07 Jul 2015


Potpourri, Shameless Self-Promotion 10 Comments

==> Tell me this isn’t the funniest headline for a real study. I have known this about male economists for a while. Women should not emulate them. No amount of career success is worth your soul, ladies!

==> I was googling a topic and stumbled across this National Review article from back in January, where I warned conservatives about a carbon tax. I didn’t remember seeing it, though my colleagues at IER tell me we circulated the link when it ran. Anyway, in case you forgot it as much as I did, here ya go.

==> In this post Scott Sumner says it’s been “smooth sailing” for the Danes, who aren’t afraid to establish a currency peg and inflate to the gates of Hell if need be. Scott doesn’t mention that the Danish central bank’s assets are up 50% year-over-year, amidst this “smooth sailing.” (I looked it up but don’t have a link for you. Their website has some stuff in English if you’re curious.) He still thinks he was right about Switzerland; they dropped his perfectly sound strategy for no good reason. He’s still right. (In contrast, when I say there was no reason for governments to abandon the gold standard in the 1930s, I really am right.)

==> My FEE article on the euro and Greece, from back in 2012, has found new legs. I think it holds up pretty well.

==> I have a new post at IER on the British Columbia carbon tax and “leakage.” Cool Excel chart at the end!

10 Responses to “Potpourri”

  1. Josiah says:

    I was googling a topic and stumbled across this National Review article from back in January, where I warned conservatives about a carbon tax. I didn’t remember seeing it

    Hmm. This is the second time in the past week when you haven’t remembered writing something that you published. I think you may be the clone.

  2. Tel says:

    Addressing the confidence gap may require further thought over what the “right” level of confidence should look like.

    Because everything we do always has a “right” level, and without some Very Serious Research we would would never know what our lives should look like.

    We have made tremendous strides toward reaching gender equality.

    Because everything we do is about being equal.

    Libertarians have such a long way to go, it isn’t even funny.

    • Harold says:

      It seems trivially true that one may be overconfident or underconfident. It seems trivially true that someone expressing more confidence should be right more often. From this we can see that confidence can clearly have a wrong level, so why not a right one?

      It would be useful to know if “experts” arer any good at assigning a confidence that has anything to do with their actual knowledge, or whether it is just based on their personalities.

      • Tel says:

        If only we could create the perfect person, and then create lots more exactly like the first one… a whole nation of perfect people. How good would that be?

        • Harold says:

          I don’t know anything about your fantasies for perfect people, all I am talking about is gaining some insight in to human, psychology. If I said it would be useful if we understood how driver’s confidence in their driving abilities was affected by alcohol, would you think I was advocating for creation of perfect people?

  3. Scott Sumner says:

    The Danish data is 100% consistent with what I said in the post. I’m not sure why you think it’s important or somehow informative. Five months ago there was a lot of speculation buying the krone, and more recently the speculation has faded away as there is no longer a fear of krone revaluation. The tough line worked. Events in Switzerland have pretty clearly shown I was right–they are falling short of their inflation target, as I predicted. The revaluation policy failed. And how much has the Swiss monetary base increased by in the past year?

    • Major.Freedom says:

      FYI, making a correct prediction about consumer price inflation, does not impress those who look to other causes and effects such as whether the prevailing consumer prices, whatever they happen to be, are a reflection of serious problems to economic coordination.

      The Swiss central bank’s balance sheet rising 50%, regardless or whether consumer priced rise just under some arbitrary target, is evidence that there are big problems in the Swiss economy. Imagine a firm that needs to suddenly borrow and spend 50% more just to stay solvent. Sure, the “spending” related to that firm has not fallen off a cliff, but nobody would claim that the firm did nothing wrong.

      Same principle applies for two firms, ten firms, or ten thousand firms.

      If a central bank’s balance sheet rises 50%, and the result is only a small increase in spending, and prices, that is evidence of big coordination problems, and not merely a sterile, mechanistic, “effects must be reversed” rise in cash preference.

      You don’t have a long term mindset, which is why you don’t get Murphy’s point.

      • Bob Roddis says:

        My attempts at trying to differentiate BASIC Austrian concepts such as praxeology, Cantillon Effects, economic calculation/miscalculation and voluntary exchange from DERIVATIVE Austrian concepts (ABCT) have been universally ignored (and mocked) by the statists. Therefore, I have tried to come up with a new analogy. These basic attributes and phenomena are like cell theory, atomic theory and molecular theory. They are ubiquitous and pre-exist all action. Therefore, any alleged pattern in economic behavior discovered/propounded by monetarists or Keynesians employing their “glop of aggregate” “empirical” methodology (which meticulously ignores the underlying phenomena) does not change or refute the underlying existence of the universal Austrian attributes. Thus, employing the “glop of aggregate” empirical method, it’s probably true that most artificial booms can be maintained for many years with addition injections of funny money. This seems to be the basic theory of the “market monetarists” and the MMTers. Such analysis ignores the underlying shifts of purchasing power (without due process of law) and the economic mis-calculations which produce false and unsustainable prices that are necessarily ubiquitous under such a funny money regime

        • guest says:

          I’ve been thinking about how to communicate my views more effectively, too.

          Try this, as I think it forms the basis for the correction of a lot of misconceptions, and it’s intuitive:

          At the end of any given production process there is a consumer good. In other words, you’re producing something for someone.

          If there’s no consumer who wants to buy the finished good, then that production process is a malinvestment.

          That’s what the Austrian theory of the structure of production is.

          I think from this starting point, you can explain why “Buy America”/protectionism is economically destructive (because American companies may not be producing what consumers want).

          And, to your point, I think from here you can explain how stimulating higher levels of production which has not been justified by consumer demand is the essense of a bubble. And since consumer demand is what makes higher levels of production profitable, such artificially stimulated higher levels of production must necessarily correct (i.e. crash).

          (Note: Goods that are bought for service industries are not bought for consumption, so what do we make of such goods in the above paradigm?

          (The service worker buys the tools as a means to an end; the buyer rents the skill of the service worker to produce a desired outcome [say, a particular style of haircut]; and the tools are consumed on/by the buyer.

          (So the above paradigm holds even for service industries.)

          • guest says:

            “… from here you can explain how stimulating higher levels of production …”

            This should read: “Higher ORDERS of production”.

            This was not meant to convey higher amounts of output, although that may accompany artificial stimulation of higher orders of production.

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