Quote of the Day
Scitum est inter caecos luscum regnare posse.(It is well known, that among the blind the one-eyed man is king.)
Gerard Didier Erasmus
Pro-Liberty Thought of the Day
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| Via Independent Institute |
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| Via LFC |
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| Via LFD |
Image of the Day
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| via Eddie DaDog on FB |
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| Courtesy of Natalie Fawn Danelishen via LFC |
Stan Veuger of US News & World Report points out an overlooked issue in Piketty's polemical analysis of the Forbes' list of the wealthiest people. Familiar readers know my usual response to comparing snapshots of income summaries--they usually are not longitudinal in nature (I think Mark Perry has published multiple posts on this topic, e.g., here). In other words, you miss dynamics of mobility over time. For example, I know at one time Ted Turner was worth about $10B on paper; several years later, his net worth collapsed by over two-thirds. This is particularly salient because Piketty espouses a patriarchal theory of capitalism. Veuger looks at the top 10 in Forbes in 1987 and how they are today. Adjusted for inflation, they collectively have increased their net worth only by about 0.5%--not the 7% Piketty suggests: and if you take outlying WalMart out of the mix, the rest of the group lost about half their cumulative wealth.
I'll probably add the Marginal Revolution blog, with major contributors Tyler Cowen (whom I've featured in embedded videos from LearnLiberty) and Alex Tabarrok, to my blogroll in the near future. Tabarrok looks at an asset pricing problem (which, to a certain extent was covered in one of Holcombe's post--recall Piketty's example of rents on a French apartment--he argues that rents will inevitably rise to accommodate a certain return on the apartment's value. Holcombe implies effectively the initial purchase price is irrelevant and a better estimate reflects the market price reflecting apartment rents: in other words, it's not a case of rents rising to meet some return on investment, but the market price correcting to meet the NPV of expected rents. Tabarrok points out that if we look at rent divided by say, interest, the price increases as interest rate decreases. So, for $100 in income, we are willing to pay $1000 if the interest rate is 10%, $2000 if the interest is 5%. Notice that we need 2 income-producing assets producing $100/month if the interest rate is 10% to have the same market priced of assets at half the interest rate. Tabarrok notes that Piketty ignores this salient nuance. Importantly, 4 French economists have demonstrated that Piketty's findings of an increase in capital stock are distorted by the anomaly of the housing bubble, and if you adjust for the disparity of rents from asset prices, capital in the US and France hasn't increased at all.
Cowen considers the asset pricing problem one of the key issue; he is less impressed with the Financial Times spreadsheet issues I discussed yesterday, he is also interested in pointing out nineteenth century data are consistent with rising inflation-adjusted wages and declining consumption inequality. He also discusses a couple of other serious criticisms of Piketty's work: if you adjust for distribution of Europe's population, Piketty's thesis of growing inequality is not confirmed; he also argues that Piketty's focus on inheritance is not supported by the data.
As an aside, the Ryan Avent commentary on the spreadsheet issues cited above has an interesting side discussion of the Reinhart-Rogoff kerfuffle I also discussed in yesterday's post:
In that way, and in many others, this does look quite a lot like the Reinhart-Rogoff contretemps, to which Mr Giles draws a parallel. The errors identified in their spreadsheet turned out to be far more embarrassing to the authors than a threat to their work. The attack on the Reinhart-Rogoff analysis showed that the authors had made a mistake in the figures that led them to identify a "discontinuity" in growth rates when public debt reaches a 90% of GDP threshold. But the analysis by economists at the University of Massachusetts, Amherst actually reinforced the finding that growth rates tended to be slower when debt levels were higher. The UMass work did nothing to undermine the broad dataset that rested beneath the 90% work (and beneath their book, and many other pieces of research). Subsequent analyses have turned up a discontinuity at various thresholds (though other papers have not).Facebook Corner
(National Review). The VA scandal is a reminder that government-run single-payer health care does not work
The point of massive bureaucracies is so valid. VA, FEMA, HSS, the list will go on. Yet, I know the benefits of ACA. The number of uninsured has gone done quite a lot. the ACA , blueprinted from Mass. and Heritage Foundation, did not go single payer route which was cheered on by the liberal\progressive wing. It is keeping the private sector in the loop (insurance companies). The downside, too many top down regulations as to how / when / who on policies. Medical Profession acceptance (see Medicare\Medicaid).
Wrong. The Heritage Foundation never advocated the idea of bundled health services which is not true insurance or risk-sharing. Keep in mind Taxachusetts implemented guaranteed issue and community rating long before RomneyCare, never mind gold-plated benefit mandates that had families paying far more than, say, those in Utah. What Heritage did was propose the concept of catastrophic coverage as an alternative to single-payer or the current fascist model where nominally insurance remains in the private sector but the government controls it. Effectively the insurance industry serves as Statists' useful idiots and whipping boys at public discontent over hiked premiums.
(IPI). Illinois Sen. Ira Silverstein wants to ban Illinois drivers from using Google Glass, even before complaints about drivers using it have become an issue. Silverstein has been pushing a Google Glass ban for some time, even before it became available for the general public to buy, and last week representatives from Google went to the General Assembly to demonstrate how Glass works.
Never underestimate the Nanny State
(Reason). Whatever you may think of Keynesian economics, you have to give it credit for one thing: its staying power.
Self-serving political whores always love a philosophy that morally justifies their propensity to overspend.
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| Via LFC |
I agree with your sentiment, but replace the word "democracy" with "liberty". Democracy is acrimonious to liberty. Democracy is mob rule; it means 51% get to dominate and control the 49%. Democracy is a terrible idea.
I wasn't referring to "vulgar" democracy or the modern form of republican democracy. Capitalism has done to raise people out of poverty than politicians and religions put together; it increases the people's standard of living, and it brings a variety of goods and services to all even the most wealthy just decades ago could barely imagine, never mind procure, like a smartphone.
(National Review). Rep. Adam Kinzinger says the two-year backlog at the VA was a sign of incompetent bureaucracy, but that the fake waiting list showed "criminal negligence.” Read NR’s coverage of the Sunday talk shows: natl.re/1nIOUcW
No, the case of hidden waiting lists is a de facto form of rationing, which is an artifact of a single-payer system (and a predictable one at that). The problem with the healthcare system is domination by government, which is too rigid to deal with the dynamism and complexity of the markets. What we should be hearing is a call to privatize the system and rollback government programs, regulations and tax policies which have served to consolidate competition and exacerbate sector inflation.
Do I believe that what happened in Arizona was a matter of negligence and incompetent management and there should be accountability? Of course. The free market operates to serve the consumer, and feedback is a way of correcting course or gaining market share. Consumers would not willingly choose a provider given bad reviews from existing customers. There's no way this would have happened given, say, an ombudsman that vets or their families could come to and/or if the agency was independently sampling current/former patients about quality, timeliness, professionalism, etc., of current providers
(Independent Institute). Senior Fellow William Shughart: " No one hates the U.S. shale revolution more than Russian President Vladimir Putin. Surging U.S. oil and gas production is a nightmare he can’t escape. Already, U.S. gas production and the promise of U.S. liquefied natural gas exports have Russia’s European customers demanding cheaper prices for gas, and the Russians are reluctantly agreeing.."
Man, this guy drinking the kool aid or what!? Russia, and the Soviet Union before it, were very reliable suppliers of gas to Europe. Even at the height of the cold war. Second, it is Ukraine not paying it's bills and siphoning (to put it polity) Gas intended for paying customers. That is why the North stream pipeline direct to Germany was built and now the South stream is being built as well. To by pass your newest fascist pets in the Ukraine. Next, shipped gas from the US is no way even close to being cheaper. Did this guy do research or simply a stooge!? Lastly, Russia and China just signed a massive gas trade agreement that will develop the Siberian regions and enable investment in high technologies, meaning diversification, and with Russia's mineral wealth, oh by golly! Also, all the benefits of fracking in the US like polluted water and god knows what else. Lastly, the gas supplies from the fracking are not really panning out to be very productive. Quite a few wells are a failure, but, the area has been polluted. So Mr. Shughart, you need to actually do some journalism instead of just being a mouthpiece.
Hypocritical talk of a country led by corrupt, lawless politicians whom have failed to diversify their country's economy from overreliance on commodities which ultimately rely on international economic growth. Everyone knows that the referenced negotiation with China broke down several times over price, and in part that had to do with global supply/demand referencing new export supplies from the US. Someone from Russia parrotting US environmentalist crackpots on fracking, when Russia has some of the worst air and water pollution on the planet? Russia is ugily extorting Ukraine and has periodically threatened cutoffs to Europe to gain concessions; the fact is, supply from the US is undermining Russia's pricing power to Europe.
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| Via LFC |
Capitalism is the best fit for a healthy economy. America started as a free market capitalist nation, we exponentially warped into a mixed market capitalist society that ignorantly moves towards socialism.
It's this countries' overwhelming ignorance that will be the downfall. Americans today are too consumed with their own self worth to bother with the future of our nation.
Sad sad truth...
"America started as a free market capitalist nation"--I don't think so. Alexander Hamilton from the first Washington Administration wanted to use tariffs and dutieson imported goods to go beyond funding the government to protect the US fledging manufacturing sector. Hamilton's ideas were inherited by Clay's American System based on central planning through tariffs, a central bank, and infrastructure: the Whigs and then the GOP developed similar themes. The Democrats saw protectionist policies as favoring the Northeast at their expense and a threat to their exports (e.g., cotton)--not to mention that high tariffs contracted the import tax base. I'm not necessarily arguing that nationalist policies carried the day, but to argue that we were free market ignores much of our history--plus pre-Constitution protectionist taxes on interstate commerce ("In the 1783–89 period, each state set up its own trade rules, often imposing tariffs or restrictions on neighboring states").
(Bastiat Institute). Is Murray Rothbard the most influential Austrian Economist ever? http://liberty.me/authors/murray-n-rothbard/
No. It's hard to overestimate Mises' impact, particularly his devastating early 1920's critique of socialism. I consider Rothbard to be a superb historian and certainly the most influential American in the tradition, and obviously Hayek's Nobel Prize speaks for itself--certainly the most accessible of the three. I do wish Hayek had done more to undermine Keynes' masterwork.
Proposals With a Twist
I really love this one and the backing song... I think I may be the only person on the planet never to have heard the song before, because Youtube shows 174M plays for Christina Perri...
Now I never thought about a flash mob on a flight... Very creative...
OK, I like the serenade aspect of the same old same old Bruno Mars tune, but does anyone else have the itch to give this dude a buzz cut?
Political Cartoon
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| Courtesy of Gary Varvel via Townhall |
Olivia Newton John, "Don't Stop Believin'"
