11 Nov 2014


Potpourri 8 Comments

==> Although it wasn’t his main point, Noah Smith mentions that Krugman is unfair with anybody who disagreed with his Keynesian model back in 2008-09: If those people didn’t change their views, Krugman mocks them. Yet even if they do change their views–so long as they don’t say “Wow Paul was right”–Krugman still mocks them. Now back to my commentary: So contrary to what he’d have you believe, Krugman isn’t so much against “derp,” rather he’s against, “People who aren’t Keynesians.”

==> Ah, the familiar pattern. The Chicago School guy who loves Milton Friedman and blogs at EconLog wants our officials to act more like FDR. Wait, what the–?

==> Some large jumps in health insurance premiums. I bet the stupid American voters never saw that coming.

==> I by NO MEANS am a typical “pro-choice libertarian,” but nonetheless check out some alarming cases of the State grabbing pregnant women.

==> I think he’s wrong, but Kevin Dowd’s critique of Bitcoin is the best I’ve ever read.

8 Responses to “Potpourri”

  1. Joseph Fetz says:

    “… Krugman isn’t so much against “deep,” rather he’s against, “People who aren’t Keynesians.”

    Does that really need to be said in the economics world?

    I’ll grant that most of his readers aren’t exactly steeped in economic theory and study. We know that. So i guess that I sort of took if for granted that those who are “steeped” sort of look at his columns as an inside joke, i.e. he’s using his role as a prominent economist to state his often insane and illogical views; mostly for political sway.

    If the cognitive dissonance that *is* Paul Krugman wasn’t already abundantly clear, all one must do to see it clearly is to contrast his work as a positive economist with that of his political commentary. That dude’s been resting on his laurels for years and sounding like an idiot since.

  2. Andrew_FL says:

    Yeah that uh. That post of Scott’s legitimately creeped me out. Anything if raises NGDP, I guess.

    • Tel says:

      Japan’s economy is in a lot of trouble. Let me predict that they will be able to induce price inflation, but they will be worse off because of it. Only a question of how much worse off.

      Find a young Japanese worker, and ask what they think of pension plans and whether they are buying any government bonds.

      • Harold says:

        “Find a young Japanese worker, and ask what they think of pension plans” Someone has done just this.
        A recent survey found some striking differences in pension attitudes and actions among 20-29 yr old workers.
        For “low readiness” for retirement, US had 65%, China 66% and Japan a whopping 87%
        For those that had some provision, private pension plans were include for USA at 40%, China 66% and Japan a tiny 4%
        When asked why they did not save more, lack of money was cited by USA 47%, China 6% and Japan 19%.
        Uncertain economic environment by USA 12%, China 29% and Japan 27%


  3. Tel says:

    Please do some searching for the cases Christopher Booker has documented in the UK… the whole stolen baby thing is going to get a lot worse. Also read about Rotherham council to find out how the State protects kids… and essentially zero consequences for the officials concerned.

  4. Major.Freedom says:

    As with most critiques of Bitcoin, the author of this article reasons from dollar exchange ratios, and adds the twist that all monopolies are inherently bad, all resting on the groundless assertion that free markets “tend towards monopolies” as if it were an economic law.

    If the dollar exchange ratioto bitcoins fluctuates wildly, this is not ipso facto a reflection of bitcoins. It could very well be a reflection of the dollar. Remember the volatile price history of oil? It was not independent of actual and expected Fed policy.

    For monopolies, there is nothing inherently wrong with a monopoly that arises due to that provider being the best provider over all others, according to consumer preferences. Such a monopoly does not have any seeds of its own destruction. As long as it continues to innovate and improve more than others, no collapse is necessary.

    If a monopoly in bitcoins mining does arise by free market competition, then this does not imply that it has dictatorial powers either. It must still compete with all other producers of other, non-bitcoin commodities. It must compete with them for scarce means of production. The more consumers want things other than bitcoins, the more expensive it will be for the bitcoin monopolist to mine larger quantities of bitcoins ceteris paribus, because when consumers pay for other things, that makes it profitable for producers of those other things to spend money on means of production that the bitcoin monopolist needs.

    People want things other than bitcoins.

    So there will in fact arise a tendency for bitcoin investment to be checked and constrained by investment needed and desired elsewhere. There is no inherent mechanism for the bitcoin monopolist to collapse, and there is no necessary reason for it to go into a long run unsustainable boom, provided bitcoins are not manipulated by non-market means that misleads investors in both bitcoins and everything else.

    I don’t think this author understands bitcoins, or economics. Platitudes about monopolies and dollar price volatility.

  5. Tel says:

    I see plenty wrong with Kevin Dowd’s article, it isn’t very well researched at all.

    However, the mining industry is characterised by large economies of scale – these are so large, in fact, that the industry is a natural monopoly, in which it is economically more efficient to have one producer than many.

    Most people making a bold statement that their entire argument hinges on, would want a bit of analysis to back it up, rather than just declaring it true and barging on. I know, we have that thing where anyone can declare anything a “natural monopoly” especially in cases where government has declared no competition can be tolerated, those are the situations most often declared to be “natural monopolies”. Even with that, you would expect just a little bit of analysis.

    Mining pools are now so big that the original atomistic competition has given way to oligopoly, and there is concern that these mining pools are big enough to threaten the system by subverting the transactions validation process for their own ends: for example, by mounting some kind of double-spend attack.

    Pools are big, imagine that, and what is a pool exactly? Is it a central entity enjoying massive economy of scale? Ummm, no actually, a pool is just a confederation of individual miners, who can choose to leave at any time. Pools exist for two reasons: more convenient management of resources, and spread of risk, neither of which would be a strongly compelling reason for any individual to stay around with a pool whose management had been caught attacking the integrity of the ledger.

    However, in recent months, one big pool, GHash.IO, has openly rejected that idealism and now poses a major threat to the system.

    I had a look at their website and noticed the very first thing they show is a big banner “TRUSED BY 300K USERS” which almost looks like they are openly emphasizing their integrity and commitment to a quality outcome. Maybe they are secretly posing a major threat, but they certainly seem eager to convince the people joining their pool of good intentions.

    But here’s a very basic question, if Kevin Dowd genuinely believes that some centrally managed pool is going to deliberately mount a massive attack on the whole integrity of the ledger such that it destroys all confidence in the currency, and crashes the price to zero… maybe he can also explain the incentive in that. Why would someone investing lots of real time and money building a pool with custom hardware, and large scale coordination of pool members want to mine a currency with the intention of zeroing out the value of all the things they have worked on?

    • Harold says:

      I don’t know if the tendency to monopoly is correct, but surely the point of bitcoin is the lack of requirement for a trusted third party to administer the ledger? Distributing it over the network avoids the need for a third party. If the network becomes controlled by one party, then you are back in the “trusted third party” scenario again, and the benefit of bitcoin disappears.

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