Here’s empirical evidence of the reality and significance of Bob Higgs’s theory of regime uncertainty.  Pay careful attention.

Ross Kaminsky, writing at The American Spectator, uses his sound voice to argue against Uncle Sam’s retaliation against China for allegedly keeping the value of the renminbi too low American consumers who dare take advantage of good deals made possible by Beijing’s policy of tying the value of the renminbi to that of the U.S. dollar.

And writing at Forbes, the Cato Institute’s Jim Dorn warns against this same pending legislation aimed at slapping additional, discriminatory taxes on Americans who buy Chinese-made goods.

Mark Perry points out the obliviousness of the “Occupy Wall Street” protesters.

The great Bastiat makes a strong case for the flat tax.  (HT David Hart)

Rob Bradley is understandably made blue by politically created “green jobs.”

Writing in Investor’s Business Daily, my former student Alex Nowrasteh makes a case for liberlizing H-1B visas.

David Boaz, of the Cato Institute, writes eloquently on Steve Jobs, “prosperity creator“.

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Invisible Backhand October 9, 2011 at 10:22 am

…wholly fictitious notion that would be peddled only by think-tank whores in the pay of Republican plutocrats. (I trust that everyone who knows me will see how closely I fit this template.)

I think Bob is from that generation that doesn’t understand the internet. Wiki Robert Higgs which leads to Independent Institute then jump to mediatransparency.org which shows grants from the Earhart Foundattion and Rodney Fund. Total search time about 60 seconds.

And if you google timeline “regime uncertainty” it disappears from 2000 to September 2008. The media forgets all about it during Republican administrations.

Randy October 9, 2011 at 10:34 am

I didn’t. It seemed clear to me that the economy took a nosedive about the time it became clear that the next president would be a socialist.

Invisible Backhand October 9, 2011 at 10:51 am

You fit in so well at Cafehayek, Randy.

Randy October 9, 2011 at 10:59 am

Thanks. But most of these folks know way more about most of the subject matter than I do. I come here because they inspire.

kyle8 October 9, 2011 at 1:00 pm

Well if Higgs is a dirty conservative think tank whore then What does that make Krugman? After all, he has been in the pay of a left wing paper, and has written many things directly contradictory to his previous research, and has been a reliable cheerleader for the current regime.

I guess that makes him a cheap whore with std’s.

Invisible Backhand October 9, 2011 at 4:50 pm

…has been a reliable cheerleader for the current regime.

Paul Krugman has said:

“I’m with Simon Johnson here: how is it possible, at this late date, for kyle8 to be this clueless?”

Oh wait, he said Obama.

kyle8 October 9, 2011 at 6:33 pm

That is just silly, he was a loud and vocal backer of the regime. If he now has a few differences with the administration then so what?

Invisible Backhand October 9, 2011 at 7:44 pm

So you don’t know what reliable cheerleader means.

kyle8 October 9, 2011 at 8:39 pm

you, as usual are splitting hairs when it suits you.

Invisible Backhand October 9, 2011 at 9:32 pm

No, I just speak English. There are many more examples of him not being a reliable cheerleader if you care to look. Here’s a brief start

Obama’s Nobel Headache
http://www.thedailybeast.com/newsweek/2009/03/27/obama-s-nobel-headache.html

Mesa Econoguy October 10, 2011 at 4:33 am

Where is Obamalini bff Warren Buffet’s impact?

He makes $100k salary, tool.

Why not write a check, Warren?

http://www.bloomberg.com/video/76366076/

[rambling buffoon]

Clearly, Warren has taken leave of what’s left of his sensibilities, and should be killed, under Obamacare guidelines 34.5 &4 sub 80, 8476h 1.6

brotio October 10, 2011 at 4:44 pm

Mesa, if you’re ever in SE Colorado, we’ll have to get together for some pickin ‘n’ grinnin, and guv’mint bashing.

Robert Fellner October 9, 2011 at 8:36 pm

I think Bob is from that generation that doesn’t understand the internet. Wiki Robert Higgs which leads to Independent Institute then jump to mediatransparency.org which shows grants from the Earhart Foundattion and Rodney Fund. Total search time about 60 seconds.

Showing that the Independent Institute received roughly 200k over the past 10 years from the two organizations you list above, does not demonstrate anything about the character or content of Dr. Higgs work. Hence his comments “as everyone who knows me” not “I bet you can’t find a conservative organization as a donor to the Independent Institute”, which is what you appear to have heard.

GiT October 9, 2011 at 9:00 pm

The Independent Institute is a Libertarian think tank which commissions public policy research on free market solutions. While polemical, ‘think tank whore in the pay of plutocrats’ is entirely apt. One can redescribe him as an employee of a think tank invested in public policy that harnesses the power of private industry and the free market to better the world, but you’re merely saying the same thing with a different polemical tincture.

And the fact that he’s also affiliated with the Mises Institute, Cato, and the Independent Review merely contribute to the point, along with all the awards from the Mises Institute or the Templeton foundation.

Robert Fellner October 9, 2011 at 9:21 pm

does not demonstrate anything about the character or content of Dr. Higgs work. Hence his comments “as everyone who knows me”

Robert Fellner October 9, 2011 at 9:24 pm

My point is the work and character of an individual can and should be based on its merits as opposed to a deliberate avoidance of the content and a sole emphasis on the perceived viewpoint or agenda of an organization.

GiT October 9, 2011 at 11:52 pm

But whether and how one uses an ad hominem to evaluate someone’s work does not reflect the truth of the ad hominem.

So let’s look at that ad hominem. Higgs said that he fits a type, not that he is a whore for plutocrats. And, as far as I can tell, anyone who knows Higgs would have to conclude that he fits the type, even if he is not in fact an intellectual whore. He acknowledges fitting the type at the end of his blog post: ” critics have continued to dismiss it either as Republican bunk bought and paid for by Obama-hating billionaires or as a sort of “just so” story concocted by flaky think-tank nobodies, such as yours truly”

Hence his appeal to corroboration by those who do not immediately fit the type of whores for plutocrats, or, should one say, intellectual workers for pro-market businessmen. Of course, one of those to whom he appeals is a graduate student whose research seems to consist of attempts to substantiate republican talking points, and another is affiliated with AEI, so his interlocutors may not be so different in type.

These affiliations, of course, do not attest to the results being ‘fictitious.’

That would require the work being examined on its merits. At first glance one must be immediately suspicious of an index which measures policy uncertainty generally, when the theory of regime uncertainty explicitly applies to policies which would allegedly negatively impact firms (taxes, regulations, etc.), and then goes on to draw conclusions that reflect the belief that policy uncertainties solely tied to pro-market policies are responsible for the negative effects of policy uncertainty.

If you look at the three indexes, they all measure uncertainty in policy shifting in either direction, not just one direction: the news measure picks up uncertainty regardless of what it’s about (could be positive – repeal taxes, or negative -impose taxes), the tax code expiration measure picks up events where taxes will either decrease or stay the same (uncertainty about a positive effect), and the forecast measure picks up increased disagreement about the direction of change in a number of measures (a positive or negative effect).

This is to say that the indexes pick up on uncertainty about policy regardless of its content and expected effect on producers or consumers. And yet the conclusions of the study as summarized in Bloomberg go out of their way to tie uncertainty to the left in every instance, when the policy results are an effect of the interaction of both parties, not just one.

If policy/regime uncertainty is about uncertainty, and not policy/regime content, then what matters is that a policy/regime is stable, not that it is of a ‘pro’ business or ‘anti’ business type. A study of policy content is a different sort of study, of which there are many.

Reasoning from the fact that policy uncertainty in both directions exists to a certain form of stable policy regime, when what you are trying to measure is the effect of policy uncertainty, not the effect of policy content, is to engage in ‘whoring for plutocrats.’

Let’s start with the writers of the report. Note that as causal mechanisms they offer both consumers uncertain about jobs and wages (and hence partial to the expectation that government will ‘create jobs’ and ‘raise wages’ and so on) and producers uncertain about taxes and regulations (and hence partial to the government ‘lowering taxes and regulations.’)

And yet in their Bloomberg piece, the authors in each case tend to assign culpability to the left when what their study points out is not a problem of policy content (economy suffers when democratic policies run through, soars when republican policies run through) but policy uncertainty (all we want is a stable policy regime, who cares which it is). Nothing in their study tells us who is at fault for policy uncertainty, which is an interactive effect of both parties.

It would be eliminated if either side just gave up its policies. Presumably, then, the implicit solution is to eliminate democracy and stick to a more authoritarian mode of setting economic policy, regardless of what that policy content looks like. Any statement about who is being more ‘unreasonable’ is a polemical statement.

So I have my suspicions about their integrity.

Support for Higgs’s thesis would have to show that uncertainty solely about whether or not ‘anti-business’ policies will occur increases economic uncertainty and hence decreases economic vitality (to quote his definition of regime uncertainty: “the likelihood that investors’ private property rights in their capital and the income it yields will be attenuated further by government action”). But the article he cites as support shows that uncertainty about any policy, regardless of content, increases economic uncertainty and hence decreases economic vitality.

In sum, from the study Higgs cites we can conclude that a single, stable state economic policy regime would help the economy solely by reducing policy, and hence economic, uncertainty. But we cannot conclude that ONLY a single, stable, laissez-faire state policy regime would do this. But the latter is the thesis for which Higgs is claiming support.

So for Bob Higgs, who takes a measure of uncertainty in both directions as support for his thesis about uncertainty in only one direction , it is clear that he is, in fact, engaging in sophistry, and one might think he truly does ‘fit the type.’ One might presume that our host at this blog, who has done the exact same thing, fits the type as well.

So much for paying careful attention.

Gil October 10, 2011 at 1:33 am

“. . . research . . . free market solutions”!? Seriously? The answer has always been “government GTFO out the econmy and existence”.

GiT October 10, 2011 at 3:00 am

…because of the epistemological assumption (and from time to time empirical proof) that governments are incapable of improving outcomes, or incapable of improving outcomes relative to free markets.

Economic Freedom October 9, 2011 at 10:10 pm

The media forgets all about it during Republican administrations.

That’s odd, considering they’re all biased to the left, and all would have grasped at any excuse, real or imagined, to destroy the administration in office from 2000 to 2008. With an average unemployment rate of about 5% through most of GWB’s administration, along with a DOW of 14,000, it could be that there simply wasn’t much regime uncertainty. Then again, don’t let the obvious answer fool you. Please do surf to Wikipedia — the fount of all wisdom on matters economic.

vidyohs October 9, 2011 at 10:24 am

Graduated tax, flat tax, VAT/sales tax, I am surprised at how few people can advance their thinking to the point of dealing in contracts instead of taxation.

We here so much bull shit tossed around about “fair share” but have no system that compares to individual contract to nail an individual down to his “fair share”. Pay for what you use, and let others pay for what they use depending on their contract.

And if the government can’t compete as a corporation (which it surely is) in offering services, then let it go out of business, and get out of the way of market driven service providers.

kyle8 October 9, 2011 at 1:02 pm

Sounds good, but it is an unrealistic dream unless in a very very small nation. There is no way such broadly libertarian goals will ever be realized in a large diverse nation like the USA.

But we can still move in that direction.

vidyohs October 9, 2011 at 4:37 pm

Is any dream a realistic dream until it is made real?

Self governance was an unrealistic dream according to the world, yet the founding fathers tried it. It didn’t work perfect because there are no perfect people, but it still worked good enough to allow the USA to become a power house in every way.

A thing untried is not a failure.

kyle8 October 9, 2011 at 6:34 pm

I agree with trying, but I lack much faith in the end product.

Gil October 10, 2011 at 1:37 am

How was the U.S. “self-goverance”? There was a government that was chosen by people of significant worth – that more of a plutocracy than Libertarianism. Then again much of the West went down the laissez-faire path during the 1800s (especially as Britain was the superpower for that period).

vidyohs October 9, 2011 at 10:25 am

Ouch. That is “We hear so muc…….”

Adam October 9, 2011 at 10:25 am

The link about the Wall Street protestors is unfair. It’s the exact same argument people have used to call me a hypocrite because I oppose government programs even though I use government healthcare (I’m Canadian), went to a subsidized university (they’re all subsidized up here) and walk on government sidewalks. We have to live in the world in which we’re born; that doesn’t mean that we can’t oppose certain of its features.

Of course, I don’t agree with anyone who thinks that profit and business are evil. But I’m not going to use cheap argument like “you shaved with a razor made by a corporation” to discredit him. What’s he supposed to do, either grow a ZZ Top beard or grind his face with a sharp rock?

Randy October 9, 2011 at 10:38 am

Good point. I wouldn’t call it unfair to point it out to them though. It is possible that they are uninformed and not hypocrits – many of them did attend US public schools…

Invisible Backhand October 9, 2011 at 10:54 am

Are you a Republican, Randy?

Randy October 9, 2011 at 11:02 am

Apparently you don’t read my anti-politician rants. No, the term I use is radical individualist, or sometimes natural heretic… though maybe its just a general lack of respect for authority…

Greg Webb October 9, 2011 at 11:02 am

Randy, my guess is that most of them are pampered rich kids who went to private school. The issue is never the school. It is always the kid. Some of us want to learn and some don’t. Look at Obama a Bush…great schools, dumb students.

Invisible Backhand October 9, 2011 at 2:36 pm

Somebody zoomed in on a portion of the picture and discovered something:

http://i.imgur.com/Ye8jM.jpg

Captain Profit October 9, 2011 at 6:47 pm

Now jobs are bad?

Greg Webb October 9, 2011 at 10:59 am

Excellent picture and commentary by Mark Perry! He accurately points out the hypocrisy of the left, who are overly pampered rich kids who, if anything, need a good kick in the ass.

Randy October 9, 2011 at 11:08 am

I agree that the left is rife with hypocrisy, but they also control the public schools. I have three who just went through those schools, and some of the ideas they were bringing home… same stuff I’m seeing now from the “occupiers”.

Greg Webb October 9, 2011 at 11:20 am

Unfortunately, leftists are involved in many private schools as well. the left has a seductive political philosophy in promoting envy and jealousy. It infects most, which is why it really annoys the left that those with principles and morals speak up and say that envy and jealousy is wrong as is nepotism, favoritism, and political cronyism.

I think that schools, whether public or private, are taught by many who believe that they should be in charge because they are used to dealing with children. Many school teachers envy others who are more successful than they are and that is what drives them to promote those idiotic leftist ideas.

Don Boudreaux October 9, 2011 at 11:28 am

Yep.

“Progressives’s” are impressively skilled at elevating envy of other people’s material and financial possessions into an allegedly sound philosophical and ethical basis for public policy.

I was taught by my parents NEVER to envy others who appear to be better off than I am. It’s a good and noble lesson. “Progressives” insist that what is noble is envy. It’s a loathsome sentiment.

Greg Webb October 9, 2011 at 11:55 am

My parents taught me the same. They also taught me about personal responsibility. They are good people.

kyle8 October 9, 2011 at 1:06 pm

Envy, jealousy, racial divisiveness, class warfare, sexual divisiveness, labor thuggery, and sometimes just outright hate. These are the things peddled by the left.

Observer October 10, 2011 at 6:19 am

your a racist, that’s all you were taught by your parents

Daniel Kuehn October 10, 2011 at 8:23 am

I’ve never known a progressive to insist on that at all.

If your problem is envy, why don’t you just criticize envy? Why do you have to present your political disagreements as ignobility or immorality on the part of others?

I can say “my parents taught me to sympathize with poor people and libertarians insist I shouldn’t” but that would obviously be wrong, wouldn’t convince anyone, and would turn off people I might convince. You’re doing the exact same thing.

muirgeo October 10, 2011 at 8:39 am

Did your parents tell you to side with Bankters, mobsters and rent seekers who steal wealth and destroy the economy and then label those who call out these crooks envious?

Randy October 10, 2011 at 9:18 am

Like Daniel, I sympathize with poor people (been there done that), though I don’t think the fact of poverty is a justification for political behavior – because I don’t think anything justifies political behavior.

As for Muirgeo, you accuse these people of criminality, and yet the political organization that you support has not only not prosecuted these people, but actively supports them. In other words, your behavior is purely political and I despise it.

Richard Stands October 10, 2011 at 5:34 pm

Or championing others who you pity and think they ought to be envious. Add jealousy, hatred, guilt, worry, and liberal doses of other destructive emotions and you get a sad mix.

Randy October 9, 2011 at 11:32 am

Envy promoting envy.

Observer October 9, 2011 at 11:30 am

you say that “envy and jealousy is wrong”

I assume every day you call and write Rush every day and tell him to stop how he talks about the Elite and Main Stream Media, and Yada Yada Yada

The trait of being jealous is universal, so every plays that card.

The quote of today, here, is basically an appeal to jealously. Would you ask the bloggers to take it down?

Seth October 9, 2011 at 11:40 am

That’s a mighty poor example of jealousy and envy.

Greg Webb October 9, 2011 at 11:52 am

I assume every day you call and write Rush every day and tell him to stop how he talks about the Elite and Main Stream Media, and Yada Yada Yada

You make another conclusory statement. Can you support with objective, verifiable evidence that he is envious of the political elite and the main stream media? My guess is not. My bet is that Rush criticizes the enviousness of the political elite and the inaccuracy of the mainstream media.

The trait of being jealous is universal, so every plays that card.

Nope. Jealousy is a human weakness that everyone must overcome, not rejoice in. We shall overcome. So, how about you, brother, will you join us in overcoming jealousy and enviousness?

The quote of today, here, is basically an appeal to jealously.

No. Read it again.

Would you ask the bloggers to take it down?

No. It is an excellent quote.

GiT October 10, 2011 at 3:19 am

Jealousy and envy typically go along with a host of other human weaknesses, including pride and greed.

The greatest of the seven vices was superbia, or, as Dante put it, “love of self perverted to hatred and contempt for one’s neighbour.”

But I’m sure your contempt for the envious and the jealous has nothing to do with your own hubris.

kyle8 October 9, 2011 at 1:09 pm

bullshit, don’t try to drag us down to your gutter. I am motivated by a desire to be like the people I admire, I don’t want to bring them down to my level.

I know I am limited and will never be a great or very wealthy person, but that is not the fault of anyone else, and I can always improve myself and my position without rent seeking.

vikingvista October 9, 2011 at 3:20 pm

Don’t you have an example of envy or jealousy?

Economic Freedom October 9, 2011 at 10:15 pm

I assume every day you call and write Rush every day and tell him to stop how he talks about the Elite and Main Stream Media, and Yada Yada Yada

How is using the term “mainstream media” an example of envy?

vikingvista October 9, 2011 at 11:33 pm

I guess Rush is jealous that almost nobody in the mainstream media makes as much money as he does.

Mesa Econoguy October 10, 2011 at 4:12 am

I assume everyday that you eat babies.

Like Nancy Piglousy says.

Her son, Paul Piglousy, worked for Angelo Mozilo, from Countrywide?

Why are you a fellow Pig?

And a Lousy one?

Ironman October 9, 2011 at 11:45 am

“The great Bastiat makes a strong case for the flat tax.”

Here’s a tool where you can design your own flat tax!

Invisible Backhand October 9, 2011 at 5:00 pm

Where does it handle income from capital gains?

kyle8 October 9, 2011 at 12:57 pm

I haven’t had time to read the paper on regime uncertainty yet, but it could be a game changer.

sethstorm October 9, 2011 at 2:43 pm

Don, your student is a promoter of fraud. The H1/L1/etc line jumping and citizen bypassing programs are a case of good intentions gone bad. They only give employers a way to avoid citizens, instead of the intended hiring of citizens.

Here’s a challenge – how about removing 20 CFR 655, 20 CFR 656 and supporting legislation? It gets rid of fraud, waste and abuse all in one clean sweep. Or is this necessary regulation?

vikingvista October 9, 2011 at 4:31 pm

Higgs is biggs. I sincerely hope he continues to produce as an expatriot.

Moggio October 10, 2011 at 2:52 pm

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