Archive for May, 2008

$4 in June, $5 in July, . . . . (May 26, 2008)

Posted in Economics, Taxation on May 26, 2008 by

$4 a gallon in June, $5 in July, $6 in August . . . . or October?  Speculators and hoarders may be distorting the market somewhat.  The real problem, of course, is one of supply and demand, too little of the former and too much of the latter.  Our global addiction is growing along with the number of new addicts.  Citizens of the world are voting daily in the world’s global voting booths – the maternity wards of the planet.  Those little mouths will consume their daily supply of unrefined bread and refined oil.  They say that if the rest of the world consumes like a typical American (which they are and will), we will need to colonize three more planets.  However, the last census concluded that there is only one planet.  For over a third of a century, since at least 1973, the world has been on notice that oil is finite.  Little has been done to reduce the luster of and lust for oil.  Seems like the time to act?

Bumper stickers of the week:

Pass the Terrorist Tax

Check those tires

Less Government Regulation Series: Love and Marriage (May 19, 2008)

Posted in Gay Politics, Government Regulation, Less Government Regulation Series, Miscegenation on May 19, 2008 by

Some day, being gay will be akin to being left handed.  No big deal.  Some opine that  there are differences between those who are right handed and those who are left handed yet not enough to start passing legislation mandating disparate treatment.

The California Supreme Court ruled on equal protection grounds that gays in California can marry.  The decision to marry is an individual choice.  The collective (judicial, legislative, executive, bureaucracy) should not define it.

“This is hard to say as a guy, but you aren’t real judgmental.  I think I’m, like, 15 percent gay.”  “I am satisfied that I just don’t have any such impulses, yet I understand that Nature wires some members differently.  . . .   By the way, how does that work?”  . . . . . . . . . . .

The science jocks say that sexual orientation is spread along a continuum.  A small percentage of the population is strictly heterosexual.  Are most members of the population dealing with demons and fears and anxieties that distort their perspective and politics?  Will the constituency for freedom of marriage include those who have no impulses at all toward those of the same sex, those who do, and a few stray free-thinking civil libertarians?

In another generation, however, no one will care.  The current restrictions will be as anachronistic as yesterday’s miscegenation laws.

Bumper sticker of the week:

There oughta not be a law.

Economics and Economists (May 12, 2008)

Posted in Economics on May 12, 2008 by

In the contemporary College of Arts and Crafts, the “Department of Economics” is the “Oakland Raiders” team.  Most departments in America’s Colleges of Arts and Sciences want you to feel good.  Economics should require one to think clearly.  Even if you feel badly.  Any question should be fair game.

The discipline today is premised on questionable assumptions that cannot be abandoned by the profession or most doctrine would need to be rejected.  Or at least questioned.  A person is greedy and self interested and all that, but that does not mean that she (or he) is even capable of acting in her (or his) own economic self interest.  If individuals cannot or do not act in their own economic self interests, markets are not likely to behave properly or to reach equilibrium.

The area of economics known as “behavioral economics” ask how a person actually behaves.  That should be the province of economics.  How and why do people act or fail to act.

What could be more fun than playing with Lagrange multipliers and toying with the Slutsky equation and endeavoring to move others to a state of Pareto optimality?  Economics is sexy.  And economists?

Bumper sticker of the week:

An economist is someone who stands behind you in the bread line and tells you how it happened.

The Economic Numbers Game (May 5, 2008)

Posted in Economics, Inflation, Unemployment on May 5, 2008 by

“The truth, though it would not exactly set Americans free, would at least open a window to wider economic and political understanding.  Readers should ask themselves how much angrier the electorate might be if the media, over the past five years, had been citing 8 percent unemployment (instead of 5 percent), 5 percent inflation (instead of 2 percent), and average annual growth in the 1 percent range (instead of the 3 – 4 percent range).

. . .

The real numbers, to most economically minded Americans, would be a face full of cold water.  Based on the criteria in place a quarter century ago, today’s U.S. unemployment rate is somewhere between 9 percent and 12 percent; the inflation rate is as high as 7 or even 10 percent; economic growth since the recession of 2001 has been mediocre, despite a huge surge in the wealth and incomes of the superrich, and we are falling back into recession.

If what we have been sold in recent years has been delusional “Pollyanna Creep,” what we really need today is a picture of our economy ex-distortion.  For what it would reveal is a nation in deep difficulty not just domestically but globally.”

Kevin Phillips

The CPI (Consumer Price Index), the benchmark for measuring inflation, underreports the actual prices for necessities such as food and energy.  [See the e-ssay dated July 16, 2007 entitled “Back Door Inflation.”]  The current CPI is “inflation sans inflation.”  The U-3 unemployment figures underreport unemployment, whereas the U-6 figures are more accurate.  The reporters should report the U-6 figures.

Perhaps the government should simply state and the media could mindlessly repeat that there is no inflation and are no unemployed citizens while the economy is growing ten percent every year.  How much less true would these statements be than the current statistics?

“Transparency” is the rage in many disciplines today.  Presenting accurate information and revising all the past information to conform to consistent and reliable benchmarks across time is a positive and long overdue start.

See by John Williams and navigate from there.

Bumper stickers of the week:

73 percent of all statistics are made up on the fly.

Lies, Damn Lies, and Government Statistics.

Disraeli was 100 percent right.

U-6 Not U-3 Unemployment Figures.

[Mildred Loving, one of the plaintiffs who challenged the miscegenation law in Virginia, died today.  See the e-ssay dated March 14, 2005 entitled “’Strict Construction’ Strictly Construed.”]