Hayek and Macroeconomics

Posted on December 6, 2011 | Comments Off on Hayek and Macroeconomics

There’s a brewing debate in the economics blogosphere about whether Hayek was a macroeconomist. Was he or wasn’t he? Did his contributions matter?

For the uninitiated, macroeconomics is large-scale in focus. It looks at the big-picture economy. GDP, recessions, depressions, that kind of thing. Contrast that with microeconomics, which studies how individuals and individual firms behave. I like how Russ Roberts closes his contribution to the debate:

Was Hayek an important macroeconomist? I would argue that the macroeconomic skepticism of the later Hayek is more valuable than the macroeconomic theorizing of the early Hayek. But he wasn’t an important macroeconomist in the mainstream sense of the title. So what? That’s a badge of honor. He was merely a great economist, without any prefix. He helps me see things I wouldn’t otherwise see. That’s all that really counts.

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Posted in Economics

Siri and Modernity’s Iron Laws

Posted on December 5, 2011 | Comments Off on Siri and Modernity’s Iron Laws

I’m fond of saying that the two iron laws of modernity are 1) things are getting better, and 2) people think they’re getting worse.

One more piece of evidence that these laws hold: this article complaining about Siri. Siri is a voice-activated program that comes with new iPhones. Users can ask their phone where, say, the nearest Thai restaurant is. Just say it out loud. No typing. In seconds, Siri gives out a dozen options, with maps, directions, and even menus.

It’s an amazing piece of technology, and it will only improve in the coming years. And this guy grouses that Siri “won’t tell me how much battery life is left, or turn my Wi-Fi antenna on or off.” What an astonishing mindset. It is disheartening that when faced with such cool innovations, people invariably find ways to complain about them.

On the other hand, if consumers weren’t such harsh sovereigns, many of today’s innovations might never happen in the first place. Modernity’s second iron law — people think things are getting worse — is a double-edged sword.

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Posted in Technology

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The Language of Politics

Posted on December 5, 2011 | Comments Off on The Language of Politics

Yahoo’s Chris Moody has a great piece about how politicians choose their words. Hint: polls are involved.

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Posted in Elections, Political Animals

What Free Market?

Posted on December 5, 2011 | Comments Off on What Free Market?

Here’s a letter to The Wall Street Journal:

Editor, The Wall Street Journal:

Andy Stern’s December 1 op-ed, “China’s Superior Economic Model,” blames America’s free-market fundamentalism for its economic troubles.

If America is indeed a free-market fundamentalist nation, it sure has a funny way of showing it. Federal, state, and local governments combine to spend roughly 40 percent of GDP. Washington indirectly spends another 12 percent of GDP by forcing businesses and consumers to comply with $1.75 trillion worth of federal regulations.

In his eagerness to attack free markets, Mr. Stern has confused the mixed economy’s crony capitalism for the real thing.

Ryan Young
Competitive Enterprise Institute
Washington, D.C.

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Posted in Correspondence, Economics

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Crazy California Laws

Posted on December 2, 2011 | Comments Off on Crazy California Laws

This photo gallery put together by Sacramento’s CBS affiliate is hilarious. A bit of Friday fun.

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Posted in regulation

Missing the Bigger Story

Posted on December 2, 2011 | Comments Off on Missing the Bigger Story

Here’s a letter I recently sent to the Washington Post:

Editor, Washington Post:

Anita Kumar’s November 29 Virginia Politics blog post “McDonnell recommends eliminating agencies, boards, commissions” incompletely details Virginia Gov. Bob McDonnell’s “ongoing effort to reshape and shrink state government.” By deregulating three professions, eliminating two state agencies, and merging 19 others, $2 million could be trimmed from the commonwealth’s budget if the legislature approves the proposal.

She does not mention that Virginia’s budget is set to increase by $1.1 billion in 2012. This new spending outweighs the proposed cuts by a factor of 550. Gov. McDonnell may be modestly reshaping government, but he certainly isn’t shrinking it.

Ryan Young, Washington
The writer is a fellow at the Competitive Enterprise Institute.

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Posted in Correspondence, Economics, Spending

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CEI Podcast for December 1, 2011: The More Numerous the Laws…

Posted on December 1, 2011 | Comments Off on CEI Podcast for December 1, 2011: The More Numerous the Laws…

Have a listen here.

The Roman historian Tacitus wrote that “Laws were most numerous when the state was most corrupt.” Today, the U.S. Code is over 47,000 pages long. The Code of Federal Regulations runs over 165,000 pages. Matt Patterson, CEI’s 2011-12 Warren Brookes Fellow, applies Tacitus’ insight to U.S. politics and discusses what it will take for substantive reforms to become politically possible.

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Posted in CEI Podcast, regulation

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Deregulation Watch: Horsemeat

Posted on November 30, 2011 | Comments Off on Deregulation Watch: Horsemeat

Unintended consequences are everywhere in the world of regulation. Some rules actually have the exact opposite of their intended effect. This happened after Congress passed a bill in 2006 banning horses from being slaughtered for human consumption. The goal was to improve the well-being of horses. But the rule actually made them worse off.

Some older horses unable to do farm work that would have been slaughtered were instead mistreated, neglected, or abandoned. Last year, about 138,000 horses were taken to slaughterhouses in Canada and Mexico, defeating the very purpose of the ban.

Recognizing its failure, the ban was lifted earlier this month. Congress and President Obama did the right thing. Now at least one slaughterhouse is expected to open in the next few months. That should create a few jobs at a time when a lot of people could really use one. Most of the meat will be exported to Europe and Asia, since horsemeat doesn’t appeal to American tastebuds.

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Posted in regulation

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Well Played

Posted on November 29, 2011 | Comments Off on Well Played

An (inentionally?) humorous lede in the Seattle Post-Intelligencer:

The Internal Revenue Service office in Seattle is investigating an infestation of possible blood-sucking parasites — bedbugs — in its downtown office, after an employee complained of insect bites at work, federal officials said Monday.

Note the need to clarify that the parasites in questions don’t work for the IRS. I don’t think OSHA is in on the joke, though:
“It is alleged (that) management has known of the presence of these parasites for several weeks and has taken no action to remedy the situation,” OSHA said in a letter to the IRS dated Nov. 18.
My suggestion for getting rid of the parasites: simplify the 70,000-page tax code.

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Posted in Economics, Taxation

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Let Me Be Clear

Posted on November 29, 2011 | Comments Off on Let Me Be Clear

Here’s a letter I sent to Politico:

Editor, Politico:

Jonathan Allen’s November 28 article, “Mandatory budget cuts after supercommittee failure will trigger pain for some,” is misleading. A cut is when spending goes down. Federal spending will go up every year for at least the next ten years, even with the supercommittee’s failure to reach a bipartisan agreement.

According to the Congressional Budget Office, defense spending is projected to increase by 18 percent between 2013 and 2021. Discretionary spending is set to increase by 12 percent over the same period. These increases are lower than previous projections. But they are still increases. And an increase is not a cut. Not even in Washington.

Ryan Young

See also the chart below that the Mercatus Center’s Veronique De Rugy put together using CBO data. I can’t put it more plainly: there are no supercommittee-related budget cuts. Stop saying that there are.

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Posted in Correspondence, Economics, Spending

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