Quotulatiousness

February 5, 2019

Macron’s desperate efforts to keep the “European Project” on life-support

Filed under: Economics, Europe, France, Government, Politics — Tags: , , , , — Nicholas @ 03:00

Justin Raimondo on the plight French President Emmanuel Macron is facing:

The EU was a joint project of Euro-intellectuals who wanted a super-socialist State and were afraid Europeans might turn away from “Europe.” They sought to create an ersatz Euro-nationalism that has still only caught on among deracinated yuppies and oligarchs, if anyone at all. What they wanted and still want is what every true state has – an army. Which Macron has been agitating about for some time now. He doesn’t want to persuade Italy and Poland and Hungary to take more refugees – he wants to force them. Even more, he wants a reliable force to crush domestic protests, one that is unlikely to sympathize with the protesters.

Protests are everywhere: the media loves to cover them provided it’s the right cause – and one of the qualifying requirements of coverage should be drama. One would think therefore that the most recent and most violent would attract the media. Not so! We hear nothing about the twelve-week riots that have shaken the Macronist regime to its foundations.

But as the so-called Yellow Vests run roughshod in France – and all over the self-proclaimed “anti-nationalist” Macron – their origins, their ideology, their story remains untold.

French President Macron, a fanatic environmentalist, decided to revise the fuel tax code so that the small urban cars beloved by his circle had their tax reduced, while fuel for trucks and more industrial uses went up as much as 30%. It was a deliberate insult to the rural working poor who must drive long distances.

Macron went out of his way to convey his contempt for the rural voters who did not vote for him. The original reduction was actually intended for long-distance fuel, but Macron changed it around at the last minute to punish this use.

The French “Deplorables” reacted swiftly and not with the usual threat to strike: they simply started an insurrection. No preliminaries. They call themselves Yellow Vests referencing the safety vests required by French law of all motorists to signal emergency: yes, they declare: there IS an emergency going on!

February 2, 2019

Remy: Better Now?

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

ReasonTV
Published on 1 Feb 2019

Promised an improved way of life, Remy does everything he can to believe in a new ideology – except the math.

Written and performed by Remy. Video produced by Austin Bragg. Music tracks and mastering by Ben Karlstrom.

Reason is the planet’s leading source of news, politics, and culture from a libertarian perspective. Go to reason.com for a point of view you won’t get from legacy media and old left-right opinion magazines.

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LYRICS
Listened to those leaders so intently
Those Che Guevara shirts all seemed so trendy
Thought that things would be so good and friendly
So why’m I eating my neighbor’s dog Benji?

Twenty million killed, sure, that’s stuff I don’t like
But I could stay on Momma’s plan for the rest of my life
A guaranteed job digging ditches? Well what’s not to like?
It’s failed miserably each time so trying again seemed wise

Now I’m looting, looting, looting, looting
Grabbing wieners like I’m Kevin Spacey
Told a crowd “we need free markets instead”
Now my neck is no longer attached to my head

They promised things would all be better now, better now
If pure equality was finally found, finally found
Now we’re all grocery shopping at the pound, at the pound
Said that we’d have everything
Now we don’t have anything
Whoa…

How much plasma are they gonna take?
Before I finally have enough to trade?
For toilet paper or a rodent steak?
I keep on looking back on better days

They promised things would all be better now, better now
If free expression it was not allowed, not allowed
But I just caught my Roomba texting Mao
Said that we’d have everything
Now we don’t have anything

They promised things would all be better now, better now
If men with guns took farmers’ land and plow, land and plow
Now it’s another night of Rat Kung Pao, Rat Kung Pao
Said that we’d have everything
Now we don’t have anything

They promised things would all be better now, better now
If we just nationalized oil in the ground, in the ground
Now somehow gasoline can not be found, not be found
Said that we’d have everything
Now we don’t have anything

January 30, 2019

The high cost Canadians pay to support our oligopolies

Filed under: Cancon, Economics, Politics — Tags: , , , , , , — Nicholas @ 03:00

In the National Post, Andrew Coyne compares the Liberal and Conservative parties’ respective claims to lower the cost of living for Canadians, and points out some examples that neither party is willing to address:

For example, there is the notorious system of agricultural quotas known as supply management — a price-fixing ring the government not only approves but organizes and enforces, whose effect is to double or even triple the prices of such basic food items as milk, cheese, eggs and chicken. For all their pretended concern for affordability, all parties and every MP, with the sole exception of Maxime Bernier, are publicly, nay fervently in favour of it.

But while the farm cartel gets a lot of ink, there are plenty of other examples. Canadians pay among the highest wireless telephone fees in the world, for starters — maybe even the highest — as study after study has found. The latest report from Tefficient, a European consultancy, found Canada’s carriers take in more revenue per gigabyte of data than their counterparts anywhere else in the world — 23 times more than in Finland.

Similarly, Canadians pay among the highest air fares in the world. The travel website Kiwi. com recently found flights from Canada on a full-service airline cost roughly five times as much per 100 kilometres as flights from the United States. The situation was a little better for domestic flights, where costs were only twice as high as in the U.S. The makers of Hopper, the travel app, note it is typically cheaper to fly from Vancouver to Hawaii than from Vancouver to Regina, though Regina is 3,000 km closer.

Finally, there are Canadian bank fees, also — you guessed it — among the highest in the world, particularly for mutual funds. What is the common thread among these three industries? All are highly concentrated oligopolies: three big wireless carriers, two big airlines and five big banks dominate their respective markets.

Rather than compete as vigorously as they might for Canadian consumers, these quasi-cartels are permitted, in effect, to harvest them. They do so, again, not only with the tolerance but the active participation of the government. Foreigners are effectively precluded from competing in any of them, whether by foreign-ownership restrictions or outright prohibitions on competition — foreign airlines may not fly from one Canadian city to another, for example.

None of the parties currently boasting of their desire to make life more affordable for Canadians proposes to change a line of this, either. Whatever else may be in (artificially) scarce supply, in Canadian politics there’s never any shortage of rank hypocrisy.

January 20, 2019

The Short-Run Aggregate Supply Curve

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

Marginal Revolution University
Published on 9 May 2017

In this video, we explore how rapid shocks to the aggregate demand curve can cause business fluctuations.

As the government increases the money supply, aggregate demand also increases. A baker, for example, may see greater demand for her baked goods, resulting in her hiring more workers. In this sense, real output increases along with money supply.

But what happens when the baker and her workers begin to spend this extra money? Prices begin to rise. The baker will also increase the price of her baked goods to match the price increases elsewhere in the economy. As prices increase, workers demand higher wages to be able to afford goods at a higher price.

In this example, the increase in money supply initially increased nominal and real wages for the baker and her employees, but as prices begin to rise, real wages begin to fall, and workers can afford less. Overtime, the demand for the baker’s goods will fall to pre-spending levels.

The takeaway? An increase in spending can increase output and growth in the short run, but not in the long run. To model this scenario, this video will show you how to draw a short-run aggregate supply curve. Let’s get started!

January 16, 2019

Tropico, the game for budding central planners

Filed under: Economics, Gaming — Tags: , , , — Nicholas @ 05:00

At FEE, Ong Jia Yi Justin looks at the video game Tropico and what it can show about real world economics:

In Tropico 5, you are El Presidente — the leader of a Caribbean island that is a semi-democratic banana republic. Your primary objective is to preserve your rule by micromanaging your country’s economy to appease your citizens, the Tropicans. If they are dissatisfied with your rule, they can vote you out in the next elections or stage a coup d’état, costing you the game.

First released in 2001, the city-building and management game has sold millions of copies worldwide, and the sixth installment is scheduled for release later in 2019. The game was even banned in Thailand due to concerns it would stir social unrest. In a hilarious response, the game developers included a mission in its DLC (downloadable content) to steal away tourists from Thailand.

Tropico 5 presents an engaging platform for players to craft their socialist paradise and examine the mechanics of socialist economies. Apart from sandy beaches and skyscrapers, Tropico 5’s appeal arises from loading players with a swarm of decisions to make, each with certain trade-offs that must be accounted for. Since most of us formulate our ideals from an armchair perspective, Tropico 5 delivers a much-needed dose of reality and numerous lessons on economics for its players to reflect upon.

Pineapples, Cotton, or Death

The first focus when you start up the Tropico 5 game is managing your agricultural sector. Players must choose between constructing two types of farms. Farms producing food crops for local consumption, such as bananas and pineapples, boost your approval rating but don’t add income to your budget. Conversely, farms growing economic crops such as tobacco and cotton bring a healthy income stream but don’t feed your people.

Some players prefer to amass large sums of wealth in the early game through cotton exports and then focus on food production later, hopefully before too many people starve to death. Other players risk bankruptcy in their attempt to bring their popularity to a safe level by spamming pineapple plantations before transitioning to economic crops later. Either way, you’re stuck between a rock and a hard place.

January 10, 2019

What Happened to America’s Passenger Trains?! The Truth – from Class to Crap!

Filed under: Economics, Government, History, Railways, USA — Tags: , , — Nicholas @ 02:00

American Rail Club
Published on 1 Jul 2017

Did America’s once industrious and world-famous passenger rail system fall because of “fair and equal” competition – or did the federal government tax it to death? Did America’s shift from rails to roads come out naturally – or from lobbying from General Motors? We visit two of America’s passenger rail cars from a bygone era to reminisce and then dive into the history and truth behind the decline of America’s passenger railroad system.

January 9, 2019

Sticky Wages

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

Marginal Revolution University
Published on 2 May 2017

Imagine you’re an employer during a recession, and you desperately need to cut labor costs to keep your firm afloat. Are you more likely to cut wages across the board for all employees, or institute layoffs for only some?

While it may seem that wage cuts are the “better” choice, they aren’t as common as you might think. Why is that?

To answer that question, this video explores a phenomenon known as “sticky wages.”

In other words, wages have a tendency to get “stuck” and not adjust downwards. This occurs even during a recession, when falling wages would help end the recession more quickly.

However, that’s not to say that wages cannot adjust downward for an individual during a recession. This can happen, but likely only after an employee has been fired from their initial job, and eventually rehired by a different firm at a lower wage rate.

Back to our original question — why are employers unlikely to cut wages? A big reason has to do with the effect on morale. Employees may become disgruntled and angry when they experience a nominal wage cut, and become less productive.

An important note here — notice that we said nominal wage cut, meaning, not adjusted for inflation. If an employee receives a 3% raise in nominal wages, they may remain happy in their current position. But what if inflation is 5%? What does this mean for their real wage? (Hint: For an in depth answer to this question check out our earlier Macroeconomics video on “money illusion.”)

Next week we’ll return to our discussion on the AD/AS model for a look at how factors such as “sticky wages” affect the economy in the short run.

January 6, 2019

The demands to re-nationalize British passenger railways

Filed under: Britain, Business, Economics, Government, Railways — Tags: , , — Nicholas @ 05:00

In the Continental Telegraph, Tim Worstall points out the mutually exclusive claims about the state of British passenger rail services and the counter-productive demand to shuffle it all back into the state’s tender mercies:

Wikimedia caption – “This is the Bring Back British Rail, a reverse image of the old BR logo, (now used by the TOC’s) to show we are heading the wrong way with Rail in the UK”

A standard whinge in Britain today is that rail privatisation has failed – just look, the trains are so crowded! The thought that people flocking to use something proves failure being a most odd one of course. That more people use the train sets to travel longer distances more often should be seen as a triumph of privatisation, not a proof of its failure. And we should note that the last few decades of British Rail did show – population adjusted – falling ridership.

There’s also a certain puzzlement at the next cry of outrage – that ticket prices are too high. If people are flocking to use something etc then it’s difficult to insist that prices are too high. […] Popularity both proves that the basic system is wrong and also that prices are too high. Tough this economics stuff, isn’t it?

As to the congestion part, well, on those popular lines and routes the route itself is running at capacity. It’s just not possible to squeeze more trains onto the tracks without them running into each other. Ah, but goes the cry, government should do something! But the tracks are already run by government, that we’re not getting more track capacity is government’s fault. Giving us a good guide to how it would be if government ran it all – as history tells it was like when government did.

As to the prices, well, that overcrowding shows us that prices are too low. We need some method of rationing that access to something being over-used. Price is always the best method of rationing. Thus prices should be higher to relieve that over-crowding – while we wait a few decades for government to pull thumb out and provide more track capacity.

Thameslink Class 700 Desiro City at London Blackfriars in 2016.
Photo by Alex Nevin-Tylee via Wikimedia Commons.

January 5, 2019

We may already have passed the peak of High Speed Railways

Filed under: Economics, Japan, Railways, USA — Tags: , , , , — Nicholas @ 03:00

Hans Bader looks at the mass transit mess, including a brief glance at the state of high speed passenger rail:

So-called bullet trains generally turn out to be white elephants. South Korea is abolishing its celebrated high-speed rail line from its capital, Seoul, to a nearby major city because it can’t cover even the marginal costs of keeping the trains running. Most people who ride trains don’t need maximum possible speed, and most of those who do will still take the plane to reach distant destinations.

Despite Japan’s much-vaunted bullet trains, most Japanese don’t take the bullet train either; they take buses because the bullet train is too expensive. Bullet trains do interfere with freight lines, so Japanese freight lines carry much less cargo than in the United States, where railroads—rather than trucks—carry most freight, thereby reducing pollution and greenhouse gas emissions.

California’s so-called bullet train is vastly behind schedule and over budget, and will likely never come close to covering its operating costs once it is built. As Reason magazine noted, transportation officials have warned that California’s misnamed “bullet train” is a disaster in the making. California is drastically understating the costs of its high-speed rail project. Just the first leg of this $77 billion project will cost billions more than budgeted. And the project is already at least 11 years behind schedule.

December 30, 2018

The Long-Run Aggregate Supply Curve

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

Marginal Revolution University
Published on 25 Apr 2017

The long-run aggregate supply curve is actually pretty simple: it’s a vertical line showing an economy’s potential growth rates. Combining the long-run aggregate supply curve with the aggregate demand curve can help us understand business fluctuations.

For example, while the U.S. economy grows at about 3% per year on average, it does tend to fluctuate quite a bit. What causes these fluctuations? One cause is “real shocks” that affect the fundamental factors of production. Droughts, changes to the oil supply, hurricanes, wars, technological changes, etc. can all have big and potentially far-reaching consequences.

Next week, we’ll dig into why wages are considered “sticky,” or slow to change.

December 29, 2018

Helping Africa become less poor

Filed under: Africa, Economics, Health, Technology — Tags: , — Nicholas @ 03:00

In the Washington Examiner, Tim Worstall explains how and why Africans will benefit from adopting western agricultural methods:

No doubt much to the annoyance of the real farming types, Africa is starting to adopt American industrial farming practices. Thankfully, this is going to make Africa and its residents vastly richer. Tyson (that enemy of everything the organic and slow-food movements hold dear) is working and investing to bring the U.S. system of broiler chicken production to the world’s poorest continent, thereby making it less poor.

[…]

To an economist, everything is a technology. A supermarket is a technology, a mobile phone system, medieval peasantry is a technology, and so is battery farming of broiler hens. A technology is a method of doing something and battery farming is a more advanced, because it’s more productive, technology than the medieval techniques. Most of Africa would be overjoyed to have something as productive as that peasantry our own forefathers suffered through.

Places and people are poor because they use older and less productive technologies. As Paul Krugman’s possibly finest essay points out (and his finest is very good indeed), when a place is using technologies as productive as a richer place, then those users are as rich. That’s just the definition: We’re richer if we get more output from our input of labor. Adopt technologies that are more productive, and we become richer.

The reason places like Africa are poor is not because of capitalism, exploitation, the residues of colonialization, or even the long, dark shadow of the slave trade. Nor is it poor even because of idiotic socialism or the propensity of politicians to run off with the national treasury. You can blame any selection of those as you wish, and with some of them you’d even be right, but they are all proximate causes. The ultimate reason is simply that poor places are using less productive technologies, richer ones more productive. All of those varied things can be blamed for reducing the use of more advanced technologies, but it is the lack of technological advance itself that causes the poverty.

December 25, 2018

Repost – The market failure of Christmas

Filed under: Economics, Government — Tags: , — Nicholas @ 03:00

Not to encourage miserliness and general miserability at Christmastime, but here’s a realistic take on the deadweight loss of Christmas gift-giving:

In strict economic terms, the most efficient gift is cold, hard cash, but exchanging equivalent sums of money lacks festive spirit and so people take their chance on the high street. This is where the market fails. Buyers have sub-optimal information about your wants and less incentive than you to maximise utility. They cannot always be sure that you do not already have the gift they have in mind, nor do they know if someone else is planning to give you the same thing. And since the joy is in the giving, they might be more interested in eliciting a fleeting sense of amusement when the present is opened than in providing lasting satisfaction. This is where Billy Bass comes in.

But note the reason for this inefficient spending. Resources are misallocated because one person has to decide what someone else wants without having the knowledge or incentive to spend as carefully as they would if buying for themselves. The market failure of Christmas is therefore an example of what happens when other people spend money on our behalf. The best person to buy things for you is you. Your friends and family might make a decent stab at it. Distant bureaucrats who have never met us — and who are spending other people’s money — perhaps can’t.

So when you open your presents next week and find yourself with another garish tie or an awful bottle of perfume, consider this: If your loved ones don’t know you well enough to make spending choices for you, what chance does the government have?

December 23, 2018

A Very Libertarian Christmas

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

ReasonTV
Published on 21 Dec 2018

Deck the halls and spread some Yuletide cheer. Or don’t. You’re your own person.

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Subscribe to our YouTube channel: http://youtube.com/reasontv
Follow us on Twitter: https://twitter.com/reason
Subscribe to our podcast at Apple Podcasts: https://goo.gl/az3a7a

Reason is the planet’s leading source of news, politics, and culture from a libertarian perspective. Go to reason.com for a point of view you won’t get from legacy media and old left-right opinion magazines.
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Written by Austin Bragg, Meredith Bragg, and Andrew Heaton. Performed by Heaton and Austin Bragg. Edited by the Braggs.

Music:
“Dance of the Sugar Plum Fairies,” “Deck the Halls,” “Jingle Bells Calm,” “Silent Night,” “The Snow Queen,” and “We Wish you a Merry Christmas” by Kevin MacLeod. Available under the Creative Commons Attribution 3.0 Unported license. Download link: https://incompetech.com/music/royalty

December 13, 2018

When Democrats Loved Deregulation

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

ReasonTV
Published on 12 Dec 2018

Left-leaning politicians of the 1970s understood that red tape punishes consumers and protects big business. The leading deregulator of that era was none other than Jimmy Carter.

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Follow us on Twitter: https://twitter.com/reason

Reason is the planet’s leading source of news, politics, and culture from a libertarian perspective. Go to reason.com for a point of view you won’t get from legacy media and old left-right opinion magazines.
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When President Donald Trump bragged in his first State of the Union address about cutting red tape, the Democratic response was no surprise. “Deregulation,” warned Center for American Progress Senior Advisor Sam Berger in Fortune, “is simply a code word for letting big businesses cut corners at everyone else’s expense.”

But many leading Democrats had the opposite view in the 1970s. Then, at the dawn of the deregulation era, left-leaning politicians and economists understood that excessive government management of industry let the big-business incumbents get away with lousy performance at the expense of competitors, taxpayers, and consumers. The leading figure in that fight to cut red tape and shut down entire federal agencies was none other than Jimmy Carter.

It was Sen. Ted Kennedy who held extensive Senate hearings in the early ’70s, with testimony from the likes of Ralph Nader and liberal economist Alfred Kahn, about the benefits of lifting state controls on the airline industry. The resulting Airline Deregulation Act of 1978, signed by Carter, killed the Civil Aeronautics Board — a federal agency that decided which airlines could fly where, and even what they could charge. The new competition to the old airline cartel reduced fares, expanded destinations, increased safety, and made air travel an option for those of us who aren’t rich.

Carter also lifted stifling government oversight of the rail and trucking industries under a Democrat-controlled House and Senate. The result? Competition intensified, prices dropped, and consumers saved more money on everyday products.

In 1978, President Carter signed a bill that lifted Prohibition-era criminal restrictions on home brewing. The legalization of do-it-yourself beer production unleashed a boom of experimentation, paving the way for the craft beer revolution that is ongoing to this day. The year that Carter loosened the rules, the U.S. was home to a mere 50 breweries. Today there are well over 5,000. In two generations of beermaking, America went from global laughingstock to world leader.

The governor of California during Carter’s presidency was none other than Jerry Brown, then known as “Governor Moonbeam” for his far-out musings, glittery social life, and lefty politics. Yet Brown, too, could be a fiery skeptic of government. In his terrific second inaugural address in 1979, Brown stated that “many regulations primarily protect the past, prop up privilege or prevent sensible economic choices.”

But even while some sectors were unleashed four decades ago by far-seeing Democrats and Republicans alike, too many governments at the local, state, and federal levels have forgotten those lessons, and instead imposed entirely new categories of regulations. Occupational licensing, which applied to about one in 10 jobs 40 years ago, now impacts one in three.

So how did the party of Jimmy Carter and sideburns-era Jerry Brown become the ideological home of Elizabeth Warren and Alexandria Ocasio-Cortez? One explanation may be that Democratic support for deregulation back then was born out of a sense of nearly hopeless desperation in the face of stagflation. Cutting red tape to foster dynamism was about the last move politicians had left.

Our long economic expansion and stock-market boom will soon come to an end, imposing limits on government precisely at the moment when it’s asked to do more. When that day of reckoning comes, the best questions for lawmakers of both parties to ask may just be: What would Jimmy Carter do?

Photo credits: Jimmy Carter Library, Arthur Grace/ZUMA Press/Newscom, Dennis Brack/Newscom, Everett Collection/Newscom, Ron Sachs/CNP/MEGA/Newscom, Brian F. Alpert/ZUMA Press/Newscom, Paul Harris/Pacific Coast Nes/Newscom, Bee Staff Photo/ZUMA Press/Newscom, Dennis Brack/bb51/Newscom, Jonathan Bachman/REUTERS/Newscom, Rick Friedman/Polaris/Newscom

December 9, 2018

QotD: The western way of war

Filed under: Economics, History, Military, Quotations — Tags: — Nicholas @ 01:00

Free capital is the key to war making on any large scale, what Cicero called “the sinews of war,” without which an army cannot muster, be fed, or fight. Capital is the wellspring of technological innovation, which is inextricably tied to freedom, often the expression of individualism, and thus critical to military success throughout the ages. That capitalism was born in the West, expanded through Europe, survived the alternate Western-inspired paradigms of socialism and communism, and found itself inextricably tied with personal freedom and democracy in its latest global manifestation explains in no small part Western military dominance from the age of Salamis to the Gulf War.

Victor Davis Hanson, Carnage and Culture, 2001.

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