Utopia, you are standing in it!

Interesting post by Prof Steven Horowitz.

He says we usually think entrepreneurs to do big heroic things which is what Schumpeter also said. However, entrepreneurship could be incremental as well a la Kirzner:

Over at Cafe Hayek, Don Boudreaux writes about a common slur we free-market supporters get called: shills for Big Business.  Don does an excellent job discussing how ridiculous such mudslinging is, so I’d like to discuss a tangentially related point: motive.

On top of being called shills, we’re often told we either don’t care about the poor (or, worse, are actively trying to oppress or hinder the poor) by opposing various “Progressive” welfare actions such as minimum wage, protectionist trade tariffs, or immigration restriction and the like.

The reality, however, is quite different.  We oppose these schemes because we, like many other economists including those on the Left, believe they to be counter to the poor’s well-being.  Our arguments are not that we hate the poor, that they just should be happy with their lot in life, or any other strawmen our accusers like to erect, but because we…

Thanks to the always great James Crabtree (@jamescrabtree), I learned two awesome facts about Singapore this morning.

First, they have children’s books about “famous urban planners.”  I’m not sure which is funnier, the fact that there are famous urban planners or that there are children’s books extolling their virtues.  I guess this is handy for nights when your kids can’t fall asleep. Here’s a photo of one of them and a link to where you can buy it (and even read a sample):

Here’s the synopsis that’s given at the publisher’s link:

“How does a spoilt young boy and party-going dandy become the man who housed a nation? Discover the passion that drives Lim Kim San from his comfortable, carefree life into a mission that would change Singapore forever.”

This seems like the worst superhero story ever. Maybe Zac Snyder can direct it.

Second, if your kids reads the book…

Ajay Shah has a post on the topic. The summary is:

Many times in India, subsidies are being used to express sheer value judgments; they are just the faddish thinking of one bunch of hausfraus running policy versus another. At other times, a market failure is indeed present. But instead of more subtle interventions and the minimum use of force — based on a sound scientific understanding of the anatomy of the market failure — we tend to rush to the excessive use of force that is a subsidy. Every subsidy is grounded in the monopoly of violence of the State that is required for tax collection. We should be far more circumspect before doling out subsidies. Subsidies are the last refuge of a failed policy maker.

One may disagree with what the author has to say but points have been well argued.

I guess the problem is not…

In the seemingly-endless housing supply debate, there is often a divide between those favouring greater intensification, and those favouring a larger physical footprint for growing cities.  My own policy view is squarely in the “it should be a matter of individual choice, provided the infrastructure etc costs of development are appropriately internalized, and the rights of existing property owners are protected” camp (and yes, I recognize that the definition of almost every word in that statement could be extensively debated). My practical prediction is that New Zealand is a society where most people will prefer to have a decent backyard (they don’t flock to high rise apartment buildings or town houses with tiny sections in Hastings or Timaru), so long as regulatory restrictions don’t make that infeasible.  It was quite possible 50 years ago, when New Zealand incomes were much lower.  There is simply no reason, in a country with this much land…

I previously highlighted the paper by Cogan, Cwik, Taylor, and Wieland that outlines the differences in Old Keynesian and New Keynesian multipliers. However, it seems that the differences might be worse than imagined.

Harold Uhlig’s presentation from the Atlanta Fed conference on fiscal policy explains the effects of stimulus when one assumes the presence of distortionary labor taxation. (He also examines the implications if rule-of-thumb consumers and the zero lower bound.) Here is what he finds:

In the context of this model, the impact of a government spending stimulus …

• … is very sensitive to assumptions about taxes.
• … on output is rarely larger than the government spending increase
• … is a comparatively larger output loss later on, due to the increased tax burden.

Furthermore,

• Consumption declines.
• Rules-of-thumb agents do not change the results much. Consumption may be feebly positive, the increase in output is somewhat larger.
• Binding zero lower…

I saw this video the other day and decided to Post it here at our site. It’s worth watching for a number of reasons.

Alex Epstein is the main speaker here, and he makes the moral case for our reliance on fossil fuel electrical power generation.

Note here how every time he mentions it, Alex Epstein correctly refers to the supposed problem, he calls it correctly by its correct and full name, Carbon Dioxide. (CO2)

Note also, at around the 7.20 mark, the California Democrat Senator, Barbara Boxer comes in to speak, and instead of actually asking a question, just proceeds to denigrate the Alex Epstein. Senator Boxer again comes in close to the end of the clip at around the 15.15 mark, and (referring back to what Alex Epstein correctly calls it, CO2, Senator Boxer again denigrates the speaker and refers to it as Carbon Pollution.

Alex Epstein speaks…

This follows reading Paul Krugman’s recent post.  I wasn’t there.  Too young, and never in America.  But, nevertheless, I’ll sketch my own version of what ‘monetarism’ means to me.

1.  The belief that monetary policy mistakes were behind the business cycle – illustrated by Friedman and Schwartz’ chartism concluding that the Great Depression was caused by too-tight monetary policy.  They were probably right about this, and this is one bit of ‘monetarism’ that has proved enduring and useful.
2. A focus on the bookkeeping identity of monetary policy PT=MV.  This was helpful during the years when policymakers thought that inflation was a ‘cost’ phenomenon to be tackled with prices and incomes policy.  This idea also endures.
3.  The unfortunate idea that it follows from PT=MV that central banks could use money targets to deliver desired changes in P.  These targets were ditched as it was realised, through difficult experience, that money demand…