Tuesday, October 27, 2009

Economy Car Watch

Washington Post writer Neil Irwin hasn't been following Global Review very closely. Neither does he know much economics. If he did, he'd know that the economy is not a car!

Irwin's big front-page article regurgitates the nauseating metaphor:
While the government has successfully jump-started the U.S. economy, there are emerging signs that its engine still isn't running very well, and may even sputter out.
He accepts as fact the silly notion that the government can manage the economy like a car owner, unsubtly settling the debate over the role of fiscal policy for his readers. Do yourself a favor and take a drive outside in your own economy car instead of wasting time on Irwin's voodoo economics.

Thursday, October 22, 2009

Gross National Happiness

What ought economists to measure? We want to know why people produce and trade scarce resources, and we want to know what are the most efficient ways to do those things. Some have noted that the traditional method - summing the price of all the traded goods and services produced by an economy - is a poor method, since it is measuring production instead of utility. This is an especially strong critique of Keynesian policy, which seeks to raise production even if that means lowering consumption. Philosophical types, myself included, also note that consumption seems to have very little to do with happiness (that is, utility) in real lives.

It should not be lost that economists study economy. Non-scarce goods, such as friendship or righteousness, may be vital to happiness but fall outside the realm of economy. What economy does contribute to people's lives is, essentially, trade. I have something that is of more value to you than it is to me, and if we can trade, we can increase world happiness. In order to measure the contribution of economy to happiness, we would like to measure the gross surplus in all exchanges.

Obviously, that is impossible. We can often measure price, which must fall between the two valuations in an exchange, but gives us no information on the size of the surplus. The convenient thing about measuring surplus, like consumption or utility, is that it can only accrue to individuals. Firms or governments don't feel and cannot enjoy surplus (although they can help create or destroy it). So, focusing on individuals, we should look at all the trades that they make. The most obvious are the sale of labor and the purchase of goods and services. There are others: taxes and government services, for instance. In addition, the screwy issue of externalities arises when an exchange reduces a third party's happiness.

Nonetheless, if we are to measure surplus as the contribution of economy to happiness - specifically in its fluctuations or in the differences between countries - we do well to focus on the biggest components. Those, in turn, are well-measured by the traditional measures of consumption and income. In order to fully justify classical economic analysis, we need the additional assumptions that the surplus from each type of exchange is roughly constant across time and location and that surpluses across different types of exchanges are roughly proportional to their total value.

I would be interested to know if these assumptions have been tested anywhere; lacking evidence for or against them, I will proceed using classical economic analysis - but remembering that this approximates not total happiness but the contribution of economy to happiness.

Friday, October 16, 2009

On Recoveries

It's well-known among economists, and often known by politicians and even journalists that employment is a lagging indicator. When the economy sinks, jobs are lost a few months later. When the economy recovers, job creation is often the last step.

Why, then, do journalists and Keynesian economists insist that demand drives business cycles? How can consumer demand increase while unemployment is high? Something always ends recessions; we've never suffered a persistent recession. Even the Great Depression didn't "bend the curve" of long-run growth.

There are a lot of mysteries in economics. It shouldn't be a mystery that the economy will recover, and when it does, it won't be because of consumer demand rising unbidden like the sphinx.

Wednesday, October 14, 2009

This Explains the Nobel Prize

What did Obama do to deserve the Peace Prize? Jen Sorensen explains all.

Hat tip to Mikey.

Sir Tim Lives!

"There are some who call me... Sir Tim." - Monty Python & the Holy Grail

It turns out those "some" include the Daily Mail. Go figure.

Friday, October 9, 2009

Video Mash-Up

I can't do video-editing, but this is a video I want to see on YouTube:
President Barack Obama: I am both surprised and deeply humbled by the decision of the Nobel Committee... And I know that throughout history, the Nobel Peace Prize has not just been used to honor specific achievement; it's also been used as a means to give momentum to a set of causes. And that is why I will accept this award as a call--
Kanye West: Yo Barack, I'm really happy for you and I'mma let you finish, but Morgan Tsvangirai was one of the best democrats of all time. Of ALL TIME!
BO: Kanye... he's a jackass
Granted, it might be hard to find video of Kanye West pronouncing Mr. Tsvangirai's name (correctly or otherwise), but with a little dubbing, this could be great!

Thursday, October 8, 2009

The Court and the Cross

As every politicized Christian in America knows, the Supreme Court is deciding whether or not a cross is allowed to stand on Federal land in the Mojave Desert. As a Christian, my usual response to these cases is 'let the jerks be jerks'. If secular people (here, it's one Frank Buono) really want to lead a witch hunt against symbols of faith, let them. History deals harshly with witch-hunters. There are many alternatives: if the Town Square won't host a creche, the church or coffee shop across the street probably will.

In this case, the argument is even sillier. The cross was there before the land ever became National Park. The notion that Mr. Buono (or anyone else) is materially harmed by the cross is a stretch. Removing the cross - which is a relic of the religious beliefs of those who used the Mojave before the Federal government - would be similar to sandblasting Navajo art off of "Federal" rocks because it depicts deities, or blowing up 6th-century statues of Buddha. Oh wait, that was the Taliban, not the Feds. Oops.

Wednesday, October 7, 2009


The Patriots play the undefeated Broncos this week, which will be the last in a string of five games in which they've played a team without a loss. That means the combined record of Patriots opponents at game time is 15-0. The next week, however, the Pats draw Tennessee, which has a good chance of being winless coming in.

Monday, October 5, 2009

Krauthammer's Law, Revisited

In 2006, Charles Krauthammer expounded his Law, everyone who is anyone is Jewish until proven otherwise. But even Charlie himself must be astounded by this one: according to the Telegraph, Mahmoud Ahmedinejad, the despot of Iran and would-be scourge of Israel, was born to Jewish parents.
A close-up of the document reveals he was previously known as Sabourjian – a Jewish name meaning cloth weaver... The Sabourjians traditionally hail from Aradan, Mr Ahmadinejad's birthplace, and the name derives from "weaver of the Sabour", the name for the Jewish Tallit shawl in Persia.
Well, stranger things have been alleged.

Hat tip to James Taranto (who is, of course, Jewish).

Fan Appreciation

The Sox had fan appreciation during their victory lap series this last week. Beth has great photos and anecdotes.

Colonel Kez

My sister is extraordinary, which is not news to those of you who know her. The latest of her exploits - serving a U.S. Army medical team in Haiti as its go-to person, and serving their patients as a fluent and bold advocate with the Army - is chronicled on her blog in several parts. Naturally, she was appreciated:
And then [the U.S. Ambassador] asked for Madame Keziah F. I walked up, shook his hand, and as he passed me the plaque, I heard the US soldiers.

Throughout the entire ceremony, they had been silent, applauding politely when they saw everyone else applauding. When Colonel Hershey was awarded 2 plaques, they clapped. When a plaque was announced for the entire MEDRETE team, they clapped. But when my name was announced, they leapt to their feet and gave me a shout-out. If you've never experienced an Army shout-out, I'm sorry, I can't do it justice. Imagine a score of deep male voices shouting out a secret code of Army brotherhood, something that you can't imitate and you can't fully understand. But when you look at their faces, you realize that you don't need to. And it's all you can do to keep from crying.

Thursday, October 1, 2009


Who knew? Of the 45 American League outfielders, the highest two in OPS are (drum roll) Jason Bay and J.D. Drew. Or so says the Herald's John Tomase. The Yahoo! numbers beg to differ: Bay is third in the AL, Drew is fifth. What data was John reading? Or maybe he didn't notice Adam Lind (#1) who belted a homer against Tim Wakefield last night.