19 Apr 2017


Potpourri 12 Comments

==> I have an essay in the Fraser Institute’s report on Canada’s experience with a personal income tax.

==> I point out that the pro-carbon-tax R Street Institute is advising conservatives to fold their hand…right after they pick up their flush.

==> I give a backhanded compliment to Steve Landsburg.

==> Ryan Murphy has an article on how the economics profession–when doing econometric estimates of the “fiscal multiplier”–overlooks the importance of monetary offset. I disagree that it’s important for the authorities to “boost aggregate demand,” but anyway Ryan’s analysis is interesting.

==> Tom Woods has an expert journalist on to talk about the crisis in Yemen.

==> This guy in the comments at a Scott Adams post points out something that is quite ironic, in light of the outrage over Sean Spicer’s comments about Hitler vis-a-vis Assad: In late 2013, in a New York Times article about chemical weapons and why Syria’s actions (then) were so outrageous, we have this now-awkward excerpt:

NYT on Hitler

So I’m betting the author of that NYT piece was thinking, “Please don’t go viral, please don’t go viral,” when everybody was denouncing Spicer. (Yes, I understand that NYT piece was more nuanced than Spicer’s initial statement. But the sentiment was the same. Spicer wasn’t “forgetting the Holocaust.” Also, I’m not mentioning this on social media because I don’t want to give anyone the idea that I’m “defending Spicer’s comments,” which were incredibly obtuse.)

12 Responses to “Potpourri”

  1. Andrew_FL says:

    It’s better to think of the “offset” as specifying the conditions necessary for the Treasury View to hold in the short run.

    The monetary and banking system determines the volume of the “Effective Money Stream” and if that system, free or unfree, “offsets” the fall in government purchases of final consumption/investment goods RGDP will not fall, at least not as a result of the normally cited reasons.

    A couple of years ago I brought this up when discussing the behavior of NGDP during the draw down of government spending after WWII. The Fed notably did not perfectly offset the effect on NGDP, but the decrease in government spending was mostly matched by a massive surge of private investment. And though NBER dates a recession to this period, most observers agree this is a statistical artifact-there’s no dramatic spike in the unemployment rate.

    Major Freedom coined the term “market offset” for this and I continue to like it.

  2. Chuck says:

    The alleged use of gas for the holocaust makes no sense. If you want to kill a lot of people, just don’t give them food or water and they’ll die on their own.

    • Harold says:

      Chuck – are you sure you want to go there?

      Forgetting those like Chuck that deny the holocaust pretty much everyone accepts that Hitler used gas on Jews. The article you cite makes no difference and is not embarrasing to anyone. Had Spicer said “Hitler refused to order chemical weapons against comatants but he did use them on millions of Jews, Gypsies and others” it would have been a different statement, and would have carried a lot less weight. However, he did not say that. He incorrectly said Hitler did not use chemical weapons on his own people.

      Since we have a new dedication to accuracy and sticking to what people actually said rather than interpretations of what they might have meant (Well, Craw and I have anyway) there is no embarrasment apart from Spicer’s.

      • Dan says:

        “Since we have a new dedication to accuracy and sticking to what people actually said rather than interpretations of what they might have meant (Well, Craw and I have anyway) there is no embarrasment apart from Spicer’s.”

        Um, considering Craw replied to that suggestion with something along the lines of “Why don’t we just intrepret them correctly.” you’d be off to a bad start.

        • Harold says:

          Craw actually said “lets be accurate”. I took that as agreement with me, and we should quote accurately and comment on the accurate quote. Particularly in the context of Craw criticising a CNN reporter for a mis-quote. A criticism I agreed with.

          But maybe you are right, and the meaning was something along the lines of “lets interpret what people said according to what we think they meant rather than what they actually said, as our individual interpretation is accurate.”

          But again, that can’t be right, because the CNN person he criticised was doing exactly that, rather than using what I would refer to as an accurate quote.

          What could Craw have meant?

      • Chuck says:

        There have been many mass killings of civilians throughout history. The vast majority of which happened simply by denying sustenance to the victims.

        Why expend valuable resources using swords, arrows, bullets, wood (for fire) or gas to kill people who are not resisting?

        I understand if you want to punish someone or make an example of them, but when it comes to killing hundreds of thousands or higher, then you need to be efficient.

    • Tel says:

      The alleged use of gas for the holocaust makes no sense. If you want to kill a lot of people, just don’t give them food or water and they’ll die on their own.

      That was Stalin’s method during the Holodomor, and also Mao’s method on a number of occasions with his sparrow swatting adventures. Got used in North Korea too.

      I’m guessing that the National Socialists thought of themselves as a cut above those lowly Communist riff-raff. Not only did they use technological and scientific methods of killing, but they were very organized about it and kept meticulous records as well. Being in position of a large scale death machine was kind of a statement of intellectual and cultural superiority (look what we can do). A certain type of person gets a huge woody at the idea of being able to force their will upon other people… regardless of whether there is any intrinsic reason why it would be worth doing that.

      Having said that, the National Socialists did also use starvation as a weapon when it suited them… but since Bob has the Yemen link up above I probably should mention that very little has changed and starvation is still being used as a weapon even today.

  3. Silas Barta says:

    I want to meet Landsburg’s mechanic. He seems to be the only one in history who frames all the alternatives into an easy format for plugging into expected value calculations.

    • Darien says:

      Wait a minute. Could Landsburg’s mechanic be… Harold?

      Nah. If he were, he wouldn’t need any input from Steve to reach the optimal solution.

      • Harold says:

        I assure you that it is in no way accurate to describe me as Landsburg’s mechanic 🙂

  4. Tel says:

    Hey on the topic of people showing a graph which tells the opposite story as what they conclude from it.


    Am I the only one who thinks this is totally wrong?

    It’s a multi-faceted challenge, because while a significant portion of middle class households are being shifted into lower income territory, there are also many households that are doing the opposite. According to Pew Research, the percentage of households in the upper income bracket has grown from 14% to 21% between 1971 and 2015.

    No! In the graph just above that sentence, we see perhaps 1% at most of middle classes households being shifted to lower income, the vast bulk are shifting upwards. The entire distribution is spreading upwards. I’m not sure if they have correctly adjusted for inflation here but if the graph is true then the bulk of people are massively better off than they were in 1971.

    I followed the link from Zerohedge, and pretty much none of the ZH comments picked up the obvious. I blame the education system (and overall the quality of ZH comments gets steadily worse every year).

    • Harold says:

      What do they mean by “middle income”? (the shaded bit).

      The most striking thing is the growh of the last bar. The frst bar also grows significantly, so we have both more very rich and very poor.

      The distribution had generally become much flatter, so apart from the extremes, we have more people moving into the better off areas that moving into the worst off areas, as Tel says.

      What would society look like if we toook this to its limit – we had every section equally populated except the bottom and the top one?

      The concept of a “middle class” would not mean the same as it did in the 1971 graph. Back then there were quite a lot of not well off, then a big group where everybody was similarly well off, with a long tail of a few richer folk stretching away.

      In the flat distribution, we have loads of less well off, an extended group n the middl, but the spred of incomes in this group is pretty wide, then the richer ones.

      The two societies will look different, but that in itself is not necessarily a bad thing.

      However, when it mes to satisfaction we might ee what we are seeiing today.

      In the 1971 world, the poor people were not that much worse off tht the miffle class. the middle class were all pretty similar. nearly everyone could look around and see they wer doing OK compared to thir immediate neighbors.

      In the flat society, the poorest are a long way from the middle classes. they look off accross the distant plain and fee thy are not doing well. Previously, a couple of steps would take them into the middle, now it is a big jump.

      The middle look forward and see lots of people better off than they are, whereas in the 1971 case they looked ahead and they could see hardly anyone doing better than they were.

      This could lead to a large number of people feeling let down by the system, even whilst they are actually better off.

      How would an ideal world look? One version would have everyone in the top segment- everyone wealthy and everyone equal. That could happen in the world run by robots.

      A distopia would have only the first and last bars occupied. A class of fabulously wealthy and a sub-class of paupers. I gues this could happen in the world run by robots.

      A worse distopia would have everyone in the bottom segment. Robots again.

      But if we take the robots out of the equation and assume that some sort of capitalist society will inevitably result in a distribution of some kind, what would your ideal distribution look like?

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