Greatest Hits from The Politically Incorrect Guide to Capitalism
I had to send this to someone else, so I thought I’d take the opportunity to showcase this blast from the past. There was a gathering in DC in the summer of 2007 for a bunch of “PIG” authors to talk about their respective books. I think in this talk I focus on the economics of discrimination, taken from my Politically Incorrect Guide to Capitalism:
I don’t remember too much from this event, except that when I first got there I put on the wrong guy’s name tag. Oh, I also remember Tom Woods explaining that all of us owed our books to his initial success with the PIG to American History. He’s a humble guy, let me tell you.
Henderson/Murphy Tag Team the Keynesian Champ
I know I’m mixing wrestling and boxing metaphors. But there are few rules at Free Advice.
David R. Henderson has a good critique of Krugman’s latest post about “unprecedented austerity” (Krugman’s term). For example, Krugman labels a sharp reduction in the rate of growth of spending as a “collapse in spending.” That’s simply not correct. It’s not merely misleading, it is false. (That’s presumably one reason that David, in his analysis, says he leans toward outright “contradiction” rather than “Kontradiction.”) To be hyper-accurate, I should acknowledge that the very end of Krugman’s chart does show a reduction in total spending, but that’s clearly not what Krugman is labeling as the “collapse” in the context of his discussion.
David makes some other points too that are worth reading. However, I want to focus on something he didn’t bring up:
Just three days ago, Krugman wrote a post criticizing the “deficit scolds” in which he said:
The deficit scolds have not had a good year. They’ve seen their forecasts of fiscal disaster fizzle; they’ve seen their favorite economic analyses crash and burn; they’ve seen the rise of a faction with actual power in the Democratic party that refuses to acknowledge their wisdom. This last bit is crucial: deficit scoldery has always depended on the illusion of consensus, in which all the, well, serious people agreed that debt is the most important enemy. [Bold added.]
Does everyone see the contradiction (Kontradiction?) here? Within the course of three days, Krugman is arguing:
(A) Nobody is listening to the deficit scolds. They’ve been warning for years that the deficit was a looming threat, but recent forecasts show it has come down significantly since they started their yapping.
(B) Over the past few years, policymakers have been listening to the deficit scolds, rather than guys like me. We have had, and continue to suffer from, unprecedented fiscal austerity.
How can both of the above be true?
More on Krugman and Fiat Money
At Mises Canada I explored Krugman’s glib assertion about fiat money being “backed by men with guns” a little more deeply:
Furthermore, it’s obvious that Krugman’s “explanation” would have no way of accounting for changes in either variable. For example, in the 1970s in the United States, price inflation took off dramatically, meaning the purchasing power of the dollar fell sharply. Was this because of a reduction in taxes? Of course not. And in the 1920s, there were sharp cuts in marginal income tax rates at the federal level. Did this lead to severe price inflation, as people now didn’t need as many dollars to pay Uncle Sam? On the contrary, consumer prices were fairly stable in this period.
In Defense of Paul Krugman
On Facebook a younger person was asking us old timers what it was like when the Internet first came on the scene in force, and I couldn’t resist relaying this gem:
“By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.” — Paul Krugman, 1998
But then it occurred to me: Maybe Krugman was simply overestimating how important the fax machine would eventually become?
The Tax on “Cadillac” Plans
I’m preparing for a lecture in my “Economics of ObamaCare” course and I thought it would be a public service to make sure we all know about just one of the features in this gift that keeps on giving. So here’s a rundown of the tax on “Cadillac” plans:
One of the most significant, and controversial, provisions of the Affordable Care Act is the new excise tax on high-cost health plans proposed to both slow the rate of growth of health costs and finance the expansion of health coverage. The provision is often called the “Cadillac” tax because it targets so-called Cadillac health plans that provide workers the most generous level of health benefits. These high-end health plans’ premiums are paid for mostly by employers. They also have low, if any, deductibles and little cost sharing for employees.
Proponents of the new excise tax argue that these benefit-rich plans insulate workers from the high cost of care and encourage the overuse of care–such as unnecessary tests and hospital visits–that raise US health costs overall. However, the plans may be more costly and therefore subject to the new excise tax for reasons other than their generous benefits, including plan participants’ health status or advanced age.
A 40 percent excise tax will be assessed, beginning in 2018, on the cost of coverage for health plans that exceed a certain annual limit ($10,200 for individual coverage and $27,500 for self and spouse or family coverage). Health insurance issuers and sponsors of self-funded group health plans must pay the tax of 40 percent of any dollar amount beyond the caps that is considered “excess” health spending.
Although the excise tax does not take effect for another four years, many employers are already scaling back their health benefit offerings or increasing workers’ deductibles and copays to avoid paying the tax. Proponents argue that employers need a renewed focus on cost control, and that when consumers must pay a share of the costs, they will be less likely to overuse care.
For consumers, especially those in poor health or with chronic illnesses who rely on Cadillac plans to cover high annual medical expenses, the tax means that they’ll have to pay much more for their health care. Critics of the tax say it unfairly “hollows out” and “slashes” health benefits.
Surely the American People Would Never Let That Happen!?
Things have gotten so bad, I have no choice but to read aloud from the New York Times.
Matt Walsh on Baking Cakes for Gay Men
I personally don’t dwell on this stuff, because–especially with my being an evangelical Christian–I am afraid it comes across as me fretting at night, worrying about homosexuals breaking down my door. That obviously is not the case. But, Matt Walsh’s blog post on all this stuff is so spot-on that I have to give a lengthy quotation from it:
A judge in Colorado has ordered a baker to make a wedding cake for a gay couple. This is like something out of a George Orwell acid trip. We now have judges forcing Christians to bake desserts for gay men. Let that sink in for a moment. This is actually happening. In America. In reality.
This baker, specifically targeted by this attention-seeking couple, initially declined to make a cake for the gay wedding because he had deep and profound religious objections to the ceremony. This left the gay couple with two options: 1) Go, like, find any other baker in the area. 2) Try to legally force the man to bake the cake, because FREEDOM.
Of course, as per usual, they went with option two. There is so much laughable hypocrisy in the “gay rights” movement that I have officially decided to stop parsing my words about it. Actually, I suppose I’ve never parsed my words about anything, so I’ll just continue with that strategy. It’s simple: you can’t FORCE people to associate with you and then turn around and preach about freedom of association. You see that, don’t you?
Meanwhile, a florist in Washington State faces penalties for declining to provide flowers for a gay wedding, and the New Mexico Supreme Court ruled against a photographer for deciding not to take pictures of a same-sex commitment ceremony. This, as a t-shirt company here in Kentucky is still embroiled in a legal battle for committing the crime of refusing to make t-shirts for a gay pride parade in Lexington. The owner even referred the gay pride parade organizers to other t-shirt companies who offer the same service for the same price; but that wasn’t good enough for these Freedom of Association Crusaders. They’ve dedicated the better part of two years to destroying this man and his business.
If a man has the right to choose who[m] he marries, a business owner surely must have the right to choose who[m] he serves. You can not argue for the first while actively attempting to undermine the second. Well, you can, but you’re a fraud, and I will call you a fraud.…
Well, freedom is a two way street. Freedom can’t be contained in your convenient little box. You can not achieve freedom for yourself by taking it away from your neighbor. You can not find freedom through tyranny.
Try to appreciate the irony. A gay wedding is, supposedly, a victory for freedom of association. Yet gay activists see no problem with forcing Christians to associate with it. The gays who pull these stunts are nothing but spiteful bullies. I wasn’t in charge of finding someone to make our cake for our wedding, but if I had been, and if I had accidentally ventured into a store owned by a Catholic-hating baker, and if that baker told me that he did not want to be a part of a Catholic ceremony, do you know what I’d do?
I’d find another baker. [Bold added.]
To reiterate, I am guessing that I’m personally more sensitive to the motivations of certain groups to run to the government for protection than Matt Walsh is, but nonetheless his analysis is dead-on. I just love that line: “We now have judges forcing Christians to bake desserts for gay men.”
Lew Rockwell on Optimism Amidst Fascism
Nelson Nash apparently bought 50 copies of Lew Rockwell’s new collection of essays, Fascism vs. Capitalism, because he was so excited by it. He sent me one. I have only just begun it (David Gordon reviews it here), but I wanted to share the conclusion of his introduction, because it got me all fired up. I hope it does the same for you:
This is no time for pessimism, despite the great many problems we continue to face. Imagine if, in the midst of the Nixonian stagflation forty years ago, we had been told that within our lifetimes the following things would happen: (1) the Soviet Union would collapse, and with it the case for the planned economy; (2) the official opinion molders’ monopoly would be decisively smashed; (3) interest in the Austrian School of economics would explode among American students; and (4) despite a media blackout, Ron Paul and his libertarian ideas would become a nationwide and even worldwide sensation that astonished the most seasoned veterans. We would have dismissed this as a fantasy.
…
The great struggle of liberty against power, which has been going on since time began, has reached a watershed moment. Let us not be mere spectators. With our pens, with our voices, with our contributions to our great cause, let us give history a push in the direction of freedom.
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