Browsing articles in "Articles"
Aug 19, 2017
boyce
Comments Off on Fake infrastructure

Fake infrastructure

Econ4’s Jerry Epstein writes on Trump’s infrastructure “plan”:

Infrastructure investment: it’s that economic policy sweet spot that everyone loves to love.

Fixing bridges, building roads, modernizing airports, improving mass transportation, keeping lead out of our water: nearly everyone can relate to the need for it and can imagine how much better their lives would be with more of it.

Read his post here.

Jul 24, 2017
boyce
Comments Off on Astrological economics

Astrological economics

Mathematics can help to clarify ideas, but it can also put a scientific veneer on a load of bunk. A philosophy professor looks at the emperor’s clothes:

The success of math-heavy disciplines such as physics and chemistry has granted mathematical formulas with decisive authoritative force. Lord Kelvin, the 19th-century mathematical physicist, expressed this quantitative obsession:

When you can measure what you are speaking about and express it in numbers you know something about it; but when you cannot measure it… in numbers, your knowledge is of a meagre and unsatisfactory kind.

The trouble with Kelvin’s statement is that measurement and mathematics do not guarantee the status of science – they guarantee only the semblance of science. When the presumptions or conclusions of a scientific theory are absurd or simply false, the theory ought to be questioned and, eventually, rejected. The discipline of economics, however, is presently so blinkered by the talismanic authority of mathematics that theories go overvalued and unchecked.

Read the piece here.

Jul 23, 2017
boyce
Comments Off on Moral equality – and immoral inequality

Moral equality – and immoral inequality

From Robert Reich’s review of two new books about the perils of concentrated wealth & power:

The greatest threat to Western liberal democracies in the future is more likely to come from extreme inequality than from Islamic extremism. This is because inequality erodes two foundation stones of modern society — openness to new ideas and opportunities, and a conviction that all citizens are morally equal.

Read more here.

Jul 4, 2017
boyce
Comments Off on Trumped

Trumped

Bernie Sanders offers an analysis of why Trump came to be president, and where we go from here:

I’m often asked by the media and others: How did it come about that Donald Trump, the most unpopular presidential candidate in the modern history of our country, won the election? And my answer is—and my answer is that Trump didn’t win the election; the Democratic Party lost the election.

Read his speech here.

Jul 3, 2017
boyce
Comments Off on This changes not much: performance of moral virtue as politics

This changes not much: performance of moral virtue as politics

Naomi Klein’s book This Changes Everything has attracted many admirers on the left. A thought-provoking exception is economist Peter Dorman, who writes:

[R]edefining politics as the performance of moral virtue rather than the contest for power can provide consolation when political avenues appear to be blocked. Activities of this sort are evaluated according to how expressive they are—how good they make us feel—rather than any objective criterion of effectiveness in achieving concrete goals or altering the balance of political forces.

Read his critique of the book here.

May 9, 2017
boyce
Comments Off on “The tapeworm of American economic competitiveness”

“The tapeworm of American economic competitiveness”

Today’s quiz:

  1. What rose from 5% of U.S. GDP in 1960 to 17% today?
  2. What fell from 4% of U.S. GDP in 1960 to 2% today?

Answers:

  1. Health care costs.
  2. Corporate taxes.

Extra credit question: Which one’s a drag on the competitiveness of the U.S. economy?

Here’s Warren Buffett’s answer:

“Medical costs are the tapeworm of American economic competitiveness,” Mr. Buffett said, using a metaphor he has employed in the past to describe the insidious and parasitic costs of our health care system….

Mr. Buffett is a Democrat, but his business partner, Charles T. Munger, is a Republican — and a rare one who has advocated a single-payer health care system. Under his plan, which Mr. Buffett agrees with, the United States would enact a sort of universal type of coverage for all citizens — perhaps along the lines of the Medicaid system — with an opt-out provision that would allow the wealthy to still get concierge medicine.

Read more here.

Apr 29, 2017
boyce
Comments Off on Thinking about groupthink

Thinking about groupthink

Conventional economics has long oversold individual rationality as the basis for how the economy works. Here’s one of the ways:

Humans rarely think for themselves. Rather, we think in groups…. Most of our views are shaped by communal groupthink rather than individual rationality, and we cling to these views because of group loyalty.

This poses a conundrum worth thinking about – individually and together:

Bombarding people with facts and exposing their individual ignorance is likely to backfire. Most people don’t like too many facts, and they certainly don’t like to feel stupid. If you think that you can convince Donald Trump of the truth of global warming by presenting him with the relevant facts — think again.

See this review of The Knowledge Illusion: Why We Never Think Alone.

Mar 28, 2017
boyce
Comments Off on Arms race – children’s version 1.0

Arms race – children’s version 1.0

More than three decades ago, the classic American television show “Mister Rogers” explained the “logic” of arms races – and their social cost – to children. The tapes, lost for years, just resurfaced:

Last week, someone mysteriously uploaded a series of lost episodes of Mr. Rogers’ Neighborhood to YouTube. The episodes, called the “conflict series,” originally aired on PBS at the height of Cold War tensions in 1983 and sought to teach children about the dangers of stockpiling weapons.

Sound timely?

Read more here. (The “Neighborhood of Make-Believe” clip begins at the 15:25 mark in the YouTube video embedded in the story.)

Check it out, kids.

Mar 19, 2017
boyce
Comments Off on The economics hammer

The economics hammer

How narrow-gauge economics leads to narrow-gauge policies:

Walk half a city block in downtown Washington, and there is a good chance that you will pass an economist. People with advanced training in the field shape policy on subjects as varied as how health care is provided, broadcast licenses auctioned or air pollution regulated….

They say when all you have is a hammer, every problem looks like a nail. And the risk is that when every policy adviser is an economist, every problem looks like inadequate per-capita gross domestic product.

Read more here.

Mar 11, 2017
boyce
Comments Off on Crazy subsidies

Crazy subsidies

In a stunning display of how political clout trumps (excuse me) common sense, nations of the world spend trillions every year subsidizing fossil fuels. It’s like paying people to drink poison. Check out one of the latest estimates:

A fossil fuel subsidy is any government policy that lowers the cost of fossil fuel production, raises prices received by producers, or lowers prices paid by consumers: they can consist of tax breaks and direct funding for fossil fuel companies. But subsidies can also consist of loans, price controls, or giveaways in the form of land or water at below market-rates, and many other actions.

They have been so high across the world, finds Dr. Radek Stefanski—an economist at the University of St. Andrews in Scotland— that they are nearly four and a half times higher than previously believed.

So what’s the damage? It’s pretty colossal. For the last year in his model, 2010, Stefanski found that the total global direct and indirect financial costs of all fossil fuel subsidies was $1.82 trillion, or 3.8 percent of global GDP. He also found that the subsidies meant much higher carbon emissions released into our atmosphere.

Remarkably, the International Monetary Fund puts the price tag even higher:

In 2015, the International Monetary Fund (IMF) calculated that global fossil fuel subsidies amounted to a monumental $5.3 trillion, which is 6.5% of global GDP—up from $4.9 trillion in 2013. The IMF even had to revise its old figure for 2011, which originally estimated the global subsidies at 2 trillion dollars. The real figure for 2011, the fund concluded, was $4.2 trillion.

Read more here.

 

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