You Can’t Inoculate Yourself Against My Logic
I am in a debate on State-mandated vaccinations at FEE. Don’t bother voting for me, though; there’s a greater chance you will be struck by lightning than changing anyone’s mind. An excerpt from my side:
This is a crucial point, and it shows why the case for mandatory vaccines is so much weaker than, for example, the case for mandatory restrictions on carbon dioxide emissions or mandatory contributions to the national military. When a person gets vaccinated, the primary beneficiary is himself. And this benefit is all the greater the lower the rate of vaccination in the population at large. In other words, among a population of people who all believe that a vaccine is effective, the individual cost-benefit analysis of taking the vaccine will only yield a temptation of “free riding” once a sufficient fraction of the population has become vaccinated, thus ensuring “herd immunity.”
Let Me Show Mercy
Josiah was cracking a joke, but he brought up something important: I really do not remember things that I wrote only a few years ago. So now I am amending my harsh view. When I see Krugman totally contradict some principle that he espoused in 2011 because now it hurts his political conclusion, I no longer think he is consciously contradicting himself and hopes his readers won’t notice. I think he doesn’t realize he’s doing it.
Potpourri
==> 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!
Awwwkward
In this post Paul Krugman is happy about the Greek vote. He writes:
Tsipras and Syriza have won big in the referendum, strengthening their hand for whatever comes next. But they’re not the only winners: I would argue that Europe, and the European idea, just won big — at least in the sense of dodging a bullet.
…You don’t have to love Syriza, or believe that they know what they’re doing — it’s not clear that they do, although the troika has been even worse — to believe that European institutions have just been saved from their own worst instincts. If Greece had been forced into line by financial fear mongering, Europe would have sinned in a way that would sully its reputation for generations. Instead, it’s something we can, perhaps, eventually regard as an aberration.
And if Greece ends up exiting the euro? There’s actually a pretty good case for Grexit now — and in any case, democracy matters more than any currency arrangement.
On a hunch, I looked it up and apparently gay marriage is illegal in Greece. (I choose those words deliberately, if you go read the link.) Supporters of gay marriage are appealing to outside institutions, including the EU, to overturn the results of Greek democracy.
I await Krugman’s column on this important social issue.
Similar Politics, Different Worldview
Recent events have only confirmed for me something I noticed a while ago: There are plenty of people who share my political outlook–even some who say they are fans of my writing–who nonetheless have utterly different worldviews.
I am a libertarian anarchist in the tradition of Rothbard because I take moral and legal rules seriously, and don’t think they can be tossed aside just because people think awful consequences would ensue if we don’t violate them systematically. So for example, if theft, kidnapping, and mass murder are flat-out wrong, then how can someone support institutionalized taxation, military conscription (or jury duty), and modern war?
On the other hand, there are plenty of libertarians today who are attracted to the philosophy because they don’t want anybody–whether a politician or a priest–telling them what to do.
I understand full well that many American Christians have done a lot to sully the reputation of the faith in the eyes of neutral onlookers, but at the same time the past month has made me realize how little many libertarians would care if the U.S. government seriously cracked down on religious freedom. Don’t get me wrong, I’m not saying they would endorse it. But I’m saying they would certainly not lose sleep over it.
Adam House on Medical Marijuana
I got to know Adam when we drove to Atlanta to catch a Jordan Page house party. He has an interesting story in that he came back from Afghanistan–where he originally thought he was defending American liberty–only to find (as I think he would describe it) that the country had been sold out to bankers and others. You may also recognize him as the drummer from the Music City Friends of Liberty.
Two Libertarian Views on War
When evaluating the so-called War on Poverty or Drugs, libertarians will often say something like, “After boatloads of money and many lives ruined in waging such efforts, decades later we haven’t really solved the underlying problem.” Thus, they do not support such “wars.”
On the Fourth of July, libertarians will often say something like, “By going through amazing sacrifices even to the point of death, our courageous forefathers delivered us a free country that we subsequently squandered. Americans today are far less free than the colonials under King George.” Thus, these libertarians urge us to wage another War for Independence.
Ishn’t zat veird?
(BTW if anybody on Facebook is reading this and thinks I’m singling you out, don’t worry–this happens every year, and I’ve seen at least 4 such posts today and it’s not even lunchtime.)
Scott Sumner to Fed: “There Is No Justification for Listening to My Advice”
I know you guys think I’m just being a mosquito, buzzing around Scott Sumner’s ear and criticizing him for no good reason.
Well you’re wrong. I am the sentinel in the night, guarding the integrity of the USD from Sumner’s attempted debasement, while you have barbecues and watch fireworks.
Now I know very well what Sumner’s apologists are going to say when they hear my latest critique. So, first, let’s consider a hypothetical scenario where a teenager goes to work for a famous chef.
CHEF: In my kitchen, there is no justification for breaking an egg. None.
BILLY: Got it.
CHEF: Now, let’s start with something simple. Here’s a standard cookbook. Go ahead and bake a cake.
BILLY: Okay sure thing. Uh, wait a second.
CHEF: What’s the problem?
BILLY: Well, it says in step #3 that I have to mix two eggs into the batter.
CHEF: What’s your point?
BILLY: Well, I mean, you just told me not to break any eggs.
CHEF: So what? I’m a busy man, kid, get moving on that cake!
BILLY: But, how can I do that without breaking any eggs?
CHEF: *sighs* I meant, don’t break eggs as your direct goal. If you end up breaking eggs as an offshoot of your goal–such as baking a cake–then it’s fine. And in fact, necessary. Now stop being such a smarta** and get to work. But don’t you dare break any eggs. There’s no justification for that, none.
My question: In the ridiculous hypothetical scenario above, would Billy be allowed to complain to his parents/friends that his new boss was either (a) completely incoherent or (b) a jerk playing a trick on him? I think we can all agree that the answer is yes.
If you agree with me on that score, then you should also agree that either Scott Sumner is incoherent, or he is actually Andy Kaufman playing a decades-long prank on everyone. Let me explain.
If you read Scott’s blog regularly, you know that for years he has hammered home the point that it is a stupid mistake to think that low interest rates signify easy money. Scott is quite flummoxed how anyone can think that, since Milton Friedman himself made the point in the late 1990s. Scott repeatedly lectures us to never reason from an interest rate change.
Just to drive home the point, Scott often observes that low interest rates are associated with depressions, while higher interest rates are associated with boom times. When the Fed would put out statements saying it will “accommodate” the economy by keeping near-zero interest rates in place for an extended period, Scott would complain that this was actually telling everyone the economy would stay depressed for another year. (Sorry, I can’t find a link on this last point, but I know he said things like that circa 2011.)
Indeed, if the Fed did the optimal policy–credibly implementing a new policy of level targeting of (market expectations of) constant growth in nominal GDP–then investors would expect strong future growth and the Wicksellian natural interest rate would immediately rise, meaning that the Fed would need to allow the fed funds rate to immediately rise in order to fulfill its new policy regime. But that “hike” in interest rates would hardly be a move toward “tighter money”; it would actually be the cessation of the Fed’s disastrously tight money policy, in place since 2008. (Again, I’m not endorsing all of these statements–I’m just summarizing the worldview that Scott has been painting since 2008.)
OK everyone got all that? Very counterintuitive, but there’s a certain elegance to it. So in that context, how in the world does Scott at EconLog today write this?!
I often see Fed officials claiming that the fall in unemployment means that they need to raise interest rates. Sometimes this is based on “Phillips Curve” thinking—the (false) idea that inflation is caused by a booming economy…
Early in the year there was some indication that wage growth was accelerating. But that no longer seems to be the case, and the latest figures show exactly 2.0% hourly wage growth over the past 12 months. That’s the same rate as we’ve been seeing for the past 6 years, and is too low for the Fed to hit its 2% inflation target. There is no justification for raising interest rates when hourly nominal wage growth is below 2.3% on a 12-month basis. None. [Italics original.]
Now I know, I know, you’re going to excuse Scott here by saying, “Oh Bob, c’mon, he just means, given that the Fed is thinking about things in terms of setting interest rates by adjusting its bond holdings–then it would be a move toward tighter money if it were to hike interest rates. But if the Fed adopts his plan, and promises to buy every asset on planet Earth if need be in order to raise next quarter’s nominal GDP to the targeted level, then interest rates would rise rapidly and that would be awesome. But that’s not really the Fed ‘raising interest rates,’ that’s just the Fed implementing a certain policy that will necessarily result in higher interest rates. That’s how to make sense of his statement.”
OK, but then see again my tale of the Chef and Billy.
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