10 Jun 2015


Potpourri, Tom Woods 19 Comments

==> Richard Ebeling doesn’t like trigger words.

==> Bryan Caplan catches an amazing piece on Paul Ehrlich.

==> Scott Sumner often seems incapable of understanding where his critics are coming from. In this post, for example, Sumner deals with Austan Goolsbee, who had posited a situation where real GDP growth is flat (because of a supply shock, presumably), and so the market monetarist response would have the Fed create 5% price inflation (to keep NGDP growing on target). Goolsbee then wondered: Would the markets really expect 5% price inflation to be a one-year thing, to go back to 2% the next year (when real growth recovered to 3%, if the market monetarists are right)? To answer him, Sumner pointed Goolsbee to the actual U.S. experience in 2008.

But no, that doesn’t really work. Goolsbee wasn’t asking, “Is it really possible for the market to quickly revise downward its expectations of price inflation?” He *knows* that can be done, for example if the Fed causes an awful economic crash–as everybody thinks Volcker did intentionally in the early 1980s, and as Scott Sumner and other market monetarists think Bernanke did unintentionally in 2007/08. What Goolsbee was getting at is that for the market monetarist Fed response to a temporary supply shock to work, it requires people in the market to go from experiencing 5% price inflation this year, to expecting 2% price inflation next year, all while the economy goes from high unemployment to full recovery. Does that really make sense? (Maybe it does or maybe it doesn’t, but Sumner doesn’t answer him by pointing to the worst economy since the Great Depression as proof that his system works…)


==> This Tom Woods interview with Doug Casey is a fun one.


==> Yet more evidence that Tyler Cowen and I think differently: He says that if he could go back in time and barter for an object to bring back to the present, and were interested purely in financial gain, that the “obvious” answer would be a painting by a famous painter. I would’ve thought the obvious answer would be to find the guy cleaning up after 13 men had just celebrated the Passover and said, “Hey, how much for that chalice?” If that fails (maybe because you can’t prove authenticity), then I would think you could buy stock certificates and make a lot more than what you’d get for a painting.

08 Jun 2015

What Is Senator Whitehouse Smoking?

Climate Change, Shameless Self-Promotion 71 Comments

The best part of my new IER post is the title, but the content isn’t bad either. An excerpt:

Internet enthusiasts are quite familiar with Godwin’s Law, which says that the longer an online argument continues, eventually someone will compare his opponent to Hitler. Well we have already had that for years in the debates over climate policy. Those favoring aggressive government intervention aren’t content to call coal, oil, and gas “dirty energy,” or to label carbon dioxide emissions “pollution”—even though trees breathe it and we exhale it. No, the alarmists go even further with their rhetorical smears, routinely calling their opponents “deniers,” making an obvious (and intended) comparison to the Holocaust.

In his recent piece, Senator Whitehouse has decided that the Nazis apparently aren’t bad enough, so he’s bringing in lung cancer.

08 Jun 2015


Climate Change, Potpourri 15 Comments

==> David R. Henderson replies (or did he issue a rejoinder?) on the question of a stock market bubble. Let me clarify my position: I am saying it wouldn’t surprise me (and indeed would be a repeat of recent history) if the market crashed in the next few years, then the Fed blew up another bubble, and then (say a dozen years from now) the market crashed again. In that scenario, David’s retirement plans would be in serious jeopardy, even if his suggested wager with me panned out the way he hopes.

==> Speaking of David, here’s his post on Thaler rediscovering Hayek. I also have to agree with David’s assessment that Thaler is mischaracterizing neoclassical search theory. In such models, you don’t keep looking for a new job every day you go to work. Rather, when you are unemployed and looking, then you adopt a rule setting out the minimum threshold at which you will accept a job offer. So although I applaud people–especially insiders–for being able to step back and make fun of the economics profession, on this narrow point it didn’t ring true to me. (Oh, you don’t feel like clicking the link? Well actually Thaler is parodying economist search models in the context of dating. More interested now? You shouldn’t be.)

==> I’ve seen lots of people on Facebook etc. (plus Tyler Cowen at MR) link to this funny story about a young guy who legally changed his name rather than pay an airline to fix a booking error on his ticket. But what’s really awesome is that he had to change his legal name to “Adam West.”

==> You know how the most vocal of the “consensus scientists” were biting the heads off of anyone who referred to the “pause” or “hiatus” in global warming? Well, now the new rhetorical move is to say, “Yes, using the old data there appeared to be a pause or hiatus, but now we’ve corrected the errors in the data and the pause/hiatus is gone.” Anyway, here’s Pat Michaels, Richard Lindzen, and Chip Knappenberger on it, plus Judith Curry.

07 Jun 2015

God, the State, and Sin

Religious 17 Comments

One of the frequent objections I get runs like this: “Murphy, how can you be so blind? You are great at seeing how the State rules people through fear and dependence, preying on their insecurities and vanities. Don’t you see that’s exactly what organized religion has done throughout the ages? No gods no rulers!”

Of course I understand the apparent patterns, but the correct reaction is not atheism. (Look, should I disbelieve in the existence of tanks and poverty, simply because politicians use the fear of these things to further their own power?)

I get annoyed when critics refer contemptuously to “Libertopia” (although in fairness, there is an actual event with that name, so it’s hardly a strawman). The giants in libertarian thought never said that abolition of the coercive State would lead to paradise on earth.

However, in practice I have seen many self-described voluntaryists or anarcho-capitalists argue that every social ill really is a direct result of the State, and that they would all disappear if only people respected property rights.

That is not correct. Yes, humans have the capacity for greatness, they yearn for an impossibly high ideal, but their nature is also capable of the utmost cruelty. Now it’s true, I recognize in my study of free-market economics how State institutions amplify these evil impulses, yet the causality runs both ways. Humans (under the influence of malevolent forces, in the view of Christians) created State institutions, after all. So it hardly makes sense to take the blame for humanity’s monstrous acts off of humans, and lay it on “the State”–which isn’t an actor with preferences, if we’re being good methodological individualists.

Let me cap this discussion by showing just how wrong it is to equate the God of the Bible with the secular State. Far from being two sides of the same coin, in reality the perversity of the modern State is that it seeks to replace God in our lives:

1 Samuel 8 New International Version (NIV)

Israel Asks for a King

When Samuel grew old, he appointed his sons as Israel’s leaders.[a] The name of his firstborn was Joel and the name of his second was Abijah, and they served at Beersheba.But his sons did not follow his ways. They turned aside after dishonest gain and accepted bribes and perverted justice.

So all the elders of Israel gathered together and came to Samuel at Ramah. They said to him, “You are old, and your sons do not follow your ways; now appoint a king to lead[b]us, such as all the other nations have.”

But when they said, “Give us a king to lead us,” this displeased Samuel; so he prayed to the Lord. And the Lord told him: “Listen to all that the people are saying to you; it is not you they have rejected, but they have rejected me as their king. As they have done from the day I brought them up out of Egypt until this day, forsaking me and serving other gods, so they are doing to you. Now listen to them; but warn them solemnly and let them know what the king who will reign over them will claim as his rights.”

10 Samuel told all the words of the Lord to the people who were asking him for a king.11 He said, “This is what the king who will reign over you will claim as his rights: He will take your sons and make them serve with his chariots and horses, and they will run in front of his chariots. 12 Some he will assign to be commanders of thousands and commanders of fifties, and others to plow his ground and reap his harvest, and still others to make weapons of war and equipment for his chariots. 13 He will take your daughters to be perfumers and cooks and bakers. 14 He will take the best of your fields and vineyardsand olive groves and give them to his attendants. 15 He will take a tenth of your grain and of your vintage and give it to his officials and attendants. 16 Your male and female servants and the best of your cattle[c] and donkeys he will take for his own use. 17 He will take a tenth of your flocks, and you yourselves will become his slaves. 18 When that day comes, you will cry out for relief from the king you have chosen, but the Lord will not answer you in that day.”

19 But the people refused to listen to Samuel. “No!” they said. “We want a king over us.20 Then we will be like all the other nations, with a king to lead us and to go out before us and fight our battles.”

21 When Samuel heard all that the people said, he repeated it before the Lord. 22 The Lordanswered, “Listen to them and give them a king.”

Then Samuel said to the Israelites, “Everyone go back to your own town.”

05 Jun 2015

Tom Woods and I Discuss Krugman’s Flawless Model

Krugman, Shameless Self-Promotion, Tom Woods 17 Comments

Everything you need is here.

03 Jun 2015

“Paid Family Leave” a Great Way to Hurt Women in the Workforce

Economics, Shameless Self-Promotion 14 Comments

My latest at FEE. An excerpt:

For example, if a 23-year-old woman with a fresh MBA is applying to several firms for a career in the financial sector, but she has a serious boyfriend and thinks they might one day start a family, then — other things equal — she is going to highly value a clause in the employment contract that guarantees she won’t lose her job if she takes off time to have a baby. Since female employment in the traditional workforce is now so prevalent, we can expect many employers to have such provisions in in their employment contracts in order to attract qualified applicants. Women don’t have a right to such clauses, just as male hedge-fund VPs don’t have a right to year-end bonuses, but it’s standard for employment contracts to have such features.

02 Jun 2015

Update on Commenting Issues

All Posts 6 Comments

OK I am going to try to go into the Spam folder periodically and approve comments that the plug-in erroneously marked as Spam. Apparently, this will help it learn over time which ones to allow and which to divert.

So that means some of you will see duplicate comments, because you resubmitted under a different email address etc. I think the best way to handle this going forward is either of the two following approaches:

(A) You use a single preferred email address. If your comment disappears, then email me and I’ll go approve it. Hopefully the plug-in will soon learn your email address is OK. But this means you have to have patience, while you wait for me to dig up your comment.

(B) When a comment disappears, you use a different email address or some other trick, in order to get instant gratification. But then don’t email me about it, because if I dig up your original you will then have the same comment multiple times.

02 Jun 2015


Potpourri, Tom Woods 115 Comments

==> Martin Weitzman is one of the leading economic theorists in the case FOR aggressive government action against greenhouse gas emissions. Here he is on EconTalk.

==> An interesting graphic from John Christy’s testimony showing 102 climate models’ predictions vs. observations on global temperatures.

==> Daniel Kuehn bringing power to the people.

==> Ryan Murphy (basically) agrees with David R. Henderson and me on the ordinal/cardinal utility stuff. However, on Facebook I backed down somewhat in an argument with David Friedman, because when I was reading the climate change economics stuff (without thinking of this debate) I realized that the “pure discount rate” is clearly talking about the percentage comparison of a util today versus a util next year. Yes, there are ways you can relate this to ordinal rankings of flows of consumption over time, but economists in the trenches are clearly thinking of this as cardinal utility. (Indeed, that’s why in my dissertation I criticized Mises’ writings on the pure time preference theory–I said in certain passages Mises only makes sense if we think utility is cardinal, and surely he doesn’t want to go down that road.)

==> Tom Woods vs. Austin Petersen. It’s just what you hoped it would be. In the future I think we should build a road around Austin and then not feed him.

==> On a more serious note, Tatiana Moroz interviews Lynn Ulbricht, whose son Ross was just sentenced to life in prison for his role in the Silk Road.