Cheap or Expensive, Pundits Hate Gas
My latest at IER. Incidentally, I have a neat chart showing the Fed’s balance sheet and falling gas prices. It’s funny how the fact that commodities went down when the Fed stopped inflating, somehow proves (according to Krugman et al.) that the inflationistas were wrong…
A Helpful Mnemonic in the Minimum Wage Debate
I am working on a paper for the Fraser Institute on the minimum wage debate. Both Krugman and Daniel Kuehn stressed the importance of picking a “treatment” versus a “control” group, in order to see that the minimum wage really doesn’t have much impact on employment (at least for modest hikes). Of course the pioneering study in this tradition is the famous Card-Krueger paper, which argued that the 1992 minimum wage hike in New Jersey didn’t affect fast-food employment relative to the control group in neighboring Pennsylvania, where the minimum wage wasn’t raised.
Now I’ve been immersed (again) in this literature for weeks, and what you need to realize is that the prima facie regression results almost all show that yes, making unskilled labor more expensive causes employers to hire fewer unskilled workers. It’s only when you add sufficient “controls” that the result disappears.
In that light, on a hunch I decided to take 5 minutes and check FRED. Why look at this:
So, if you ever forget the year when New Jersey raised its minimum wage and thus gave the “natural experiment” for the famous Card-Krueger study, you can just look up to find the first time in over a decade when New Jersey’s unemployment rate surpassed Pennsylvania’s.
I know, I know, I couldn’t get this published in Econometrica. But this literature is chock FULL of misleading coincidences just like this, ones which all make it LOOK LIKE employers cut back on hiring when workers get more expensive, even though we have been told the empirical debate is settled.
(Also, less sarcastically, I realize there is a distinction between the unemployment rate and the level of employment. However, as I explain in this EconLib article, I don’t think we should so casually toss aside the welfare implications of rising unemployment.)
Tom DiLorenzo: “How I Came To Austrian Economics”
This was the opening lecture for Mises University. (I’m in Auburn, AL all week for this flagship event of the Mises Institute.)
Starting around the 12:00 mark Tom pays a nice compliment to David Friedman.
Potpourri
==> Larry Reed, president of FEE, gives a talk to the Young Americans for Liberty on his new book.
==> Well that’s kind of surprising…the headline says former ObamaCare chief to head insurance lobby.
==> Tom Woods talks to Jeremy Hammond about Ron Paul vs. Paul Krugman.
==> A description of my new book.
I Talk About My New Book With Anthem
At FreedomFest:
Here’s the link to my book. It’s pretty sweet.
The LORD Mocks Those Who Construct Idols
I thought this was pretty funny. It’s from Isaiah 44:
6 “This is what the Lord says—
Israel’s King and Redeemer, the Lord Almighty:
I am the first and I am the last;
apart from me there is no God.
7 Who then is like me? Let him proclaim it.
…
9 All who make idols are nothing,
and the things they treasure are worthless.
Those who would speak up for them are blind;
they are ignorant, to their own shame.
10 Who shapes a god and casts an idol,
which can profit nothing?
…
13 The carpenter measures with a line
and makes an outline with a marker;
he roughs it out with chisels
and marks it with compasses.
He shapes it in human form,
human form in all its glory,
that it may dwell in a shrine.
14 He cut down cedars,
or perhaps took a cypress or oak.
He let it grow among the trees of the forest,
or planted a pine, and the rain made it grow.
15 It is used as fuel for burning;
some of it he takes and warms himself,
he kindles a fire and bakes bread.
But he also fashions a god and worships it;
he makes an idol and bows down to it.
16 Half of the wood he burns in the fire;
over it he prepares his meal,
he roasts his meat and eats his fill.
He also warms himself and says,
“Ah! I am warm; I see the fire.”
17 From the rest he makes a god, his idol;
he bows down to it and worships.
He prays to it and says,
“Save me! You are my god!”
18 They know nothing, they understand nothing;
their eyes are plastered over so they cannot see,
and their minds closed so they cannot understand.
19 No one stops to think,
no one has the knowledge or understanding to say,
“Half of it I used for fuel;
I even baked bread over its coals,
I roasted meat and I ate.
Shall I make a detestable thing from what is left?
Shall I bow down to a block of wood?”
20 Such a person feeds on ashes; a deluded heart misleads him;
he cannot save himself, or say,
“Is not this thing in my right hand a lie?”
GMOs: Pro and Con
Mark Spitznagel and Nassim Taleb deploy their “fat tails” framework (initially developed for financial markets) to GMOs.
This guy on Forbes is not a fan.
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