Potpourri
==> Gene Epstein liked the most recent Contra Krugman, but pointed out that I missed this even more ironic–vis-a-vis his current stance–Krugman column (detailing the flaws of French regulations on labor) from 1997. An excerpt:
To an Anglo-Saxon economist, France’s current problems do not seem particularly mysterious. Jobs in France are like apartments in New York City: Those who provide them are subject to detailed regulation by a government that is very solicitous of their occupants. A French employer must pay his workers well and provide generous benefits, and it is almost as hard to fire those workers as it is to evict a New York tenant. New York’s pro-tenant policies have produced very good deals for some people, but they have also made it very hard for newcomers to find a place to live. France’s policies have produced nice work if you can get it. But many people, especially the young, can’t get it. And, given the generosity of unemployment benefits, many don’t even try.
…
France’s problem is unemployment (currently almost 13 percent). Nothing else is even remotely as important. And whatever a unified market and a common currency may or may not achieve, they will do almost nothing to create jobs.Think of it this way: Imagine that several cities, all suffering housing shortages because of rent control, agree to make it easier for landlords in one city to own buildings in another. This is not a bad idea. It might even slightly increase the supply of apartments. But it is not going to get at the heart of the problem. Yet all the grand schemes for European integration amount to no more than that.
==> I liked that one so much, Gene then reminded me of this 1997 Krugman column praising cheap labor and globalization (which I had read before). Here’s a good excerpt:
The occasion was an op-ed piece I had written for the New York Times, in which I had pointed out that while wages and working conditions in the new export industries of the Third World are appalling, they are a big improvement over the “previous, less visible rural poverty.” I guess I should have expected that this comment would generate letters along the lines of, “Well, if you lose your comfortable position as an American professor you can always find another job–as long as you are 12 years old and willing to work for 40 cents an hour.”
Such moral outrage is common among the opponents of globalization–of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports. These critics take it as a given that anyone with a good word for this process is naive or corrupt and, in either case, a de facto agent of global capital in its oppression of workers here and abroad.
But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.
I am being dead serious, when Krugman post-2007 (or so) casts derision on orthodox economists and how they conveniently assume away the heart-wrenching problems faced by the disadvantaged, he is usually describing the way he himself treated a topic either in his pop stuff from the 1990s or in the latest edition of his textbook. The only thing I’m not certain about is if he is consciously or subconsciously doing that.
==> You know how the Marvel universe features a plot line where the US government after World War II brought in a bunch of Nazi scientists in weapons development? (Dr. Strangelove fits this too.) Well that was real; the CIA even says so, and you know they tell the truth.
Contra Krugman Episode 86: Let’s Talk France
Yet another good episode. An outline:
9:10 I point out that Adolph Hitler is considered a right-winger, even though Nazi stands for “National Socialist.”
10:50 I exhibit my command of the French tongue.
11:25 I point out how slippery Krugman is with his French economic data. (I also give tutorial to Tom on how to run the show if something happens to me.)
16:10 I give the theory to explain the empirical results. Why is it that “generous” French regulations on work benefits lead to such high unemployment among younger workers?
18:38 I dig up a textbook backing up my views. You WON’T BELIEVE who the author is.
25:00 We take on the issue of the French working less.
30:00 We talk about austerity. I mention David R. Henderson’s work on Canada.
36:15 I praise Krugman’s discussion of Brexit (really).
The Love of the Father and the Son
This post will probably only matter to Christians, just to warn you… I am relaying a train of thought that occurred to me a few days which you may find of interest.
I could imagine letting someone attack me even when I’m completely not at fault. For example, suppose I’m walking down the street at night, and I notice a car parked on the street has its windows all smashed in. I walk over to make sure there’s not somebody who needs help, and just then somebody yells, “HEY!!” A teenager runs out of the nearby house and starts swearing at me for messing with his car.
I try to explain it wasn’t me, but he is so furious that he just starts swinging at me. In that type of scenario, I would like to think that I would take measures to protect myself, but that I wouldn’t hurt the kid.
More generally, I could imagine circumstances where I would deliberate beforehand and walk into a situation, knowing that I was going to allow people to beat the @$( out of me. (It’s not my style to be confrontational rhetorically so it doesn’t really make sense, but if for some reason I thought a student group was going to try to shut down one of my talks, I absolutely would not want to ever strike back in anger even if students were attacking me physically.)
Now to be clear, I’m not telling you guys that I’m certain I *would* behave in this way. I’m just explaining that intellectually I would *want* to, and I hope I’d have the courage to do so if thrust into such a scenario.
In total contrast, if I’m walking down the street with my son, and we investigate a car with smashed up windows, and then a teenager runs out, there is no way he’s touching my son. I’m going to try to defuse the situation, but it is absolutely not going to happen that I am going to let my son do the very thing (i.e. absorb a beating from the confused teenager) that I personally would do.
Now take it one step further. This is a totally implausible thing but hypothetically speaking, suppose somehow my son and I found ourselves in a situation where we were both convinced that the right thing to do would be for him to take a beating from somebody that was completely unjustified, and I wasn’t going to intervene even though I could easily do so. When that scene unfolded, I would have to turn away and not look. There’s no way I could look at it.
Now think about the relevance of what I’ve written to these passages:
John 3:16 New International Version (NIV)
16 For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life.
and
Matthew 27:46 New International Version (NIV)
46 About three in the afternoon Jesus cried out in a loud voice, “Eli, Eli, lema sabachthani?” (which means “My God, my God, why have you forsaken me?”)
So as much as we are in awe at the sacrifice Jesus made for us, I think you could argue that what God the Father did was even more stupefying.
Where Monetarism Goes Wrong
Jeff Deist had me on “Mises Weekends” to talk about Vienna vs. Chicago. Speaking of which, we’ll be in Chicago next week, and then Seattle.
A Young Jon Stewart Interviews George Carlin
It was Friday night and I was procrastinating, so I stumbled across this interview. It was pretty touching; you see Carlin’s vulnerability (and also Jon Stewart himself was still trying to prove how cool he was with that get-up).
Potpourri
==> In Part 1 of our interview with Nelson Nash, Carlos and I focus on faith, family, and forestry. But Nelson also talks about his relationship with Leonard Read, so check it out.
==> Joe Salerno explains that a new econometric paper criticizes Friedman and Schwartz’s famous studies. I haven’t studied the original paper, I’m curious for other reactions.
==> The respectful von Pepe sends this obituary of Carl Christ.
==> I think the respectful von Pepe also sent me this obituary of Allan Meltzer.
Contra Krugman Episode 85
This was a fun one. Krugman returns to his familiar theme of claiming that right-wing Republicans never admit when they’re wrong, a habit that apparently eludes left-wing progressives. Some highlights:
8:00 I point out that it’s odd that people are (a) flipping out about how horrible Trump is, including threatening the planet and (b) saying he hasn’t done anything in his first 100 days.
11:10 Tom points out examples of left-wingers who didn’t learn from their longstanding mistakes.
15:00 I talk about the awkward inflation prediction stuff.
18:10 I recall what the NYT Ombudsman said about Krugman’s willingness to admit he was wrong.
23:40 In the midst of talking about the Contra Cruise, Tom and I end up sharing funny stories about jokes blowing up in our faces.
26:18 I talk about GDP calculation and inventory adjustments.
Incidentally, my mises.org column “Inventories Don’t Kill Growth, People Kill Growth” is one of my all-time favorites. In particular, check out my numerical example; I think I isolated what was bothering me about the way the BEA reports on GDP.
Another Slight Correction to a Boudreaux Anti-Tariff Argument
In my never-ending quest to get everything perfect, I once again must quibble with one of Don Boudreaux’s free trade (or anti-tariff) arguments. Now for context, Don publishes three of these a day, so the fact that I object once a month means I endorse just about everything the guy writes…
Anyway, here’s Don’s piece (in the form of a letter to the editor) that I think is a bit off:
Jeff Jacoby superbly analyzes the Trump administration’s proposal to slap punitive tariffs on softwood lumber imports from Canada – that is, the administration’s proposal to punitively tax Americans who buy softwood lumber from Canadians (“Trump’s tariffs will hurt Americans,” May 3). The goal, of course, is to reduce the amount of Canadian lumber that we Americans receive in exchange for our dollars.
Mr. Trump boasts about his mastery of the “art of the deal.” Given his administration’s approach to trade, we can therefore conclude that, in Mr. Trump’s mind, a truly masterful deal-maker is someone who, with each deal, commits himself to give to his trading partner as much as possible while he himself – the masterful deal-maker – gets in return as little as possible.
You’ll forgive me for being skeptical that such ‘artful’ deal-making will increase our prosperity and make America great again. [Bold added.]
So to reiterate, obviously I agree with Don that slapping tariffs on Canadian lumber makes Americans poorer, but I think his actual argument is wrong. (And so if Don hopes Trump sympathizers will come around, he might understand why they would reject his particular attempt.)
It’s the part I’ve put in bold that is wrong. And since that particular error is the whole crux of this letter, I think the whole thing blows up in Don’s face.
When the United States government puts a tariff on Canadian lumber, that doesn’t make Americans give more to Canadians for Canadian lumber imports. If you think the U.S. is a small player in the world market, it will have no effect on the price. Or, to the extent that reducing U.S. demand for Canadian lumber has an impact on price, it will actually cause the Canadians to give us more lumber per dollar we give to them.
Now the source of the error here is our usual notion of looking at the particular American importer. From his perspective, a tariff makes him pay more for Canadian lumber. But clearly Trump (and Don, since he’s trying to argue on Trump’s own terms) is thinking of it in terms of “us vs. them.” And clearly, the U.S. levying a tariff on Canadian lumber means that either the U.S. gets the same amount of wood per dollar we send them, or we get more wood per dollar. It’s true, the particular American importer gives up more dollars per unit of wood received, but it’s not all going to Canadians; some is getting redirected to Washington. To repeat, the amount “getting through” to Canada is at most the same (per cord of wood imported), or if anything lower.
In the big picture, the problem with a tariff on Canadian lumber is NOT that it forces Americans to give more resources (per unit of wood) to Canadians for the Canadian lumber that Americans continue to import, even after the tariff is levied. (To repeat, in general it’s possible that on this dimension the tariff IS beneficial.) Rather, the problem with this tariff is that it leads Americans to partially reduce the amount of wood obtained from Canada, and to replace it with domestic sources, even though the total resources expended “internally” vis-a-vis other Americans is more than what we’d have to send to Canadians for the same amount of wood.
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