Who You Gonna Call?

by Don Boudreaux on September 4, 2008

in Politics, The Profit Motive, Wal-Mart

By sending this letter to the editor of the New York Times, my friend — and The Austrian Economists‘  — Steve Horwitz shows how a serious economist assesses the politically poisoned “analysis” of a newspaper pundit:


To the Editor:

In his September 1 column (“John, Don’t Go”), Paul Krugman blames the failed response of FEMA during Hurricane Katrina on the Bush Administration’s antipathy to government. To the contrary, FEMA’s failures resulted from two problems endemic to bureaucracies no matter the party in power:  a lack of local knowledge and weaker incentives than the private sector to succeed.  By contrast, Wal-Mart got supplies and people into the worst-hit areas because its associates and managers had detailed knowledge of their communities and the incentive to help their neighbors that will always be absent in bureaucracies.  FEMA’s warehouses of unused resources contrasted with Wal-Mart’s trucks on the move suggest that indeed the failures of Katrina were ones of bureaucratic ignorance, not administration ideology.

Sincerely,

Steven Horwitz

Economists understand that incentives matter; too many pundits think that party matters.

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Chris September 4, 2008 at 7:52 am

Why does Krugman, the economic pundit, have such a firm belief that party matters and incentives do not?

dave smith September 4, 2008 at 8:42 am

Because Krugman's only concern right now is hating Bush to the extent that nothing else matters.

Maybe when Bush leaves office Krugman will return to being an economist instead of a hack.

vidyohs September 4, 2008 at 9:23 am

DS,

I think that is being generous to Krugman.

Yes Krugman obviously hates Bush, but in reality Bush is just the latest face on what he really hates. Like all of his ilk what he really hates is anything or anyone that denies the correctness of his socialist beliefs, call that denial conservatism, capitalism, or republicanism it is the real enemy of the left.

It matters intensely to Krugman and his ilk that the other side be defeated and they will beat that drum incessantly until that happens; but that isn't the end of it, recent history shows that they will not miss a beat on that drum even in victory because it is imperative that the enemy remain defeated and truth or light never enter a tiny little mind anywhere. Schools, media, entertainers, law, and courts must beat that drum to keep the populace ignorant and docile in the worker's paradise.

There is something broken in a mind that embraces Marxism and refuses to see the truth in the results in application of those ideas. Something that short circuits Churchills wisdom that "if at forty you aren't a conservative you have no brain". A broken brain is as deadly as no brain.

Krugman is broken.

Being broken, everything he writes or says is immediately suspect.

vidyohs September 4, 2008 at 9:27 am

Personally, I prefer to face the problems and inequality of freedom and capitalism rather than the certainties and stagnation of socialism.

Chris O'Leary September 4, 2008 at 10:25 am

"There is something broken in a mind that embraces Marxism and refuses to see the truth in the results in application of those ideas. Something that short circuits Churchills wisdom that "if at forty you aren't a conservative you have no brain". A broken brain is as deadly as no brain."

I'm not so sure that something is broken. I think the real problem is arrogance (which admittedly may be caused by something being broken).

These people (which includes one of my brothers) actually believe in the ideal of Plato's Philosopher King. They believe that if they ran the zoo, everything would go swimmingly. They think that the only thing that the failures of Communism to date prove is that the leaders weren't smart enough.

We know better.

Charlie September 4, 2008 at 10:54 am

"Economists understand that incentives matter; too many pundits think that party matters."

It's become fashionable on the right to call Krugman a "journalist" or "pundit" when they disagree with him. Usually it is more subtle and backhanded, Don actually puts it out there as pundit as opposed to an economist. It immediately makes the author look petty and dishonest. Krugman won a Clark medal which is the second most coveted prize in economics next to the nobel. He's legitimately in the running for nobel. In the 1990 to 2000 period his citation ranking is 3rd and publication ranking 40 of all economists. These are the main stats economists are objectively judged by. Call it the homeruns and average statistics of economists. Looking at it objectively to continue with the baseball analogy, Paul Krugman is a perennial all-star and former MVP, while Don and Steven are minor leaguers. That doesn't mean they can't have opinions, but they shouldn't be trying to undermine far superior economists credentials.

Though, I agree with the Horowitz comment. The early days after Katrina was a good example of how the free market would respond to a crisis in the absence of government. I just think it shows the importance of good government. The response after all was woefully inadequate.

Methinks September 4, 2008 at 11:37 am

The early days after Katrina was a good example of how the free market would respond to a crisis in the absence of government. I just think it shows the importance of good government. The response after all was woefully inadequate.

You ignore two important points. The first is that a large number of taxpayer dollars went to fund FEMA – which was, a you say, absent. So, why pay for something that doesn't work? Wouldn't we be better off if we didn't pay for FEMA in the first place?

Second, you ignore any externalities from the very existence of FEMA. If residents were not lulled into a false optimism about the government's ability to bail them out of any natural disaster at no additional cost to themselves, would they have ignored the warnings to evacuate? If we weren't inefficiently allocating resources to FEMA, would we have had a better response? Without FEMA, might there have been private emergency agencies (like the medi-jet travelers insurance one can buy when traveling to countries with sub-par health care options) which would have been more efficient than FEMA?

I don't think that Katrina was a great example of the free market response in the absence of government. It think it was a very good illustration of how government usually doesn't work and prevents the free market from creating better solutions than impotent government – to the detriment of the populace.

Hammer September 4, 2008 at 11:51 am

I think the conceit of anyone being able to run a given economy or even large system stems from a complete lack of experience actually running a complex system. When you think about it, no one really does this on a regular basis, usually being part of a much larger whole in their day jobs. Even people who are high up in various large organizations really don't run as much as they might seem, being responsible for a finite number of suborninates in a specific business activity. The scope of their job is still relatively narrow, which is probably what allows it to actually function.

The reason I say this is that I work with complex enterprise resource planning (ERP) software, and it is very obvious that no one fully understands it. It is kind of scary sometimes that even the most knowledgable people just can not understand exactly how it is supposed to work all at once, much less how it is actually used by people on the lower levels. It takes months to make changes due to the fact that you never know whose toes are going to be stepped on, even once you know a particular change will have all of the cascading effects you are looking for.

The Dirty Mac September 4, 2008 at 1:04 pm

Speaking to vidyhos point, I note that the headline story in Yahoo "News" right now is a debunking of the Republican convention.

Charlie September 4, 2008 at 1:28 pm

"So, why pay for something that doesn't work?"

After the initial delay, the response was pretty good. There were some problems, but a lot of important things got done in a short amount of time.

"Without FEMA, might there have been private emergency agencies (like the medi-jet travelers insurance one can buy when traveling to countries with sub-par health care options) which would have been more efficient than FEMA?"

All of these things could have existed with FEMA in place. FEMA didn't block the ability for these sorts of arrangements to exist. And if government is so consistently bad at responding to crises, and predictably bad as this board maintains. Then these things should already exist, right? The fact that better free market disaster relief must prove one of two things, either the government usually responds very well to such crises or the free market is generally poor at responding to such crises. If Horwitz wants the market to get credit for the initial Katrina response, he can have it.

Charlie

andy September 4, 2008 at 2:10 pm

All of these things could have existed with FEMA in place. FEMA didn't block the ability for these sorts of arrangements to exist.

I guess taking taxpayers money that could be used for such insurence could be reasonably called 'blocking'.

Then these things should already exist, right?

No. The inefficiency of the government can be shown either on inability to provide the same quality of service or by providing the same service at triple cost.

If the government provides at least some service regardless of the cost, it effectively prices out most competition out of the market because the government service is free of charge. On one hand the taxpayer has less money, on the other when the taxpayer has a choice of paying some money to private company providing good service and paying no money and still get some help from the government, the second option would be more attractive to most people.

Having almost nonexistent market for such services while having poor (but existent) government services and wasting huge amounts of taxpayers money is perfectly economically consistent.

floccina September 4, 2008 at 2:42 pm

Look it up scientific models predicted 61,000 deaths if New Orleans was hit by a category 4 hurricane. Katrina relief over all was an incredible success!

That is not to say that people were not hurt they were, but overall the response was amazing this is an amazing country.

The reporting was sensational and made things sound more chaotic and violent than the reality. One heartening thing to a libertarian was that unlike predictions and what reports said even the poor people in New Orleans did not resort to violence despite no police presence. The people even in very bad conditions kept a level of civility.

Perhaps people are disappointed that non-government people had to do so much.

John Dewey September 4, 2008 at 2:52 pm

Charlie: "FEMA didn't block the ability for these sorts of arrangements to exist."

Charlie, perhaps you are not aware just how much FEMA and other government organizations hampered the Katrina relief efforts.

"FEMA issued a press release urging all fire and emergency services departments not to respond to counties and states affected by Hurricane Katrina without being requested and lawfully dispatched by state and local authorities."

"According to Ben Morris, the mayor of Slidell, Louisiana, "We are still hampered by some of the most stupid, idiotic regulations by FEMA. They have turned away generators; we've heard that they've gone around seizing equipment from our contractors.""

"Aaron Broussard, president of Jefferson Parish, when Wal-Mart sent three trailer trucks loaded with water, FEMA officials turned them away. Agency workers prevented the Coast Guard from delivering 1,000 gallons of diesel fuel, and on Saturday they cut the parish's emergency communications line, leading the sheriff to restore it and post armed guards to protect it from FEMA."

""Sen. Mary Landrieu (D-LA) accused the Federal Emergency Management Agency of 'dragging its feet' when Amtrak offered trains to evacuate victims. 'Offers of medicine, communications equipment and other desperately needed items continue to flow in, only to be ignored by the agency,' she said."

Methinks September 4, 2008 at 2:53 pm

"So, why pay for something that doesn't work?"

After the initial delay, the response was pretty good. There were some problems, but a lot of important things got done in a short amount of time.

Charlie, for me the question is always was the cost worth the value that we got. I don't know but I doubt it. That said, if FEMA was as effective as you claim, then why the outrage over FEMA's impotence?

All of these things could have existed with FEMA in place. FEMA didn't block the ability for these sorts of arrangements to exist.

Of course FEMA doesn't prevent private arrangements. However, the existence of FEMA may make people think that that they are in less danger than they are actually in and may make them less willing to take precautions like evacuation and additional insurance. You can't ignore that when you claim that the initial response is an accurate representation of a free market response to disasters.

People who frequent this blog do generally think the free market is better at providing services. If the government is so much better at providing services, then why are proponents of government endlessly complaining about government services? It never gets any better.

John Dewey September 4, 2008 at 3:11 pm

Charlie: "either the government usually responds very well to such crises or the free market is generally poor at responding to such crises."

Mechanisms of the free market are prevented by law from being employed during crises.

My mother, five of my siblings, and numerous cousins were all at risk as Hurricane Rita bore down on Southwest Louisiana. Why? Gasoline for vehicles was just about non-existent. Why couldn't the free market ensure adequate supplies of gasoline to south Louisiana and southeast Texas? The Attorney generals of both states arned that "price gougers" would be prosecuted. So gasoline jobbers (wholesalers) from north Texas and north Louisiana had no incentive to provide extra supplies to their neighbors to the south. Retailers across the gulf coast were prevented by law from raising prices enough that additional supplies could be transported to the region. Rationing by price was impossible. So early departing families filled up two and three vehicles. Those departing later – those instructed by local government to depart later – could obtain no gasoline en route to safer locales.

Anyone who has lived in cities at risk to hurricanes knows that free markets are never allowed to function. Government agencies prevent private efforts and government prosecutors threaten those who could provide emergency aid.

Charlie September 4, 2008 at 4:08 pm

andy, provides an argument that has been echoed by some other posters.

First he says FEMA's existence changes the budget constraint of people, so they can't afford to buy privately provided disaster relief. And second, he says the existence of free government services is knocking out private services.

"If the government is so much better at providing services, then why are proponents of government endlessly complaining about government services? It never gets any better."

It seems reasonable, but it isn't. First the effect of the budget constraint from eliminating FEMA is miniscule compared to a consumers budget constraint. Their annual budget of 6 billion would be an increase to the total budget of $20. So that is a bit ridiculous to think that the twenty dollars per person taken out of the economy destroys the demand for private disaster relief.

And does free government knock out private services? Yes, but only if it's pretty good. The government could give out gruel for free, but it wouldn't destroy the food market. The only way the government can destroy the demand is if the service it provides is a reasonably good substitute.

-John Dewey

I mostly agree with what you said. I think FEMA made major errors and I think it is bad that politicians sometimes threaten price gouging. But your comment about FEMA preventing local public authorities, doesn't really help make the case others are trying to make. After all, government is and must be incredibly ineffective, so there should have been private police and fire teams responding to their clients. There aren't and there won't be, because government usually does a pretty good job.

As far as price gouging goes, thankfully it happens all the time. In Don's terminology, there is legislation and law, and while politicians may scream bloody murder, price gougers are rarely prosecuted. A large disincentive to price gouging retailers face is that it seems to outrage the public. They consider it really offensive, and many retailers just aren't willing to bear the scorn. That's unfortunate, but it is the world we live in.

-Methinks

Do you see how these two statements contradict each other?

"If the government is so much better at providing services, then why are proponents of government endlessly complaining about government services? It never gets any better."

"Of course FEMA doesn't prevent private arrangements. However, the existence of FEMA may make people think that that they are in less danger than they are actually in and may make them less willing to take precautions like evacuation and additional insurance"

You are saying: People always complain about government services because they are always so bad. And the existence of government services makes people feel safer.

If government services are never effective, why do they make people feel safer? The truth is, that the answer to your first statement is that complaining is how we get government to respond to us. Answering voters complaints is one of the main incentives that drives governance. I'm all for complaining about all sorts of things. Reading this blog, I assumed you guys were too.

Charlie

Charlie September 4, 2008 at 4:19 pm

Also, the main substance of my first post was that Don should call great economists names a lot less often. Does everyone agree with that point?

"Steve Horwitz shows how a serious economist assesses the politically poisoned "analysis" of a newspaper pundit"

I mean, he calls a Clark medal winner an unserious economist. It's like a minor leaguer saying this other minor leaguer will show Albert Pujols how a serious ball player plays baseball.

Charlie

vidyohs September 4, 2008 at 5:11 pm

"I mean, he calls a Clark medal winner an unserious economist."

Krugman is a Marxist shill and any one who reads his stuff on even an irregular basis knows it. His professional abilities are meaningless when he ignores truths to beat the Marxist drum.

To explain Don's comment there are several possibilities as I see it.

1. Committees make mistakes.

2. Committees make decisions on awards that reflect their collective biases.

3. Medal winners are selected in the same way a Catholic Pope is.

4. The selection of an award winner often says more about the selectors than the selectee…..uh oh this is redundant.

5. Perhaps there was an instnce when Krugman actually performed an unbiased piece of work that demonstrates his professional ability while ignoring his usual trait of being biased to the Marxist side. Unlikely, but maybe.

6. Perhaps after all they just tossed a coin. (Ooops, see #3 above)

John Dewey September 4, 2008 at 5:31 pm

Charlie: "But your comment about FEMA preventing local public authorities"

Perhaps you should read my posting a little more carefully, Charlie. FEMA prevented Walmart from delivering water, Amtrak from providing transport, and seized equipment from contractors. None of these are "local public authorities". I am certain I could find numerous other tales of FEMA and other government entities hampering the efforts of private relief.

Charlie: "As far as price gouging goes, thankfully it happens all the time."

You are quite mistaken about price gouging happening "all the time" with respect to Hurricanes Katrina and Rita. The very real threats from governments of Texas and Louisiana kept retailers in line during Katrina and Rita evacuations – and hundreds of thousands of evacuees could not obtain gasoline. My siblings and my mother were among those left stranded.

Charlie: "price gougers are rarely prosecuted"

Again, you are mistaken. Governments do not need to prosecute a thousand potential price gougers in order to control their behavior. A few dozen highly-publicized cases will do the trick.

Missouri gasoline stations prosecuted for price gouging after Katrina

Governor's Office of Consumer Affairs Continues Its Prosecutions of Price Gougers – 51 Additional Settlements

Tulsa Man Sentenced in Gas Price Gouging Case

John Dewey September 4, 2008 at 5:37 pm

Charlie: "Don should call great economists names a lot less often. Does everyone agree with that point?"

I certainly do not agree with your point. I have great respect for Professor Boudreaux and I'm glad he calls it like he sees it. At least he has the courage to reveal his full name, unlike every anonymous Tom, Dick, and Charlie who shows up here to try and mute free speech.

Charlie September 4, 2008 at 5:59 pm

-John Dewey

Do you realize what you just did? You argued price gouging rarely happened during Katrina, and then you linked to sources documenting the large amount of price gouging. You even acknowledged that only a small minority of price gougers were prosecuted when you said, "a few high profile cases." And look you source said, "The Funny thing is the gas stations that were charged with price gouging were charging no more then other local stations who were not charged gouging."

But maybe you think this was the first government attempt to crack down on price gouging, so next time there won't be any price gouging cause people will be scared…

I'm not saying price gouging is up to its optimal level, but there is a lot of it.

Charlie September 4, 2008 at 6:03 pm

That was a good spoof, vidyohs, you're funny. You'd have to use some pretty messed up arguments to ignore the accumulation of citations and journal articles Krugman acclaimed. I guess that's why no on objected to my argument.

John Dewey September 4, 2008 at 6:21 pm

Charlie, I'm getting tired of this. Read what I post before you respond.

I cited a few instances of price gouging prosecutions in Missouri, Oklahoma, and Georgia. I had made the point that the governments of Louisiana and Texas signaled – frequently and forcefully – that they would crack down on price gougers. The prosecutions and the threats are now working like a charm. Retailers are now afraid to use market-clearing prices during emergencies – exactly when such pricing is desperately needed.

Your point earlier was that free markets must not be working during crisis times. My argument, which I'm tired of repeating to you, is that governments do not allow free market mechanisms during crisis times.

Charlie September 4, 2008 at 6:46 pm

"I had made the point that the governments of Louisiana and Texas signaled – frequently and forcefully – that they would crack down on price gougers. The prosecutions and the threats are now working like a charm."

I actually alluded to how your argument could lead to this conclusion, but I was doing so to show how ridiculous it was. See, "But maybe you think this was the first government attempt to crack down on price gouging, so next time there won't be any price gouging cause people will be scared…"

Your actually taking the side that government is just now cracking down on price gougers, and that now they're serious. And now it will work and eliminate price gouging. You really are unaware that politicians have always made a hullabaloo about price gouging. There has always been a few token cases, and price gouging continues. But this time it's different right? Now all the threats will work. Really? You believe that.

Here's a bold prediction: next time a hurricane hits Texas, many retailers selling many things will raise their prices. Politicians will make a hullabaloo, and the whole process will continue.

Charlie

Methinks September 4, 2008 at 7:25 pm

You are saying: People always complain about government services because they are always so bad. And the existence of government services makes people feel safer.

That's not what I said, Charlie. People who think government is the answer endlessly complain that government is is doing a poor job. Note the loudest complainers about FEMA's (in)action during Katrina think we should have MORE such government services. People who think government always provides substandard service at much higher prices shake their heads and say "of course". At least that's been my experience.

Most people are never faced with an emergency so severe it requires FEMA, so they have no reason to believe that FEMA isn't exactly as capable as the government claims. How differently would people behave if they knew there was no FEMA at all?

The truth is, that the answer to your first statement is that complaining is how we get government to respond to us. Answering voters complaints is one of the main incentives that drives governance.

You think so? I've never noticed that this was the case – unless you happen to be part of a very large voting block. My hope is that we will eventually become a large voting block (although, trying to get libertarians to vote at all is sometimes difficult – South Park's "Douche vs. Turd" episode explains the dilemma best).

Methinks September 4, 2008 at 7:43 pm

There has always been a few token cases, and price gouging continues. But this time it's different right? Now all the threats will work. Really? You believe that.

Charlie, to the "token case", the process is very unpleasant and costly. The prosecution of these token cases will have some deterrent effect and at the worst time possible. These threats don't have to deter everyone from raising prices to effect shortages where there shouldn't be any. And "price gouging continues" is just wrong. Price gouging requires collusion and I challenge you to try to get more than two parties to stick to a collusive agreement (hell, I challenge you to get two parties to stick to a collusive agreement!).

Charlie September 4, 2008 at 7:47 pm

"At least he has the courage to reveal his full name, unlike every anonymous Tom, Dick, and Charlie who shows up here to try and mute free speech."

Saying people shouldn't call other people names is not trying to mute their free speech. I don't want to take away the right for Don to be able to call people names; I just want him to exercise that right less often. On a free and open forum, it is important for people to argue against ad hominem attacks as well as intelligent argument. Don started off this post by trying to undermine PK's credibility. I think it is perfectly reasonable to point out that he is in fact leaps and bounds ahead in any sort of objective measure of economics prestige. I'm not saying being a better economist makes one necessarily correct, but it is certainly a reasonable counterpoint to being called unserious.

Charlie

Charlie September 4, 2008 at 7:56 pm

-Methinks

I actually totally agree with this, if you go back and read you'll find it's quite consistent with my position, "Charlie, to the "token case", the process is very unpleasant and costly. The prosecution of these token cases will have some deterrent effect and at the worst time possible. These threats don't have to deter everyone from raising prices to effect shortages where there shouldn't be any."

"Price gouging requires collusion and I challenge you to try to get more than two parties to stick to a collusive agreement (hell, I challenge you to get two parties to stick to a collusive agreement!)."

Is this true? If someone has access to westlaw or some other legal source, can they post a definition for price gauging, possibly from Texas or Louisianna. It's hard for me to imagine collusion is necessary or it'd be very very hard to ever convict anyone. I think the law as written will probably capture all kinds of behavior. Here is one definition, "pricing above the market price when no alternative retailer is available." Under that definition or a similar one, I still maintained that only a really small fraction of economic activity that meets that definition is prosecuted. And that such activity happens "all the time."

Mesa Econoguy September 4, 2008 at 7:58 pm

Sorry, no. Krugman is unserious precisely because of his bogus rants against capitalist society, and his knee-jerk defense of government.

Never mind his crappy forecasting record back when he was an economist.

Al Gore won a Nobel Prize, but that does not alter the fact that he is an abject moron.

vidyohs September 4, 2008 at 8:39 pm

"That was a good spoof, vidyohs, you're funny. You'd have to use some pretty messed up arguments to ignore the accumulation of citations and journal articles Krugman acclaimed. I guess that's why no on objected to my argument.
Posted by: Charlie | Sep 4, 2008 6:03:37 PM"

Don't kid yourself, Charlie. 11th Commandment is "Don't lie to thy self."

Being unanswered is not proof of anything other than people just don't really give a shit. Take it for anything else and you're probably flattering yourself, unduly.

Methinks September 5, 2008 at 12:35 am

Charlie,

It's hard for me to imagine collusion is necessary or it'd be very very hard to ever convict anyone.

It's next to impossible to convict someone of price gouging. I'm not aware that anyone has been convicted for price gouging in recent decades (and my lack of awareness doesn't mean it hasn't happened – just that I'm too lazy to look it up properly). However, in reading some random articles about price gouging investigations, the main reason for unsuccessful prosecution has been a lack of evidence of collusion. This is probably because there's usually more than one seller of the same good and all sellers take their price up. If there's more than one seller and all sellers increase their price, the only way to prove gouging is to prove collusion. Collusion is very difficult to prove (usually, because there isn't any).

However, successful prosecution of "gougers" is not necessary. It's so easy to get into court and so expensive for the accused to fight the battle – even if they ultimately win – that it's not worth taking the risk that an overzealous politician will try to further his career on your hide.

I think the law as written will probably capture all kinds of behavior.

Convenient, eh? Proving any of it is impossible, but capturing some of that Eliot Spitzer as prosecutor magic political spotlight is a certainty. How's that for gouging?

"pricing above the market price when no alternative retailer is available."

Amazing how nonsensical that is, isn't it? When nobody else is selling that good, the lone seller is the market and the price at which he's selling defines the market price.

Russ Nelson September 5, 2008 at 2:00 am

Charlie, Krugman HAN no credibility to lose.

Charlie September 5, 2008 at 2:10 am

""pricing above the market price when no alternative retailer is available."

Amazing how nonsensical that is, isn't it? When nobody else is selling that good, the lone seller is the market and the price at which he's selling defines the market price."

Yes, though in the law's defense this isn't a legal definition (I think it's from free dictionary.com). I can't decide if it says price gouging is impossible as you pointed out. Or if I interpret "market price" as the "normal market price" (which is a concept probably beyond definition, but what the definition means to say), then it happens all the time: popcorn at a movie, movies in a hotel room, beer at a baseball game…

It's of course also possible the laws are different in different states. You should check out John Dewey's links to some price gouging cases that actually went to trial and got convictions.

Charlie September 5, 2008 at 2:14 am

Here's a statute from Ohio from one of Dewey's links. It says a price increase of 10% in a state of emergency is gouging. I still maintain that only a tiny fraction of gougers are brought to trial. I think that is certainly true under this statute. I think that trend will continue into the future as well, though Dewey does not, at least not in Texas and Louisiana.

"No person for the duration of a declaration of emergency by the Governor of this state or by the President of the United States and for thirty (30) days thereafter shall sell, rent, or lease, or offer to sell, rent, or lease, for delivery in the emergency area, any goods, services, dwelling units, or storage space in the emergency area at a rate or price which is more than ten percent (10%) above the rate or price charged by the person for the same or similar goods, services, dwelling units, or storage spaces immediately prior to the declaration of emergency unless the increase in the rate or price is attributable only to factors unrelated to the emergency and does not include any increase in profit to the seller or owner."

Diogenes of Sinope September 5, 2008 at 4:53 am

Charlie,

An ad hominem really only warrants reproach when it accompanies or constitutes an argument that fails to produce any relevant evidence or substance, which is clearly not the case here – Krugman's claims were addressed.

Your point, that Bourdreaux should play nice when in the presence of what you perceive as superior economists, is technically valid, but totally inconsequential and slightly obnoxious.

"The early days after Katrina was a good example of how the free market would respond to a crisis in the absence of government."

An event so recent and well documented makes poor fodder for ideological allegory. The early days after Katrina demonstrated the exact events and conditions that produced them, and the presence of government, specifically bad government, was undeniably influential.

Paul September 5, 2008 at 5:24 am

After Katrina, FEMA's budget went up. So, for FEMA as a organism, everything turned out quite well.

Charlie September 5, 2008 at 1:35 pm

"An ad hominem really only warrants reproach when it accompanies or constitutes an argument that fails to produce any relevant evidence or substance, which is clearly not the case here – Krugman's claims were addressed."

You could make this argument if it was just an ad hom attack – "PK is a fat head" – but if it is attack on credibility "PK is a pundit not an economist" it certainly warrants reproach. Imagine two people are debating surgical procedures, and one says "well, I'm a nurse I've assisted in lots of surgeries and you're just a journalist." It definetely matters if the journalist is also a world-class surgeon. I don't know much about surgery; I would take that into account when evaluating their arguments. It doesn't mean the nurse is wrong, but the info is important. Why would people attack credibility if it didn't matter, just to be mean?

"what you perceive as superior economists is"

One of the things I just wanted to make clear is that we have objective measures of economic accomplishments. That doesn't mean they are perfect. Batting average and homeruns may not tell you who the best baseball player is, but they are also not my opinion. You could still argue X is better than Y, but expect to have to counter the argument that Y has much better stats.

"but…slightly obnoxious."

I actually agree. I would never have brought it up if Don hadn't attacked PK. If he had said, "here is an excellent passage by Horwitz that points out errors in PK's logic" then I would never bring it up. But he went after PK at the beginning and end with credibility attacks, as I said before, I think in a free and open forum, it's important for those attacks to be met with contrary evidence. And I also think many people, even people interested in economics, don't necessarily know who top economists are, so it has informational value. I would probably not feel the need to respond to "bill parcels is just a tv host" in a discussion of people interested in football.

Charlie

vidyohs September 5, 2008 at 3:08 pm

Charlie,

"You could make this argument if it was just an ad hom attack – "PK is a fat head" – but if it is attack on credibility "PK is a pundit not an economist" it certainly warrants reproach."
Posted by: Charlie | Sep 5, 2008 1:35:50 PM

As PK's article contained no economic information and was a political hit job, just how was his creditbility as an economist denigrated? He wrote as a pundit and was criticized as a pundit by an economist pointing out that PK is using his supposed economist creds to give his pundit efforts creditibility; an "attack" that is totally justified with the facts on hand. Which just hi-lights further the fact that PK is a socialist shill.
—-

"But he went after PK at the beginning and end with credibility attacks, as I said before, I think in a free and open forum, it's important for those attacks to be met with contrary evidence."
Posted by: Charlie | Sep 5, 2008 1:35:50 PM

In this free and open forum what contrary evidence have you shown that PK is not a pundit more often than an economist and in this particular case he was not writing as a socialist shill?

Answer: none.

PK is a socialist shill, foremost, and well before being a serious economist.

Charlie September 5, 2008 at 4:14 pm

"As PK's article contained no economic information and was a political hit job, just how was his creditbility as an economist denigrated? He wrote as a pundit and was criticized as a pundit by an economist pointing out that PK is using his supposed economist creds to give his pundit efforts creditibility; an "attack" that is totally justified with the facts on hand. Which just hi-lights further the fact that PK is a socialist shill."

The article is all about incentives. PK is arguing that if you believe government is always the problem, then you have an incentive to run government poorly if in charge to prove yourself correct. The response is arguing about market based incentives. They are both about economics.

"In this free and open forum what contrary evidence have you shown that PK is not a pundit more often than an economist and in this particular case he was not writing as a socialist shill?

Answer: none."

You have such a funny idea that people have economist hats and pundit hats, and when you are one you can't be the other. Does a baker stop being a baker when he writes a newspaper article? Or a policeman stop being a policeman? Or a doctor stop being a doctor? PK doesn't stop being a great economist when he gives political opinions, just as Don Boudreaux does not give up his Ph.D. when he shills for less government. Regardless of what you might believe, economics does not take sides in political disputes just as philosophy does not take sides in moral disputes.

Charlie

Babinich September 5, 2008 at 6:45 pm

Charlie says:
"Paul Krugman is a perennial all-star and former MVP, while Don and Steven are minor leaguers."

"it is important for people to argue against ad hominem attacks as well as intelligent argument."

Well whaddaya know, a hypocrite to boot…

Charlie says:
"Krugman won a Clark medal which is the second most coveted prize in economics next to the nobel. He's legitimately in the running for nobel."

As Vidyohs stated so magnificently in an earlier post: "Krugman is broken."

Paul Krugman lacks the most important trait necessary to be an great economist.

Mesa Econoguy September 5, 2008 at 6:47 pm

Okay, this is getting old, Charlie.

Yes, you invalidate your so-called expertise when you make indefensible statements like the ones Krugman regularly gets paid to make, and makes here. To wit:

The party can thus avoid reminding voters that the last man they placed in the White House did such a heckuva job that he scored the highest disapproval ratings ever recorded.

So Bush, the symbolic figurehead of "government," didn't do enough around Katrina. So he, and government, need to do more this time. Fine.

Assuming that the ["classified"] folder contained something other than scrap paper, is the planned response to a hurricane a state secret? Are we worried that tropical storm systems will discover our weak points? Are we fighting a Global War on Weather?

So now Krugman is worried that state secretiveness, caused by FEMA – a.k.a "government" – response to things like hurricanes, which Krugman fully endorses, will make the problem worse?

This is nonsensical.

He continues,

Some observers have pointed out that daily briefings on preparations for Gustav, which should be coming from the Federal Emergency Management Agency — which is, you know, supposed to manage emergencies — have been coming, instead, from the U.S. military’s Northern Command.

There’s a whiff of paranoia of Bush’s “moustache-twirling villainy" (h/t Jonah Goldberg) there, and he’s insinuating that the military is behind this, possibly even the hurricane. Again, ridiculous.

And by "some observers," read "Daily Kos bloggers," or some other such waste of space.

Simply put, when the government is run by a political party committed to the belief that government is always the problem, never the solution, that belief tends to become a self-fulfilling prophecy. Key priorities are neglected; key functions are privatized; and key people, the competent public servants who make government work, either leave or are driven out.

This is conjecture, and needs to be backed with hard evidence, like total costs of hurricanes under various administrations, response times, etc. As an award-winning, “acclaimed” economist, Krugman should know this, and fails to provide any support whatsoever to bolster his assertions. Weak.

Nice shameless political nod to government peons, too, most of whom do very little to make government work.

[The reality is, as mentioned above, bureaucratic lethargy regardless of which party is “in charge,” tho this could be quantified as well.]

More:

The problem with the Bush administration’s response to Katrina wasn’t the president’s failure to show up promptly for his photo op. It was the failure of FEMA and other degraded agencies to show up promptly with food, water and first aid.

Um, that isn't what happened, Paul. They did show up with all the above, and couldn't get in, then get stuff distributed, mostly due to the crushing incompetence and corruption of local Louisiana government (Ray Nagin), which would make a Chicago south-sider blush.

Given these statements by Krugman, I'm forced to conclude that he's either woefully ignorant, completely lacking any type of logical reasoning ability, or possibly mentally retarded.

I subsequently also question his economic "expertise," as the same confused mind produced this garbage.

Charlie September 5, 2008 at 7:13 pm

-Babinich

""Paul Krugman is a perennial all-star and former MVP, while Don and Steven are minor leaguers."

"it is important for people to argue against ad hominem attacks as well as intelligent argument."

Well whaddaya know, a hypocrite to boot…"

It's not a subjective measure. It's not my opinion. Objectively those people are in different leagues. In measures economists use to judge the work of other economists, under criterion in which awards and bonuses are given out, and the all coveted in academia prestige. It's not a slant. And you can totally make counter arguments that the objective measures are bad, just like you could say "batting average doesn't tell you about leadership or fielding." Just like you can say "mainstream rankings underrate heterodox theories like Austrian Economics."

-Mesa

"Given these statements by Krugman, I'm forced to conclude that he's either woefully ignorant, completely lacking any type of logical reasoning ability, or possibly mentally retarded.

I subsequently also question his economic "expertise," as the same confused mind produced this garbage."

Almost all of your points are irrelevant. Economists are judged at least in part (maybe mostly) on objective terms: pblications in top journals and citations. Either papers and models are influential or they aren't. It's just a fact that PK's career as an economist has been incredibly successful. I'm sorry if that hurts your feelings, but it's extremely relevant to someone calling an unserious economist.

And if credibility matters, then the credibility of the person attacking credibility matters. It matters if the career is someone like Don's or someone like Greg Mankiw or John Taylor or Marty Feldstein. All I've done is bring these relevant facts to the discussion.

Charlie

Charlie September 5, 2008 at 7:28 pm

Full Disclosure: When I am not busy extolling Keynesian claptrap, I provide private entertainment to Paul Krugman.

Mesa Econoguy September 5, 2008 at 7:44 pm

Almost all of your points are irrelevant.

Can I have what you’re smoking? Powerful stuff….

Economists are judged at least in part (maybe mostly) on objective terms: pblications [sic.] in top journals and citations.

Yes, I actually studied under Russ Roberts, an acclaimed economist. That’s nice. Step outside that realm, as Krugman more than has, and regularly commit analytical faux pas as he does, you lose any credibility you may have. News flash to you.

As I mentioned above, I [and many others, most others in the financial industry] don’t care if you’ve won a Nobel Prize or not. In fact, I’m probably less interested if you are an “acclaimed economist,” because you’re probably wrong.

Very weak defense.

Don [and Russ] regularly points out flawed underlying economic and/or logical premises in most of the arguments you read in the popular press, including and especially Krugman, who isn’t very bright. These arguments are continually repeated and believed by people like you.

Interesting that you mention Marty Feldstein. He has lost much credibility predicting the imminent recession which has yet to materialize, and has flip-flopped and backtracked multiple times on CNBC alone. This from the head of the NBER, the arbiter of business cycles. People stopped listening to him, too.

Both Marty and Paul dabble (Paul more than Marty) in political economy. They’re both largely irrelevant.

Charlie September 5, 2008 at 7:52 pm

Just to clear something up. A lot of people seem to think that my judgement of economist's contributions has to do with my political views or their political views. There are lots of right wing economists that are in the same or better league as Krugman: Milton Friedman, Friedrich Hayek, Greg Mankiw, Robert Barro, Ed Prescott, Martin Feldstein…and many more. There is no shortage of great and prestigious right wing economists (all of these may have a better record than Krugman; certainly the nobelers do-Friedman, Hayek, Prescott). That doesn't mean I have to agree with their political views. But they are objectively serious economists, no matter how idiotic or biased an argument I think they are making.

Charlie

Mesa Econoguy September 5, 2008 at 8:05 pm

But then consider the evidence, Charlie. Your own point is irrelevant.

Free markets work far better than government intervention throughout history.

Relevant contributions are made, but do you really think Thorstein Veblen is a cornerstone? Krugman does. He writes like him.

Do you think P. Diddy is a better producer than George Martin, too?

Charlie September 5, 2008 at 8:10 pm

"They’re both largely irrelevant."

To you maybe, but not to the field. Look, Russ is great, he seems like a great guy, a great teacher, he does really good podcasts and blog posts, but it isn't a stretch to say that Russ and PK and the other people I mentioned are in different leagues. And that's fine. That's not a diss. In the end, publications and citations and prestige aren't the end all be all. As far as I know Russ spends most of his time writing fiction books. It obviously isn't his goal to be considered one of the world's great economists (though he may want to be one of the best economic communicators). But I would hope Russ wouldn't pick some great and prestigious economist and call him unserious. It would look petty and unprofessional.

Mesa, you spend a lot of time telling us who you think is great and important. Neat. It doesn't matter. You might have a favorite pretty good baseball player too. That's fine. You are free to go around extolling why your player is better than Pujols and A-Rod and any other player. And if your player says some other player sucks at baseball, you are free to go defend him. But I'm also free to throw their stats in your face, and most people that know about baseball will think you are being ridiculous.

Charlie

PS -I'm going for most baseball analogies in one post. Feel free to join in.

Mesa Econoguy September 5, 2008 at 8:17 pm

No, I’m telling you who financial people, i.e. other economists, are listening to.

You should listen, too.

Actually, I have no opinion on baseball. Krugman should have no opinion on politics. You should understand this.

vidyohs September 5, 2008 at 10:47 pm

Charlie,

"Full Disclosure: When I am not busy extolling Keynesian claptrap, I provide private entertainment to Paul Krugman.
Posted by: Charlie | Sep 5, 2008 7:28:52 PM"

Talk to Monica about how to keep those knees clean while giving private entertainment to Krugman. P.S., wear a blue outfit so as to preserve evidence in case you need it later.

Mesa Econoguy September 6, 2008 at 12:31 am

PS, That baseball thing was a dead giveaway, Russ!

Well done!

Zambrano’s out for at least a week….

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