Potpourri
==> At IER, I tag Steve Landsburg to jump in on the gas tax question.
==> David R. Henderson brings to our attention this excellent analysis about the controversial pass call on the goal line. One of the things that most annoys me about Facebook is that everyone suddenly becomes a better football coach than the guy who brought his team to the Super Bowl. (Full confession: I did something similar when I repeated a joke making fun of the screenwriters of the J. Lopez thriller, where the boy next door hands her a copy of the Iliad and says it’s a first edition. Collectors were pointing out that they could’ve meant a first edition of a certain translation, so it wasn’t necessarily as stupid as a bunch of us thought.)
Reconciling Marginal Productivity Theory of Factor Payments With No-Profit in Equilibrium
My latest Mises CA responds to a reader who thought he had discovered a contradiction in Rothbard. An excerpt:
Notice that in this outcome, it is still true that an entrepreneur earns a “surplus” on the inframarginal units. However, such an entrepreneur is starting out with a bunch of fixed costs (based on other expenditures necessary for the operation), and by optimizing the amount of units to buy of the particular factor under examination, the entrepreneur is simply reducing his loss down to $0. For example, holding all other expenditures at their optimal amount, and starting with 0 units of labor, the entrepreneur might suffer a loss of $1 million per year. Then if the entrepreneur hires 1 unit of labor at $10/hour, where that first worker has a MVP [marginal value product] of $20/hour, then for a 2,000 hours / year work schedule, the loss now drops to ($1 million – $20,000) = $980,000 per year. The marginal benefit of hiring each new worker exceeds the marginal cost, meaning that total profit increases, up until the point at which the last worker hired just pays for his own wages. At that point–if we’re in a long-run equilibrium–the loss has been whittled down precisely to $0.
Potpourri
==> My latest at Mises CA, urging caution about that neat Texas jobs growth graphic that’s been floating around.
==> David Beckworth–who wants a kinder, gentler Market Monetarism–sent me Bill Woolsey’s reply to my stuff about Switzerland. Sure, as with any intervention, you could do follow-up interventions to postpone the bad consequences. In this case, Woolsey (among other things) says that the Swiss might have to restrict the issuance of large-denomination bills, to thwart the desires of people to save. And this is at the “Monetary Freedom” blog, mind you.
==> Bryan Caplan has an interesting reconsideration of the famous “…I’ll defend to the death your right to say it” slogan.
Tom Woods and I Get Worked Up Talking About Thom Hartmann
Here are the show notes that go along with this interview:
Potpourri
==> Just an announcement, kids, I’m scaling back my frequency of posts at Mises CA; I’m just too busy. If you want to take your hand at it, feel free to pitch ideas to them at contact@mises.ca. They often get picked up by ZeroHedge if that matters.
==> Someone else made a print version of Barta and my Bitcoin book. Silas and I only benefit from the transmission of knowledge… (Remember if you want the free PDF, go here.)
==> A new NBER study suggests that part of the “surprising” US performance last year was due to the ending of unemployment benefits. Here’s a Reason review, but TL;DR if you stop paying people to not have jobs, then fewer people will not have jobs.
==> Can’t remember if I linked to this? Peter Lewin (an expert on Austrian capital theory) chimes in on Piketty.
==> I don’t have time to deal with this, but if you want to see another perspective, Mike Konczal tries to defang Scott Sumner’s laughing over the sequester and Keynesians.
==> An interesting autobiographical note from one of the authors of The Market for Liberty, fantastic book that I reviewed very favorably (here–thanks to Darien for finding the link).
Solving the Great Piketty Minimum Wage History Mystery
My latest at Mises CA. For the quick version, Phil Magness showed me a data table from Piketty that makes it clearer what the heck happened with Piketty’s erroneous “history” of the U.S. minimum wage. Specifically, Piketty came up with annual values by looking at the minimum wage as it stood on January 1 of a given year. So in the graphic below, on the left I have the actual legislative history, on the right I have the table Piketty constructed to represent the values over time:
This solves *some* of the problems (a little), but it makes the remaining ones even worse. Look again at how Piketty described things, assuming he had the right table in front of him as he did so:
“From 1980 to 1990, under the presidents Ronald Reagan and George H.W. Bush, the federal minimum wage remained stuck at $3.25, which led to a significant decrease in purchasing power when inflation is factored in. It then rose to $5.25 under Bill Clinton in the 1990s and was frozen at that level under George W. Bush before being increased several times by Barack Obama after 2008” (p. 309).
It’s more understandable now how Piketty could’ve (incorrectly) said that George W. Bush never saw an increase, since in Piketty’s table the hikes don’t happen until 2008. (Even here it’s wrong, since George W. Bush was the president for every second of the calendar year 2008. But still.)
However, look at how Piketty handled George H.W. Bush. He made true statements (disregarding being off by a dime) about the wage being stuck through 1990, and how this included Reagan and H.W. Bush, and then that it went up again under Clinton.
So in light of this new quirk, I personally am more confident that this was deliberate funny business rather than just Piketty looking at the wrong data table and inventing a random history out of simple error.
Science vs. Religion? Ravi Zacharias Fields a Question Citing Agnostic Thinkers
Last one for now. I want to show why I said RZ is very educated in his apologetics. Just watch the guy’s question (takes about a minute), then fast forward to the 7:15 mark or so when Ravi takes the floor to respond.
Ravi Zacharias Fields a Tough Question About Atheists and Hell
This is a very intense question, and he relaxes everyone with two jokes at first. This guy is as smooth and gentle as Barry White.
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