Published on 25 Feb 2015
We’ll look at the costs and consequences of tariffs, quotas, and protectionism. How do tariffs affect consumers? What about producers? Who wins and who loses? Find out with this video.
We’ll apply the fundamentals we learned in the supply, demand, and equilibrium section of this course to real-world examples — like that of protectionism in the U.S. sugar industry — to determine lost gains from trade or deadweight loss, the tariff equilibrium vs. the free trade equilibrium, and the value of wasted resources as a result of tariffs.
September 2, 2015
Tariffs and Protectionism
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Seattle is considering implementing rent control
Megan McArdle on the things Seattle may learn — painfully — if they fail to heed the experiences of other cities that have implemented rent control:
So I see that Seattle is considering rent control. For a columnist who covers economic issues, this is a little bit like hearing that residents are debating how big to make the reet pleats on their zoot suits. It’s hard to get economists to agree on much of anything, but as Alex Tabarrok notes, this is an area of rare consensus among economists: Rent control creates more problems than it solves.
If you want a vivid example of what those problems look like, you can do no better than a letter written by a resident of Stockholm to the good citizens of Seattle, quoted by Tabarrok: “Seattle, you need to ask your citizens this: How would citizens like it if they walked into a rental agency and the agent told them to register and come back in 10 years? … Stockholm City Council now has an official housing queue, where 1 day waiting = 1 point. To get an apartment you need both money for the rent and enough points to be the first in line. Recently an apartment in inner Stockholm became available. In just 5 days, 2000 people had applied for the apartment. The person who got the apartment had been waiting in the official housing queue since 1989!”
Now, Stockholm is extreme. But the general effect always goes in the same direction. Rent control creates two classes of tenants: people who have the right to rent at below-market rates, and renters who would like to get a long-term lease on an apartment, but cannot, or must pay through the nose for a limited number of uncontrolled properties. Meanwhile, landlords let the quality of the existing stock decline and become very reluctant to build new housing that they can’t make a profit on.
This is not some sort of arcane secret that has not reached the policy analysts in our nation’s fair metropolises. They’re well aware of what rent control does. So why is it ever on the table?
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Guardian writer: Terry Pratchett was a “mediocrity”
Jonathan Jones lets all of Terry Pratchett’s fans know that they’re idiots for liking such a mediocre writer of “potboilers”:
It does not matter to me if Terry Pratchett’s final novel is a worthy epitaph or not, or if he wanted it to be pulped by a steamroller. I have never read a single one of his books and I never plan to. Life’s too short.
No offence, but Pratchett is so low on my list of books to read before I die that I would have to live a million years before getting round to him. I did flick through a book by him in a shop, to see what the fuss is about, but the prose seemed very ordinary.
I don’t mean to pick on this particular author, except that the huge fuss attending and following his death this year is part of a very disturbing cultural phenomenon. In the age of social media and ebooks, our concept of literary greatness is being blurred beyond recognition. A middlebrow cult of the popular is holding literature to ransom. Thus, if you judge by the emotional outpourings over their deaths, the greatest writers of recent times were Pratchett and Ray Bradbury. There was far less of an internet splurge when Gabriel García Márquez died in 2014 and Günter Grass this spring. Yet they were true titans of the novel. Their books, like all great books, can change your life, your beliefs, your perceptions. Everyone reads trash sometimes, but why are we now pretending, as a culture, that it is the same thing as literature? The two are utterly different.
But, despite never having read a single one, he’s willing to share his amazingly brilliant insight with us ignorant, barely literate troglodytes. What a prince! We should all feel honoured and all that if he’s condescended enough to point out our collective failings, shouldn’t we?
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QotD: The only four ways to spend money
In Milton Friedman’s 1980 PBS TV series Free To Choose, Friedman drew a simple graph showing that, mathematically, there are only four ways to spend money.
Spending your money on yourself is efficient. Tonight’s Special, prime rib with a small side dish of kale, looks like a good deal.
Spending your money on other people is efficient too. She’ll have the mac and cheese.
Spending other people’s money on yourself is not so efficient. The Wall Street Hedge Fund Managers’ Annual Dinner will be at Maxim’s in Paris.
But spending other people’s money on other people is the way government spending is done. Free caviar for all Americans! Whether they like caviar or not. And get in line because there’s nothing except caviar, and it will be rationed.
P.J. O’Rourke, “My Coffee Klatch With Rand Paul: The Kentucky small-l libertarian (and likely presidential candidate) talks with P.J. O’Rourke about philosophy, money, and hopelessness”, The Daily Beast, 2014-09-27.
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