Quotulatiousness

May 8, 2012

Now available for download: License to Work

Filed under: Bureaucracy, Economics, Government, Liberty, USA — Tags: , , , , — Nicholas @ 10:14

The Institute for Justice has released a new study, License to Work: A National Study of Burdens from Occupational Licensing, which shows the negative effects imposed on (especially) poor and minority workers across the United States:

The report documents the license requirements for 102 low- and moderate-income occupations — such as barber, massage therapist and preschool teacher — across all 50 states and the District of Columbia. It finds that occupational licensing is not only widespread, but also overly burdensome and frequently irrational.

On average, these licenses force aspiring workers to spend nine months in education or training, pass one exam and pay more than $200 in fees. One third of the licenses take more than a year to earn. At least one exam is required for 79 of the occupations.

Barriers like these make it harder for people to find jobs and build new businesses that create jobs, particularly minorities, those of lesser means and those with less education.

Hayek and Keynes

Filed under: Economics, History, Media — Tags: , , , , — Nicholas @ 08:32

Brian Lee Crowley recounts some of the interactions between F.A. Hayek and John Maynard Keynes in the National Post:

This year marks the 20th anniversary of the death of Friedrich August Hayek, the Viennese-born Nobel Prize-winning economist and philosopher, who led the intellectual equivalent of the D-Day charge against central planning in the postwar era. His lessons are worth remembering in 2012, especially now that left-wing politicians in France, Greece and elsewhere seem intent on forgetting them.

Hayek’s great adversary was John Maynard Keynes, whose faith in the ability of government economic planners to “correct” the operation of markets inspired generations of disciples in government and academe. In the long run, Hayek got the better of the argument with Keynes. Indeed, his ideas contributed to the fall of the Berlin Wall, and continue to influence economic thought to this day.

Hayek and Keynes were punctilious professional colleagues and scholarly rivals. Yet for all the correctness that characterized their relations — Hayek was, for example, Keynes’s guest when the London School of Economics fled the Nazi bombings to the relative safety of Cambridge — the Austrian could not shake a profound distrust of Keynes.A brilliant economist, captivating teacher, witty conversationalist and bon vivant, Keynes seemed to almost everyone who knew him a Renaissance man and one of his country’s most powerful minds. Hayek found Keynes glib and superficial, but it was Keynes’ intellectual dilettantism that most appalled him. When Keynes wrote A Treatise on Money in 1930, Hayek spent a year carefully analyzing it, and then wrote a devastating review. At their next meeting, Hayek was outraged when Keynes airily said that he now agreed with Hayek, having long since changed his mind. Hayek always regretted that this incident led him to neglect replying to Keynes’ next book. By the time Hayek was alive to the danger, it was too late.

Celebrating the birthday of F. A. Hayek

Filed under: Economics, History, Humour, Media — Tags: , , , , — Nicholas @ 08:16

And the sequel, which some think is even better than the original, Fight of the Century:

May 7, 2012

Chicago and the everlasting rail bottleneck

Filed under: Economics, USA — Tags: , , — Nicholas @ 15:36

Chicago is where rail traffic goes to get delayed:

When it comes to rail traffic, Chicago is America’s speed bump.

Shippers complain that a load of freight can make its way from Los Angeles to Chicago in 48 hours, then take 30 hours to travel across the city. A recent trainload of sulfur took some 27 hours to pass through Chicago — an average speed of 1.13 miles per hour, or about a quarter the pace of many electric wheelchairs.

With freight volume in the United States expected to grow by more than 80 percent in the next 20 years, delays are projected to only get worse.

The underlying reasons for this sprawling traffic jam are complex, involving history, economics and a nation’s disinclination to improve its roads, bridges, and rails.

Six of the nation’s seven biggest railroads pass through the city, a testament to Chicago’s economic might when the rail lines were laid from the 1800s on. Today, a quarter of all rail traffic in the nation touches Chicago. Nearly half of what is known as intermodal rail traffic, the big steel boxes that can be carried aboard ships, trains or trucks, roll by, or through, this city.

May 6, 2012

One of the worst moves African countries can make

Filed under: Africa, Economics — Tags: , , , — Nicholas @ 09:55

Tim Worstall at the Adam Smith Institute blog:

You don’t have to go far into NGO land to find people arguing that poor countries need to protect their baby industries from the big bad wolves of international capitalism. That trade barriers are a good idea, that infant industries need to be nurtured and, as is the way of these things, the Washington Consensus is the imposition of the poverty that the poor suffer from.

That this is entire nonsense does not stop those idiots wearing ideological blinkers from repeating it. Which is something of a pity as it really is trade, openness to it, which drives economic growth:

    In recent years, sub-Saharan African countries have grown remarkably. According to data from the Penn World Table 7.0 (Heston et al. 2011), average annual real GDP per capita growth from 2005-9 has been over 2.5% (3.5% when excluding 2008 and 2009). This recent growth performance is remarkable given that, for over four decades since 1960, real GDP per capita growth in sub-Saharan Africa was dismal, averaging less than 0.5% per annum.

We are, as we know, talking about the poorest of the poor and any uptick in their fortunes has been both extremely difficult to find and extremely welcome when it is.

One thing that might be remembered is that, post-colonialism, most sub-Saharan countries did in fact follow the policies of infant industry protection behind tariff and licencing barriers. It was the falling apart of this in the 80s and then the gradual adoption of good old neoliberalism in the mid to late 90s which has turned the numbers around.

Gary Johnson wins the Libertarian nomination

Filed under: Economics, Liberty, Politics, USA — Tags: , , — Nicholas @ 09:19

Former New Mexico governor Gary Johnson won the Libertarian Party’s nomination for their presidential candidate. Yesterday, before the vote, Dave Weigel posted this profile of Johnson:

Gary Johnson is late. He’s pretty happy about the reason: too many interviews on the schedule today. That was never a problem when he was running for the Republican Party’s presidential nomination. Now that he’s the front-runner for the less-exclusive Libertarian Party nod, people want to talk to him.

“We started out at Grover Norquist’s meeting,” says Johnson, putting down his iPad to join me at a Dupont circle coffee shop. Norquist’s meeting of conservatives is off the record, but attendees can confirm that they crossed the threshold. “I thought it was a really good reception. Part of being out there, campaigning, talking to people, is being able to read body language. And it was all good. Nobody was dozing off. Nobody was shaking their heads. They were actually shaking their head this way.” He nods vigorously.

We’re talking on the day that Newt Gingrich announced the end of his profound presidential bid, when the Republican Party, supposedly, was learning to love Mitt Romney. It’s a few days before Johnson will claim the Libertarian Party’s nomination, potentially becoming a spoiler for Romney. The heads really nodded this way? No heads shaking that way?

“No, none, zero,” says Johnson. “I really believe I’m gonna take it from Obama rather than Romney. I joke, you know — maybe all those pot-smoking, marriage equality, get out of Afghanistan voters for Romney are going to switch to me. Then, boy, he’ll be in trouble!”

May 5, 2012

Rick Santelli goes to the white board

Filed under: Economics, Media, Politics, USA — Tags: , , , — Nicholas @ 08:59


H/T to Kate at Small Dead Animals.

May 3, 2012

Reason.tv: Brian Doherty on Ron Paul’s Revolution

Filed under: Economics, Liberty, Media, USA — Tags: , , , , — Nicholas @ 10:39

“Ron Paul invented the notion of a populist, activist, modern movement thats transpartisan” says Reason’s Brian Doherty

Brian Doherty sat down with ReasonTV to talk about his new book and how Ron Paul has changed politics in America. Doherty wrote about the evolution of the libertarian movement in his 2007 book “Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement”. He has been following and writing about Ron Paul and his movement since then. Doherty examines Ron Paul’s influence in a new book out May 15, “Ron Paul’s rEVOLution: The Man and the Movement He Inspired”.

May 2, 2012

Jim Flaherty on why the IMF should not go too far to rescue the Eurozone

Filed under: Cancon, Economics, Europe, Government — Tags: , , , — Nicholas @ 08:44

As I’ve mentioned before, Jim Flaherty is the federal finance minister and also my local MP. I don’t always agree with him (especially around budget time when he channels his inner spendthrift), but he makes some excellent points in this article at The Telegraph:

At the meeting of the International Monetary Fund recently, Canada decided against contributing more resources to support the eurozone. We also argued that all countries borrowing from the IMF should be treated equally. We took these positions because we believe they are in the best interests of the eurozone, of the IMF, and of the international community.

We have always supported the IMF’s important systemic role in promoting economic stability by providing loans to countries that have exhausted their domestic options, and placing these countries on a path to sustainability through time-limited interventions. But it is not the IMF’s role to substitute for national governments.

[. . .]

Ultimately, the adequacy of the actions taken will be judged by the markets. Repeated expressions of confidence by politicians are futile if the markets continue to cast their vote of non-confidence. The markets’ confidence in political leadership will only be restored when it is clear that politicians are willing to see the full scope of the problem, to focus on the key issues instead of pursuing sideshows such as the financial transactions tax, and to set out and implement a plan for tackling these issues.

[. . .]

We cannot avoid the question of fairness. Eurozone members benefit from increased exports and price stability. Spreading the risks of the eurozone around the world, while its benefits accrue primarily to its members, is not the way to resolve this crisis. We cannot expect non-European countries, whose citizens in many cases have a much lower standard of living, to save the eurozone. Further, the IMF, with roughly $400 billion, already has adequate resources to deal with imminent needs.

H/T to Elizabeth for sending me the link.

Demographics as destiny: China’s coming population bust

Filed under: China, Economics, India, USA — Tags: , , — Nicholas @ 08:00

Ramesh Ponnuru hits many of the same points that Mark Steyn has been making for the last several years, only he’s cut out all the jokes:

Today’s most important population trend is falling birthrates. The world’s total fertility rate — the number of children the average woman will bear over her lifetime — has dropped to 2.6 today from 4.9 in 1960. Half of the people in the world live in countries where the fertility rate is below what demographers reckon is the replacement level of 2.1, and are thus in shrinking societies.

[. . .]

As Eberstadt points out, we can make predictions about the next 20 years with reasonable accuracy. The U.S.’s traditional allies in western Europe and Japan will have less weight in the world. Already the median age in western Europe is higher than that of the U.S.’s oldest state: Florida. That median age is rising 1.5 days every week. Japan had only 40 percent as many births in 2007 as it had in 1947.

These countries will have smaller workforces, lower savings rates and higher government debt as a result of their aging. They will probably lose dynamism, as well.

[. . .]

The Census Bureau predicts that China’s population will peak in 2026, just 14 years from now. Its labor force will shrink, and its over-65 population will more than double over the next 20 years, from 115 million to 240 million. It will age very rapidly. Only Japan has aged faster — and Japan had the great advantage of growing rich before it grew old. By 2030, China will have a slightly higher proportion of the population that is elderly than western Europe does today — and western Europe, recall, has a higher median age than Florida.

H/T to Jon, my former virtual landlord, for the link.

May 1, 2012

A second Obama term might be better for the Republicans

Filed under: Economics, Liberty, Politics, USA — Tags: , , , , , — Nicholas @ 09:57

Shikha Dalmia explains why a Mitt Romney presidency is far from the best outcome for the Republican party:

One: Smart folks are betting that the Supreme Court will outlaw the individual mandate but leave the rest of ObamaCare to Congress. Hence, one conservative argument for a Romney victory is that, combined with a GOP-controlled Congress, it’ll offer the last hope for repealing the law. But repeal is not an end in itself. The question is, can the GOP replace ObamaCare with sensible market-based reforms?

[. . .]

Two: Commentators like Michael Gerson maintain that precisely because Romney has been a serial flipper previously, he’ll be less likely to flop now on conservative issues. But Romney’s desperation to establish his street cred with the base is not a blessing when it comes to government spending.

[. . .]

Three: Both the left and the right, according to the polls, are troubled by the fact that America is becoming a land of crony capitalism. No doubt that’s why Romney has been mouthing clumsy platitudes about how “you’ve got to stop the spread of crony capitalism” and striking a brave pose against the auto bailout.

But, tellingly, the financial bailout was just fine with him. That’s no coincidence. He is, after all, the ultimate Wall Street insider, receiving millions of dollars in subsidies and government handouts for companies he was trying to rescue as CEO of Bain Capital. He might not be running with the intention of helping his corporate pals, but it is inevitable that they’ll have his ear. Their interests and needs are far more comprehensible to him than, say, those of consumers

[. . .]

Four: If Romney wins this election, odds are he’ll automatically be the Republican nominee in 2016. Regardless of whether he wins then, this will effectively kill all prospects for putting a more serious Republican reformer (such as Wisconsin’s Rep. Paul Ryan) in the White House until 2020 or 2024. It might be far better to swallow hard and accept another Obama term to keep the path clear for a Republican more likely to deal with our fiscal and political dysfunction, rather than elect President Romney and block that possibility for another generation.

The morality of taxation

Filed under: Britain, Economics, Government — Tags: , , — Nicholas @ 08:17

In the Telegraph, Philip Johnston recounts the story of the 10 beer-drinking men and uses it to discuss the morality of taxes. Although the details are British, the story applies equally to Canada or the United States:

No discussion of the morality of taxation can be divorced from what is done with the money. It is not enough to say we must all contribute according to our means without at the same time questioning where it all goes. Tax has become the new immigration: a taboo subject for politicians who fear being derided as friends of the rich or denounced for immoral policies.

Yet, even with the parlous state of the nation’s finances, an argument can be made for low taxation that speaks to both a desire for smaller government and for greater personal freedom. The last Labour government took too much in taxes not merely because it believed that ever-increasing amounts of public spending were the only way to achieve better services. It did so because socialists think they know best how to spend people’s money and should be entrusted to do so. That is the essence of the Left’s worldview; and it is the principal reason why the state has grown so much in the past 50 years.

Where is the morality in taking money from people so that politicians can feel good about themselves? How is it ethical of a government to remove 40 per cent of an individual’s income with the purpose of engineering society the way it sees fit, rather than ensuring that people have the means to get on, by and large, with their own lives? Our system of governance has become characterised by grotesque waste, unfulfilled promises, incompetent delivery and excessive red tape. It has over-reached itself and seems incapable of retrenching, even under a Tory prime minister.

The moral, and Conservative, case for lower taxes is that they allow people to make their own decisions, to save when they wish, to give if they choose and to spend on what matters to them. Tory politicians should not be ashamed to talk about cutting taxes, because high taxation removes the need for individuals to take responsibility for their own lives and heightens cynicism about the ability of the government to deliver.

April 29, 2012

QotD: Bankers, Marx’s dream workers

Filed under: Economics, Humour, Quotations — Tags: , , — Nicholas @ 09:54

In a way bankers are Marx’s dream, it’s the workers getting the fruits of their labours. It’s funny that the left is usually angry at shareholders, for taking money out of companies and thereby bringing down workers’ salaries. Yet with the banks they want shareholders to press the banks to do exactly that, and curb pay.

Joris Luyendijk, “External auditor: ‘Nobody at a bank can have a complete overview any more’”, The Guardian, 2012-04-28

Do you read the daily stock market commentaries? Don’t bother

Filed under: Cancon, Economics, Media — Tags: , , — Nicholas @ 00:04

I don’t mean the ups-and-downs of the market … if you’re invested in the market, it behooves you to pay a bit of attention now and again. No, what I mean are the interpretations of what’s happening in the market and what is or isn’t driving it. Canadian Couch Potato has a good summary:

I remembered the joke this morning when I read the Financial Post’s daily market commentary: “The S&P 500 added more than 2% in the two previous sessions as immediate concerns over rising yields in Spain and Italy ebbed and on bets the Chinese GDP data would surprise on the upside.”

This commentary can sound so knowledgeable and wise. But to suggest that daily market movements can be explained in such simple cause-and-effect terms is laughable. If you want proof, all you need to do is read the commentary every day. You’ll just as often see statements like this: “The S&P 500 shed more than 2% in the two previous sessions despite immediate concerns over…”

It can’t work both ways: either these events affect daily stock prices, or they don’t. Once you accept this, you realize that commentary linking the S&P 500 to surprising Chinese GDP data sounds a lot like the joke about Katarina Witt and Billy Martin.

Here’s my own version of the daily market report: “The S&P 500 added more than 2% during the last two sessions because of an incredibly complex and largely random combination of factors that cannot possibly be distilled into one sentence. Analysts expect gains to continue during the second quarter, but since this already priced into the markets, no one should give a fiddler’s fart what they think. Meanwhile, money managers have released their forecasts for the year, which will be widely read and acted upon, despite the fact that their previous forecasts were dead wrong. Tune in tomorrow for more of the same. In the meantime, stick to your long-term plan.”

H/T to Terence Corcoran for the link.

April 28, 2012

Charles Stross analyzes the economic and technical arguments for removing DRM on ebooks

Filed under: Economics, Media — Tags: , , , , — Nicholas @ 00:08

A post at Charles Stross’s blog from earlier this week, when Macmillan announced that they were removing DRM from their ebook lines:

After I recommended that the major publishers drop mandatory DRM from their ebook products, I realized that my essay had elided a bunch of steps in my thinking, and needed to reconsider some points. Then I realized that it’s not a simple, straightforward argument to make. Consequently, I ended up writing another essay, although I’ve tried to summarize my conclusions below.

First, my conclusions:

1. The rapid current pace of change in the electronic publishing sector is driven by the consumer electronics and internet industry. It’s impossible to make long term publishing plans (3-10 years) without understanding these other industries and the priorities of their players. It is important to note that the CE industry relies on selling consumers new gadgets every 1-3 years. And it is through their gadgets that readers experience the books we sell them. Where is the CE industry taking us?

2. Dropping DRM across all of Macmillans products will not have immediate, global, positive effects on revenue in the same way that introducing the agency model did …

3. However, relaxing the requirement for DRM across some of Macmillans brands will have very positive public relations consequences among certain customer demographics, notably genre readers who buy large numbers of books (and who, while a minority in absolute numbers, are a disproportionate source of support for the midlist).

4. Longer term, removing the requirement for DRM will lower the barrier to entry in ebook retail, allowing smaller retailers (such as Powells) to compete effectively with the current major incumbents. This will encourage diversity in the retail sector, force the current incumbents to interoperate with other supply sources (or face an exodus of consumers), and undermine the tendency towards oligopoly. This will, in the long term, undermine the leverage the large vendors currently have in negotiating discount terms with publishers while improving the state of midlist sales.

Now the details:

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