24 Feb 2015


Potpourri 28 Comments

==> His resolve weakens: Scott Sumner admits that there is a non-trivial chance that my monetary views are correct.


==> The media are going nuts over the revelation that one of the leading climate change “deniers” failed to disclose his funding from fossil fuel companies, because obviously this should lead us to doubt his objectivity. In related news, the head of the IPCC (and joint recipient of the Nobel Peace Prize with Al Gore) resigned amid allegations of sexual harassment. In his resignation letter, Pachauri reportedly said, “For me the protection of Planet Earth, the survival of all species and sustainability of our ecosystems is more than a mission. It is my religion and my dharma.” But this BBC article on the story doesn’t even mention that. Instead the news story bleeds into a (labeled) “Analysis” from its environmental expert who writes:

Dr Pachauri’s resignation is a shock – but it is unlikely to create lasting damage to the IPCC as he was due to retire, and potential replacements are already throwing hats in the ring.

Good luck to them: the IPCC chair is one of the most gruelling and controversial jobs on the international stage.

The chair has to spend much of his life in mid-air, flitting between capitals, whilst suffering relentless attacks from campaigners challenging climate science.

I’m glad to see that the alleged dichotomy between science and religion has evaporated!


==> I’m probably not going to address the male/female wage gap stuff, because I don’t have too much to say that others won’t have already (by the time my article would be posted). If you’re curious, though, here’s Daniel Kuehn’s contrarian take, just to see how anybody could possibly reject the standard libertarian view on this stuff.

28 Responses to “Potpourri”

  1. khodge says:

    Bob, when you get a chance, you should update your “Read at Your Own Risk” section. At least you ought to put Daniel’s blog on there, especially because of your recent reliance on him.

  2. Scott Sumner says:

    My “resolve” hasn’t weakened one iota. What makes you think otherwise?

    • Bob Murphy says:

      This is the most contractionary humor policy since the Hoover Administration.

      • Major.Freedom says:

        Never reason from logical consistency.

      • Brian says:

        “This is the most contractionary humor policy since the Hoover Administration.”

        Now that’s funny right there. I don’t care who you are.

    • David R. Henderson says:

      Scott, Maybe that’s humor on your part, and humor is very hard to pull off without facial expressions. But you do see why Bob took your statement “There’s also a non-trivial chance that I’m wrong about almost everything, and that Paul Krugman or Bob Murphy is much closer to the truth” means that your resolve has weakened, right?

      • Keshav Srinivasan says:

        I think he’s trying to say that his resolve was always this “weak”: he said that he tends to not have certainty about everything.

  3. E. Harding says:

    Evan Soltas has argued the wage gap still exists after controlling for lots of variables:

  4. Michael says:

    It’s a nice touch putting you in the same sentence as Paul Krugman. Was that to discredit him, you, or both of you? Or perhaps it’s to put himself in the same league as Krugtron and Papa Murph.

  5. Andrew_FL says:

    That Sumner has always had doubt is a matter of apodictic certainty.

  6. Grane Peer says:

    Woods is complaining about you sleep singing. Something about an Abba medley in a Tim Curry Rocky Horror kinda voicing.

  7. Tel says:

    I’m probably not going to address the male/female wage gap stuff,

    If you have nothing else to do, listen to Peter Schiff get himself worked up over it.

  8. Tel says:

    Also a link to reports on the Chicago police running their own black-ops interrogation site might be interesting.

  9. Daniel Kuehn says:

    I’ve always found Scott’s professed pragmatism interesting. On the one hand it’s well articulated typically which suggests he’s really considered the point but on the other hand he definitely comes across as one of the most overconfident economics bloggers out there. There’s a lot of confidence on negative points – lots of people are adamant about what appears to be wrong. But Scott is pretty unique in his confidence about how things actually work.

    This is likely to be a matter of perspective of course – we all fight with our own doubts and interpret others as being more one dimensional. But Scott the skeptic should probably hesitate on concluding that Noah has it exactly backwards and consider that he might have good reason for seeing things the way he sees them.

  10. Scott D says:

    The gap in average pay is not a myth, but the idea that discrimination is the main or only cause is highly suspect. That is the myth that critics refer to, even if their language might be inexact. Also we have the idea that productivity should be equal when aggregated across all possible employment, which also seems unlikely.

    • Daniel Kuehn says:

      “Discrimination” is such a wishy washy term. What do you mean by that exactly? The coefficient on gender that’s left when you control for a bunch of things? That can get fairly small if that’s what you’re talking about but I wouldn’t want to identify that as “discrimination”.

      • Scott D says:

        “Discrimination” is such a wishy washy term. What do you mean by that exactly?

        Discrimination in this context would constitute an error in decision-making. It would be a case of a worker’s real productivity being discounted irrationally, resulting in them losing out to another candidate with weaker credentials. It would harm both the candidate and the firm considering them for hire. I do not believe that the evidence is in any way solid enough to support the case that this happens constantly and systemically.

        • Daniel Kuehn says:

          re: “It would be a case of a worker’s real productivity being discounted irrationally, resulting in them losing out to another candidate with weaker credentials.”

          So I’m confused why you think controlling for occupations is such a great way to get at discrimination.

          So this person loses out to another candidate with weaker credentials. That MIGHT land them in the same job at a lower pay or it MIGHT shunt them off into a different job.

          If it shunts them off into a different job then part of the coefficient on your occupational controls will be “discrimination” by your definition.

          • Scott D says:

            So I’m confused why you think controlling for occupations is such a great way to get at discrimination.

            Did I say that?

            I think that taking a simple mean of wages, grouped by gender, is a terrible way to measure discrimination in the way I framed it–as logical error. Controlling for other factors might get us closer to the truth, or they might not.

            The problem is that there are many, many assumptions being made, and some sacred cows which no one wants to touch, such as the idea that the average productivity of males and females is the same across all jobs. This is a classic indication of bias in research.

            Controlling for some factors might eliminate some of those assumptions, but might also introduce more. Given the intractability of the problem and the weakness of any solution proposed thus far, I revert to my default position of letting the market slowly and inexorably sap the difference, as it has been doing for decades. That this comports with my worldview that coercion is a very poor way to enforce social justice of any kind is a happy coincidence.

            • Daniel Kuehn says:

              Right that’s very much my position too. See my comment below btw. I wasn’t 100% sure what your take was.

        • Daniel Kuehn says:

          ^ Unless you think there’s some other reason why the evidence is so good besides the controls.

    • Harold says:

      “but the idea that discrimination is the main or only cause is highly suspect.”
      True for direct discrimination by employers, and as the only cause true anyway. But there is more to discrimination than this. The point has been well made that maybe we shouldn’t correct for some of these factors as they may themselves be the product of discrimination. Employers may choose only on the basis of experience, but if discrimination means men get more of the appropriate experience, then that is still discriminatory. So even if controlling for all these factors showed no wage gap (which it doesn’t) that would not prove there was no discrimination – nor would it prove that there was, of course.

      The test for discrimination has often been said to be whether two individuals that are identical except for the discriminatory factor (sex, race etc.) are treated the same. But when to we say these individuals should be the same? The question is usually posed at the point of presentation for the job, but maybe it should be at birth. Of course such an assessment is impossible. If we just present two individuals at say 25 years old with the same qualifications and experience, it is possible that one of them needed to be more able, more determined and had to sacrifice more to get to the same position.

      When direct discrimination is tested by sending identical applications except for the factor tested the results usually confirm that there is discrimination. A study in the UK on 2006 has some interesting results.

      They found that engineering discriminated against women, and secretarial employers discriminated against men. This was similar to previous findings in other countries, and may act to create a “pay gap” as engineers are paid more than secretaries. Especially if this pattern were the same accross other high paid /low paid jobs. However, they also discovered significant and unprecedented discrimination against men in the mixed sex fields of data analysis and chartered accountancy.

      There is said to be either statistical or taste discrimination. Statistical is where employers generalise about groups based on actual data – in this case perhaps that women cost more because of pregnancy and childcare responsibilities. There was discrimination against women in engineering, but in favor of women in the other professional fields, which cannot be reconciled with crude statistical screening across the professional labor market.

      Since we seem to be able to demonstrate both a real pay gap even after correcting for other factors, and we can demonstrate discrimination in practice-i.e. both cause and effect – it seems perverse to dismiss discrimination as a significant factor in employment.

      • Scott D says:


        If the problem is unconscious, systemic, and internalized, such that it is a whole host of individual decisions, including those made by women themselves, that in aggregate create a disadvantage for women, who has the obligation to correct it?

        • Daniel Kuehn says:

          Scott D –
          If there were not a singular or perhaps not any answer to your question what do you think the implications would be?

          I’m worried about this sense that we can only focus on or care about or even name these problems if they have some obvious culprit or involve some obvious obligation for correction.

          • Scott D says:

            Well, if you can’t find a cause to blame, only a symptom, I think it is a bit irresponsible to immediately place obligations on businesses to correct it. Incentives kinda matter. Here’s an example:

            Imagine that this year, congress passes a bill prohibiting discrimination in wages and hiring in modeling. Wages for models must be reported annually to the Department of Labor and will be examined for wage discrimination, and anyone employing models must have an equal number of males and females. What would you predict will happen to the modeling profession. Will this be good for men, good for women, neutral for both, bad for both, or good for both? How will modeling as an industry fare?

  11. Tel says:


    For a refreshing change AEP is working as a journalist (which he is good at) rather than a money printing Keynesian inflationist (which is exactly what you would expect).

    I know, I know, it’s about Greece, that’s foreign, right? Yeah, it’s foreign, also relevant to economics.

  12. Tel says:

    Am I weird, or do other people find this incredibly hilarious?

    When you buy a Nobel Prize, what are you purchasing exactly?


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