Archive for January, 2007|Monthly archive page

freak, freakonomics

Here is the URL for a delightful slam at Levitt’s book.  By way of a disclaimer, I did not make it all the way through the book.  The review might explain why.

http://arielrubinstein.tau.ac.il/papers/freak.pdf

The White House Iraq Group and the Whig Interpretation of History

I doubt that anybody noticed, but I had to remove myself from the blogosphere temporarily in order to finish my new book, which is now entitled, The Confiscation of American Prosperity: From Right-Wing Extremism and Economic Ideology to the Next Great Depression. I almost like the title, except it would not have included ” and Economic Ideology.” Palgrave is supposed to have on the bookshelves in October.

White House Iraq Group (WHIG) were, as is well known, high-level government officials who concocted the inappropriately termed “intelligence” that created public support for the Iraq invasion. I found the term, Whig, intriguing. The Whig interpretation of history is the distortion of history to celebrate the present. Bush’s WHIGs went further, cheering us on to a nonexistent future.

Wikipedia tells us: Whig history is a pejorative name given to a view of history that interprets history as a story of teleological progress toward the present.

Butterfield, Herbert. 1931. The Whig Interpretation of History (London: George Bell & Sons).

4: The Whig interpretation of history is “the tendency in many historians to … praise revolutions provided they have been successful, to emphasize certain principles of progress in the past and to produce a story which is a ratification if not a glorification of the present.”

George Gilder Saves Social Security — Supply-Side Economics Redux

I am always amazed how market fundamentalists are able to use any problem — real or imagined — as an excuse to carry out their desired polices, even if they will make the problem worse.

“Lower tax rates will yield the additional revenues and borrowing power we need to sustain social programs for the aged for decades to come. As a pay-as-you-go transfer scheme, Social Security is currently working fine. But we have to stop driving aged workers out of employment through implicit Social Security taxes on their incomes. As a key first step, we need to reduce the payroll tax by at least a third — at least to the degree we are pretending to build up “reserves” for the future. Lower payroll taxes will mean more jobs and income for Americans of all ages, and build up the real capabilities as opposed to the mere accounting balances of the U.S. economy. Ideally, as part of a flat tax program, we should eliminate the payroll tax altogether.”

Gilder, George. 2007. “Economics Is Not For Actuaries.”Wall Street Journal (2 January): p. A 23.

Ramblings about Economic Development

G. Pascal Zachary published an interesting article in the New York Times. I’ve always found his work very interesting, whether he was publishing in small leftist publications or in the Wall Street Journal or his fascinating book Vannevar Bush.

January 14, 2007

Out of Africa: Cotton and Cash

http://www.nytimes.com/2007/01/14/business/yourmoney/14duna.html?ref=business

Here he is telling the story of rising cotton prices in Africa, where Dunavant Enterprises is just paying African farmers in cash and allowing them to engage in petty capitalist enterprises or send their children to school.

Another article, published in the San Francisco Chronicle tells the story of tortilla prices rising because corn is being diverted to ethanol.

Mexicans Cope With Rising Tortilla Price

PETER ORSI, Associated Press Writer

Saturday, January 13, 2007

http://sfgate.com/cgi-bin/article.cgi?file=/n/a/2007/01/13/financial/f185223S78.DTL

Here, the tone of the story is very different, emphasizing the hardship for poor people who depend upon tortillas. The story is unclear about the extent to which rising corn prices are because of market manipulation by processors or whether farmers are enjoying higher corn prices.

The juxtaposition of these two articles is interesting because it suggests how difficult it is to expect welfare improvements from market price adjustments, except when powerful forces are manipulating prices to their advantage.

In general, rising prices for raw material producers, excluding food which makes up so much of the budget of the poor, tends to favor less advantaged societies. At the same time, the “curse of oil” when too much income flows into a less-than-democratic society, many negative consequences occur. Venezuela seems to offer a model in which a nation can channel much of its windfall into productive public activities.

In short, generalizing about economic development is a treacherous affair.

The Futility of Game Theory: A Murder Mystery

An economics professor at the University of Pennsylvania is charged with brutally murdering his wife. The University only says that somebody else will teach his course. I have no idea whether he is guilty or not, but the press reports seem to have convicted him.

I found the story interesting for 2 reasons. First, the Times reports: “Robb was an expert in game theory, a complex melding of psychology, human behavior and economics — all aimed at determining what one’s adversary will do next. With that background, police say, Robb may have thought he could outsmart them.” Although the police claim that his efforts to outwit them were amateurish.

How could anyone expect a game theorist to have any expertise in the game of murder?

Second, in light of the strong punishment for Ward Churchill’s evil misdeeds, the university gives this man the benefit of the doubt, just saying that someone else will teach the class.

I wonder how much outrage there would have been if he had been an outspoken leftist.

http://www.nytimes.com/aponline/us/AP-Professors-Wife-Slain.html?_r=1&oref=slogin

The Wall Street Journal on Global Warming

 

Global Warming Does Not Exist, according to much of the Wall Street Journal. Just as its Personal section used to report on declining real estate prices, now its Pursuits section tells gardeners how to adapt to global warming. So now you know.

Climate-Change Gardening

Shifting weather alters the equation for spring planting; ‘pushing the zone’

By BART ZIEGLER

January 6, 2007; Page P7

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