Ron Paul and Gary Johnson on the Drug War
This is a really interesting contrast in both style and content. (I didn’t watch the Republican debate, so this is the first I’ve seen of it.) HT2 LRC
Tom Woods Tells Conservatives Why Wars Are Not Conservative
This is really a great little video. Like Tom, I thought the first Gulf War was pretty cool. When I was little my uncle gave me a bunch of photos of Grumman aircraft and such. Man the F-14 Tomcat is still one sleek machine.
My Facebook Status Today
Today:
Robert Murphy thinks “in the ballpark” is a nonsense phrase. If I had to drop a ball from an airplane, getting it “in the ballpark” would be really hard. Even if I were in the parking lot, getting it “in the ballpark” would be hard. But if I were already *in* the ballpark, doing so would be easy.
Want more off-kilter observations stripped of political and economic content? Then you too should Friend me on Facebook. All the cool kids are doing it.
Auction Off the State
In this article I explain the logistics of the debt ceiling and how Geithner is going to buy himself a couple of more months.
I then say:
In all the hoopla over the debt ceiling, I haven’t heard many people raise the point that the government has a huge collection of assets that could be sold to the private sector. This would cushion the blow and make the transition easier. In other words, if people say that $750 billion in spending cuts (between now and September 30) is simply “impossible,” then we still don’t have to either borrow more or raise taxes. We have another option: namely, the federal government could auction off some of its holdings and fill the gap that way.
For example, the Strategic Petroleum Reserve (as of late November) had almost 727 million barrels of crude oil. At current market prices, this inventory is worth more than $80 billion. The Outer Continental Shelf (OCS) contains an estimated 59 billion barrels of technically recoverable crude oil. Obviously, a barrel of oil in the hand is worth more than one under the sea floor, but clearly the federal government could raise huge sums of money by selling this property to the private sector.
In addition to mineral resources, the federal government has enormous holdings of real estate and office buildings. A Reason report quotes then-OMB Director Peter Orszag estimating in 2010 that the federal government owned 14,000 buildings and structures that were “excess” and 55,000 that were “under- or not-utilized.”
Beyond auctioning assets, the feds could get even more creative in dreaming up win-win scenarios that would ease the cash crunch without having to raise taxes or borrow more. For example, the government could tell current Social Security beneficiaries: “If you agree to renounce all of your future benefit checks, we will exempt you from income taxation should you go back to work.” Depending on how the deal were configured, this arrangement might not “sacrifice” too much future tax revenue from the government’s point of view, and it would reduce the upfront cash outflow needed to pay Social Security beneficiaries.
Incidentally, do any of the policy wonks out there know if a think tank has done a compilation of how much the federal government could raise by selling off assets? I was surprised that I couldn’t quickly find such a thing at Heritage or Cato.
Existential Star Wars
Tyler Cowen linked to this. It’s pretty funny if you’re a high-brow sophisticate like us.
Giving Back to the Community
OK I have a sense that the blog readership is a lot higher now than it was, say, a year ago. So I’m going to try the Google Ads again and see how that goes.
If it looks like they bring in a decent amount of revenue, then I can justify blogging more. There are easily three or four posts that I consider making each day, but I don’t because I realize they would take too much time and I “have work to do.”
Donald Trump Wants Lebensraum
OK I exaggerate for your attention holy cow this is amazing. I think Kelly Evans was getting excited because she knew millions of people would watch this with jaws dropped. (HT2 Glenn Greenwald)
Krugman Upset That Opponents Don’t Read Him Carefully
The older I get–from my wistful observation you would think I was in my 70s, wouldn’t you?–the more I agree that people criticize in others that which they (deep down) despise in themselves. For example, take Krugman today talking about Casey Mulligan:
I’ve been asked for reactions to Casey Mulligan’s piece about the failure of New Keynesian economics.The short answer is, he should try reading a bit of Keynesian economics — old or new, it doesn’t matter — before “explaining” what’s wrong with it. For the doctrine he’s attacking bears no resemblance to anything Keynesians are saying.
This is fairly typical of freshwater economists. They know that what the other side is saying is obviously stupid, so there’s no need to read it; they picked up enough about it talking to some guy in a bar, or whatever, to criticize it.
That’s rather ironic, coming from the same blogger who wrote this back in March:
Some have asked if there aren’t conservative sites I read regularly. Well, no. I will read anything I’ve been informed about that’s either interesting or revealing; but I don’t know of any economics or politics sites on that side that regularly provide analysis or information I need to take seriously. I know we’re supposed to pretend that both sides always have a point; but the truth is that most of the time they don’t. The parties are not equally irresponsible; Rachel Maddow isn’t Glenn Beck; and a conservative blog, almost by definition, is a blog written by someone who chooses not to notice that asymmetry. And life is short …
If I might drop the Freudian analysis for a second, I want to make a serious point about economics. In complaining about Mulligan, Krugman says:
So Mulligan shows us a graph indicating how much prices would have to fall, according to New Keynesians, to restore full employment. No reference to anyone actually saying this, or any model that can be used to derive that line, is presented; nor is there any explanation of how Mulligan got that line. So what is it?
It looks as if he’s assuming that nominal demand is constant, so that a fall in prices would lead one for one to a rise in real output. But where’s that coming from?
If he had read anything — anything at all — that Keynesians have written about policy at the zero lower bound, he would have learned that there is no reason to expect falling wages and prices to raise employment — in fact, quite the contrary in the face of a debt overhang.
If Mulligan wants to argue that point, fine — but he presents as “the New Keynesian position” something that is just what he imagines, on casual reflection (or, again, maybe after talking to some guy in a bar) to be the New Keynesian position.
OK, so from now on I’ll assert that the Chicago position on unemployment is that we can cure it by sacrificing goats. Hey, I heard that somewhere — no need to actually read anything they say, right?
Are you kidding me? The idea that monetary and/or fiscal policy is important because wages are sticky, is now akin to saying that we need to sacrifice goats?!
Here are some quick counterexamples:
(1) In NYU, one of the New Keynesian professors once told the class (paraphrasing), “Wages and prices are sticky, they just are, we don’t need to debate that. We can talk about why they are, but we can’t doubt that they are.” (His point was to justify the sticky-price component of the New Keynesian model he was teaching the class. Without that assumption, it would have been a bang-whiz Chicago School markets-always-work model with no role for the Fed to affect anything.)
(2) Greg Mankiw, a New Keynesian, explicitly said I was wrong because prices were sticky.
(3) Scott Sumner–whom Krugman has praised for being on “his side” of the great Demand Matters debate–explicitly blames sticky prices/wages for everything.
(4) Krugman himself–and I wish I had the time to dig up the blog post–once sarcastically ripped on Chicago School types with a line like, “So recent data from the IMF shows that wages and prices are sticky–who knew?” It was only fairly recently that I noticed Krugman shifting to the even-falling-wages-won’t-fix-this-slump position. In particular, Krugman started saying that when Republicans and right-wingers began saying that labor unions and unemployment insurance were at fault for holding up wages. I.e. I didn’t see Krugman going out of his way to make the “if you had read anything–anything at all” point until it looked like right-wingers were calling the Keynesian bluff and saying, “OK, if the problem is sticky wages, then let’s knock down wages.”
In summary, I’m not claiming that Krugman invented this doctrine in the last year. Rather, I am saying he is nuts for claiming that only willful ignorance could lead a Chicago School economist to think that “sticky prices and wages” play a huge role in the standard New Keynesian explanation for involuntary unemployment.
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I’M STARTING WITH THE MAN IN THE MIRROR.
Now since I have pointed out that people’s criticisms of others actually reflects their subconscious views of themselves, let me acknowledge that the same holds for me. I mean, that guy Charlie Sheen really ticks me off. Just because he’s incredibly good looking and women throw themselves at him, he acts like he’s a big deal. I really wish he could handle his shocking good looks and charm more responsibly.
(See what I did there?)
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