Economic links
A sensible post on humbling international comparisons.
A thought:
Our moral failings, character flaws, and biases are rewarded and magnified through the political process but punished and reduced through the market process.
A paper on resource quality and assertion of common property rights using (pdf) Californian surf gangs as an empirical example.
A nice post (which really could have done with some graphs) on aggregate supply, aggregate demand and national income:
The best way to understand first hand that it is a conceptual mistake and that it can lead to error is to go to Cuba. (Or North Korea, I suppose). Better yet, go to Cuba and teach macroeconomics. Watch the looks on the faces of your students when you try to teach any macroeconomic theory that assumes that output is demand-determined. Because in Cuba it isn't; it's supply-determined (except on the black market, etc.). There is always excess demand. The Cuban output gap is the gap between AD and Y, not between AS and Y.
Paper which compares income per resident with income per person born in that country:
The bottom line: migration is one of the most important sources of poverty reduction for a large portion of the developing world. If economic development is defined as rising human well being, then a residence-neutral measure of well-being emphasizes that crossing international borders is not an alternative to economic development, it is economic development.
The paper in effect measures the impact of different institutional frameworks on income.
About open borders and the welfare state:
The transfer state redistributes funds from those with high-skill and high-income levels to those with lower skill levels. Low-skill immigrants become natural recipients in this process. On average, low-skill immigrant families receive $30,160 per year in government benefits and services while paying $10,573 in taxes, creating a net fiscal deficit of $19,587 that has to be paid by higher-income taxpayers.
There is a rough one-to-one fiscal balance between low-skill immigrant families and upper-middle-class families. It takes the entire net tax payments (taxes paid minus benefits received) of one college-educated family to pay for the net benefits received by one low-skill immigrant family.
Somalia is now in its third decade of statelessness:
Down south, the Islamists who had sworn to eradicate the piracy scourge have joined up with the pirates’ southern branch. There’s more: 13 pirate syndicates have gone public, becoming shareholding companies. The town of Barawa, pillaged and raped by Mohammed Farah Aideed’s Somali National Movement in 1991, is now the wedding capital of the Benadir, and according to a recent visitor’s account, an outpost of Blackberries, Porsches, and Bling.
Some awkward fiscal obligation trends in the US. Being worried that government bailouts are becoming a path to crony capitalism. Taking the time to read the 1,279 page banking regulation reform bill: which authorises bailouts in advance.
A nice case of dysfunctional incentives in public provision:
If this service record worries you, you're going to love Metro's new strategy to plug its operating budget's holes by skimping on preventive maintenance, even as it adds new bureaucrats to its staff.
Making the comparison between cost-cutting in government and in a private company.
North America (particularly the US) has the cheapest rail freight in the world (pdf) (providing, BTW, a classic example of the benefits of de-regulation) which no doubt helps account for why the US moves far more freight by rail than Japan or the EU (the latter in particular waste resources on loss producing passenger rail triumphalism).
The US Congress subsidised biofuel: surprise, surprise, that turned out to have unintended consequences:
But as laudable as that goal sounds, it could end up causing more economic damage than good -- driving up the price of raw timber, undermining an industry that has long used sawdust and wood shavings to make affordable cabinetry, and highlighting the many challenges involved in decreasing the nation's dependence on oil by using organic materials to create biofuels.
In a matter of months, the Biomass Crop Assistance Program -- a small provision tucked into the 2008 farm bill -- has mushroomed into a half-a-billion dollar subsidy that is funneling taxpayer dollars to sawmills and lumber wholesalers, encouraging them to sell their waste to be converted into high-tech biofuels. In doing so, it is shutting off the supply of cheap timber byproducts to the nation's composite wood manufacturers, who make panels for home entertainment centers and kitchen cabinets.
But, remember, if you judge things by their intentions, and ostentatiously have “good intentions”, then you are never wrong.
Regarding biofuels:
Millions are already dying of starvation in the world's poorest nations because world food prices have doubled in two years. That was caused by a sharp drop in world food production, caused by suddenly taking millions of acres of land out of growing food for people who need it, to grow biofuels for clunkers that don't. The policies that you advocate are killing people by the million. At a time when so many of the world's people are already short of food, the UN's right-to-food rapporteur, Herr Ziegler, has rightly condemned the biofuel scam as "a crime against humanity".
Yet this slaughter is founded upon a lie: the claim by the IPCC that it is 90 per cent certain that most of the "global warming" since 1950 is man-made.
New York and Los Angeles have refuted the “poverty and unemployment causes crime” theory, with crime falling as unemployment rises:
In 1990s New York, crime did not drop because the economy improved; rather, the city's economy revived because crime was cut in half. Keeping crime rates low now is the best guarantee that cities across the country will be able to exploit the inevitable economic recovery when it comes.
Having fun putting together various indicators of how Texas outperforms California.
NSW is ranked lowest in performance among Oz state economies.
A proposal to have failure insurance for students: a certain potential for moral hazard there. The paper (pdf). A company offers the opportunity for students to bet on their grades.
Listing commentators who mis-called the US housing bubbles.
Defending the expansion of housing land supply around Melbourne:
The proposed expansion will create 284,000 new houses by adding just 43,000 hectares to our residential land supply. This amounts to a land supply expansion of just 0.19 per cent of Victoria's total land mass. Surely we have not reached a point where such minute changes in land use have become environmentally irresponsible?
But it will get in the way of further inflating land values in the inner city of Melbourne, where most greenies live.
A thought:
Our moral failings, character flaws, and biases are rewarded and magnified through the political process but punished and reduced through the market process.
A paper on resource quality and assertion of common property rights using (pdf) Californian surf gangs as an empirical example.
A nice post (which really could have done with some graphs) on aggregate supply, aggregate demand and national income:
The best way to understand first hand that it is a conceptual mistake and that it can lead to error is to go to Cuba. (Or North Korea, I suppose). Better yet, go to Cuba and teach macroeconomics. Watch the looks on the faces of your students when you try to teach any macroeconomic theory that assumes that output is demand-determined. Because in Cuba it isn't; it's supply-determined (except on the black market, etc.). There is always excess demand. The Cuban output gap is the gap between AD and Y, not between AS and Y.
Paper which compares income per resident with income per person born in that country:
The bottom line: migration is one of the most important sources of poverty reduction for a large portion of the developing world. If economic development is defined as rising human well being, then a residence-neutral measure of well-being emphasizes that crossing international borders is not an alternative to economic development, it is economic development.
The paper in effect measures the impact of different institutional frameworks on income.
About open borders and the welfare state:
The transfer state redistributes funds from those with high-skill and high-income levels to those with lower skill levels. Low-skill immigrants become natural recipients in this process. On average, low-skill immigrant families receive $30,160 per year in government benefits and services while paying $10,573 in taxes, creating a net fiscal deficit of $19,587 that has to be paid by higher-income taxpayers.
There is a rough one-to-one fiscal balance between low-skill immigrant families and upper-middle-class families. It takes the entire net tax payments (taxes paid minus benefits received) of one college-educated family to pay for the net benefits received by one low-skill immigrant family.
Somalia is now in its third decade of statelessness:
Down south, the Islamists who had sworn to eradicate the piracy scourge have joined up with the pirates’ southern branch. There’s more: 13 pirate syndicates have gone public, becoming shareholding companies. The town of Barawa, pillaged and raped by Mohammed Farah Aideed’s Somali National Movement in 1991, is now the wedding capital of the Benadir, and according to a recent visitor’s account, an outpost of Blackberries, Porsches, and Bling.
Some awkward fiscal obligation trends in the US. Being worried that government bailouts are becoming a path to crony capitalism. Taking the time to read the 1,279 page banking regulation reform bill: which authorises bailouts in advance.
A nice case of dysfunctional incentives in public provision:
If this service record worries you, you're going to love Metro's new strategy to plug its operating budget's holes by skimping on preventive maintenance, even as it adds new bureaucrats to its staff.
Making the comparison between cost-cutting in government and in a private company.
North America (particularly the US) has the cheapest rail freight in the world (pdf) (providing, BTW, a classic example of the benefits of de-regulation) which no doubt helps account for why the US moves far more freight by rail than Japan or the EU (the latter in particular waste resources on loss producing passenger rail triumphalism).
The US Congress subsidised biofuel: surprise, surprise, that turned out to have unintended consequences:
But as laudable as that goal sounds, it could end up causing more economic damage than good -- driving up the price of raw timber, undermining an industry that has long used sawdust and wood shavings to make affordable cabinetry, and highlighting the many challenges involved in decreasing the nation's dependence on oil by using organic materials to create biofuels.
In a matter of months, the Biomass Crop Assistance Program -- a small provision tucked into the 2008 farm bill -- has mushroomed into a half-a-billion dollar subsidy that is funneling taxpayer dollars to sawmills and lumber wholesalers, encouraging them to sell their waste to be converted into high-tech biofuels. In doing so, it is shutting off the supply of cheap timber byproducts to the nation's composite wood manufacturers, who make panels for home entertainment centers and kitchen cabinets.
But, remember, if you judge things by their intentions, and ostentatiously have “good intentions”, then you are never wrong.
Regarding biofuels:
Millions are already dying of starvation in the world's poorest nations because world food prices have doubled in two years. That was caused by a sharp drop in world food production, caused by suddenly taking millions of acres of land out of growing food for people who need it, to grow biofuels for clunkers that don't. The policies that you advocate are killing people by the million. At a time when so many of the world's people are already short of food, the UN's right-to-food rapporteur, Herr Ziegler, has rightly condemned the biofuel scam as "a crime against humanity".
Yet this slaughter is founded upon a lie: the claim by the IPCC that it is 90 per cent certain that most of the "global warming" since 1950 is man-made.
New York and Los Angeles have refuted the “poverty and unemployment causes crime” theory, with crime falling as unemployment rises:
In 1990s New York, crime did not drop because the economy improved; rather, the city's economy revived because crime was cut in half. Keeping crime rates low now is the best guarantee that cities across the country will be able to exploit the inevitable economic recovery when it comes.
Having fun putting together various indicators of how Texas outperforms California.
NSW is ranked lowest in performance among Oz state economies.
A proposal to have failure insurance for students: a certain potential for moral hazard there. The paper (pdf). A company offers the opportunity for students to bet on their grades.
Listing commentators who mis-called the US housing bubbles.
Defending the expansion of housing land supply around Melbourne:
The proposed expansion will create 284,000 new houses by adding just 43,000 hectares to our residential land supply. This amounts to a land supply expansion of just 0.19 per cent of Victoria's total land mass. Surely we have not reached a point where such minute changes in land use have become environmentally irresponsible?
But it will get in the way of further inflating land values in the inner city of Melbourne, where most greenies live.