John Oliver says a lot with which I disagree – but in this particular clip, he and I see eye-to-eye pretty consistently.  (Warning: some obscene language)  (HT Thomas Boudreaux)

I’m especially glad that Oliver gives some air time here to the heroic Radley Balko.

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Here’s a letter to the New York Times:

Paul Krugman suggests that “deficit scolds” ignore two important facts: first, any net harm to human well-being generated by government deficits are “uncertain”; second, even if such harm does materialize, it won’t do so for many years (“Secret Deficit Lovers,” Oct. 10).

Whether or not Mr. Krugman is correct in his fiscal analysis, it’s striking that in other of his writings he sides aggressively with those who we might call “carbon scolds” - people who ignore two important facts: first, any net harm to human well-being generated by climate change is uncertain; second, even if such harm does materialize, it won’t do so for many years.

Perhaps it’s true that the concern over deficit spending really isn’t justified while the concern over climate change really is.  But the similarity between these two concerns ought at least to temper the scorn that Mr. Krugman infamously pours on those who assess the risks of both deficit spending and of climate change differently than he assesses these risks.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

UPDATE: A commenter’s remarks prompted me to change the title of this post from “Inconsistent Mr. Krugman” to “Inconsiderate Mr. Krugman.”  The latter title is closer to the point of my letter-to-the-editor – that point being that Krugman seems not to consider carefully enough the parallels between the fears of “deficit scolds” and those of “carbon scolds.”  Like too many “Progressives,” Krugman treats the prospect of harm from climate change to be far more certain – its reality far more firmly established by science – than it is in fact.  And he simultaneously dismisses too readily concerns that attempts to use the force of the state to combat climate change might well generate harms that are greater and graver than are those harms that those attempts are meant to mitigate.

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Quotation of the Day…

by Don Boudreaux on October 11, 2014

in Myths and Fallacies

… is from page 178 of the 1978 Arlington House edition of David Friedman’s 1973 book, The Machinery of Freedom; (a revised on-line edition of this indispensable book is available for free):

In spite of popular myths about capitalism oppressing the poor, the poor are worse off in those things provided by government, such as schooling, police protection, and justice.  There are more good cars in the ghettos than good schools.

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Video Prize Bloast

by Don Boudreaux on October 10, 2014

in Growth, Video

(I think that I just made up a word: bloast – meaning, to boast on a blog.)

“The Hockey Stick of Human Prosperity” – which is the first of the four “Everyday Economics” videos that Mercatus made this past Spring (as part of its larger MRUniversity project) – is a finalist for the 2014 Reason Video Prize.  Roman Hardgrave deserves special congratulations for this nomination.

Here, btw, is that video:

Six other “Everyday Economics” videos will be released soon.

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Quotation of the Day…

by Don Boudreaux on October 10, 2014

in Inequality, Myths and Fallacies, Taxes

… is from pages 27-28 of James Piereson’s 2014 monograph, The Inequality Hoax:

Piketty implies that reductions in taxes over the past three decades have allowed the rich to accumulate money while avoiding paying their fair share of taxes.  Nothing could be further from the truth.  As income taxes and capital-gains taxes were reduced in the United States beginning in the 1980s, the share of federal taxes paid by “the rich” steadily went up.  From 1980 to 2010, as the top 1 percent increased their share of before-tax income from 9 percent to 15 percent, their share of the individual income tax soared from 17 percent to 39 percent of the total paid.  Their share of total federal taxes more than doubled during a period when the highest marginal tax rate was cut in half, from 70 percent to 35.5 percent.  The wealthy, in short, are already paying more than their fair share of taxes, and the growth in their wealth and incomes has had nothing to do with tax avoidance or deflecting the tax burden to the middle class.

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… is from page 8 of Roger Koppl’s insightful monograph, From Crisis to Confidence: Macroeconomics after the Crash (original emphasis):

It is true that there was a kind of selective deregulation before the [2008 financial] crisis.  But the idea that excess lending was somehow a market failure overlooks a big important fact: too big to fail.  The bankers were gambling with other people’s money.

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Middle-Class Consumption

by Don Boudreaux on October 9, 2014

in Growth, Seen and Unseen, Standard of Living

Scott Sumner has a good post, at EconLog, on the inequality debate.  Here’s a long comment that I left in the comments section of that post (edited and augmented here slightly):

Scott: Nice post. One (non-rhetorical) question: why do you believe that the consumption of the rich has risen faster than that of the middle class? You might be correct, but it seems to me that the very same sort of logic, observations, and data that suggest to you (and to me) that the consumption of the poor has risen faster than that of the middle class also suggest that the consumption of the middle class has risen faster than that of the rich.

You and I both remember the mid-1970s well. Here are my impressions of that era compared to today: Back then, flying was not common for middle-class people. Middle-class people were far less likely than they are today to vacation in Europe or Latin America. Middle-class-people’s cars broke down much more frequently than they do today. Many more middle-class families had only “the” family car rather than multiple cars. Middle-class people personally changed the oil in their cars more frequently than they do today (with the likes of Jiffy Lube performing that dirty job now).

Making long-distance telephone calls was so costly that middle-class people monitored the number of minutes they spent on such calls. Almost no middle-class person had a telephone in his or her car. Middle-class people had access to a less-varied selection of foods – both in supermarkets and in restaurants – than they have access to today. A smaller proportion (than today) of middle-class homes were equipped with automatic dishwashers, central air-conditioning, attached garages, push-button-garage-door controls, and garbage disposals. (I’m pretty sure, too, that the size of the typical middle-class home back then – measured in both square- and cubic-feet – was smaller than it is today. And while the size of the homes of the rich might have increased even more [I don't know], a, say, 10% increase in living space starting from a relatively small space means a greater improvement in living standards than does a 10% increase in living space starting from a larger space.)

While rich people in the 1970s could afford home theaters, middle-class people could watch at home only those movies (and other programs) that the three t.v. networks (and perhaps also a local independent channel) were airing.  No middle-class person shipped, or had anything shipped, overnight.

Again, your claim might well be correct. I have no firm-enough evidence against it. But it strikes me as being as doubtful as is the claim of others that the consumption of the middle-class over the past several decades has grown faster than has the consumption of the poor.

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Talking about Adam Smith

by Russ Roberts on October 8, 2014

in Adam Smith, Books

Nick Gillespie interview me about my new book on Adam Smith and how the ideas of The Theory of Moral Sentiments apply to modern life:

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On today’s Kojo Nnamdi Show, someone named Tom Burford (who’s an expert on apples) issued two complaints that are evidence of just how very deeply economic ignorance runs in society.  He said:

(1) that large apple growers do not care about the taste of their product; they care only about profiting from the sale of apples;

and

(2) because apples are so important to the U.S. (although, he admits, not indigenous to the Land of the Free), he’s quite upset – I think he used the word “offended” – that Americans import apples.  He cannot understand why Americans import apples.

Mr. Burford sounds like a perfectly nice and intelligent human being.  And I don’t doubt that he is.  Yet these two claims that he made publicly are just such ideal specimens of the way so many people ‘think’ about economics that I can’t resist sharing them here at the Cafe.  Note that the problem with these statements isn’t that they express an opinion about preferences that I happen not to share; instead, the problem is that they are economically illogical – thoughtless – hilariously wrong to anyone who knows even a smidgen of economics.

One problem with group decision-making is that people as economically thoughtless and clueless as this Mr. Burford get to have a say in how other people lead their lives.

(I do agree with one main point of this Kojo Nnamdi Show that only one of the two descriptors in the name of Red Delicious apples is true: those apples are indeed vividly red.)

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Quotation of the Day…

by Don Boudreaux on October 8, 2014

in Competition, Politics

… is from page 38 of Steve Landsburg’s insightful 1997 book, Fair Play (original emphasis; link added):

A few years ago I published a book called The Armchair Economist in which I argued that bipartisanship in Congress should be treated as a violation of antitrust law.  We don’t allow the presidents of United and American Airlines to conspire against the public; why should we allow the leaders of the Democratic and Republican parties to conspire?  I got a note back from a copy editor asking whether there wasn’t actually a key difference, in the sense that the airline presidents are conspiring to break laws, while the politicians are conspiring to make laws.  I wrote back, asking if he had any historical evidence as to which of these activities was more likely to be harmful.  My guess is that making laws is on average worse than breaking them.

(Of course, by “laws” Steve here means “legislation” – for the state makes, not law, but legislation.)

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