Potpourri
==> I don’t know this guy personally, but he is a “colleague of colleagues” and his story about typical police treatment of a black driver certainly sounds quite sincere. Interesting reading.
==> Can anybody confirm that this charge against Rand Paul is correct? (They are saying he deliberately quoted the Ayatollah out of context in order to bang the war drums.) This is the worst thing I’ve heard about him, so I don’t want to file it away as true in case the translation is dubious or whatever.
==> Tom Woods has two recent guests (1 and 2) taking shots at me. It’s lonely up here at the top.
==> Mark Perry flags a really good gotcha on Krugman regarding the minimum wage. Just read the comparison of Krugman’s views from 1998 vs. 2015. In particular, the writer notes that Krugman today (while applauding Hillary Clinton for making higher wages part of her agenda, I note) wags his finger at those dastardly free market economists who won’t budge, even in the face of evidence like Card-Krueger. And yet, back in 1998–four years *after* the Card-Krueger paper was published (and five after the working paper was posted)–Krugman at that time said of their paper:
So what are the effects of increasing minimum wages? Any Econ 101 student can tell you the answer: The higher wage reduces the quantity of labor demanded, and hence leads to unemployment. This theoretical prediction has, however, been hard to confirm with actual data. Indeed, much-cited studies by two well-regarded labor economists, David Card and Alan Krueger, find that where there have been more or less controlled experiments, for example when New Jersey raised minimum wages but Pennsylvania did not, the effects of the increase on employment have been negligible or even positive. Exactly what to make of this result is a source of great dispute. Card and Krueger offered some complex theoretical rationales, but most of their colleagues are unconvinced; the centrist view is probably that minimum wages “do,” in fact, reduce employment, but that the effects are small and swamped by other forces.
What is remarkable, however, is how this rather iffy result has been seized upon by some liberals as a rationale for making large minimum wage increases a core component of the liberal agenda…
Note, the point of this is NOT that, “But Bob, if we control for blah blah blah…” It is that Krugman’s current stories about what an openminded scientist he is, following wherever the evidence may lead, are extremely self-serving and far from accurate.
(Also note, I think the author at the link is a little off himself. He is taking Krugman to be endorsing the Econ 101 logic full-throatedly, but Krugman is in fact being more nuanced, even back then.)
Gold Prices Prove Krugman Wrong
My latest at Mises CA. An excerpt:
However, what happened since early 2014? Gold prices have bounced around in a tight zone, even though 20-year TIPS yields dropped almost a full percentage point. Back in early 2012, when the blue line was at a comparable level, gold prices were above $1,600. And in any event, Krugman’s baseline theory says that there should be a permanent upward drift in the price of the resource, as its exhaustible supply flows into difficult-to-recover uses (like dentistry). That means that if the interest rate comes back down in 2015 to where it was in 2012, then the spot price should be higher than it had been three years earlier–certainly not $400 (25%) lower.
These Market Monetarists Aren’t So Bad
I obviously disagree with Scott Sumner on his key issue, but I really like how he has been hammering on the Dennis Hastert case, which is really outrageous (putting aside one’s distaste for political figures, which doesn’t excuse someone getting railroaded).
Also, I have to salute the Teflon blogger, Nick Rowe, who is impervious to my zingers.
Framing Effects in the Name Game
(We also would have accepted, “Tyranny by any other name…”)
In certain states, there are restrictions on your legal name. (For example, in some states there are length limits, and in some states you can’t use numbers.) Now some libertarians will probably say, “You should be able to name yourself whatever you want, screw the State!” while other people might say, “To foster an orderly society and avoid linguistic chaos, surely it is proper for the politicians to put in place some limits.”
But this is a false dichotomy, as I will now show. First, assume that there are only two people (refer to them as #1 and #2), and only two possible names: Alice and Bob. Further, assume that there are no costs to changing one’s name, and that each person is equally happy with either name per se. The only thing each person cares about is whether he or she has the same name as the other. We do not assume that #1 wants to have the same name, or would prefer to have a different name, as person #2. But, we *do* assume that #1 is just as happy as being named “Alice” or “Bob,” so long as it coordinates properly with what person #2 is named.
Now then, in this hypothetical world there are two possible legal systems:
(1) Each person is legally allowed to call himself whatever he likes.
or
(2) Each person is legally allowed to force the *other* person to name himself what the first person desires.
So, which legal arrangement is better?
Take *that*, libertarians!
(For further deep insights into the political battles of our day, see this post on immigration by Nick Rowe.)
Bohmian Mechanics
How did I never hear about this until this week? Anyway, it kinda sorta uses the distinction I was getting at in the comments over at Steve Landsburg’s blog. Then it purports to explain subatomic events without resort to weird quantum stuff. And best of all, it’s got “Bohm” in the title–like Eugen von Bohm-Bawerk, you know?
Faith and Works (Again)
I’m saying “(again)” because I’m pretty sure I made this point before, but now I have some extra flourishes.
Paul famously wrote that one receives salvation through faith, not works. However, even he links the two, like in Ephesians 2: 8-10 when he writes:
8For by grace you have been saved through faith; and that not of yourselves, it is the gift of God; 9not as a result of works, so that no one may boast. 10For we are His workmanship, created in Christ Jesus for good works, which God prepared beforehand so that we would walk in them.
It is in that context that evangelical Protestants reconcile the apparent contradiction with the book of James. For example James 1: 22-27 says:
22 Do not merely listen to the word, and so deceive yourselves. Do what it says. 23 Anyone who listens to the word but does not do what it says is like someone who looks at his face in a mirror 24 and, after looking at himself, goes away and immediately forgets what he looks like. 25 But whoever looks intently into the perfect law that gives freedom, and continues in it—not forgetting what they have heard, but doing it—they will be blessed in what they do.
26 Those who consider themselves religious and yet do not keep a tight rein on their tongues deceive themselves, and their religion is worthless. 27 Religion that God our Father accepts as pure and faultless is this: to look after orphans and widows in their distress and to keep oneself from being polluted by the world.
(Later on, James is more explicit about faith and works, but in my Bible study we only got through chapter 1 so far.)
In his audio commentary on James, Dr. Vernon McGee deals with the apparent conflict by saying (these are my notes so not exact quotes):
==> Faith is the root and cause of salvation.
==> Works are the fruit and effect of salvation.
==> God can see your heart, and whether you have faith, so that’s how you’re saved.
==> But your neighbor can only see your works.
Finally, let me bring up my favorite resolution of the apparent conflict. John 6:28-29:
28Therefore they said to Him, “What shall we do, so that we may work the works of God?” 29Jesus answered and said to them, “This is the work of God, that you believe in Him whom He has sent.”
I really love that answer. It’s very Misesian, for those of you into Austrian economics. It’s linking mind and body, thought and action.
#LoveLoses, Again
Ah, I just saw someone who was really happy about the SCOTUS ruling retweet this from one of her fans. (In fairness, I should disclose she’s not a libertarian–in fact she actively mocks libertarians. But, I think even many pro-SCOTUS SSM ruling libertarians have similar views.)
Again, the standard disclaimer: Just because some people loudly pontificating on a given issue are hypocrites, doesn’t mean everybody on their side is hypocritical (let alone wrong). But I’m occasionally relaying stuff like this (like the earlier Dalmia piece) so you can understand why some of us were stunned at the reaction to the SCOTUS ruling.
In reference to the above graphic, in case you don’t get what my point is: The people who are now mocking a brother marrying a sister among those idiot Southerners were exactly the same ones who a month ago were so scandalized that evangelicals might look down upon two men getting married. So this had nothing to do with the principles they espoused (like individual autonomy, minding one’s own business, live and let live, and of course #LoveWins), but instead was simply, “My personal preferences regarding which marriages are fine and which are yucky are better than yours. By the way you’re a bigot and I hope someone burns down your pizza shop.”
Economists Are Odd Fellows
[UPDATE: I added the Paul Romer one, and clarified Landsburg’s position.]
I hope all of you take this in the proper spirit. Especially if you follow me on Facebook, you know that every once in a while I like to step back and point out the big picture. To be clear, I fully understand what’s going on in each of the below links, and I’m not criticizing the economists in question.
Rather, I’m just pointing out how odd we are.
==> Austrians famously think that there’s too much math in economics, and that it obscures the logic of the underlying theory. But we are always lectured that to be scientific, you have to be precise, and math is the way to be sure about what we’re saying as economists–you don’t want to slip in some assumption verbally without realizing you’re doing it. So anyway, Paul Romer and Brad DeLong are now really mad at those jerks from the Chicago School who sneak in mathematical assumptions into their papers without explaining verbally how their models work. Can’t these Chicago guys realize they are undermining the scientific method when they do this?
==> A pretty serious debate among serious macroeconomists right now concerns NOT whether raising interest rates is a good or bad idea, but which direction (price) inflation would move in, if central banks suddenly raised interest rates significantly. And when the leader of the dominant view responds to the minority viewpoint, some really sharp guys try to explain to other economists exactly what the response was, but admit they’re not really sure they understand it. Again: This is an argument over whether raising interest rates will cause price inflation to go up or down; really sharp economists can’t even 100% convince themselves of why they believe in their answer to that question.
==> I am a pacifist and yet I recently wrote a column on the most efficient way to wage war.
==> Steve Landsburg spent an hour thinking about it, and still couldn’t explain why giving all the available elite public school slots to only white kids–because they are white–would be unfair.
==> Edmund Phelps proudly announced that, if given the choice to wipe out half the humans who ever lived, he would not do it. (Because of classical music, of course. Duh.)
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