never understood the Christy Romer’s team’s rosy forecast of a quick recovery back in early 2009. Greg Mankiw winces with pain…
The opening paragraphs from my new Mises Canada post:
The good thing about the Internet is that there is a Hayekian safety net: When a bunch of free-market economists are idiots and overlook an obvious point, eventually somebody comes along to rescue them. For today’s example, we have the arguments over the CBO’s estimate that the Affordable Care Act (ACA aka “ObamaCare”) will cause a reduction of the equivalent of 2.5 million full-time jobs in the U.S. labor market.
In previous posts (here, here, and here), I walked through the attempts of Paul Krugman and other ACA apologists to spin this finding as a good thing. Yet there was something incredibly obvious that I (and everybody else I have been reading) missed, until David R. Henderson pointed it outin a piece for the Hoover Institution. David writes:
Can’t stand the suspense? You’ll have to click the link.