Economics
-
China
Tyler Cowen shares my concerns about China, namely that they can’t take a punch, or in this case, an economic downturn.
If you are not convinced, raise your right hand and repeat after me: “China in the 20th century had two major revolutions, a civil war, a World War, The Great Leap Forward [sic], mass starvation, the Cultural Revolution, arguably the most tyrannical dictator ever and he didn’t even brush his teeth, and now they will go from rags to riches without even a business cycle burp.”
It’s worth reading the whole thing.
-
Christmas a day early
David Friedman is now blogging! Now if we can only round up Michael Sheaur we’d have a very thought provoking internet.
-
It’s as if the internet is all about Nick
I cruise on over to Marginal Revolution, and I see Why people don’t like Wikipedia (and blogs) which references The Probabalistic Age over on The Long Tail
When professionals–editors, academics, journalists–are running the show, we at least know that it’s someone’s job to look out for such things as accuracy. But now we’re depending more and more on systems where nobody’s in charge; the intelligence is simply emergent. These probabilistic systems aren’t perfect, but they are statistically optimized to excel over time and large numbers. They’re designed to scale, and to improve with size. And a little slop at the microscale is the price of such efficiency at the macroscale.
But how can that be right when it feels so wrong?
There’s the rub. This tradeoff is just hard for people to wrap their heads around. There’s a reason why we’re still debating Darwin. And why Jim Suroweicki’s book on Adam Smith’s invisible hand is still surprising (and still needed to be written) more than 200 years after the great Scotsman’s death. Both market economics and evolution are probabilistic systems, which are simply counterintuitive to our mammalian brains. The fact that a few smart humans figured this out and used that insight to build the foundations of our modern economy, from the stock market to Google, is just evidence that our mental software has evolved faster than our hardware.
RTWT
-
Economic illiteracy
For the last time (though not anyone in particular, I’ve just heard this twice today from random people):
Software piracy does not raise prices, it lowers them by adding substitutes, namely pirated copies of the software. It DOES prevent software from being profitable, and hence, created by making it unfeasible to create the software.
-
Well put from Landsburg
I finally get around to reading his New Orleans column, and he makes a very good point in favor of cash payouts. Money quote:
The specific flood-related policy question is this: Given the population of poor people, do we make them, on net, better or worse off when we give them disaster relief (which is good) and simultaneously raise their housing costs (which is bad)? The refusal to engage that question is, it seems to me, nothing short of a declaration of indifference to what actually benefits the poor.
You might say that what we really owe the poor is disaster assistance and affordable housing. You might as well say that we owe them all magical pink unicorns that produce an unlimited supply of milk. It is quite simply impossible to guarantee assistance to people living on a flood plain without affecting their housing costs. And it is quite simply unserious to declare your commitment to poor people without pausing to ask whether your pet program does poor people more harm than good.
-
Two from Dreck
The first link is to a post containing a proposed national anthem
The Scotsman is mean, as we’re all well aware
And bony and blotchy and covered with hair
He eats salty porridge, he works all the day
And he hasn’t got bishops to show him the way!and
And crossing the Channel, one cannot say much
Of French and the Spanish, the Danish or Dutch
The Germans are German, the Russians are red,
And the Greeks and Italians eat garlic in bed!The Germans are German is a lovely insulting tautology.
And speaking of the Scots, this article Taller women are more career-driven – that’s the long and the short of it is well worth a read. I have no idea if it’s true or not, but any article that seems to use “homely” as a technical term must be interesting.
-
Casinos
Ray Nagin now wants casino gambling in New Orleans, which seems to be a better idea than most. While that’s the best idea for revitalization to come along so far, it still does nothing about the fact that NOLA is between a lake, a river, and an ocean, which will forever make it geographically unsafe, no matter how many levees are in place.
-
I went back to Marginal Revolution, and came across this post, The Unreported Mexican Immigration Story which makes the point that Mexican immigration increases as Mexicans get rich enough to leave. Well worth reading.
-
Watch the math sparks fly
The best commentary on the Bill Bennett comments have come from the Freakonomics guys, who did seem to start the entire thing.
Bennett’s offensive commentary
CALLER: I noticed the national media, you know, they talk a lot about the loss of revenue, or the inability of the government to fund Social Security, and I was curious, and I’ve read articles in recent months here, that the abortions that have happened since Roe v. Wade, the lost revenue from the people who have been aborted in the last 30-something years, could fund Social Security as we know it today. And the media just doesn’t — never touches this at all.
BENNETT: Assuming they’re all productive citizens?
CALLER: Assuming that they are. Even if only a portion of them were, it would be an enormous amount of revenue.
BENNETT: Maybe, maybe, but we don’t know what the costs would be, too. I think as — abortion disproportionately occur among single women? No.
CALLER: I don’t know the exact statistics, but quite a bit are, yeah.
BENNETT: All right, well, I mean, I just don’t know. I would not argue for the pro-life position based on this, because you don’t know. I mean, it cuts both — you know, one of the arguments in this book Freakonomics that they make is that the declining crime rate, you know, they deal with this hypothesis, that one of the reasons crime is down is that abortion is up. Well —
CALLER: Well, I don’t think that statistic is accurate.
BENNETT: Well, I don’t think it is either, I don’t think it is either, because first of all, there is just too much that you don’t know. But I do know that it’s true that if you wanted to reduce crime, you could — if that were your sole purpose, you could abort every black baby in this country, and your crime rate would go down. That would be an impossible, ridiculous, and morally reprehensible thing to do, but your crime rate would go down. So these far-out, these far-reaching, extensive extrapolations are, I think, tricky.
Now mind you, nowhere does he point out the obvious point that even if we did successfully prohibit abortions in this country we would only move the bankruptcy date of Social Security back a few years, having not changed the pay-in to pay-out ration that much.
One point that Leavitt makes is quite interesting, to wit:
4) When a woman gets an abortion, for the most part it is not changing the total number of children she has; rather, it is shifting the timing so those births come later in life. This is an important fact to remember. One in four pregnancies ends in abortion and this has been true for 30 years in the U.S. But the impact of abortion on the overall birth rate has been quite small.
This is unsourced and I would like to see some data and theory on the matter.
Beyond that, it’s amazing how large the indignation industry is in this country. Here was a statement which, true or false, kind-hearted or malicious, did not kill or hurt anyone, and left no one richer or poorer. The fact that many people got exorcised about this empirically meaningless statement is amazing. It says a lot about the wealth we have as a society when we can afford the endless chattering classes.
-
Jane Galt at her best
From one of several posts recently about poverty and culture
In other words, middle class culture is such that bad long-term decision making also has painful short-term consequences. This does not, obviously, stop many middle class people from becoming addicted to drugs, flagrantly screwing up at work, having children they can’t take care of, and so forth. But on the margin, it prevents a lot of people from taking steps that might lead to bankruptcy and deprivation. We like to think that it’s just us being the intrinsically worthy humans that we are, but honestly, how many of my nice middle class readers had the courage to drop out of high school and steal cars for a living?
I’m not really kidding. I mean, I don’t know about the rest of you, but when I was eighteen, if my peer group had taken up swallowing razor blades I would have been happily killed myself trying to set a world record. And if they had thought school was for losers and the cool thing to do was to hang out all day listening to music and running dime bags for the local narcotics emporium, I would have been right there with them. Lucky for me, my peer group thought that the most important thing in the entire world was to get an ivy league diploma, so I went to Penn and ended up shilling for drug companies on my blog.