My GMU Econ colleague Bryan Caplan argues that “the ‘right to your culture’ is literally totalitarian, because you can’t ensure the preservation of your culture without totalitarian rule over the very fabric of life in your society.”

Thomas Firey is correct: the late Alan Krueger did not prove that raising minimum wages causes no job losses. A slice:

I confess that I’m little-persuaded by Card and Krueger’s research, because it suffers from what I think is a serious flaw. Though they carried out their first-wave survey a few weeks before the minimum wage increase, the New Jersey law mandating the increase was enacted back in early 1990. That is, the fast-food chains had two years to prepare for the policy change. Employers typically don’t like to fire workers, so a rational strategy to prepare for the policy change would have been to reduce employment through attrition in anticipation of the policy change, rather than issue morale-crushing pink slips on March 31, 1992. Indeed, Card and Krueger’s first-wave survey data show the Pennsylvania restaurants averaged 23.3 full-time-equivalent employees while the New Jersey restaurants averaged 20.4.

Mike Munger summarizes capitalism with three principles.

“Auditing The Empire” – a new blog – looks as though it has much promise. (HT Walter Grinder)

Max Gulker explains that no economic system is perfect.

Here’s Shikha Dalmia on the current political dust-up over sanctuary cities.

Ben Zycher demolishes the Green New Deal.

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I was very pleased and honored to be a recent podcast guest of Antony Davies and James Harrigan. The topic of our discussion is recent campus moron-icity.

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Quotation of the Day…

by Don Boudreaux on April 24, 2019

in Hubris and humility

… is from page 431 of the 3rd edition (1998) of Paul Hollander’s indispensable 1981 account of the political credulity of intellectuals, Political Pilgrims:

While the suspension of disbelief has its place in human life, it belongs more to the religious (or aesthetic) than the political realm. There is, furthermore, as has been shown by this study, an all too close affinity between high utopian hopes and expectations on the one hand, and credulity, the rationalization of repression, and double standards, on the other.

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Politics…

by Don Boudreaux on April 23, 2019

in Other People's Money, Politics

… today is this tragi-comic spectacle (witness, for instance, Elizabeth Warren’s crackpot scheme to ‘forgive’ most student loans and make college ‘free‘):

Candidate A: “Vote for me, for I will give you lots of stuff paid for by other people!”

Candidate B: “Vote for me, for I will give you even more stuff paid for by other people!”

Candidate C: “Vote for me, for I will give you yet even more stuff, paid for by other people, than is promised to you by my unimaginative opponents!”

Candidate A: “Nonsense! Vote for me, for here is even more of what I will give to you paid for fully by others!”

Candidate B: “Paltry! Vote for me and I will give to you twice the amount of free stuff promised by my opponents, and paid for – of course! – only by other people!”

Candidate C: “Bush league! Vote for me and I will give to you triple – nay, quadruple! – no, quintuple!! – the amount of stuff promised by my opponents – all of course paid for fully by other people!”

So it goes.

And the media, the punditry, and the professoriate embarrassingly treat these power-mad charlatans as if they are worthy not only of respect but also of admiration.

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Bonus Quotation of the Day…

by Don Boudreaux on April 23, 2019

in Complexity & Emergence, Economics

… is from this 1991 interview of my late, great teacher Leland Yeager, who died one year ago today:

I don’t see anything peculiar about economists being interested in ethics. The two fields overlap. Both are concerned with how people can function together in society without central direction. Somehow, they pursue their own interests and serve those of others at the same time.

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My intrepid Mercatus Center colleague Veronique de Rugy reports on a severe factual problem that is at the core of a new ‘conservative’ scheme to increase paid family.

Here’s Mark Perry on the enormously high costs of Trump’s tariffs punitive taxes on Americans who purchase goods assembled abroad.

Catherine Rampell is rightly critical of the Trump administration’s hypocrisy on matters of trade.

Jeff Miron exposes an instance of domestic protectionism.

Ilya Somin tells us what Elizabeth Warren gets wrong about Daenerys Targaryen.

Ben Zycher exposes the irrationality of the religion whose adherents celebrate “Earth Day.”

My GMU Econ colleague Bryan Caplan encourages Dan Moller to extend his – Moller’s – philosophical analysis to immigration.

Richard Rahn warns of the returning slavery.

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… is from pages 376-377 of John Cogan’s superb 2017 book, The High Cost of Good Intentions:

The emergence of federal budget surpluses from time to time has only served to magnify existing pressures to liberalize entitlements. The heightened pressures have been sufficiently powerful to invariably overcome reasoned concerns about the long-term fiscal consequences of liberalizations. All of the major nineteenth-century veterans’ pension liberalizations occurred during economic good times when the U.S. Treasury was temporarily flush with revenue…. Since then all of the major expansions in Social Security have occurred during times when the Social Security trust fund has been flush with large accounting surpluses and without regard for whether the federal budget overall was in surplus or deficit. The last of these expansions in 1972 put the trust fund on its own long road toward bankruptcy.

A second pattern of modern expansions emerged from the New Deal and Great Society after entitlements were created for the unemployed and the poor. During recessionary periods when general economic hardship has spread among the population, pressure has mounted on Congress to expand entitlement programs to meet the rising economic need. Congress has invariably responded with program liberalization. As a result, entitlements are expanded during recessions that bring hard times to the general population, as well as during economic good times when federal revenues are plentiful.

DBx: In short, political pressures compel Congress to expand so-called “entitlements” during both economic good times and bad. “We’ve currently got lots of tax revenues!” makes the case for buying votes with other-peoples’ money in the first case, while “We’ve currently got lots of people in need!” makes the case for buying votes with other-people’s money in the second case.

This political reality can be imagined away. It can be wished away. This political reality cannot, though, actually be made to go away. And so this reality reveals that calls for allowing American workers to purchase family leave by borrowing from their fictional Social Security accounts are both politically naive and historically uninformed. Such calls are also, therefore, fiscally imprudent (in addition to addressing a ‘problem’ that is wholly imaginary).

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… is from page 261 of 1993 Nobel-laureate economist Douglass North’s October 25, 1994, lecture, “My Evolution as an Economist,” in Lives of the Laureates, William Breit & Roger W. Spencer, eds. (3rd ed., 1995) (link added; pictured here is North):

At a deeper level of analysis, [Kenneth] Arrow’s disturbing impossibility theorem had implications for the entire process for aggregating choices. In effect, one cannot achieve collectively rational choices by aggregating the individual choices of people with diverse values and preferences.

DBx: Yes. Yet I disagree with North’s description of Arrow’s finding as “disturbing.”

Arrow’s finding is certainly unexpected and unwelcome by – and, hence, disturbing to – those who naively believe that groups of individuals are akin to an actual flesh-and-blood individual – that is, by those who wish to anthropomorphize groups of individuals. But for those of us who never fell for the validity of such anthropomorphization, Arrow’s finding is no more disturbing than is the realization that flapping our arms doesn’t cause us humans to fly.

The impossibility of deriving an ordering of group preferences from the preferences of the individuals who comprise the group – an ordering of group preferences that is akin to an ordering of an individual’s preferences – is simply a reality that makes no more sense to bemoan than it makes sense to bemoan the reality that our arms aren’t wings.

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Consistently Anti-Consumer

by Don Boudreaux on April 22, 2019

in Antitrust, Competition, Crony Capitalism

Here’s a letter to the Wall Street Journal:

Editor:

You are correct to bemoan the Trump administration’s attempt to block the merger of Sprint and T-Mobile (“Justice Drops Another Call,” April 22). If the administration’s antitrust enforcers get their way, competition in the wireless market will indeed be stymied.

But give the administration credit for consistency: its use of antitrust to prevent domestic firms from competing more vigorously for consumers’ dollars is on all fours with its use of tariffs to prevent foreign firms from competing more vigorously for consumers’ dollars.

In Mr. Trump, monopoly power has found a true-blue champion.

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

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In my most recent column for AIER I document some of the many ways that free markets have made – and continue to make – our environment less polluted. A slice:

Indeed, once you start noticing that markets enable us to protect ourselves, at low cost, from the filth and household pollutants that were routinely encountered until very recently, you can’t stop noticing. Here are some anti-pollution advances, each admittedly small, but the sum of which is significant:

You can even get shoe trees to kill the fungus in your footwear.

But I don’t wish to end with these small conquests of pollution. Here are four other, major advances, each brought to us by innovative capitalism, that rival antibiotics in reducing our exposure to lethal pollutants: electric lightingair conditioningasphalt, and — last but not least — the automobile.

On this Earth Day, look around your home and workplace and take notice of the very many ways that capitalism has made your daily life less polluted than that of any of your ancestors. And then give thanks.

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