02 Feb 2017


Potpourri, Steve Landsburg, Trump 50 Comments

==> We at the Free Market Institute at Texas Tech are hosting an IHS seminar on American democracy. You can register even up till the last minute, so come on down. I’ll be talking about secession on Saturday, but all the talks look good.

==> Glenn Greenwald on the depressing consistency of Obama-Trump when it comes to military strikes killing kids.

==> Speaking of using deaths as a way to critique policy, Steve Landsburg does it for Trump’s tariff (or whatever it ends up being) against Mexico. I push back in the comments, because I don’t think Steve would endorse an analogous critique (and I make it, plausibly) of a free trade policy.

==> Is it weird that the AP is running a story with a headline about what Trump said to the Mexican leader on the phone, which both the White House and Mexican government vigorously deny? Is it a completely nutjob theory to consider that the media is saying to Trump, “You think you can insult us and box us out? Now you’ll see much power we really have, tough guy.” ?

50 Responses to “Potpourri”

  1. Andrew_FL says:

    Landsburg lost me at citing epidemiological literature.

    As a general rule I totally discount any arguments connecting one thing to another that involve too many uncertain intermediary steps.

  2. Khodge says:

    Steve’s consistent emphasis on positive rather than normative is what makes his work so challenging. It is also why his gets people – especially progressives – mad at him: it is hard to actually think through his scenarios.

    • Bob Murphy says:

      Khodge so you think Steve was just engaging in some fun trivia? Like he could’ve just as easily wondered how many cycles the moon would go through during the implementation of the Mexican tariff?

      I got the sense he was saying, “Trump shouldn’t do this, look how many Americans it will kill.” You don’t think so?

      • Andrew_FL says:

        Either that or he’s being a hypocrit.

      • Khodge says:

        It is a huge step from “this is a problem” to “let’s do something about it.”

        I’ve occasionally dropped comments on his blog referencing things he had written while doubting he actually agreed with his own conclusion. (One such example: In Armchair Economist he suggests that a dictator is the optimal government. In a response to a different comment he explained, without refuting my comment, that his ideal government was something else.)

        So…Fun trivia? No. Another data point to be examined? Absolutely. A crucial argument? No, Steve has much stronger arguments for free trade. It reminds me of a case study I had once where the obvious solution was to accept a project; there were so many positives that it was too easy to ignore some of the pieces. The answer was that the real world example failed because the preliminary test did not scale up.

        The correct answer is: (1) Is Steve’s answer correct (some of the comments suggest that it was more complicated)? (2) what weight should be given this aspect (including is it complementary to other points or contradictory)?

        • Adrian Gabriel says:

          Quite simply as an economist anything beyond normative value free descriptions is typical educated guesses. Truly the most effective method in captivating an audience toward advocating more prosperity, is to describe to them what actually occurs in the present circumstance.

          Positivists attempt to make predictions with either numerical examples, or step into the realm of assuming future predicaments with integers or philosophical value judgements. This is where the confusion lies, where the economist’s witty descriptions turn into advocacy of correlative processes.

          I believe Dr Murphy has the best method, rhetorical questions are mortifying as well as elucidating. Within the book with the highest sales ever, the Bible, we find the essence of human nature. Economics reminds everyone that intervention, coercion that is, distorts the market signals estimated through price discovery. Overall, price discovery becomes difficult and deceptive with government. Free the markets.

      • Capt. J Parker says:

        Yup, Dr. Landsberg slipped up big time in not considering the trading counterparty in his analysis and rather than admit his error he chose to throw up a smokescreen by saying counting lives lost is a normative analysis.

        On the other hand if Dr. Murphy’s proposition is correct and a 20% tariff on Mexican fruit and vegetable imports to the US will reduce total lives lost to poor nutrition (counting both US and Mexican lives) then it gives some credence to the progressive claim that income inequality has costs (it is the low incomes of Mexicans relative to Americans that leads to excess Mexican deaths in a free trade regime) that can be mitigated by policy even if the policy creates inefficiencies.

        • Adrian Gabriel says:

          Interesting contention Mr Parker. To me you have involved yourself in the debate of policy making. It even sounds like you are describing that a trade war would arise.

          A tax is filching, it is an interjection of a third party into a free exchange of goods between two parties. Any fees associated with the trade are included in the mark up, or rate of return. Logistical costs would be undertaken during the transition of the goods themselves. All costs are in the market.

          It is not true that a new import tax is necessary to charge foreigners for using ports. The ports have their own fees and pay taxes to the US government as well. Every corporation that either purchases or transfers the goods, if using public goods such as roads or the like, are paying taxes. Those taxes pay to maintain those socialist entities in place.

          Everything should be private.

    • Craw says:

      That post doesn’t even pretend to being a positive analysis, as Bob shows clearly. The Blowin’ in the wind quote is a give-away. And there isn’t even a hint of a consideration of any lives the policy might save. Not a hint.

  3. Daniel Kuehn says:

    Are there papers associated with the IHS conference or are these just talks?

    • Bob Murphy says:

      It’s not a paper-presenting forum, but it wouldn’t surprise me if some speakers draw on their published or working research. But I don’t have a paper per se.

  4. DesolationJones says:

    The AP story you linked says the White House did not comment on the quotes.

    Another article I found says a white house official confirmed the quotes.


    • Bob Murphy says:

      DJ here’s The Hill reporting that both WH and Mexican governments deny the reports.

      Also, if my theory (let’s call it a hypothesis since I’m not saying it’s right) were true, then the fact that the media cooks up another anonymous official to confirm what the first anonymous leaker told them…doesn’t seal the deal for me. I would like someone to go on record with this so Trump could fire the person if s/he is lying.

      If people in the media really think the next Hitler is in the White House, I’m sure they think lying in order to contain him is totally justified and in fact their duty. I’ve already seen Trump foes think it’s OK to punch people and set cars on fire.

      • Dan says:

        CNN reported a much more amicable conversation where Trump was offering his help if they needed it, rather than threatening them unless they fixed the problem.

        Not that I’d be down with sending troops there in either scenario, but the second take sounded much more plausible.

      • DesolationJones says:

        I think even that Hill article is using an anonymous WH source. Hard to argue the WH is “vigorously” denying it if they’re not going on the record. And it sounds to me like they’re not denying the quotes. They’re just saying Trump didn’t mean it the way it sounds. I get the same impression from the quotes from the Mexican officials in the original AP story.

        A newer Hill article says:

        “The White House did not dispute the latest account when asked by The Hill. It has not confirmed or denied whether Trump used the phrase “bad hombres” in his conversation with Peña Nieto.”


        • Bob Murphy says:

          I’m not sure if the original WH official was anonymous or not; it didn’t say he was, which I took to mean they know who the guy is if challenged. But maybe I was wrong about that.

          The reason I said “vigorously deny” DJ is that they didn’t originally just say, “Oh it’s a misunderstanding.” They said the report was false and pointed out that Mexican gov’t was agreeing with them that it was false.

          Anyway to be clear, I’m not saying I’m sure that your newer story is wrong, I’m just saying this is a weird environment right now. Media keeps running stuff then partially or completely retracting.

          • Craw says:

            Because if it looks bad for Trump they don’t check it, they print it.

  5. Adrian Gabriel says:

    I am looking forward to your speech there at the IHS conference being held at Texas Tech. I hope you’re able to record it and later share it with us.

    It’s nice to see IHS embracing this topic, I am utterly surprised they would espouse such a radical ideal. It seems like our time has come to begin disseminating at a higher rate, our Rothbardian philosophies.

    That looks like a well versed group of scholars as well. Good luck with inciting that fervent libertarian schema in everyone.

  6. guest says:

    I have to put this quote somewhere, it’s awesome:

    Democrats Aim For Their Own Initiative Modeled After The Tea Party

    “INSKEEP: When Republicans turned against President Obama, they were labeled the party of no.

    “BROCK: Right.

    “INSKEEP: Do you want Democrats to be the party of no?

    “BROCK: I do. I mean, we are – if we are, quote, “obstructing,” we’re obstructing for the values of the majority of the country as expressed actually in this election and for working families, not for corporations. And so I’m not afraid of that label.”

    HAH! Lefties are so ridiculous.

    So, when it’s Dems who are being obstructionists, its OK to be a Party of No.

    That’s right up there with Chuck Schumer calling the Tea Party “extreme” because the caucus told him to.

    The left wants to lie to everyone to get people to vote their way.

    • Harold says:

      So are you saying it is OK for the Republicans to be to be party of No but not the Democrats, or that is wrong for any party to be the party of no? Or did you object when the Republicans were saying No?

      If the strategy is effective, then even if it is wrong should we expect the Democrats to eschew such policies, whilst the Republicans should be allowed to pursue such policies with impunity?

      Just want to make sure you are not applying double standards.

      • Richie says:

        HAHA no he’s pointing out the double standard of the leftists. Take off your political glasses.

        • Harold says:

          Richie , I know that. I am exploring if there are more double standards here as well.

          • Richie says:

            No, you’re not. You’re being a political hack.

      • guest says:

        No double-standards, here.

        The Dems were calling the Republicans “The Party of No” because they wanted people to think they had no principles – that all they were doing was getting in the way of “progress”.

        This narrative, of course, is based on the statist belief that the government’s role is to “do something”.

        The Republicans were right to be obstructionists because the Democrats’ positions were economically destructive and totalitarian.

        The Democrats cannot win a fight on the merits of their own views, so they have to lie about their, and their opponents’ agenda.

        Two examples:

        First is when the Republicans wanted to discuss the obvious unconstitutionality of Obamacare during the Health Care Summit, but were told that there had been enough talking up to this point.

        Second is the Fairness Doctrine. Left alone, people do not want to hear socialists on their radio (think “Duck Dynasty”, but for radio), and so it is naturally more profitable to give far more air time to conservative views.

        So, it’s “unfair” if people don’t voluntarily listen to Lefties. Psh.

        Republicans don’t need to call Democrats “The Party of No”, because we can argue the unconstitutionality of their positions.

        At any rate, the United States was set up by its founders to make it easy to obstruct government laws so that it couldn’t easily be taken over by any one faction. Gridlock is a feature, not a bug.

        (By the way, the Republican Party is very socialist, too. I’m actually only identifying with them in the sense that they used to be against socialism and gung-ho free market advocates. So, I’m using the term loosely, here.)

        • Harold says:

          I see where you are coming from. The Dems do it is bad for justifiable reasons. The GOP does it and it is OK for justifiable reasons. Although that could be a pretty good definition of double standards.

          Now is the time to come out in opposition to unconstitutional orders from whomever they come, agreed?

          • Richie says:

            You’re hopeless. Again, take off your political glasses.

          • guest says:

            “Dems do it is bad for justifiable reasons. The GOP does it and it is OK for justifiable reasons.”

            No, the Left is *saying* that the Right is just being obstructionist to get in the way of “government work” – as if the government is supposed to “do something”.

            Whether or not it is legitimate to obstruct for principled reasons IS NOT the issue at hand.

            I’m on the Right, and so I’m not going to concede that the Left has justifiable reasons for being obstructionist. But if I *was* a true-believing Lefty, I wouldn’t feel the need to lie about the Right’s motives, as if they weren’t obstructing for reasons *they* thought valid.

  7. Tel says:

    (This is, deliberately, a considerable underestimate, since it entirely ignores the fact that the tariff will also lead to increases in the price of American vegetables, leading to further reduced consumption.)

    And the increased price of American vegetables will be incentive for Americans to produce more, so really the difference will come out quite small. Very quickly US growers will fill most of that gap.

    I don’t know exactly what the difference in productivity between US growers and Mexican growers, but I’m sure it’s less than 20%, and besides that, with more Americans producing vegetables there will also be more Americans with jobs who are thus not as poor as they wold have been and able to afford better food. Also, since the US sells staples into Mexico (e.g. corn) presumably the Mexicans won’t buy as much of that and then some of the corn producers shift to other crops because the US price of corn might come down a bit. Economies are quite adaptable, so I’ve heard.

    That’s kind of the whole point of what Trump is doing here. But yeah, if you ignore the whole purpose of it, then you can also make it look bad by considering only the bad effects.

    • Harold says:

      “Tel, are you sure you want to stand by to this comment? “with more Americans producing vegetables there will also be more Americans with jobs who are thus not as poor as they wold have been and able to afford better food.”

      If free trade establishes the efficient level of production and consumption, then a tariff must produce an inefficient level. Those Americans that now produce vegetables should be doing something more efficient instead, providing more jobs. Ultimately the tariff must make Americans worse off unless you have some mechanism whereby free trade did not produce an efficient outcome.

      I am not saying that such a mechanism is not possible, but you have not presented it here.

      • guest says:


        Prosperity is not a function of jobs, per se. Jobs are just means to ends.

        Prosperity is a function of production of what people demand (not to be confused with Keynesian “output”.)

        It’s difficult to hear that workers and producers don’t matter, until you understand that a consumer has to actually want what is produced in order for any production process to be profitable.

        It is not the responsibility of producers to create jobs, and it is not the responsibility of consumers to buy something, as if trading for trading’s sake is what creates prosperity (Keynesian “circular flow”).

        The only reason a producer produces is to make a profit off of consumers. Period.

        Consumers will consume whatever exists if they think it will make them better off. Otherwise, they will produce for themselves. If you can earn more trading a produced good for what a consumer has, then you can profitably be a producer.

        If someone can earn more trading his labor to a producer than he can earn producing with his bare hands, then there’s an opportunity for a job.

        So, the point isn’t to create jobs, but to allow people the freedom to engage in the economic activities that seem most profitable *to them*.

      • Tel says:

        If free trade establishes the efficient level of production and consumption, then a tariff must produce an inefficient level.

        Inefficient by how much?

        • guest says:

          By as much as it raises costs on otherwise free exchanges.

          *High five to Harold*

          • Tel says:

            But how much? You didn’t answer the question.

            Measure it.

            • Harold says:

              Why do we need to measure it? If something is worse it is worse. Asking by how much may be interesting but it does not change the fact.

              An analogy. Person A says that putting a wing mirror on a sports car makes it go faster. Car designer B points out that we know the wing mirror must make the car slower because of aerodynamics. Person B asks “by how much?” It doesn’t matter to the argument – the mirror will not make the car faster, just like the tariff will not make Americans economically better off.

              We might decide we want the wing mirror anyway, for other reasons, but we must acknowledge that it will make the car slower.

              • Tel says:

                We might decide we want the wing mirror anyway, for other reasons, but we must acknowledge that it will make the car slower.

                How would you go about comparing these “other reasons” without at any time being able to estimate the magnitude of effect? At this stage you probably wouldn’t be my first choice on any design team.

                BTW you might notice a lof of sports cars have a turned up tail. That can’t possibly make it go faster (by exactly your argument)… must be a lot of stupid sports car designers out there. Lot of stupid buyers too I guess.

              • Craw says:

                There is no real debate that a minimum wage reduces employment. The real debate is, by how much. Now you tell us that how much is irrelevant: worse is worse.
                And of course, by any notion of efficiency you are using here, minimum wage laws reduce efficiency. And worse is worse.
                So you oppose minimum wage laws then?

      • Tel says:

        I should also ask the bigger question, “Who gets to set the metric for inefficiency?”

        There’s over 300 million people living in the USA, so that’s 300 million subjective opinions on what is efficient and what is not efficient. Who’s opinion are you using as the basis for your conclusions?

        • Craw says:

          Other than as an exercise in forensic virtuosity, or the indulgence of a morbid curiosity, there really is no point in debating Harold.
          Well, there is the comedy aspect. Carry on.

          • Bob Murphy says:

            Craw wrote:

            Other than as an exercise in forensic virtuosity, or the indulgence of a morbid curiosity, there really is no point in debating Harold.

            That is a very articulate put-down, I think we all have to agree.

            • Harold says:

              OK Bob, you are apparently happy to abandon the concept of economic efficiency.

              “There’s over 300 million people living in the USA, so that’s 300 million subjective opinions on what is efficient and what is not efficient.”

              I had believed that economic efficiency was something economists thought was not just a matter of opinion. There might be debate about what precisely it means, but there was general agreement that it meant something.

              Now you as a professional economist tell me you agree with Tel that there are 300 million equally valid subjective opinions of what is economically efficient to the point that debate on the matter is pointless.

              You now believe that tariffs will create jobs and prosperity. I consider my education complete.

              • Bob Murphy says:

                Harold, you’re quoting Tel with that line, not me.

                I realize in the Age of Trump people can be accused by progressives of holding opinions they explicitly deny, but I hope on this blog at least I am not guilty because of stuff Tel said.

              • Bob Murphy says:

                Oh, now I get what happened.

                Harold I haven’t been following your argument with Tel. I logged in the other day and saw Craw’s comment, and was feeling generous. I meant it literally; it was an articulate put-down. Had nothing to do with the fact that it was about you.

              • Harold says:

                OK. Thank you for that clarification. Just for the record, you think we must all agree that it was a clever put down, not that there is no point in debating Harold.

                Mix-up all cleared up.

              • Bob Murphy says:

                Right… It was obvious to me that that’s what I meant, but admittedly you have reason to be more sensitive on the example I grabbed.

              • Tel says:

                Ignoring the articulate put downs and related distractions, here’s conceptual economics problem.

                Suppose after imposing a tariff on Mexican tequila, the following events happened:
                [1] price of tequila in the USA rises by 10%
                [2] volume of consumption of tequila goes down.
                [3] volume of consumption of American bourbon goes up by equal amount.
                [4] price of bourbon initially rises but the industry grows, hires more staff and due to economies of scale ends up producing bourbon at a slightly lower price than before the tariff (but higher volume, and profits are about the same).

                Show how you would calculate the change in “economic efficiency” of the system as a whole, including all steps in your working. You may make reference to any facts from the CRC Handbook of Chemistry and Physics (e.g. using the specific gravity of bourbon is perfectly acceptable) but you cannot bring any subjective preference into the calculation; nor can you use the type of utility function that would involve external visibility of internal human brain activity.

              • Tel says:

                Also, as an afterthought, in the situation above… let’s suppose the government collecting the tariff reduces all other tax by just enough to make that balance out.

                Thus, total government spending and total government revenue does not change and therefore has no particular effect.

              • Harold says:

                ” but you cannot bring any subjective preference into the calculation; nor can you use the type of utility function that would involve external visibility of internal human brain activity.”

                I am not sure what you are specifying here. Are you saying supply / demand curves are off the table?

                Do you reject the idea that the price mechanism will result in an optimum level of production and consumption in the absence of market failures?

        • guest says:

          “There’s over 300 million people living in the USA … Who’s opinion are you using as the basis for your conclusions?”

          The opinions of all those 300 million who are not directly enforcing the tariffs.

          Prices are the result of demand relative to supply, limited, in part, by producers’/suppliers’ willingness to supply.

          What the imposition of tariffs imply is that consumers ought not be able to spend where they want to spend, or producers not be able to hire whomever they want.

          Tariffs are a violation of the rights of individuals to do with their property as they wish without violating those same rights of others.

  8. guest says:

    “Is it a completely nutjob theory to consider that the media is saying to Trump, “You think you can insult us and box us out? Now you’ll see much power we really have, tough guy.” ?”

    Food for thought:

    I realize that the Left media hates freedom and will propagandize toward that end, but …

    Do we really want politicians to box out the media? Don’t we need *more* bothersome media from all sides?

    Freedom of the press, and all. Just sayin’.

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