Quotulatiousness

June 27, 2017

QotD: The mistakes of the wealthy versus the mistakes of the poor

Filed under: History, Liberty, Quotations, USA — Tags: , , , , — Nicholas @ 01:00

What have been the effects of progressive, centralized control of education, healthcare, and social services? It is true that the backwards practices of a few local school boards have been reformed, but the loss of a rich layer of church and private charity social services has impoverished local social capital. While today’s mass communication and the Internet removed one of the impulses to community (“I’m bored. Let’s go into town and hang out!”), a lot of the loss is due to the crowding out by a monopoly government, which had deep pockets and would use them to continue failed policies, as Microsoft in the 80s used the profits from its near-monopoly OS business to keep creating mediocre applications software until the innovators in applications were destroyed.

Very wealthy people have always been freer than others from the stifling social controls and judgments of bourgeois community standards. The elite of Paris and London in the 1800s often kept mistresses and dabbled in drug use without having their lives destroyed. The lower classes did not have the wealth to recover from errors, and those who did not hew to bourgeois social norms were isolated and damaged.

As the upper middle classes in the US grew as wealthy as the elite had been in the previous century after WWII, the sexual revolution and War on Poverty bestowed more social freedom on everyone — the middle and upper classes got birth control, sexual freedom, and women in the workplace, while the poor got programs to “uplift” them from poverty (a term which exposes the condescension involved). Social workers in vast numbers were hired to distribute assistance, free of any obligation — except for unmarried mothers, who were told their assistance would be cut if they married a working man.

Over the course of several generations, the well-off used their freedoms and came out relatively unscathed — families were still largely intact, children were still trained in the arts of civilization and followed the path of university and marriage into professional careers. But the artificial assistance to the poor, with its lack of community obligations and support and its immediate withdrawal in the event of marriage and better work, removed the social incentives that keep healthy communities healthy. Intact families grew less common. Crime and social pathologies became the norm in poor inner-city communities. As conditions worsened, the motivated and organized left for more civilized neighborhoods with better schools. The segregation of cities and even whole regions by income increased. Whole generations of children were poorly raised, poorly schooled, and left to drift without purpose or guidance from now-absent fathers, who were in prison or adrift themselves.

Jeb Kinnison, “Real-life ‘Hunger Games'”, According to Hoyt, 2015-09-25.

June 22, 2017

Words & Numbers: The Population Boom Could Save the World

Filed under: Economics — Tags: , , , — Nicholas @ 06:00

Published on 21 Jun 2017

In 1798, 95 percent of the world lived in poverty. Today, less than 10 percent do, in spite of the world’s population growing by 700 percent in that same time.

The common thought among young people is that this 700 percent population growth is going to overpopulate the earth. But given the number of people in poverty, it looks like population growth is actually good for poverty – more people means more brains, which means more ideas, inventions, and innovations.

This week on Words and Numbers, Antony Davies and James R. Harrigan talk about how and why the world is improving despite widespread negativity towards the idea of a growing world population, and why that negativity persists regardless of the prosperity we see every day.

June 17, 2017

Puerto Rico votes for statehood

Filed under: Government, USA — Tags: , , , , — Nicholas @ 04:00

Andrew Heaton discusses the recent vote by Puerto Ricans to apply for full statehood within the United States and why that might be a good thing for all concerned:

Puerto Rico voted to become a U.S. state this week. Needless to say, we should all be deeply concerned about the island’s engorged debt, destructive fits of socialism, and terrifying chupacabras.

But Puerto Rican statehood also represents a unique opportunity to reform American federalism. Accepting a new state with markedly different problems and programs means acknowledging that states aren’t interchangeable. We should welcome Puerto Rico and, while we’re redefining what constitutes our union, re-examine the power dynamic between Washington and the states.

Puerto Rico is a test case in one-size-fits-all solutions and federal intervention ruining an economy. The island has significantly lower income and productivity than the continental United States, but it is still subjected to a national minimum wage crafted for the mainland. That disparity squeezes entry-level jobs out of the market and ratchets up unemployment rates. The slumping job market is worsened by the fact that federal programs like food stamps, Social Security benefits, education grants, and disability payments aren’t pegged to local cost of living. In a region poorer than America’s poorest state, it’s not surprising that people would opt for generous federal handouts over scrambling for jobs the minimum wage hasn’t yet outlawed. Puerto Rico would benefit from an opt-out clause on the mininum wage — an option that should be available to all states.

Because Puerto Rico is an unincorporated territory and not a state, it’s more vulnerable to federal intervention. The Jones-Shafroth Act exempted Puerto Rican bonds from local, state, and federal taxes. The feds might as well have sprinkled cocaine and cronuts over the bonds. Investors bought dumpsters full of Puerto Rico’s sovereign debt, leading the island to further lurch into exorbitant deficit spending.

Federal trade laws also hobble Puerto Rican prosperity. The Jones Act prohibits foreign ships from moving goods between American ports. That means a foreign flagged vessel can’t stop at Puerto Rico on its way to or from the mainland, but must instead offload and reload goods at another American port so a more expensive U.S. ship can transport them. Peter Schiff explains: “Even though median incomes in Puerto Rico are just over half that of the poorest U.S. state, thanks to the Jones Act, the cost of living is actually higher than the average state.” The Jones Act would be a great issue to bring up when Congress deliberates on Puerto Rican accession. Abolishing it would benefit everyone, most of all Puerto Rico.

June 15, 2017

Words & Numbers: What You Should Know About Poverty in America

Filed under: Economics, Government, USA — Tags: , , , , , — Nicholas @ 04:00

Published on 14 Jun 2017

Poverty is a big deal – it affects about 41 million people in the United States every year – yet the federal government spends a huge amount of money to end poverty. So much of the government’s welfare spending gets eaten up by bureaucracy, conflicting programs, and politicians presuming they know how people should spend their own money. Obviously, this isn’t working.

This week on Words and Numbers, Antony Davies and James R. Harrigan delve into how people can really become less poor and what that means for society and the government.

May 26, 2017

Puzzle of Growth: Rich Countries and Poor Countries

Filed under: China, Economics — Tags: , , , — Nicholas @ 02:00

Published on 16 Feb 2016

Throughout this section of the course, we’ve been trying to solve a complicated economic puzzle — why are some countries rich and others poor?

There are various factors at play, interacting in a dynamic, and changing environment. And the final answer to the puzzle differs depending on the perspective you’re looking from. In this video, you’ll examine different pieces of the wealth puzzle, and learn about how they fit.

The first piece of the puzzle, is about productivity.

You’ll learn how physical capital, human capital, technological knowledge, and entrepreneurs all fit together to spur higher productivity in a population. From this perspective, you’ll see economic growth as a function of a country’s factors of production. You’ll also learn what investments can be made to improve and increase these production factors.

Still, even that is too simplistic to explain everything.

So we’ll also introduce you to another piece of the puzzle: incentives.

In previous videos, you learned about the incentives presented by different economic, cultural, and political models. In this video, we’ll stay on that track, showing how different incentives produce different results.

As an example, you’ll learn why something as simple as agriculture isn’t nearly so simple at all. We’ll put you in the shoes of a hypothetical farmer, for a bit. In those shoes, you’ll see how incentives can mean the difference between getting to keep a whole bag of potatoes from your farm, or just a hundredth of a bag from a collective farm.

(Trust us, the potatoes explain a lot.)

Potatoes aside, you’re also going to see how different incentives shaped China’s economic landscape during the “Great Leap Forward” of the 1950s and 60s. With incentives as a lens, you’ll see why China’s supposed leap forward ended in starvation for tens of millions.

Hold on — incentives still aren’t the end of it. After all, incentives have to come from somewhere.

That “somewhere” is institutions.

As we showed you before, institutions dictate incentives. Things like property rights, cultural norms, honest governments, dependable laws, and political stability, all create incentives of different kinds. Remember our hypothetical farmer? Through that farmer, you’ll learn how different institutions affect all of us. You’ll see how institutions help dictate how hard a person works, and how likely he or she is to invest in the economy, beyond that work.

Then, once you understand the full effect of institutions, you’ll go beyond that, to the final piece of the wealth puzzle. And it’s the most mysterious piece, too.

Why?

Because the final piece of the puzzle is the amorphous combination of a country’s history, ideas, culture, geography, and even a little luck. These things aren’t as direct as the previous pieces, but they matter all the same.

You’ll see why the US constitution is the way it is, and you’ll learn about people like Adam Smith and John Locke, whose ideas helped inform it.

And if all this talk of pieces makes you think that the wealth puzzle is a complex one, you’d be right.

Because the truth is, the question of “what creates wealth?” really is complex. Even the puzzle pieces you’ll learn about don’t constitute every variable at play. And as we mentioned earlier, not only are the factors complex, but they’re also constantly changing as they bump against each other.

Luckily, while the quest to finish the wealth puzzle isn’t over, at least we have some of the pieces in hand.

So take the time to dive in and listen to this video and let us know if you have questions along the way. After that, we’ll soon head into a new section of the course: we’ll tackle the factors of production so we can further explore what leads to economic growth.

May 3, 2017

“Poverty, to be scenic, should be rural”

Filed under: Americas, Economics, Liberty — Tags: , , , — Nicholas @ 05:00

Daniel Hannan on the contrast between rural and urban poverty, and the attitudes of Westerners:

When I was growing up in Lima in the 1970s, Western visitors were astonished by the shantytowns, the barriadas, as they were known, that ringed that grimy city. Why, they asked, did people leave the countryside to live in these squalid slums? Why swap the pure air of the Andes for traffic fumes and sewage?

It was a very First World question. No Peruvian ever asked why people were quitting villages that lacked electricity and clean water. The barriadas may have been ugly, but they were humming with enterprise. They offered work, access to schools and clinics, a power supply. They were, for most of their denizens, transitional, a staging post between mountain squalor and something better.

In time, I came to realize that Western nose-wrinkling at developed countries was more esthetic than sympathetic. As the Victorian novelist Anthony Trollope put it, “Poverty, to be scenic, should be rural.”

Western attitudes haven’t advanced much since then. My kids’ geography homework is full of stories about evil Western corporations exploiting poor women in Vietnam or wherever. Now, you and I would not want to work in a Vietnamese sweatshop. But we have not spent our lives bending our backs in rice paddies.

Employees of foreign-owned companies in Vietnam earn 210 percent of the average wage. The readiness of that country to open itself to trade and investment has brought huge benefits to the Vietnamese, including those on the lowest incomes. Over 19 years, the West struggled to defeat totalitarian socialism in Vietnam, and failed. Three decades of trade have achieved what 60,000 American lives and over a trillion dollars in today’s prices in military spending failed to achieve: the end of Communism.

Developing countries which open their markets eliminate poverty more quickly than those which don’t. Compare Vietnam to Myanmar, or Colombia to Venezuela, or Bangladesh to Pakistan. A study of developing states since 1980 showed that those which had joined the global trading system enjoyed annual growth at an average of 5 percent, as against 1.5 percent for those which hadn’t.

April 28, 2017

Words & Numbers: Actually, Life is Pretty Awesome

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

Published on 26 Apr 2017

This week, James and Antony take a brief departure from talking about the growing national debt, and our absurd tax system to discuss the numerous ways in which more economic and personal freedom has made people wealthier, more equal, and better off all over the world. We’re actually living in pretty amazing times.

Read more:
https://fee.org/articles/actually-life-is-pretty-awesome/

April 25, 2017

Cultural appropriation of “poverty culture” in the Tiny House Movement

Filed under: Media, Randomness, USA — Tags: , , , , , — Nicholas @ 03:00

Ann Althouse linked to this older article by July Westhale on “Poverty Appropriation”:

How many folks, I wonder, who have engaged in the Tiny House Movement have ever actually lived in a tiny, mobile place? Because what those who can afford homes call “living light,” poor folks call “gratitude for what we’ve got.”

And it’s not just the Tiny House Movement that incites my discontent. From dumpster diving to trailer-themed bars to haute cuisine in the form of poor-household staples, it’s become trendy for those with money to appropriate the poverty lifestyle — and it troubles me for one simple reason. Choice.

The Tiny House Movement began in the ’90s, but has only been rising in popularity since the recession. And to be fair, it’s rooted in a very real problem: more and more people being displaced as a result of soaring housing costs, especially in tech-boom areas like the Bay Area.

[…]

It’s likely, from where I sit, that this back-to-nature and boxed-up simplicity is not being marketed to people like me, who come from simplicity and heightened knowledge of poverty, but to people who have not wanted for creature comforts. For them to try on, glamorize, identify with.

Such appropriation isn’t limited to the Tiny House trend, or even to the idea of simplicity. In major cities, people who come from high-income backgrounds flock to bars and restaurants that both appropriate, and mock, low-income communities. Perhaps the most egregious example is San Francisco’s Butter Bar, a trendy outpost that prides itself on being a true-blue, trailer park-themed bar, serving up the best in “trashy” cuisine and cocktails. With tater tots, microwaved food, and deep-fried Twinkies on the menu, the bar also serves cocktails that contain cheap ingredients, such as Welch’s grape soda. The bar has an actual trailer inside, and serves cans in paper bags, so that bar flies can have a paid-for experience of being what the owners of this bar think of when they think of trailer trash.

Butter Bar in San Francisco (Credit: Facebook)

It’s but one example of an entire hipster movement — can it be called a movement when it’s a subculture rooted not in political consciousness, but in capitalism? — that has brought with it an ethos of poor-culture appropriation and the “re-invention” of things that have largely been tools of survival for poor, disabled, working class, and/or communities of color for decades.

April 24, 2017

QotD: Introducing socialized medicine in Europe

Filed under: Europe, Health, History, Quotations — Tags: , , — Nicholas @ 01:00

There are things left behind, in that past I came from, things I can easily live without. First there’s the lack of access to medical care. Most Europeans who are happy with socialized medicine are happy because at the time it was introduced it was a huge step up over what was available at the beginning of the century — when it was introduced there. If all you have in the way of treatment is a local nurse who administers shots, the local pharmacist which (say, apropos nothing) will change dressings on the back you completely skinned while seaside-cliff climbing (or rather falling from. I managed to turn around and take the slope on my back. I still don’t remember/have no idea how we kept mom from seeing the dressings) and the occasional overworked, over harried doctor who will do house calls at a prohibitive price if you’re seriously ill, yeah. Socialized medicine is an improvement over that. I don’t think the progressives (I almost typed primitives — curse you, auto-correct mind) who push for socialized medicine understand that it’s not an improvement even over the f*cked up bureaucracy of the US. They tend to live in a state of envy of the fact that France has a pony and imagine that pony neither craps nor eats.

Sarah A. Hoyt, “Being a Time Traveler”, According to Hoyt, 2015-07-12.

April 18, 2017

Ned Kelly – II: Under Suspicion – Extra History

Filed under: Australia, History, Law — Tags: , — Nicholas @ 02:00

Published on 25 Mar 2017

Ned’s second venture as a bushranger brought him to the attention of the local police. He did time in prison, then tried to clean up his act, but became frustrated by the suspicion that continued to dog him.

QotD: Rent control

Filed under: Business, Economics, Government, Quotations — Tags: , , , , — Nicholas @ 01:00

To someone ignorant of economic reasoning, rent control seems like a great policy. It appears instantly to provide “affordable housing” to poor tenants, while the only apparent downside is a reduction in the income flowing to the fat-cat landlords, people who literally own buildings in major cities and who thus aren’t going to miss that money much. Who could object to such a policy?

First, we should define our terms. When a city government imposes rent control, it means the city makes it illegal for landlords to charge tenants rent above a ceiling price. Sometimes that price can vary, but only on specified factors. For the law to have any teeth — and for the politicians who passed it to curry favor with the public — the maximum rent-controlled price will be significantly lower than the free-market price.

The most obvious problem is that rent control immediately leads to a shortage of apartments, meaning that there are potential tenants who would love to move into a new place at the going (rent-controlled) rate, but they can’t find any vacancies. At a lower rental price, more tenants will try to rent apartment units, and at a higher rental price, landlords will try to rent out more apartment units. These two claims are specific instances of the law of demand and law of supply, respectively.

[…]

In the long run, a permanent policy of rent control restricts the construction of new apartment buildings, because potential investors realize that their revenues on such projects will be artificially capped. Building a movie theater or shopping center is more attractive on the margin.

There are further, more insidious problems with rent control. With a long line of potential tenants eager to move in at the official ceiling price, landlords do not have much incentive to maintain the building. They don’t need to put on new coats of paint, change the light bulbs in the hallways, keep the elevator in working order, or get out of bed at 5:00 a.m. when a tenant complains that the water heater is busted. If there is a rash of robberies in and around the building, the owner won’t feel a financial motivation to install lights, cameras, buzz-in gates, a guard, or other (costly) measures to protect his customers. Furthermore, if a tenant falls behind on the rent, there is less incentive for the landlord to cut her some slack, because he knows he can replace her right away after eviction. In other words, all of the behavior we associate with the term “slumlord” is due to the government’s policy of rent control; it is not the “free market in action.”

Robert P. Murphy, “The Case Against Rent Control: Bad housing policy harms lower-income people most”, The Freeman, 2014-11-12

April 8, 2017

Ned Kelly – I: Becoming a Bushranger – Extra History

Filed under: Australia, History — Tags: , — Nicholas @ 02:00

Published on Mar 18, 2017

When Ned Kelly lost his father at a young age, he became the man of the house but didn’t know how to support his family. Swept up by the grandiose tales of a visiting bushranger, young Ned decided to give crime a try.

March 9, 2017

Words & Numbers: Women Prosper When Markets Are Free

Filed under: Economics, Education, Liberty — Tags: , , , — Nicholas @ 04:00

Published on 8 Mar 2017

This week, in honor of International Women’s Day, Antony & James discuss the strong correlation between economic freedom and gender equality found across the world. They argue that if you want to see a world of increasing equality and opportunity for women, you also want to free the economy from central planning and control.

March 2, 2017

Words & Numbers: The Problem with Alternative Facts

Filed under: Media, Politics, USA — Tags: , , , — Nicholas @ 04:00

Published on 1 Mar 2017

I this week’s episode, Antony & James talk about alternative facts and how false, partisan data skews important discussions about public policy.

Update: For some reason the original post link was taken private, so I’m reposting to the current version.

February 27, 2017

Real GDP Per Capita and the Standard of Living

Filed under: Economics — Tags: , , , — Nicholas @ 02:00

Published on 20 Nov 2015

They say what matters most in life are the things money can’t buy.

So far, we’ve been paying attention to a figure that’s intimately linked to the things money can buy. That figure is GDP, both nominal, and real. But before you write off GDP as strictly a measure of wealth, here’s something to think about.

Increases in real GDP per capita also correlate to improvements in those things money can’t buy.

Health. Happiness. Education.

What this means is, as real GDP per capita rises, a country also tends to get related benefits.

As the figure increases, people’s longevity tends to march upward along with it. Citizens tend to be better educated. Over time, growth in real GDP per capita also correlates to an increase in income for the country’s poorest citizens.

But before you think of GDP per capita as a panacea for measuring human progress, here’s a caveat.

GDP per capita, while useful, is not a perfect measure.

For example: GDP per capita is roughly the same in Nigeria, Pakistan, and Honduras. As such, you might think the three countries have about the same standard of living.

But, a much larger portion of Nigeria’s population lives on less than $2/day than the other two countries.

This isn’t a question of income, but of income distribution — a matter GDP per capita can’t fully address.
In a way, real GDP per capita is like a thermometer reading — it gives a quick look at temperature, but it doesn’t tell us everything.

It’s far from the end-all, be-all of measuring our state of well-being. Still, it’s worth understanding how GDP per capita correlates to many of the other things we care about: our health, our happiness, and our education.

So join us in this video, as we work to understand how GDP per capita helps us measure a country’s standard of living. As we said: it’s not a perfect measure, but it is a useful one.

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