People who really believe that trade restrictions prevent domestic unemployment or raise domestic wages – people who really believe that minimum wages raise the incomes of low-skilled workers without causing any loss of employment or worsening of other terms of these workers’ jobs – people who really believe that government-mandated family leave leaves workers better off – are like people who attend magic shows and really believe that the magician causes a rabbit to materialize out of the thin air within the magician’s hat.
“Wow!” exclaims an audience member. “I saw with my own eyes the magician pull a rabbit from a hat that only a moment earlier was empty! And also, the magician assures me that that’s what he did. He wouldn’t lie to me. So it must be true that the magician pulled a rabbit miraculously from his hat – that he bends reality to his will. I’m impressed!!”
These people believe their eyes. And why shouldn’t they? The empirical record, after all, is stuffed with rabbits being pulled from magicians’ hats – hats that audiences saw were empty just moments before live rabbits were pulled from them. What’s not to believe?
Don Boudreaux, “Do You Believe in Magic?”, Café Hayek, 2016-06-22.
February 16, 2018
QotD: It’s not economics, it’s magic!
February 15, 2018
QotD: Computer models
How can one be certain about outcomes in a complex system that we’re not really all that good at modeling? Anyone who’s familiar with the history of macroeconomic modeling in the 1960s and 1970s will be tempted to answer “Umm, we can’t.” Economists thought that the explosion of data and increasingly sophisticated theory was going to allow them to produce reasonably precise forecasts of what would happen in the economy. Enormous mental effort and not a few careers were invested in building out these models. And then the whole effort was basically abandoned, because the models failed to outperform mindless trend extrapolation — or as Kevin Hassett once put it, “a ruler and a pencil.”
Computers are better now, but the problem was not really the computers; it was that the variables were too many, and the underlying processes not understood nearly as well as economists had hoped. Economists can’t run experiments in which they change one variable at a time. Indeed, they don’t even know what all the variables are.
This meant that they were stuck guessing from observational data of a system that was constantly changing. They could make some pretty good guesses from that data, but when you built a model based on those guesses, it didn’t work. So economists tweaked the models, and they still didn’t work. More tweaking, more not working.
Eventually it became clear that there was no way to make them work given the current state of knowledge. In some sense the “data” being modeled was not pure economic data, but rather the opinions of the tweaking economists about what was going to happen in the future. It was more efficient just to ask them what they thought was going to happen. People still use models, of course, but only the unflappable true believers place great weight on their predictive ability.
Megan McArdle, “Global-Warming Alarmists, You’re Doing It Wrong”, Bloomberg View, 2016-06-01.
February 14, 2018
QotD: Portuguese quality of life … or “Is Portugal a shithole?”
You see, you can judge a country’s status as an … ah… excrement sinkhole by figuring out “Migration out or in?”
In Portugal this picture is complicated. They are suffering “brain drain” as their youngest, brightest and most educated decamp for Germany, England, or even Brazil (where the picture is also complicated) but at the same time they receive immigrants from Africa, Brazil, South America, China and, weirdly, Russia (I’ve never figured out if these are descendants from people who took their crappy cars when the wall came down, and drove until they hit the ocean (or drove/walked till they hit the ocean) or whether they’re a fresh migration. I know the first existed, but I haven’t sussed out the other particulars.)
So, Portugal is not a shithole. What it is is a country so tied down by regulations, rules, and the ever present weight of tradition (Portugal, like many Baltic countries produces way more history than it can consume locally) that it works at cross purposes to itself.
Looking at what Portuguese (at least some) can do abroad, in terms of insane amounts of work and sometimes success, one assumes that if Portugal could eschew its perennial fascination with socialism, it would … well… I don’t know, but it would be scary for good or ill.
I mean for a country tied up with socialism (first national, then international) for the best part of a century, it’s not doing badly at all. Look at it this way: it hasn’t gone Venezuela. And the gentleman in the back who just said that’s because they can’t do anything efficiently, not even socialism, is just being mean. Yes, the Portuguese have been locked in a tragic fight throughout history with their traditional enemies, the Portuguese, but that’s no reason to look down on them.
Sarah Hoyt, “On Shaking The Dust From One’s Sandals”, According to Hoyt, 2018-01-17.
February 13, 2018
QotD: Mark Twain on Indian weather
I believe that in India ‘cold weather’ is merely a conventional phrase and has come into use through the necessity of having some way to distinguish between weather which will melt a brass door-knob and weather which will only make it mushy.
Mark Twain, Following the Equator: A Journey Around the World, 1897.
February 12, 2018
QotD: Science on the brink
Present reality is that science is on the verge of a nervous breakdown. That’s the not-so-tongue-in-cheek message in Science on the Verge, a new book by European scientist Andrea Saltelli and seven other contributors. Science on the Verge is a 200-page indictment of what to the lay reader appears to be a monumental deterioration across all fields, from climate science to health research to economics. The mere idea that “most published research results are false” should be cause for alarm. But it is worse than that. The crisis runs through just about everything we take for granted in modern science, from the use of big data to computer models of major parts of our social, economic and natural environment and on to the often absurd uses of statistical methods to fish for predetermined conclusions.
Terence Corcoran, “Science is on the verge of a nervous breakdown”, Financial Post, 2016-06-13.
February 11, 2018
February 10, 2018
QotD: “The masses”
I don’t believe that the ordinary people in fact resemble the normal description of the masses, low and trivial in taste and habit. I put it another way: that there are in fact no masses, but only ways of seeing people as masses.
Raymond Williams, Resources of Hope: Culture, Democracy, Socialism, 1989.
February 9, 2018
QotD: Canadian versus American forms of government
Canada does not bother with palaces; the closest thing we have is Rideau Hall, whose history, appearance, and location all serve to confirm the point. In Canada we pay relatively little heed to social class — a legacy of having been a colony, with its ultimate rulers (and, until 1949, its literal court of last resort) conveniently offshore. We have left formal titles mostly in the dust while Americans resurrect them frantically: the newspapers bow and scrape to “Sen. Clinton” and “Gov. Palin” long after their brief periods in office.
We manage not to admire displays of wealth in the whimpering, craving way that Americans do; our old money avoids ostentation, and our bankers are practically Spartan. (We have a few literal lords, but I suspect even my colleague Conrad Black would resist being addressed as anything but “Mr. Black” by a fellow Canadian in Canada.) We accept higher taxes in exchange for state provision of medical care, but when it comes to welfare we honour the Protestant work ethic more earnestly than the republic to the south does, with its food stamps and its endless disability rolls.
This all emerges partly from having an expatriate monarchy that we can drag onto the scene as needed, and can worship and scrutinize from afar. We get the best of both worlds. If we adopted a real republic, the long-term path to union with the U.S. would be that much shorter; how long could a squeal of “But we’re so much nicer than they are,” a bare assertion of mystical innate superiority, provide a moral basis for independence?
The Romans and the Tudors would perceive the Canadian genius quickly: they would discern more clearly than ourselves that we have pioneered a truly novel political system — an ultra-practical, constitutionally successful version of the old Jewish temple, with its invisible god secreted in a hidden sanctum. Our domestic political leaders can never be glory-hunting priest-emperor types, as long as there is someone above them, far away, who is called “Majesty” and possesses the regalia of state. This is why, when someone refers to the prime minister’s wife as “first lady,” they are really threatening the basis of our political existence, and should be chastised — even if, I hasten to add, they are writers or editors for other Postmedia newspapers.
Colby Cosh, “Why Canadians are better republicans”, National Post, 2016-05-30.
February 8, 2018
QotD: Minimum prices for wine, a thought experiment
Consider this hypothetical (which, given the poor quality of today’s punditry and publicly discussed economics, is not as far-fetched as it might at first seem): Ostensibly to help raise the incomes of hard-working vintners of low-quality wines – vintners many of whom have children to feed and sick parents to care for, and many of whom also are stuck in their jobs as owners of low-quality vineyards – Congress passes minimum-wine-price legislation: no wine may sell for any price less than $1.00 per fluid ounce. Roughly, that means that the minimum price of a standard-sized – 750ml – bottle of wine becomes $25.00. Armed officers of the state will use deadly force against anyone and everyone who insists on disobeying this diktat.
If proponents of the minimum wage are correct in their economics, then the only effect of this minimum-wine-price diktat will be distributional. Consumers – including retailers and restaurants buying from wholesalers – will continue to buy as much wine, and the same qualities of wine, that they bought before the diktat took effect. The only difference is that, with the diktat in place, owners of low-quality vineyards earn higher incomes, all of which are paid for by consumers who dip further into their own incomes and wealth to fund this transfer. Easy-peasy! Problem solved!
But who in their right mind would suppose that a minimum-wine-price diktat would play out in the manner described above? Who would not see that a wine buyer, obliged to pay at least $25 for a standard-size bottle of wine, will buy only higher-quality wines – wines that before the diktat took effect were fetching at least $25 per bottle (or some price close to that)? Many wine buyers who before the diktat were confronted with the choice of paying either $8.99 for a bottle of indifferent but drinkable chardonnay and $25.00 for a bottle of much more elegant and enjoyable chardonnay opted for the less-pricey bottles. They did so not because they prefer to drink chardonnay that is indifferent to chardonnay that is elegant – they in fact do not have this preference. Rather, they did so because the greater elegance of the pricier chardonnay was not to them worth its higher price. So the low-quality chardonnay found many willing buyers.
Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2016-06-02.
February 7, 2018
QotD: You are not the customer … you’re the product
As we enter the third 24-hour period of relentless media coverage, the part where even the local TV stations have custom bumpers for the incident with distinctive theme music, let’s make sure we have some things clear.
TV news does not sell news to you.
TV news sells commercial time to corporations and your eyeballs are the poker chips in the card game.
Atrocities (and let’s keep our terminology straight: hurricanes and earthquakes are tragedies, this was an atrocity) are like a Double Bonus Round in the Eyeball Delivery Sweepstakes for FOXNews and CNN and MSNBC.
And all this attention is just incentivizing the next Eyeball Deliverer out there, patiently loading magazines (or mixing fertilizer, or dumping powder into pressure cookers, or studying a flight manual, or filling jerry cans…)
And, yes, ironically this post is just more attention being paid, and by complaining about the problem I make myself a part of it. It’s a hell of a thing.
Tamara Keel, “Terminology, again”, View From The Porch, 2016-06-14.
February 6, 2018
QotD: The original goal of the minimum wage
For progressives, a legal minimum wage had the useful property of sorting the unfit, who would lose their jobs, from the deserving workers, who would retain their jobs. Royal Meeker, a Princeton economist who served as Woodrow Wilson’s U.S. Commissioner of Labor, opposed a proposal to subsidize the wages of poor workers for this reason. Meeker preferred a wage floor because it would disemploy unfit workers and thereby enable their culling from the work force.
Thomas Leonard, “Eugenics and Economics in the Progressive Era”, Journal of Economic Perspectives, 2005-09.
February 5, 2018
QotD: The Age of Hypocrisy
Hitler (one cannot mention him without the subliterates mouthing, “Reductio ad Hitlerum!” — not realizing that they are quoting Leo Strauss) was the great enabler. He gave cover to all lesser evils, including the greater of the lesser ones; and thereby retired all the prattling politicians from the Age of Hypocrisy, which he closed. Now all the baddies seemed good, by comparison, and everyone needed a baddie of his own, or they would get one assigned from Berlin.
The Age of Hypocrisy re-opened, of course, with Hitler’s death, when political discourse again softened. (Hypocrisy is the padding on the madhouse walls.) But for a twelve-year run in Germany, and shorter periods wherever their shadow fell, Hitler’s Nazis erased hypocrisy.
This is what Karl Kraus meant, when he said that the Nazis had left him speechless. For decades he had exposed the lies and deceitful posturing not only of politicians in the German-speaking world, but among their immense supporting cast of journalists and fashion-seeking intellectuals. He was the greater-than-Orwell who strode to the defence of the German language, when it was wickedly abused. He identified the new “smelly little orthodoxies” as they crawled from under the rocks of Western Civ — the squalid, unexamined premisses that led by increments to the slaughterhouse of Total War. He was not, even slightly, a revolutionist; he had no argument against anyone’s wealth or status, even his own. Rather, through savage satirical humour, with language untranslatably precise, impinging constantly upon the poetic, he undressed the false.
He had seen the First World War coming, in the malice spreading through the language; in the smugness that fogged perception; in the lies that people told each other, to preserve their amour-propre; in the jingo that lurked beneath the genteel. After, he saw worse.
David Warren, “The decline of requirements”, Essays in Idleness, 2016-06-07.
February 4, 2018
QotD: Modern feminism
Feminism now regularly calls for women to be treated as eggshells instead of equals. And through this, it does something pernicious to the women it claims to advocate for: Feminism has become a movement for female disempowerment, or what I call “encouraged helplessness” (from psychologist Martin Seligman’s “learned helplessness”—the feeling that there’s nothing you can do to escape your fate).
In fact, feminism, bizarrely, has morphed into paternalism — instructing women that they are fragile, passive, powerless victims who need authority figures to advocate for them.
That’s a movement I want no part of. Or, as I like to put it — because I’m neither a feminist nor much of a lady: Count me the fuck out.
If you’re a woman, I encourage you to join me — count yourself the fuck out of what feminism has become.
This doesn’t require you to be fearless. You just need to shove your fears aside and do what needs to be done — say, getting up on your hind legs and telling some co-worker, “Stop saying that thing to me” or “…treating me this way.”
Now, if they persist after you’ve told them to stop a few times, that’s harassment and you can seek support to get them to stop. But consider that it’s less likely to get to that point if you simply act like men’s equal—act as if you’re powerful — instead of acting like you’re a feminist.
Amy Alkon, “Are Women Really Victims? Four Women Weigh In”, Quillette, 2017-11-22.
February 3, 2018
QotD: Subsidising the arts
… the Luvvies justify tax subsidy of The Arts by saying, “We can’t call ourselves a civilized country without opera houses, ballet companies, etc., etc.”. Well, perhaps not. But can we call ourselves a civilized country when we have to be forced to pay for these things against our will? Does that not then make us an uncivilized country pretending to be civilized, aping true civilization, a sort of cargo-culture? It’s not our culture at all, spontaneously emerging through voluntary action, it’s someone else’s, laid on the top of our real civilization like fancy icing on (as they might have it) mud. Isn’t that worse?
Sam Duncan, commenting on David Thompson’s “Elsewhere (100)”, davidthompson.com, 2013-10-09.
February 2, 2018
QotD: Infrastructural sclerosis
I have an op-ed in the Boston Globe today on infrastructure, addressing the issue of quality rather than quantity of investment. Rachel Lipson, a graduate student at Harvard, and I describe the fiasco that has emerged from what should have been a routine maintenance project on the Anderson Memorial Bridge over the Charles River next to my office in Cambridge. Though the bridge took only 11 months to build in 1912, it will take close to five years to repair today at a huge cost in dollars and mass delays.
Investigating the reasons behind the bridge blunders have helped to illuminate an aspect of American sclerosis — a gaggle of regulators and veto players, each with the power to block or to delay, and each with their own parochial concerns. All the actors — the historical commission, the contractor, the environmental agencies, the advocacy groups, the state transportation department — are reasonable in their own terms, but the final result is wildly unreasonable.
At one level this explains why, despite the overwhelming case for infrastructure investment, there is so much resistance from those who think it will be carried out ineptly. The right response is to advocate for reforms in procurement policies, regulatory policies and government procedures to make the investment process more efficient and effective. This is all clear enough.
At another level, though, our story may illustrate phenomena that go way beyond infrastructure. I’m a progressive, but it seems plausible to wonder if government can build a nation abroad, fight social decay, run schools, mandate the design of cars, run health insurance exchanges, or set proper sexual harassment policies on college campuses, if it can’t even fix a 232-foot bridge competently. Waiting in traffic over the Anderson Bridge, I’ve empathized with the two-thirds of Americans who distrust government.
Larry Summers, “Why Americans don’t trust government”, Washington Post, 2016-05-26.
