Category Archives: Uncategorized

Ludwig Lachmann – Capital and Its Structure

Ludwig Lachmann – Capital and Its Structure

Published in 1956, this book is a useful antidote to the Samuelsonian blackboard economics that were beginning to dominate the profession in Lachmann’s day and still do in ours. Capital is not some featureless black box that can be plugged into an equation; it is a multi-faceted, ever-changing part of the economic process that is subject to whatever an entrepreneur thinks the best use might be for a given resource at a given time. Sometimes they guess right, and sometimes they guess wrong.

Lachmann’s theory of capital doesn’t fit so well on the classroom blackboard, but it does fit human behavior. I leave it to the reader to decide which is more important.

Cold Snaps and Modernity

The Midwest is in a bit of a cold snap right now. It was -24 degrees Fahrenheit earlier this morning here in the Chicago area. That’s 56 degrees below freezing, or as far below freezing as an 88 degree day is above it. This is excluding wind chill.

My house’s heating system is proving capable of maintaining a roughly 90-degree temperature difference against the outdoors. This is par for the course these days, even for people who aren’t that well off. As someone who works from home, this means I am able to be perfectly productive with little more than a sweater and a sleeping cat nearby for added warmth. Moreover, this productivity involves interacting in real time with colleagues who are hundreds of miles away using little more than a computer, a phone, and a small amount of electricity.

Of course, today’s weather does make commuting difficult, and in many cases impossible. So the schools around here are closed, and many workers have the day off. This will make them about as comfortable as I am in most cases, though hopefully rather less busy.

It’s worth taking a minute to imagine just how different this picture would be for a similar cold snap just a century ago. We are able to cozy up over hot chocolate, but not too long ago, we would have had legitimate worries about just surviving the next few days. This cold snap is a good opportunity to reflect on how good people have it today compared to any previous era in history, and why. Since things could also be a lot better, it is worth reflecting on what could make things even better for future generations.

Lawrence Krauss – The Greatest Story Ever Told–So Far: Why Are We Here?

Lawrence Krauss – The Greatest Story Ever Told–So Far: Why Are We Here?

Strong on science, weak on philosophy. Krauss correctly observes that science can answer all manner of how questions, but not the why questions. But he misses a golden opportunity to explain in depth that this is okay.

People, especially those given to strong religious or political beliefs, should admit when they don’t know certain things, instead of making answers up. Such assertions signal confidence and boost self-esteem, but stifle discovery and progress.

In a book of more than 300 pages, Krauss spends just the occasional paragraph or two addressing the question he thought important enough to ask in the title of his book. Instead, readers get a tour of the discoveries and personalities in modern physics from roughly Maxwell and Faraday to the present.

As a survey of modern physics leading up to the discovery of the Higgs boson, it’s pretty good. But this book could easily have been much more.

Frank H. Knight – The Economic Organization

Frank H. Knight – The Economic Organization

A short introduction to the economic way of thinking, published in 1933 by the legendary University of Chicago professor. Despite its brevity, it contains deep insights on monopoly and competition, long- and short-term thinking, and the place of economics in a life well lived.

Reject the Reciprocal Trade Act

The National Taxpayers Union recently sent a coalition letter to members of Congress opposing the Reciprocal Trade Act. I am delighted to be a co-signer of the letter. You can read it here.

The bill was written by Trump trade adviser Peter Navarro’s office, and would expand the president’s power to enact tariffs without congressional input. Rep. Sean Duffy (R-WI) is the lead sponsor.

The Shutdown Is Over: How Does that Affect Regulation?

On January 25, President Trump signed legislation to end a 35-day partial federal shutdown. The deal only lasts for three weeks, so another shutdown could happen if Trump and Congress don’t reach a longer-term deal by then.

During the partial shutdown, the Federal Register slowed to a crawl. Published every weekday, an average day’s edition consists of about 270 pages and contains a dozen or so new final regulations, plus proposed regulations, agency notices, and presidential documents. Compare this with 18 final regulations and 436 pages published all year through January 28.

What will happen now? Very little, for the first few days of normalcy. There is typically a 2-3 day lag between the time an agency submits an item to the Federal Register and when it runs. When that period ends, there will likely be a temporary flood to make up for rules and notices that agencies originally intended to publish during the shutdown, but could not. That busy period will likely last just a week or two, then it should be normal activity levels from there.

The big lesson is that even a month-long shutdown will have little impact on how much regulating agencies do. Rules that were scuttled during the shutdown will come into effect just the same, except a little later or with less advance notice.

It is also possible that agencies will simply not bother to publish some overdue notices or other documents, which could be a transparency concern. Hopefully this kind of evasion will be minimal, but it will be impossible to quantify.

Of course, the shutdown drama might not be over yet. Both sides are dug in on the border wall debate, and they are not guaranteed to reach a deal in the next three weeks. If they don’t, the process will repeat, and the Federal Register will again go through a lull and a flood. But the net consequences will be virtually nil.

There are lessons to be learned from shutdown battles, such as the wisdom of leaving something as important as air traffic safety in government’s bumbling hands. But as far as federal rulemaking is concerned, there is little to get worked up about, regardless of one’s policy views.

This Week in Ridiculous Regulations

The partial shutdown ended on Friday, though only on a three-week deal. This likely will not show up in the Federal Register’s page and rule counts until mid- to late-week, given that it usually operates on a 2-3 day lag. Something else important happened last week: Venezuela’s dictatorship might be ending. It’s too early to cheer, but opposition leader Juan Guaidó, if his claim to legitimacy is successful, seems decidedly more liberal than the Chavez/Maduro regime. Time will tell.

Regulations that did appear during the week range from cockpit displays to crabbing vessels.

On to the data:

  • Last week, 4 new final regulations were published in the Federal Register, after 10 the previous week.
  • That’s the equivalent of a new regulation every 42 hours.
  • Federal agencies have issued 16 final regulations in 2019. At that pace, there will be 236 new final regulations. Last year’s total was 3,367 regulations.
  • Last week, 211 new pages were added to the Federal Register, after 85 pages the previous week.
  • The 2019 Federal Register totals 406 pages. It is on pace for 5,971 pages. The 2018 total was 68,082 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. No such rules have been published this year, with just one since last June 12. Six such rules were published in 2018.
  • The running compliance cost tally for 2019’s economically significant regulations is currently zero. The 2018 total ranges from $220.1 million to $2.54 billion, depending on discount rates and other assumptions.
  • Agencies have published no final rules meeting the broader definition of “significant” so far this year. 2018’s total was 108 significant final rules.
  • So far in 2019, 2 new rules affect small businesses; none of them are classified as significant. 2018’s totals were 660 rules affecting small businesses, 29 of them significant.

All of last week’s new final regulations:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

Jeffrey Kluger – Apollo 8: The Thrilling Story of the First Mission to the Moon

Jeffrey Kluger – Apollo 8: The Thrilling Story of the First Mission to the Moon

This one was hard to put down. An exciting account of the first time men flew to the moon and orbited around it. Less than a year later, Apollo 11 would actually land on the moon and Neil Armstrong would utter his famous words. But he couldn’t have done it without the Apollo 8 team paving the way through many difficulties, both physical and political.

NAFTA/USMCA Ratification Politics

A story in Canada’s The Globe and Mail quotes me on the NAFTA/USMCA trade deal negotiations between Congress and President Trump. The article is behind a paywall, but here’s my cameo:

There is also the possibility that the Democrats will use it as a bargaining chip to force the administration to agree to unrelated party priorities: The Democrats are pushing for more infrastructure spending, improved health care and immigration changes.

“USMCA has a great deal of symbolic value to the Trump administration. The President will lose face if he can’t get it passed,” said Ryan Young, a trade expert at the Competitive Enterprise Institute think tank. “That means House Democrats hold all the cards. They can refuse to pass USMCA out of spite, or they can offer to ratify USMCA in exchange for concessions.”

Ken Kesey – One Flew Over the Cuckoo’s Nest

Ken Kesey – One Flew Over the Cuckoo’s Nest

This novel likely played a role in the move away from institutionalization for mental health patients, and more humane treatment for those who genuinely needed it.

It is also a parable for the hierarchical, rules-for-rules’-sake approach to life versus a more free-spirited approach. Both are bad in excess, but the one personified by Nurse Ratched is inarguably worse.