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Archive for March, 2013

It is a pleasure to introduce Eric Crampton as our guest blogger this week at Pileus.  Eric is an economist at the University of Canterbury in Christchurch, New Zealand. He is currently working on projects relating to voter knowledge, electoral stock markets, alcohol regulatory policy and paternalism. He hails originally from Canada but earned his doctorate at George Mason University. He usually blogs at Offsetting Behaviour.

Pileus veterans may remember that Eric’s first attempt to guest blog here was interrupted by the 2011 New Zealand earthquake.  We hope that nothing like that occurs this time.  Welcome Eric!  Looking forward to your always interesting thoughts.

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David Stockman has an interesting piece in today’s New York Times (“State-Wrecked: The Corruption of Capitalism in America”). If the title doesn’t grab you, here is a paragraph from the last page of the article:

These policies have brought America to an end-stage metastasis. The way out would be so radical it can’t happen. It would necessitate a sweeping divorce of the state and the market economy. It would require a renunciation of crony capitalism and its first cousin: Keynesian economics in all its forms. The state would need to get out of the business of imperial hubris, economic uplift and social insurance and shift its focus to managing and financing an effective, affordable, means-tested safety net.

The article provide a taste of his new book, The Great Deformation. I have not read it yet (I believe I had it on advanced order at Amazon).

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How long before someone on the left claims that the Kochs are now unfairly influencing NCAA basketball?  No good deed they do can go uncriticized, can it?

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Wise words on equality

From a recent short posting by Steve Smith of the USD Law School:

Everyone favors equality: Everyone thinks that like cases should be treated alike. Nobody argues, “These groups are alike in all relevant respects, but they should be treated differently.” So when people disagree about legal or political issues, they aren’t arguing for and against equality. Instead, they are disagreeing about whether two cases, or two classes of people, actually are alike for the purposes of whatever is being discussed.

So the real disagreement is not about equality, but rather about what marriage is, or what it should be thought to include. Among the vast spectrum of human relationships, many of them valuable or ennobling, which ones should be classified under the heading of “marriage”? On that question, there are various views. Some think marriage is a relationship between one man and one woman. Some think it can include relationships between two committed adults, regardless of sex. Some would not limit marriage to only two persons. Some would not limit it to adults.

Reasonable people can debate these views in good faith and in various vocabularies—cultural, psychological, political, theological. So there are important debates to be had, and important decisions to be made. But the debates will only be cluttered up, and the decisions confounded, if the issue is framed in the question-begging terms of “marriage equality.”

Well said.  And I would add that simplifying that which is not simple (human sexuality, for instance) does not make any group, in the long run, better off.

 

 

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William Ruger and I will be going on MSNBC’s “NOW with Alex Wagner” tonight to discuss our Freedom in the 50 States study. The spot will be between 8 and 9 PM, likely around 8:30.

[This is Sven butting in]: You can go directly to the clip with Ruger/Sorens here.

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Roger Koppl argues this week at ThinkMarkets that “Income inequality matters.” He thinks it matters so much that he says it twice. He believes “Austrian,” pro-market, economic liberals should be speaking up more on this “central issue.” I think Koppl could not be more wrong. The issue deserves all the inattention we can muster for it.

The problem I think is not Koppl’s motives. He rightly says that we should “watch out for ways the state can be used to create unjust privileges for some at the expense of others.” He is certainly right about that. He argues that unjust state policies may be skewing market results in such a way as to increase inequality. He may be right about that. But he is wrong in suggesting that we ought therefore to be paying attention to income inequality. We ought therefore to be paying attention to those policies. Whether they produce greater inequality is neither here nor there.

Koppl gives four examples: (i) policies that privatize profits and socialize losses, (ii) bad regulation, (iii) collapse of the rule of law, and (iv) public schools. I can certainly join Koppl in a hearty wish that we not only attend to these unwarranted policies, programs, and tendencies, but that we do so with a degree of urgency prompted, in part, by their effects on the poorest and most vulnerable among us. But talking about inequality is precisely a distraction from doing so.

In a great paper of a few years ago, Harry Frankfurt argued that “Egalitarianism is harmful because it tends to distract those who are beguiled by it from their real interests.”* Frankfurt thought that focusing on equality was actually pernicious because it distracted us from attention to real harms, of which inequality is at most an indicator. And he was right. It may well be that, for example, the evisceration of the rule of law results in greater income inequality. But it also might not. Whether or not it does so, however, it is unjust, and it deserves our attention. Similarly for the increase in moral hazard and regulation, to say nothing of the deplorable system of public education. All of these need attention, and one prime reason they do so is because of their effects on those least capable of circumventing their evils. If we care about the poor, what we ought to care about is bad policy, not indicators that may or may not have anything to do with policies that are making people worse off. As long as we are worrying about income inequality, we are worrying about the wrong thing.

* In “The Moral Irrelevance of Equality,” Public Affairs Quarterly, April 2000.

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For some time, J. Bradford DeLong has been referring to the current economic episode as the “Lesser Depression.” He has now dropped the “Lesser.” His evidence from the bond market is worth reviewing (in particular, the yield on 30-year Treasuries). His conclusion: we may be looking at “a slack and depressed economy, if not for the next generation, at least for most of it.”

At the same time, as the Hill reports, the OECD projects “that U.S. gross domestic product would grow at a 3.5 percent clip in the year’s first quarter and 2 percent in the second quarter,” viewing the slow growth rate of 0.4 percent in the fourth quarter of 2012 as being the product of “one-off factors.”

Given the choice (the bond markets vs OECD forecasts) I would normally bet on the markets. But, given the Fed’s extraordinary interventions in the past few years, can we really trust information we glean from the bond markets?

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