07 Aug 2009

Glenn Beck Brigades Are Loose!

All Posts No Comments

This is so ridiculous. Paul Krugman has a post called “Rioting Against Health Care Reform.” I only watched the first 2:30 of this, but it hardly looks like a riot. If Krugman actually listened to Glenn Beck, he’d know that Beck’s fans like to quote the Federalist papers. I’m not saying Glenn Beck’s growing popularity is A-OK, I’m just saying the people in this video–I’m assuming this is the same town meeting that I heard people calling Beck about–are mad because union people were allowed into a back entrance to fill up the hall before the angry mob could storm the gates. Those people had a right to be furious.

(Again, I only watched to 2:30. If something awful happens afterward, then point it out and I’ll retract my criticism of Krugman.)

UPDATE: Just look at this sentence from Krugman: “By all accounts, many if not most of the rioters were elderly.”

He has to be kidding, right? I mean, go read the whole post, and you’ll see that no, it’s a serious Krugman statement.

But what I mean is, no one can possibly write the sentence quoted above, and actually take himself seriously.

Krugman has been kidding all along. He might not say it in those words, but he knows.

07 Aug 2009

The Coming Marijuana Legalization

All Posts No Comments

The more I think about it, the more certain I become that there will be significant liberalization of the marijuana market within the next three years. I expect that at least half of the states will allow small purchases of marijuana, perhaps under an open ended “medicinal use” clause.

The power elites in D.C. are clever, but they’re not as clever as they think they are. And that’s not a good group of people to get handed the keys to the nukes, the IRS, and the Fed. They are going to hit a brick wall within the next two years and the elites will be genuinely surprised by just how hard the wall is. They think they have several backup plans, but they don’t really understand how society works and so their mental simulations are wrong.

In particular, I think they are underestimating the importance of reputation in financial markets. These people understand thuggery and intimidation. That’s not how you have your way in the bond market. Maybe it is for a while; but you can’t take on the whole world if they start attacking the dollar.

And oh my gosh can you imagine how much Putin is hoping the dollar crashes? This is like the time in high school when the meat-head gang slipped up and went to the wrong barbecue. They didn’t realize it was a get-together of 15 guys who were huge and who hated them with a passion. And they were just waiting, biding their time, until the meat-heads showed a vulnerability… (Yes I’m referring to actual events from my high school years, and yes Uncle Sam would be the big meat-head in the analogy.)

So what does all this mean? It means they will face the dilemma that Jeff Hummel describes: Within three years (my timing, not Hummel’s), they will have to either default on Treasury obligations or simply let the Fed print all our troubles away.

But they will have a third option, as someone will surely point out: They could legalize pot and tax the heck out of it! Not only would it bring in tax revenue, but it would also let the states turn out millions of nonviolent inmates. So they’d bring in more money and have to spend less on prisons.

How much money are we talking? Well, in 2007 the U.S. states in total collected $5.8 billion in revenues from liquor stores. Now note, I’m pretty sure that figure just refers to the actual earnings from state-run stores; that number doesn’t count sales and special sin taxes levied on alcohol sales in general. (The alcohol and beverage tax receipts in 2006 were $5.4 billion.)

Now who knows how much revenue pot legalization would bring in. But I’m guessing that it will be at least $15 billion annually, especially if you include the jump in sales tax and income tax revenues.

Because the elites who run the show will be caught with their pants down, I think they will almost certainly turn to marijuana legalization. They might save it to deploy near the 2012 election, just to make sure Obama gets enough votes that they can plausibly declare him the winner. There are going to be some seriously angry people then, so getting a bunch of them stoned might be an added bonus.

07 Aug 2009

California Government Won’t Accept Its Own IOUs

All Posts No Comments

This is pretty funny (HT2LRC):

SAN FRANCISCO (CN) – Small businesses that received $682 million in IOUs from the state say California expects them to pay taxes on the worthless scraps of paper, but refuses to accept its own IOUs to pay debts or taxes. The vendors’ federal class action claims the state is trying to balance its budget on their backs.

Lead plaintiff Nancy Baird filled her contract with California to provide embroidered polo shirts to a youth camp run by the National Guard, but never was paid the $27,000 she was owed. She says California “paid” her with an IOU that two banks refused to accept – yet she had to pay California sales tax on the so-called “sale” of the uniforms.

Incidentally, I’ve been writing a few op eds lately about the California budget crisis. Their deficit is bigger than most countries’ GDPs. Here is my best impression of Bill Kristol.

Last point: For those of you who like to consider data before forming a political conclusion, I refer you to Table 7 [.pdf] in the latest ALEC/Laffer state rankings. Before I began reading this research, I figured tax cuts were great but mostly on principle. But after reading this stuff for a few months, I began to be puzzled as to why any states have bad tax policies. My only conclusion was the (Hans Hoppian) observation that a governor at most gets to play with the state’s finances for eight years. But if a governor served a life term, then–whatever horrifying things might ensue–at least the 50 states wouldn’t have such ludicrous tax codes.

07 Aug 2009

Mark Thoma Continues to Spread Myths About the Great Depression

All Posts No Comments

Greg Ransom sent me this very interesting NYT piece on BB&T’s John Allison and Ayn Rand. Check out this absurd remark from Mark Thoma:

Mark A. Thoma, an economist at the University of Oregon, says the financial crisis would have been worse if the government hadn’t rapidly intervened.

“I completely disagree with the idea that letting the markets heal themselves is the best idea,” he says. “We tried that in the ’30s, and it didn’t work out so well.”

At the very very very most, you could argue that “we” tried letting markets heal themselves until March 4, 1933. But at that point, FDR was in charge, and right away he seized everyone’s gold at gunpoint. And then there was that whole New Deal thing.

So for a good 65% of the 1930s, we clearly had massive intervention; the most in U.S. history, before or since. And for the first portion, we still had much much much more government (and Fed) tinkering than we had ever had up to that point in U.S. history.

I actually think it would be far more accurate to say we didn’t let markets heal themselves in the 1930s, and that’s why we had the worst depression in world history.

07 Aug 2009

We’ll Get Through This Depression, Really

All Posts No Comments

As with most of my writing, my previous blog post on this topic did not receive the attention it deserved.

I don’t think I specified clearly enough why we are all fantastically rich, were it not for dumb government policies.

Just take organ markets. If the government made trade in body organs as regulated as, say, trade in perishable food, that would overnight add about $90 trillion in wealth to the U.s. population, at current market prices. OK, so prices for hearts and kidneys would come way down with the liberalization, so let’s call it $5 trillion to be super conservative.

I have no idea if they’re accurate, but I’ve seen estimates that the market price for a good kidney right now is $160,000. Now imagine you sold the rights to all of your body organs to some third party group. (You adjust your will so that after your death, you bequeath any salvageable body parts to the group.) How much would they pay you upfront for that right? It would depend on the characteristics of each person, of course, but I bet it’s worth at least $300,000 for a healthy 30-year-old.

So if I did the math right (and it’s tough with so many zeroes), then $300,000 per person times 300 million people in the U.S. is an increase in marketable wealth of…$90 trillion. Like I acknowledged above, presumably the price of a kidney comes way down once ten million people opt to sell their spare ones off, so the $90 trillion is way too high. But my point is to get you to see how rich we are, were it not for dumb laws.

Even if you chose to retain your kidney, you would still be wealthier. You would now have that $160,000 (or whatever) as an emergency backstop. And if the idea of signing away your body parts freaks you out–you don’t want the third party group cutting deals with ambulance paramedics!–then you can just leave your body to your own heirs. (You’d be like that tree in the Shel Silverstein book.) Knowing that Billy would get the farm and your heart, kidneys, eyeballs, and so on, you could safely contribute less to your 401k etc. Freeing up more present income would make you richer right away, even if you retained full rights over your body parts while alive.

Last point, more ominous: It’s possible that the State could transform this into a monstrous new development, just like other types of “deregulation” often blow up. For example, if I owe a lot to the IRS or my mortgage lender, I don’t want the executives telling me they were seizing a kidney. So with a predatory State looking on, the leftists are quite rightly concerned about commercializing the human body (even more so than our culture has already done).

07 Aug 2009

Don’t you hate it when…

All Posts No Comments

…you call a business and the answering machine tells you to call back during normal business hours, which include the time at which you’re hearing the message?

I also get mad when the self-checkout stations at the grocery store boss me around. (“Please put the item in the bag.”) Like I’m trying to steal a Valu Pak of paper towels. Yeah I’ll just put that under my shirt, heh heh. Doh! Foiled again by the clever machine!

07 Aug 2009

Scratch Brad DeLong Off the List

All Posts No Comments

This is all I’m looking for, no big requirements on my end. Brad DeLong quotes Robert Lucas who argued that nobody saw this train wreck coming, and then comments:

some economists did indeed forecast the financial crisis of 2008–or, rather, forecast that Alan Greenspan’s low interest rate policies of 2002-2004 (policies I approved of and endorsed, by the way) ran an unacceptable risk of getting the economy wedged into a position like the one it now is. All praise and honor to Dean Baker, Richard Thaler, Robert Shiller, Michael Mussa, and their posse. Here’s Michael Mussa, writing in 2004…

Then after quoting from Mussa who nailed it, DeLong continues:

The disappointment with economists is not because there were none of us who forecast the possibility of the crisis we are in, but rather that economists like Robert Lucas and myself did not listen with sufficient care and attention to [the] Michael Mussa posse. (Indeed, I have a half-finished paper that will now never, ever be finished on how Mussa was wrong.)

OK so DeLong admitted he got it wrong, and that the people warning about Greenspan’s low interest rates were correct. That’s all I hope for from critics of Austrian economics. Obviously we’re not going to make everyone a Misesian overnight, but as long as we admit when “our side” loses on a particular point, then it’s worthwhile to continue debating.

(This is incidentally why I’m putting so much effort in cultivating good relations with the monetary crank Scott Sumner. When he sees the CPI over the next 12 months, I think he will have some serious ‘splainin to do on his blog, and I think he will do it honestly.)

07 Aug 2009

Glenn Greenwald the Most Dangerous Blogger in the World for Keith Olbermann

All Posts No Comments

Uh oh GG is stirring up more trouble. For months, Olbermann and Bill O’Reilly had been sniping at each other (on their respective shows). But then on June 1, Olbermann announced that he would no longer crack jokes about the creator of the No Spin Zone, because (he claimed) O’Reilly had endorsed the murder of Dr. Tiller and so it was no longer a joking matter.

Wow, isn’t that refreshing, to see someone drop the childish stunts when people start getting hurt?

Hmm, GG reported that Olbermann’s newfound civility was the result of an explicit deal cut between GE (which owns MSNBC) and News Corp (which owns Fox). The parent companies decided that a ceasefire would be better for business, all things considered. So they told their top “journalists” to stop poking into each other’s business.

Since it’s mostly liberals who read GG, Olbermann was in hot water. He explicitly denied on air that he had been a party to any deal. But oddly, he also confirmed that GG had reported accurately on the matter.

If you want objective measures, some prof emailed GG facts about the frequency of attacks by O’Reilly and Olbermann before and after the alleged deal. It’s posted as an update at the second link above.