Economics

  • Economics,  Oil

    A fine post from Steve Levitt

    Solid work explaing why the “Peak Oil” notion is wrong, a summary quote.

    So why do I compare peak oil to shark attacks? It is because shark attacks mostly stay about constant, but fear of them goes up sharply when the media decides to report on them. The same thing, I bet, will now happen with peak oil. I expect tons of copycat journalism stoking the fears of consumers about oil induced catastrophe, even though nothing fundamental has changed in the oil outlook in the last decade.

    Curiously unmentioned is that oil demand usually peaks in the month of August (it’s lowest in February). I actually read all of the comments thread, which wasn’t terribly illuminating. Few addressed the point in the post. It was surprising how attached people are to particular doomsday scenarios.

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  • Economics,  Oil

    Yet more things that annoy me

    I was listening the ever earnest radio program Democracy Now on the way from my the guitar lesson and I heard for the third time today the phrase “Oil driven inflation”.

    Inflation is a general rise in prices, which is the same thing as a decline in the purchasing power of the dollar (or whatever currency). A rise in the price of oil does not cause this. If it did then wages would be increasing due to the oil price increase as well. It is a transfer of wealth from oil-consumer to oil-producer, which is not inflation.

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  • Alt Energy,  Economics

    More on the magic car

    Asymetrical Information has an average post (which for them is of high quality) on the article on hybrid cars I mentioned yesterday. However the really interesting part is in the comments. That site really does have the best and most reasoned commenters.

    One thing the blogosphere has left unsaid so far is: What changes can we expect with a year or two of gasoline at $2.50 a gallon? Presumably it won’t stay that high for much longer, but if it did, how much more bottom-up innovation becomes feasible?

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  • Economics

    They said it

    From Paul Krugman’s latest column, where insists that there is a housing bubble, albeit not in areas with better geography

    Housing prices move much more slowly than stock prices. There are no Black Mondays, when prices fall 23 percent in a day. In fact, prices often keep rising for a while even after a housing boom goes bust.

    The bubble (construct that it is) pops and prices still increase? We have such happy problems in this country, it reminds me of our obesity “epidemic”. It reminds me of the old adage “Economists have predicted 14 of the last 5 recessions”.

  • Economics,  Quotes

    Perfectly put (again)

    By the wonderful Dr Sowell.

    Many people are so preoccupied with the notion that their own knowledge exceeds the average knowledge of millions of other people that they overlook the more important fact that their knowledge is not even one-tenth of the total knowledge of those millions. That is the crucial fallacy behind the repeated failures of central planning and other forms of social engineering which concentrate power in the hands of people with less knowledge and more presumption.

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  • Economics,  Hoffer

    The Wall Street Journal echoes me

    While reading the diary of Eric Hoffer I came across his account of talking an old Russian emigre who claimed that the long-term effects of Communism in Russia was biological. To wit all of the people who were naturally talented farmers, managers and such were sent to die in Siberian labor camps.

    The authors of Freakonomics make a similar point when discussing abortion and the dramatic drop in crime since the early 90’s. Their argument: unwanted pregnancies become unwanted children who are far more likely to commit crimes. Seems pretty believable.

    I hadn’t thought of the crime angle but I had thought that the long term effect, or the Roe Effect would be, to quote the Jargon Database

    An up and coming term; is the tendency of the “pro-life” people to have more children than “pro-choice” people. Since pro-lifers tend to be politically more conservative and they pass this political outlook on to their children. There are fewer corresponding pro-choice children to acquire pro-choice (an other) values.

    Rather, legalized abortion will produce people who don’t support it. It is not an Evolutionary Stable Strategy.

    James Taranto in the Wall Street Journal reaches my same conclusion before I write about it. Oh well.

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  • Africa,  Economics,  PMC

    LA Times echoes A-Sides

    From Max Boot in the LA Times

    In the last 50 years, $2.3 trillion has been spent to help poor countries. Yet Africans’ income and life expectancy have gone down, not up, during that period, while South Korea, Singapore and other Asian nations that received little if any assistance have moved from African-level poverty to European-level prosperity thanks to their superior economic policies.

    and

    Any real solution to Africa’s problems must focus on the root causes of poverty — mainly misgovernment. Instead of pouring billions more down the same old rat holes, maybe the Live 8 crew should promote a more innovative approach: Use the G-8’s jillions 2 hire mercenaries 4 the overthrow of the 6 most thuggish regimes in Africa. That would do more to help ordinary Africans than any number of musical extravaganzas.

    Oddly enough, Adam expressed the same idea, in nearly the same words last Sunday. Strange.

    And as I do a spell check of this post, It tags “misgovernment” as a misspelling, and wants to replace it with “McGovern”.

  • Economics,  Society

    Live 8

    A very good post from the Agitator about this current foolishness

    It’s all the more perverse when you consider that corporate farms in Europe, Japan, and the U.S. are a big reason why Africa remains so poor. In heavily subsidized crops like cotton and corn, farmers in these countries can sell their crop on the international market for less than what it costs them to grow it. There’s simply no way poor farmers in emerging economies can compete with that. So lavish subsidies in rich countries keep poor countries from competing, which in turn keeps them poor. The rich countries feel guilty, so they sap taxpayers to come up with aid projects that don’t work, and really only benefit the exact same industries that benefit from the subsidies. All the while, each time public aid does fail, it makes private donors think Africa’s a lost cause, and therefore makes them less likely to give. Which is tragic, because private aid does seem to work. It’s more likely to find its way around the corruption, and hit the people who need it.

    Which brings us back to Live 8. The whole purpose of the event, Geldoff kept telling us, was not to raise private funds for Africa. Rather, it was to encourage the citizens of developed countries to lobby their governments for more public aid. Oh, and also to make spoiled rock stars feel better about their respective social consciences.

    There is also this very good post from Josh Trevino who’s reporting on the G-8 protesters

    But the true believers exist, and they are capable of organizing themselves. A counterintuitive thing, one would think, but the anarchist/hard left capacity for assembling at set times and doing set things is a well-proven one. Just like libertarians availing themselves of public services, the contraindicating intersection of reality and ideology is often employed, but never acknowledged. As at Seattle, DC, and Genoa, so too Edinburgh: the city is overrun in a well-planned influx from across the developed, Western, wealthy world to protest developed, Western, wealthy things.

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