11 Mar 2015


Potpourri, Shameless Self-Promotion 46 Comments

==> Tom Woods has a good discussion of the “living wage.”

==> A recent interview with “Political Badger” where we discuss the mechanics of a voluntary society.

==> I knew “The Imitation Game” (movie about Alan Turing and Enigma) had a lot of bogus details. This article outlines some.

==> Viewers’ Choice: If I’m going to go after one of Noah Smith’s recent Bloomberg posts, would you guys prefer this one or this one? We don’t believe in democracy here; I’m asking you to make a case.

==> Scott Sumner has been writing on tax theory again, and I think he is badly mistaken. (Or at least, if you didn’t know economic theory beforehand, reading Scott’s treatment of taxation would totally screw you up.) He presented a cleaned-up version here, which I will critique formally elsewhere. For now, let me just bring to your attention an interesting throw-away observation Scott made in his initial post. After proposing to tweak the Rubio-Lee tax plan by adding “a 50% rate for income above $250,000 (or $500,000 for married people),” Scott wrote:

Conservatives might complain that a 50% top rate is too high.  The current top rate is 43.4% (don’t believe the liars who claim it’s 39.6%.)  But that is the top rate for an income tax system.  Rubio and Lee are proposing that we switch to a consumption tax system.  Consumption is less than income, especially for the rich, or should I say the “rich.” (How much will I consume the year I finally sell my house?  Not $600,000.)  So the top rate should be higher with any switch to a consumption tax.  Indeed you can argue that people with consumption levels in the $100s of millions per year should face an even higher tax rate.  And don’t tell me they “deserve” the 500 yachts earned through legal barriers to entry like intellectual property laws, there is no such thing as “deserve” in a cold heartless universe composed of nothing but subatomic particles, where most people are born into peasant families in places like Nigeria and Bangladesh.  If conservatives won’t be hardheaded realists, who will be?

That’s actually kind of freaky. But, then again I realize most economists don’t like my metaphysical Sunday posts and just stick to criticizing my “austere” policy positions…

46 Responses to “Potpourri”

  1. khodge says:

    I vote for the second, economist failures. The problems with the first, Republicans and Laffer and Reagan, are (among many of its weaknesses) it is long and rambling, it makes too many unsupportable assertions, its a rah-rah piece attacking everything evil in the eighties, and, basically, rehashes spitting matches that accomplished nothing. The second article is much more nuanced and presents a much more fertile ground for alegitimate challenge.

    • Gamble says:

      Speaking of unsupported assertions, in the FaithvWorks thread, you asserted “Interesting. The only passage that faces the 2 in a direct confrontation (by your own words) just so happens to not support what you are saying.”. Khodge you never gave any explanation or support. Most Biblical scholars use the passage as the platform for FvW, contrary to your unsupported assertion. After you made your comment, the thread locked me out, weird. So I came here to finish or discussion.

      Here are a few primers.

    • khodge says:

      1. Bob’s blog, not mine and I have no desire to troll here.
      2. I made it clear many weeks ago that I’m not going into that rabbit hole…each of my comments addressed logical inconsistencies of the poster (with yours being especially fertile ground).
      3. By my count, 2/3 or the responders on that post do not seem to agree with your sentiments.
      4. “Most biblical scholars” suggests that you have a rather insular view of the subject.

  2. Andrew_FL says:

    Sumner the Utilitarian scares me way more than Sumner the Currency Monopolist.

    • Z says:

      Sumner the Squirrel Hunter is the worst of all.

      • guest says:

        Sumner the squirrel marryer …

  3. E. Harding says:

    Yeah, I noticed Sumner’s pronouncement, too, but I decided not to comment on it. I wonder what percentage of economists are atheists.

    • Harold says:

      According to this, 23% of humanities and social science faculty members, and 28% of sciences faculty are atheists in USA. So a quarter of academics in round numbers This will be much higher in Europe. What proportion of economists are academics is another question.

  4. Anonymous says:

    I wonder what proportion of his income Sumner donates to poor people in Nigeria

  5. Tel says:

    And don’t tell me they “deserve” the 500 yachts earned through legal barriers to entry like intellectual property laws, there is no such thing as “deserve” in a cold heartless universe composed of nothing but subatomic particles

    That rule would also apply equally as much to the poor.

    The poor have the numbers to vote for representatives who promise to give them what they don’t deserve, while the rich need to either bribe those same representatives or hire some thugs (or both) in order to achieve a similar result. Having repeated this experiment a number of times, it appears to favour the rich, but then again, tautologically something must favour “the rich” else we would be calling someone else “rich”.

  6. Daniel Kuehn says:

    I liked Economists’ Biggest Failure so I’m curious what your problem is with it. Hopefully it’s a big better than a guy on my fb wall that was convinced it was just cliche physics envy.

  7. David R. Henderson says:

    Good piece on Alan Turing, but it didn’t handle the thing I cared about most: was the bar scene where they figure something out based on what that woman tells them accurate or not? I’m guessing not.

  8. David R. Henderson says:

    I think you should criticize both Smith articles. I think I know what you’ll say about the first, roughly speaking, but it’s important to say. I don’t know what you’ll say about the second, which is why I would like to read your critique.

  9. Keshav Srinivasan says:

    Bob, are you going to make a second Mises CA post about the Krugman Kontradictjon involving what he said in 1998 about the minimum wage? I think that would be effective, because I don’t think anyone in that comment thread even tried to mount a defense of that. It was clearly a case where he was making arguments against the exact arguments he uses now.

  10. Patrick says:

    Definitely the article about economists failures. I know he hates brain worms but perhaps he could use some of his own. I’d write it up myself but without a ph.D he isn’t going to care what I think. the ongoing methodenstreit is of the utmost importance to the future success of the Austrian school within popular discussion… IMO

  11. Taboo says:

    Not only is Sumner insane. But apparently he espouses Aspen Institute ideals.

    But WOW. Noah blaming national debt on tax cuts? That is just infuckingcredible!

    Isn’t this the same wet behind the ears fool that writes Noahpinion? He is writing for Bloomberg now? Is that a reverse nickname? This is really beyond senseless at this point. University trained academic type economists are little more than trolls with a certificate of propaganda running around serving as journalists writing up polarizing bullshit based on fraudulent and misconstrued paradigms.

    We are witnessing the biggest shit show in developed modern times. Live and commin at ya.

    • Scott D says:

      Yeah, I caught that too. As if federal spending were handed down by God, completely isolated and immune from the petty acts of men.

    • khodge says:

      Taboo, I’m pretty certain that this blog is being run by a university-trained economist. I’m, likewise, guessing that a high percentage of the readers of this blog respect that same university-trained economist.

  12. Taboo says:

    We have a couple hundred trillion of debt (including intragovernmental) and it is because citizens are keeping too much of the fruits of own labor? Not because of an out of control welfare/warfare state documented so well that only a goon could fail to see the proper context. Fools. You are getting what the doctor ordered! Cause the small business owners and higher end professionals like Surgeons and high level technicians/programmers making 250K or so need to get hosed right? They are the “evil rich” people that need to pay “fair share?’ Give me a break.

    Why don’t economists focus on the obvious and real mechanical problems of the economy?

    Oh yeah. They would be out of a job.

    I got news for you. There is no level of taxation that can “fix the “problem.” The government is bankrupt and they are going to come after everything! Just as always according to historical precedent. As far as they are concerned it is you that is the problem.

  13. Taboo says:

    The “Economists biggest failure” is a joke! Beautifully displays the nonsense that poses as economic dialogue in journals and media. As if many economists do not accurately predict these events. Schiff getting laughed off of news shows when predicting the housing bubble comes to mind. Particularly in light of Bernanke comments around the same time. Lets not forget about Greenspan’s PhD dissertation. Hello. Mcfly! Although that is probably one of the most spectacular examples, there are many others. This is akin to denying a depression by coming up with new semantics like “great recession” and “Jobless recovery.” Simply put, contrarians are typically ignored, and when they deserve credit for accurate analysis the pundits just redress everything and call it something else.

  14. Tel says:

    From Noah:

    It might even increase tax revenue — if you believe Arthur Laffer and the famous curve he drew on the back of a napkin. These arguments became known as supply-side economics — or, in the words of former President George H.W. Bush, “voodoo economics.”

    Repeated rounds of Republican tax cuts failed to pay for themselves, and failed to noticeably boost growth. All we got was a big overhang of national debt.

    Right in the middle of that he linked to a graph showing that tax as a percentage of GNP shot up dramatically after WWII and has been rising steadily! How to refute this? Any normal reader would immediately understand that it refutes itself.

    Take a close look at the specific area around the late 70’s and through the 1980’s and you can see about 1981 a local peak in tax percentage correlating almost exactly with a local trough in growth. Then about 1984 a local peak in growth coincides with a dip in tax percentage, late 80’s the inverse correlation continues.

    Basically the graph Noah linked to says exactly the opposite about Reaganomics as what Noah’s text says.

    Why try to engage with people who obviously are more interested in the party circuit than what they are writing about? Clearly Noah has made some economic decisions about quality vs quantity and about the sort of lifestyle he is interested in. That’s 100% his choice.

    • Taboo says:

      “Clearly Noah has made some economic decisions about quality vs quantity and about the sort of lifestyle he is interested in. That’s 100% his choice.”

      Exactly. It’s not like there are many economists out there in the first place. When push comes to shove, most all will take the Krugman road to cush university jobs, status quo approval, ego stroking BS awards and accolades. Rather than go against the grain and stand for something, have some integrity and state the obvious. The situation is bleak and the reasons why are not a mystery.

  15. Levi Russell says:

    I agree with David Henderson, I’d like to hear your thoughts on both.

  16. Major.Freedom says:


  17. Josiah says:

    How can you say it’s not a democracy and then call it “Viewer’s Choice”? For shame!

    I say do the second one.

    • skylien says:


      Well because he closed with “I’m asking you to make a case”. That means it is not sufficient to say for which one you vote, but it would be more important why you want the second one.

    • skylien says:

      I would be for both also, because finally both are about models, bias and method.

      • skylien says:

        Sorry Josiah, the last one shouldn’t have been an answer to you..

    • khodge says:

      Josiah, it looks like I’m the only one who has formally “vote”d. You, for instance, only “say.” Of course, though, we need a formal nomination and a second.

  18. Mule Rider says:

    Somewhat off-topic although relevant given the amount of time spent critiquing Paul Krugman’s work on this site. He said something so particularly galling recently that I just had to comment on it. Here’s the link:

    http://krugman.blogs.nytimes.com/2015/03/11/the-truth-about-entitlements/?module=BlogPost-Title&version=Blog Main&contentCollection=Opinion&action=Click&pgtype=Blogs&region=Body

    And the pertinent quote:

    “The only way to make it seem as if means-tested programs were exploding is to include Medicaid, which has gone up in part because of rising costs, in part because of a major expansion to cover children (all those 11-year-old bums on welfare, you know).”

    Now is that not the straw man of all straw men (that part about pre-teen welfare bums)? That’s about as dishonest as it gets in terms of a response to people concerned about the bloat of our social welfare programs. No one in their right mind has the least bit of disgust over “11-year-old bums on welfare” but rather the irresponsible and often conniving parents of these kids who abuse the system and the cunning politicians who use these programs to essentially buy votes.

  19. Ryan Tracy says:

    It’s gotta be the second one.

    • Ryan Tracy says:

      As for the case for refuting it, the last sentence is a fast ball sent right down the pipe, I can’t think of anyone that I would rather see hit it out of the park.

  20. guest says:

    “No one in their right mind has the least bit of disgust over “11-year-old bums on welfare” …”

    Defending the Undefendable (Chapter 32: The Employer of Child Labor) by Walter Block

    I agree with Walter Block that the government’s laws against child labor delay mobility and maturity.

    And I would add that they prevent escape to a better life in the case of abused children. Were the cops not shutting down children’s lemonade stands and the like, there’d be some that could begin to make a safer life for themselves.

  21. Major.Freedom says:

    Noah Smith is one of those few writers who I can always count on to make glaring inconsistencies and errors. He seems to actually believe the truth resides in a hemisphere, in his case the left one. He does not know the ground of economics being self-reflective. To him that is eye rolling.

    But a little self-reflective activity would help him avoid being so inconsistent and prone to error.

    In the first article you linked to, what he said about conservatives and economics, if true, would have to also apply to liberals and economics. But he trashed the right hemisphere by contradicting what he said in the second article. He clesrly suggested that economic models that contradict “voodoo economics” are the correct models, since he is so sure that the next time taxes are cut, he predicts higher debt and no boost to growth. But how can that be? His second article claims that economics can’t make predictions!

    What is that? The zero ability of conservatives and their bretheren is somehow lower than the zero ability of him and his left hemisphere brethren? Is it “I may not be able to predict the future of the economy…but I am not as bad as those conservatives who predict lower taxes leads to higher growth instead of higher debt and no growth!

    Just ugly.

    His second article in itself is also badly informedz and as usual gets things backwards. He claims economics today suffers from too many models and too many theories without scientific rigor because it is derived from the “literature” roots of economics such as Smith and Ricardo. What he is referring to of course is deduction. He claims that deductive based reasoning lacks a sort of truth value that only empirical validation brings. Yet the truth is of course exactly the opposite. Logic is much more constrained and strict in terms of what you can and cannot say, as well as much more stringent in terms of the quality of the argument you have to make. Smith has it backwards. What he calls “thought experiments and casual observations” is actually a strict discipline that in fact prevents the gigantic range of all goobledygook theories that exist today as a precise result of abandoning the strict logical constraints and reasoning in favor of “any theory is permissible as long as it predicts”, which ironically is the very problem Smith complained about in that second article!

    What Smith cannot do very well is test his own beliefs for internal consistency. He does not do so because he is convinced of the very thing that took place in mainstream economics, which is a movement towards a theoretical anything goes as long as there is empirical validity, which again Smith pointed out is something ANYONE can do, for example in order to promote their political bias.

    Smith refutes Smith. Again.

    • skylien says:

      His second article about predictions really shows that at the bottom he thinks economics is just like physics. You just need the right model, enter the data you gather empirically put it in and then you can predict what is going to happen. Which means he believes People are basically just like stones.

      If that would really be possible then this would mean that those economists able to do that would not only be Rock Star economists, they would also be Rock Star investors who would be filthy filthy rich basically by definition.

      Who really thinks that is possible?

      • guest says:

        “Which means he believes People are basically just like stones.”

        Free will breaks the causal chains that would be necessary for predictive models.

        • skylien says:

          guest, you know at the Macro level “Free Will” disappears statistically…


          • guest says:

            And so does economic calculation.

      • E. Harding says:

        People are just like stones, but are much more difficult to model. Also, good one, skylien.

        • skylien says:

          “People are just like stones, but are much more difficult to model. ”

          E.Harding, well maybe you they are or they are not, but for all I know stones are not able to model stones.

          • skylien says:

            forgot to delete *you*… should be *…well maybe they…*

    • Tel says:

      What is that? The zero ability of conservatives and their bretheren is somehow lower than the zero ability of him and his left hemisphere brethren? Is it “I may not be able to predict the future of the economy…but I am not as bad as those conservatives who predict lower taxes leads to higher growth instead of higher debt and no growth!

      What Smith seems to believe is that his crowd are useless but well meaning, while those dang Republicans are both useless and nasty about it too.

      Personally, I think this greatly underestimates the damage that useless well meaning people can do.

    • khodge says:

      It is my observation that Smith took a couple spare marketing classes and has been relying on those to get his start. He clearly comes with a Keynesian bias but, with practice, should develop better analytical and presentation skills. As to why Bloomberg uses him…maybe they think they are getting a cheaper version of Krugman, one who hasn’t yet won a Nobel prize.

  22. Matt S says:

    So we live in a cold, heartless, universe that is composed of nothing but subatomic particles, but we (being part of this cold, heartless universe) should have a heart and tax the “richer” blobs of subatomic particles more to somehow help the less wealthy blobs of subatomic particles?

    Why Scott?

  23. Tel says:

    Of all the hilarious comments:


    The European Central Bank’s bond purchases will create an unsustainable stock market rally and are unlikely to boost euro zone investments, Greek Finance Minister Yanis Varoufakis warned on Saturday.

    He’s all hurt because Greece got left out of the free money circus. Don’t worry Yanis, it’s only going to fly when Draghi buys himself some trousers and we know that ain’t happening any time soon.

  24. Brian says:

    “Voting” on the Noah Smith articles:

    I’d say the second article about economic predictions is more important and goes to the essence of modern economics.

    The first seems relatively straightforward, and I would expect any number of people could/would aptly respond. However, it may be that you have a unique angle. So unless David Henderson is wrong – that we don’t know how you would respond to the first, ‘B’ would be more interesting and important.

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