What a joke. I say it because I took multiple practice tests and at one point I earned a 790 (math), and at another I missed half of the test (don't know the score equivalent). On the real deal, I earned a 750 (math) and a 590 (verbal). But I could just as easily have earned lower on both (or higher), considering that I was nervous as hell and hated the whole process.
It's funny how graduate schools have you take a test that doesn't reflect anything you've learned during your undergrad years. I understand that it's one measure of many that admissions folks look at, but sheesh. I hated the whole thing.
Totally didn't study for the verbal, with the exception of vocabulary flashcards. I figured, "I know english, and I know big words, so I will do well!" Wrong. But I also knew that GMU and NYU econ programs don't look too much at the verbal.
I wonder if you can retake the GRE piecewise? That'd be great, but I doubt it. It's meant to be an enduring (3 hour) process for a reason, I suppose.
All in all, a valuable lesson learned in what is my first step into the inanity that is graduate school.
Wednesday, September 30, 2009
Wednesday, September 23, 2009
My Thesis
AP -- With [increased] demand, [bullet] prices have also risen.
"Used to be gold, but now lead is the most expensive metal," said Donald Richards, 37, who was stocking up at the Jefferson store.
Actually, no, not at all. But I did discover something interesting:
"Used to be gold, but now lead is the most expensive metal," said Donald Richards, 37, who was stocking up at the Jefferson store.
Actually, no, not at all. But I did discover something interesting:
It takes lead to make bullets, for sure, and the price of lead did increase right around the presidential debates, where McCain was at his prime idiocy. No, really, what a mooncalf. I suppose I could compare lead's price activity relative to all other industrial commodities' prices around that time, maybe I'd be on to something!
But seriously, we do see a jump in Oct. '08 and Jan. '09. I wonder how much of the lead market firearms and ammunition take up.
Something's not right.
AP -- Bullet-makers are working around the clock, seven days a week, and still can't keep up with the nation's demand for ammunition.
Shooting ranges, gun dealers and bullet manufacturers say they have never seen such shortages. Bullets, especially for handguns, have been scarce for months because gun enthusiasts are stocking up on ammo, in part because they fear President Barack Obama and the Democratic-controlled Congress will pass antigun legislation...
Demand has been so heavy at some Walmarts, a limit was imposed on the amount of ammo customers can buy. The cutoff varies according to caliber and store location, but sometimes as little as one box — or 50 bullets — is allowed...
At Jefferson Gun Outlet and Range in Metairie just west of New Orleans, owner Mike Mayer is worried individuals are going to start buying by the case.
"If someone wants to shoot on the weekend you have to worry about having the ammunition for them. And I know some people aren't buying to use it at the range, they're taking it home and hoarding it." [Emphasis mine]
Interesting, I'm guessing the managers at a place like Wal-Mart aren't allowed to ad hoc raise prices during times of high demand. Kind of neat, in that smaller businesses are able to better provide in times of turbulent demand. But this is merely a conjecture. Although, it seems as though Wal-Mart of all places would be savvy enough with their merchandise to raise prices in a timely manner, as opposed to limiting purchases (and thus limiting their own profit potential). I wonder if the government is somehow involved in the bullet business? Wouldn't surprise me at all.
I added the last two lines simply to say "What the hell?" What business is it of Mike Mayer's to be concerned with what the hell people do with the products they purchase from him? He uses the word "hoarding" as a pejorative, like storing bullets for rainy days is stupid. If that's his stance, he needs to clear out his bank account, sell his investments, throw all the canned goods in his pantry away, and donate any clothes he hasn't worn in the past 3 days to the local Good Will. We can't go halfway when it comes to hoarding, sir.
Sheesh, Mr. Mayer sounds like a Keynesian!
Shooting ranges, gun dealers and bullet manufacturers say they have never seen such shortages. Bullets, especially for handguns, have been scarce for months because gun enthusiasts are stocking up on ammo, in part because they fear President Barack Obama and the Democratic-controlled Congress will pass antigun legislation...
Demand has been so heavy at some Walmarts, a limit was imposed on the amount of ammo customers can buy. The cutoff varies according to caliber and store location, but sometimes as little as one box — or 50 bullets — is allowed...
At Jefferson Gun Outlet and Range in Metairie just west of New Orleans, owner Mike Mayer is worried individuals are going to start buying by the case.
"If someone wants to shoot on the weekend you have to worry about having the ammunition for them. And I know some people aren't buying to use it at the range, they're taking it home and hoarding it." [Emphasis mine]
Interesting, I'm guessing the managers at a place like Wal-Mart aren't allowed to ad hoc raise prices during times of high demand. Kind of neat, in that smaller businesses are able to better provide in times of turbulent demand. But this is merely a conjecture. Although, it seems as though Wal-Mart of all places would be savvy enough with their merchandise to raise prices in a timely manner, as opposed to limiting purchases (and thus limiting their own profit potential). I wonder if the government is somehow involved in the bullet business? Wouldn't surprise me at all.
I added the last two lines simply to say "What the hell?" What business is it of Mike Mayer's to be concerned with what the hell people do with the products they purchase from him? He uses the word "hoarding" as a pejorative, like storing bullets for rainy days is stupid. If that's his stance, he needs to clear out his bank account, sell his investments, throw all the canned goods in his pantry away, and donate any clothes he hasn't worn in the past 3 days to the local Good Will. We can't go halfway when it comes to hoarding, sir.
Sheesh, Mr. Mayer sounds like a Keynesian!
Tuesday, September 22, 2009
The Silver in the Sand
AP -- President Barack Obama says the United States was slow to recognize the magnitude of climate change, but that Washington is moving swiftly to catch up...
Addressing the U.N. Climate Change Summit in New York, Obama said his administration has made the "largest-ever" American investment in renewable energy. And he called on other nations — the rich and the developing countries alike — to rise to the challenge.
Obama acknowledged that pursuing costly environmental clean up is difficult at a time when the world is trying to recover from a recession, but said it has to be done. The president said "we did not come here today to celebrate progress," saying the conference dramatizes the need for even more work...
"We understand the gravity of the climate threat. We are determined to act," Obama said. "And we will meet our responsibility to future generations."
Obama is under pressure to put political capital behind getting a serious clean-energy law at home and show that the U.S., an economic giant, will do its part to cut heat-trapping emissions. The U.S. House passed a bill this summer that would set the first mandatory limits on greenhouse gases, but a Senate version appears increasingly unlikely this year.
Calgary Herald -- When a leading proponent for one point of view suddenly starts batting for the other side, it's usually newsworthy.
So why was a speech last week by Prof. Mojib Latif of Germany's Leibniz Institute not given more prominence?
Latif is one of the leading climate modellers in the world. He is the recipient of several international climate-study prizes and a lead author for the United Nations Intergovernmental Panel on Climate Change (IPCC). He has contributed significantly to the IPCC's last two five-year reports that have stated unequivocally that man-made greenhouse emissions are causing the planet to warm dangerously.
Yet last week in Geneva, at the UN's World Climate Conference--an annual gathering of the so-called "scientific consensus" on man-made climate change --Latif conceded the Earth has not warmed for nearly a decade and that we are likely entering "one or even two decades during which temperatures cool."
While they deny it now, the facts to the contrary are staring them in the face: None of the alarmist drummers ever predicted anything like a 30-year pause in their apocalyptic scenario.
Even if warming was happening, there's no reason to believe the buffoons in the beltway could do anything close to efficient to mitigate it. It's pure politics at this point, and as for 2009, the U.S. will not take any action towards the global warming paper tiger. In a world in which the media isn't held hostage by its own ideology, you would expect a story like the one above to hold several headlines on multiple major newspapers. Instead, we get President blockhead all over the Internet damning the U.S.'s egregious industrialism.
I'm thankful that a more moderate, less aggressive democrat wasn't put into office in 2008. Obama has thoroughly stretched himself so incredibly thin (health care, energy, prodigal social spending for the next x years), and has stepped on board with much baggage (a less than impressive resume of friends and ties with a criminal organization [ACORN]), I'm going to be bold and predict that he's a one-term president. He hasn't done much of anything this year besides appeasing car manufacturers, a ~1.8 trillion dollar deficit, and pissing off a major fraction of this country with his agenda. I couldn't ask for a better president, in a way, because
The best Washington is a divided Washington.
Addressing the U.N. Climate Change Summit in New York, Obama said his administration has made the "largest-ever" American investment in renewable energy. And he called on other nations — the rich and the developing countries alike — to rise to the challenge.
Obama acknowledged that pursuing costly environmental clean up is difficult at a time when the world is trying to recover from a recession, but said it has to be done. The president said "we did not come here today to celebrate progress," saying the conference dramatizes the need for even more work...
"We understand the gravity of the climate threat. We are determined to act," Obama said. "And we will meet our responsibility to future generations."
Obama is under pressure to put political capital behind getting a serious clean-energy law at home and show that the U.S., an economic giant, will do its part to cut heat-trapping emissions. The U.S. House passed a bill this summer that would set the first mandatory limits on greenhouse gases, but a Senate version appears increasingly unlikely this year.
Calgary Herald -- When a leading proponent for one point of view suddenly starts batting for the other side, it's usually newsworthy.
So why was a speech last week by Prof. Mojib Latif of Germany's Leibniz Institute not given more prominence?
Latif is one of the leading climate modellers in the world. He is the recipient of several international climate-study prizes and a lead author for the United Nations Intergovernmental Panel on Climate Change (IPCC). He has contributed significantly to the IPCC's last two five-year reports that have stated unequivocally that man-made greenhouse emissions are causing the planet to warm dangerously.
Yet last week in Geneva, at the UN's World Climate Conference--an annual gathering of the so-called "scientific consensus" on man-made climate change --Latif conceded the Earth has not warmed for nearly a decade and that we are likely entering "one or even two decades during which temperatures cool."
While they deny it now, the facts to the contrary are staring them in the face: None of the alarmist drummers ever predicted anything like a 30-year pause in their apocalyptic scenario.
Even if warming was happening, there's no reason to believe the buffoons in the beltway could do anything close to efficient to mitigate it. It's pure politics at this point, and as for 2009, the U.S. will not take any action towards the global warming paper tiger. In a world in which the media isn't held hostage by its own ideology, you would expect a story like the one above to hold several headlines on multiple major newspapers. Instead, we get President blockhead all over the Internet damning the U.S.'s egregious industrialism.
I'm thankful that a more moderate, less aggressive democrat wasn't put into office in 2008. Obama has thoroughly stretched himself so incredibly thin (health care, energy, prodigal social spending for the next x years), and has stepped on board with much baggage (a less than impressive resume of friends and ties with a criminal organization [ACORN]), I'm going to be bold and predict that he's a one-term president. He hasn't done much of anything this year besides appeasing car manufacturers, a ~1.8 trillion dollar deficit, and pissing off a major fraction of this country with his agenda. I couldn't ask for a better president, in a way, because
The best Washington is a divided Washington.
The Ceiling's Leaking
I don't mean to beat the dead horse, but it's better to see it graphically:
One should draw the conclusion to never, ever, ever listen to a politician when he/she talks about the other party spending at "unsustainable levels." It's hubris at best and hypocrisy at worst. I say this because the Republicans were responsible for the first 8 years of craziness and the democratic executive and legislative has, in only half a year, made all that look like frugality.
I am of course not saying that government debt doesn't distort interest rates and private investment; it does. Because I tend to agree that all government spending is consumption because of its compulsive nature, an increase in the national debt (different from above) makes the citizenry worse off. The 2008 gross federal debt was 9.99 trillion dollars, and it is estimated in 2014 to exceed 18.3 trillion dollars. That's an 85% increase; will we be even .0085% better off? I will be, because I have plenty to write about over the next few decades. But you won't be.
It's funny, we have a debt ceiling in this country, and it was raised to $12.104 trillion by the American Recovery and Reinvestment Act of 2009. Have you ever made an expenditure that automatically increased your budget? Nor have I!
One should draw the conclusion to never, ever, ever listen to a politician when he/she talks about the other party spending at "unsustainable levels." It's hubris at best and hypocrisy at worst. I say this because the Republicans were responsible for the first 8 years of craziness and the democratic executive and legislative has, in only half a year, made all that look like frugality.I am of course not saying that government debt doesn't distort interest rates and private investment; it does. Because I tend to agree that all government spending is consumption because of its compulsive nature, an increase in the national debt (different from above) makes the citizenry worse off. The 2008 gross federal debt was 9.99 trillion dollars, and it is estimated in 2014 to exceed 18.3 trillion dollars. That's an 85% increase; will we be even .0085% better off? I will be, because I have plenty to write about over the next few decades. But you won't be.
It's funny, we have a debt ceiling in this country, and it was raised to $12.104 trillion by the American Recovery and Reinvestment Act of 2009. Have you ever made an expenditure that automatically increased your budget? Nor have I!
Wednesday, September 16, 2009
Tom's Idea
taken a little further. The original post is here, where Tom McMahon came up with the funny idea. But I think Americans feel like this:
Again, this was derived from Tom's original post. His 4-Block World is very entertaining and original, check it out.
Again, this was derived from Tom's original post. His 4-Block World is very entertaining and original, check it out.
The Cost of Society
Sometimes so much ridiculous stuff goes on during the week in politics that writing about it is beyond me. Current events are sometimes so blatantly ensconced upon a faulty premise that I'm confused as to why anybody would argue about it in the first place. I ask myself, "are we really considering this policy," or "do people actually understand what that legislation would do in the long run?"
Short of feeling dejected, I wrote what follows over the summer. In it is what I believe to be the case for the free market, that the required knowledge to even govern (by compulsion) effectively approaches infinity on a long enough time line:
Thomas Sowell of the Hoover Institution points out that, “The transformation of Western economies from agriculture to industry brought with it a reduction in the proportion of the population consisting of autonomous economic decision makers. However much “consumer sovereignty” was retained, as producers their role as fixed claimants to some extent insulated them from the direct consequences of their own decisions, largely by limiting the scope of their decision making itself.”[1]
Indeed, perhaps the only fathomable drawback to the division of labor and its advancement lies in its virtue, i.e., that we as producers become ever more specialized as time passes. Consequently, we are farther removed from the producing of all of our needs; yet, politically, we retain much ability to shape the overall economic landscape of the country. Inevitably, a disconnection between knowledge and decision-making manifests itself, and as the division of labor progresses, knowledge becomes exponentially expensive. This is not an argument for or against a particular political philosophy, but on the contrary, the cost of knowledge is likely to be the culprit when pondering the utter disparity in today’s state of affairs and yesterday’s reality.
There is always the price system that enables anybody to realize the state of affairs, whether he chooses to or not. However, this is only as far as a market economy is concerned and even this realization incurs the cost of knowledge; it seems as though contemporary leaders default on such transactions, and are extolled for it to no end.
[1] Thomas Sowell, Knowledge and Decisions (Basic Books, Inc., 1980), p.164
Short of feeling dejected, I wrote what follows over the summer. In it is what I believe to be the case for the free market, that the required knowledge to even govern (by compulsion) effectively approaches infinity on a long enough time line:
Thomas Sowell of the Hoover Institution points out that, “The transformation of Western economies from agriculture to industry brought with it a reduction in the proportion of the population consisting of autonomous economic decision makers. However much “consumer sovereignty” was retained, as producers their role as fixed claimants to some extent insulated them from the direct consequences of their own decisions, largely by limiting the scope of their decision making itself.”[1]
Indeed, perhaps the only fathomable drawback to the division of labor and its advancement lies in its virtue, i.e., that we as producers become ever more specialized as time passes. Consequently, we are farther removed from the producing of all of our needs; yet, politically, we retain much ability to shape the overall economic landscape of the country. Inevitably, a disconnection between knowledge and decision-making manifests itself, and as the division of labor progresses, knowledge becomes exponentially expensive. This is not an argument for or against a particular political philosophy, but on the contrary, the cost of knowledge is likely to be the culprit when pondering the utter disparity in today’s state of affairs and yesterday’s reality.
There is always the price system that enables anybody to realize the state of affairs, whether he chooses to or not. However, this is only as far as a market economy is concerned and even this realization incurs the cost of knowledge; it seems as though contemporary leaders default on such transactions, and are extolled for it to no end.
[1] Thomas Sowell, Knowledge and Decisions (Basic Books, Inc., 1980), p.164
Friday, September 11, 2009
The Wedding Planner
WSJ -- The use of special White House advisers and the czar moniker itself go back decades, but government watchers say President Barack Obama has appointed an unusual number of senior coordinators, especially for a president so early in his administration. They have responsibilities ranging from health care and climate change to Afghanistan and the auto sector...
One concern about czars centers on the fact that many of these appointments aren't subject to confirmation by Congress. To have them running the government, rather than simply assisting the president, "is an affront to the Constitution," Mr. Alexander said. West Virginia Democratic Sen. Robert Byrd warned earlier this year that the growth of czars could sap congressional authority...
But it is true that the Obama administration has broadened the ranks of special advisers, in some cases giving large portfolios to officials who might have faced difficulties in a Senate confirmation process. Some Obama supporters acknowledge that a Senate vetting process would likely have uncovered earlier Mr. Jones's controversial past.
Obama's rhetoric about "obscene profits" and "discipline" in particular industries, "cutting cost" in health care and "stimulating competition" via government fiat is all very revealing. There's no doubt, this guy's a bona fide planner.
Planners have absolutely no clue as to how the economy, in its intricacies and complexities, even begins to function. The decisions of hundreds of millions and even billions of people all appear chaotic, disorganized, and even baneful. The notion of a "spontaneous order," that is, a functioning system of human interaction without the willful design of anybody at all, is totally antithetical to the planner's mindset. In his world, cost is always measurable and objective (it isn't), people benefit only at the expense of others in free trade (absolutely not), and statistics are the end-all be-all of economic science (when actually they only reveal a historical incidence that is not necessarily indicative of the future).
It should be no surprise that this guy has a large number of "czars" at his disposal. His modus operandi is making sure the individual is taken out of the decision-making picture as much as possible. This entire health care push is about exactly that, via making sure that competition is dead in the private sector so a public option is seen as the only solution.
However, I have about as much faith in Congress as I do in any of these "czars." So what are we losing, really?
It's a shame this guy has such a lust for central control. He'd make a great wedding planner or hotel manager. Maybe he could be the guy who organizes the Wal-Mart aisle layouts.
No, I'm not cynical.
One concern about czars centers on the fact that many of these appointments aren't subject to confirmation by Congress. To have them running the government, rather than simply assisting the president, "is an affront to the Constitution," Mr. Alexander said. West Virginia Democratic Sen. Robert Byrd warned earlier this year that the growth of czars could sap congressional authority...
But it is true that the Obama administration has broadened the ranks of special advisers, in some cases giving large portfolios to officials who might have faced difficulties in a Senate confirmation process. Some Obama supporters acknowledge that a Senate vetting process would likely have uncovered earlier Mr. Jones's controversial past.
Obama's rhetoric about "obscene profits" and "discipline" in particular industries, "cutting cost" in health care and "stimulating competition" via government fiat is all very revealing. There's no doubt, this guy's a bona fide planner.
Planners have absolutely no clue as to how the economy, in its intricacies and complexities, even begins to function. The decisions of hundreds of millions and even billions of people all appear chaotic, disorganized, and even baneful. The notion of a "spontaneous order," that is, a functioning system of human interaction without the willful design of anybody at all, is totally antithetical to the planner's mindset. In his world, cost is always measurable and objective (it isn't), people benefit only at the expense of others in free trade (absolutely not), and statistics are the end-all be-all of economic science (when actually they only reveal a historical incidence that is not necessarily indicative of the future).
It should be no surprise that this guy has a large number of "czars" at his disposal. His modus operandi is making sure the individual is taken out of the decision-making picture as much as possible. This entire health care push is about exactly that, via making sure that competition is dead in the private sector so a public option is seen as the only solution.
However, I have about as much faith in Congress as I do in any of these "czars." So what are we losing, really?
It's a shame this guy has such a lust for central control. He'd make a great wedding planner or hotel manager. Maybe he could be the guy who organizes the Wal-Mart aisle layouts.
No, I'm not cynical.
Wednesday, September 9, 2009
What do Madoff and Obama have in common?
The words of convicted swindler Bernie Madoff were apparently quite convincing to many people who were regarded as knowledgeable and sophisticated. If you go by words, you can be led into anything.
No doubt millions of people will be listening to the words of President Barack Obama Wednesday night when he makes a televised address to a joint session of Congress on his medical care plans. But, if they think that the words he says are what matters, they can be led into something much worse than being swindled out of their money.
One plain fact should outweigh all the words of Barack Obama and all the impressive trappings of the setting in which he says them: He tried to rush Congress into passing a massive government takeover of the nation's medical care before the August recess— for a program that would not take effect until 2013!
-Thomas Sowell, 09/08/09
No doubt millions of people will be listening to the words of President Barack Obama Wednesday night when he makes a televised address to a joint session of Congress on his medical care plans. But, if they think that the words he says are what matters, they can be led into something much worse than being swindled out of their money.
One plain fact should outweigh all the words of Barack Obama and all the impressive trappings of the setting in which he says them: He tried to rush Congress into passing a massive government takeover of the nation's medical care before the August recess— for a program that would not take effect until 2013!
-Thomas Sowell, 09/08/09
Tuesday, September 8, 2009
Name that Scapegoat!
The Washington Times -- A proposal to tax health insurance companies who offer the most expensive coverage plans is gathering support in a key Senate panel as a way to pay for a portion of the health care reform bill.
Sen. John Kerry, Massachusetts Democrat, has put together a proposal to tax the companies that offer so-called "gold-plated" insurance plans...
The idea from Mr. Kerry would tax the insurer instead of the purchaser, which so far seems to be the key to acquiring more political support...
"We're interested in it, not for the sole reason of raising money, although it would do that," Sen. Charles E. Grassley, Iowa Republican and chief GOP negotiator on health care, told Bloomberg. "We're interested in it as a discipline within health care."
Health care analysts say the proposal is politically viable in part because it gives lawmakers a way around the House's proposal to apply a surtax on wealthy Americans.
"There's a certain appeal to it," said Lewis J. Hoch, partner at Blank Rome LLP in Philadelphia. "I think a proposal which has the benefit of generating revenue and furthering the ends of health care reform is a win-win."
The idea is that the most expensive insurance plans drive up health care costs because consumers don't realize the true cost of the health care services they use.
So when all else fails, call your opponents names, pull out the pejoratives, and demonize the minority. It's incredible how politicians are extolled for serving the public good, and yet, the aforementioned is exactly how they operate. You know you're dealing with a bad argument if it refers to health care plans tailored to the needs of different people as 'Cadillac plans' or 'gold-plated.' The whole notion of 'taxing the insurer' is fallacious, because an insurance company is not a living, breathing entity, but instead is composed of individuals who must turn to the market for insurance, too; 'punishing the insurer' is just a nice way of saying punishing a particular group of people for political purposes.
Notice when the free market, composed of the nonviolent, autonomous decisions of free people, fails to tell them what they want to hear, our 'public servants' decide to enforce 'discipline' and 'restraint.'
Last time I checked, a restraint on liberty is called tyranny.
Sen. John Kerry, Massachusetts Democrat, has put together a proposal to tax the companies that offer so-called "gold-plated" insurance plans...
The idea from Mr. Kerry would tax the insurer instead of the purchaser, which so far seems to be the key to acquiring more political support...
"We're interested in it, not for the sole reason of raising money, although it would do that," Sen. Charles E. Grassley, Iowa Republican and chief GOP negotiator on health care, told Bloomberg. "We're interested in it as a discipline within health care."
Health care analysts say the proposal is politically viable in part because it gives lawmakers a way around the House's proposal to apply a surtax on wealthy Americans.
"There's a certain appeal to it," said Lewis J. Hoch, partner at Blank Rome LLP in Philadelphia. "I think a proposal which has the benefit of generating revenue and furthering the ends of health care reform is a win-win."
The idea is that the most expensive insurance plans drive up health care costs because consumers don't realize the true cost of the health care services they use.
So when all else fails, call your opponents names, pull out the pejoratives, and demonize the minority. It's incredible how politicians are extolled for serving the public good, and yet, the aforementioned is exactly how they operate. You know you're dealing with a bad argument if it refers to health care plans tailored to the needs of different people as 'Cadillac plans' or 'gold-plated.' The whole notion of 'taxing the insurer' is fallacious, because an insurance company is not a living, breathing entity, but instead is composed of individuals who must turn to the market for insurance, too; 'punishing the insurer' is just a nice way of saying punishing a particular group of people for political purposes.
Notice when the free market, composed of the nonviolent, autonomous decisions of free people, fails to tell them what they want to hear, our 'public servants' decide to enforce 'discipline' and 'restraint.'
Last time I checked, a restraint on liberty is called tyranny.
Monday, September 7, 2009
Interventionist Chaos
That's how Hayek referred to our 'mixed economy.' He was absolutely correct, as this chart exemplifies:
This is a plot of wages over time for federal and private workers. It's alarming to note that not only have the past two recessions not retarded the growth of federal wages as compared to private wages, but also, as it stands today, the average federal employee earns almost $30,000 more than the average private employee.
This is a plot of wages over time for federal and private workers. It's alarming to note that not only have the past two recessions not retarded the growth of federal wages as compared to private wages, but also, as it stands today, the average federal employee earns almost $30,000 more than the average private employee. This is chaotic because the market, which uses prices to communicate information about all sorts of things, is made less efficient by the presence of an 800 lb gorilla named Uncle Sam. There is little coherence in turbulent times between federal employment (among many other things that the government does) and actual market conditions; the consequence is that the recession will manifest itself in other ways, chiefly, by further decreasing wages in the private sector, lengthening the duration of the recession, postponing credit market recovery, etc., etc.
I do believe these circumstances would be sharply mitigated if the state was not in charge of the money supply and delimiting what is and isn't money. Consider that state and local governments can't balloon their agencies and doles, without a more or less severe bite-back by the tax payers. Whereas the federal government can conceal its counter-fitting by inflationary stealth, state and local government finance operates in the open.
The situation is all the more chaotic, because many people look at the above graph or those like it and draw the conclusion that the government can do things that the private sector can't, that magnanimous legislators can somehow beat economic law and make us all better off. Thus, as has been the trend over the past 200 years, we become ever more entrenched in statism and bureaucracy. A mixed economy as a stable system is just false.
Friday, September 4, 2009
Perspicacious Pelosi
I'd say this video illustrates the fact that many of our elected leaders feel themselves and their decisions above that of the common man. It is somehow not O.K. for private individuals who own private property to engage in the same practices that our magnanimous leaders indulge in.
Wake up, electorate.
Thanks, Mark Perry.
Thursday, September 3, 2009
Gold and What to Do With It
For a more or less elementary analysis on whether to invest in gold, I would say there are two broad considerations to be had:1) Gold prices have multiplied within the past ten years, but the demand has especially grown since '08, and this is understandable, given the Fed's wickedly accommodative policies to "prevent a meltdown," and the general uncertainty/lack of confidence in the dollar that goes with the U.S. recession. I cannot help but be reminded of housing prices, and how they at one time multiplied year over year, too. I'm not making any direct comparisons, but I am versed in bubble economics to some degree. All I'm saying is that the stuff might not hit the fan as many people believe it will, leaving a lot of investors with surplus gold on their hands. With Bernanke's reappointment, and with seemingly everything that this administration does almost blowing up in its face (the precipitous drop in approval ratings hasn't been seen since the '60s), there could be extra political pressure on the Fed (yes, I said it)to tighten its wallet, I guarantee it. Regardless, rates will be targeted upwards eventually, either late this year or early next. For gold to "double" again, that is, break $2000/oz, I would imagine the Fed would have to keep its target (0%-.25%) for much longer or cook up some other kind of cockamamie idea.
2) Let us not forget about the $9 trillion debt over the next ten years, and that's just a prediction by the borrowers themselves. When the Fed does tighten, it will be at the same time that the spending in Washington really picks up, and I can't say specifically what will happen in particular sectors. However, if you've ever heard of the concept of "crowding out," I believe it's a fait accompli here. Interest rates will be especially prone to increasing in these ripe circumstances, and lending in the private sector will be adversely affected. That has negative implications for employment and the ability of businesses to pay back their debts; thus, I also believe that another recession, sooner rather than later, is not unreasonable. This would, of course, put pressure on other currencies and gold.
So, what do we conclude from this? I have no idea. I think this situation is much more unique than what some would have you believe, when they say to "look at the 1970s" or "remember 2001." I think there is some time yet to watch the tide of events, specifically, the health care debate, and the 2010 elections, among many other things. I wouldn't turn all my assets into gold just yet, but as a professor told me not too long ago, a %10 assets-in-gold insurance policy never hurt anybody in times like these.
Chart and other information can be found at Goldprice.org.
Ideas MUST be important if...
Lord Keynes said so:
"The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good and evil."
-J. M. Keynes, The General Theory of Employment, Interest, and Money, pp. 383-84.
With that, I agree with Peter Boettke here that someone will rise up and meet the challenges of the day, whether it be today, or tomorrow, or 428 years from now. And ideas are the way to go about it. Let us remember that ideas are not fixed relative to specific issues and concepts, but instead ideas are just as much influenced by time and place. This precludes the notion that the pool of ideas is fixed and once we're out of heroes, we're out of luck. No way.
Digressing a bit, when our more mainstream friends ostensibly are "for" the free market, but then turn around and write columns about how public vouchers for private schooling is a good idea, they're actually undermining the very cause they claim to support. Statism on the rocks with a splash of 7-UP is still statism. To substitute some mild form of statism to move in the general direction of freedom is a dangerous game; what if your idea does help the cause of publicly funded education? Who have you really helped, in the long run?
Advocating a particular policy specifically for the short term, as is characteristic of politicians, is exactly what we must divorce ourselves from. Hayek said it best, but let me paraphrase: Society's ethical principles are relatively fixed in the long-run; however, we must set forth to demonstrate to our peers that such principles are often in tumultuous conflict, and will not remain static; the pursuit of such contradictory goals will harm even greater values. So, in trying to realize semi-statism, we are only shooting ourselves in the foot, maybe blowing it off completely.
My point is, consistent ideas change the flow of events. Today, half-hearted apologists for Uncle Sam aren't ebbing the tide of things, but make it only worse. The men garnished with the most support are always those who are committed to a firm set of principles relative to their time. It is how this country was founded, it is how political philosophers and economists go down in the history books, and it is why we can turn on the radio every day from noon to three, expecting to hear one of the greatest voices of today. I believe this is the consequence of consistent ideas.
"The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good and evil."
-J. M. Keynes, The General Theory of Employment, Interest, and Money, pp. 383-84.
With that, I agree with Peter Boettke here that someone will rise up and meet the challenges of the day, whether it be today, or tomorrow, or 428 years from now. And ideas are the way to go about it. Let us remember that ideas are not fixed relative to specific issues and concepts, but instead ideas are just as much influenced by time and place. This precludes the notion that the pool of ideas is fixed and once we're out of heroes, we're out of luck. No way.
Digressing a bit, when our more mainstream friends ostensibly are "for" the free market, but then turn around and write columns about how public vouchers for private schooling is a good idea, they're actually undermining the very cause they claim to support. Statism on the rocks with a splash of 7-UP is still statism. To substitute some mild form of statism to move in the general direction of freedom is a dangerous game; what if your idea does help the cause of publicly funded education? Who have you really helped, in the long run?
Advocating a particular policy specifically for the short term, as is characteristic of politicians, is exactly what we must divorce ourselves from. Hayek said it best, but let me paraphrase: Society's ethical principles are relatively fixed in the long-run; however, we must set forth to demonstrate to our peers that such principles are often in tumultuous conflict, and will not remain static; the pursuit of such contradictory goals will harm even greater values. So, in trying to realize semi-statism, we are only shooting ourselves in the foot, maybe blowing it off completely.
My point is, consistent ideas change the flow of events. Today, half-hearted apologists for Uncle Sam aren't ebbing the tide of things, but make it only worse. The men garnished with the most support are always those who are committed to a firm set of principles relative to their time. It is how this country was founded, it is how political philosophers and economists go down in the history books, and it is why we can turn on the radio every day from noon to three, expecting to hear one of the greatest voices of today. I believe this is the consequence of consistent ideas.
Tuesday, September 1, 2009
Elasticity of Substitution...
... means nothing more than that as the price of a particular good changes, the consumption of other goods change as well. If two goods are very much like each other, it is likely that if the price of one good were to increase, consumption of the good whose price remained the same will rise. This makes sense, considering that we usually like possessing more money to less, no?
Consumer product regulation is no different. Regulating the heck out of something, such as requiring licensing or specific safety features, increases the cost of consuming that something, whether that cost be in terms of money, or time, or complexity, for the consumer. Thus, the consumer will choose other items to attain an end. If the particular regulation aimed at increasing consumer safety, but in the process increased the costs of using a particular item so much as to encourage the use of other, less safe products, then at the end of the day all we have is a bunch of fat n' happy bureaucrats at the expense of consumer well-being.
Think of regulating ladders, by requiring ever-more advanced safety features that raises the cost of production, which decreases the supply of ladders on the market, which increases the sale price of ladders. It is likely that consumers will choose not to buy expensive ladders and instead opt to use chairs and watermelons and footballs to stand on to change the light bulb. Are we safer at the end of the day? I'd argue, no.
I would call such an analysis paradoxical, but it isn't, not at all. This is completely reasonable and should surprise nobody. But, I think that's the trick about economics. Many people don't consider it easy, because those same people might look at the issues with blind eyes. Emotion, that is, tends to play a far larger role concerning economic issues than more "objective" sciences, such as physics or biology.
That's why I really appreciate lecturers who can make economics entertaining. Art Carden did that this summer, at Mises University. His Mises page, with his lectures in MP3 format, are here. Making economics entertaining is among the many ways to get otherwise emotional people to see what "good intentions" result in.
Consumer product regulation is no different. Regulating the heck out of something, such as requiring licensing or specific safety features, increases the cost of consuming that something, whether that cost be in terms of money, or time, or complexity, for the consumer. Thus, the consumer will choose other items to attain an end. If the particular regulation aimed at increasing consumer safety, but in the process increased the costs of using a particular item so much as to encourage the use of other, less safe products, then at the end of the day all we have is a bunch of fat n' happy bureaucrats at the expense of consumer well-being.
Think of regulating ladders, by requiring ever-more advanced safety features that raises the cost of production, which decreases the supply of ladders on the market, which increases the sale price of ladders. It is likely that consumers will choose not to buy expensive ladders and instead opt to use chairs and watermelons and footballs to stand on to change the light bulb. Are we safer at the end of the day? I'd argue, no.
I would call such an analysis paradoxical, but it isn't, not at all. This is completely reasonable and should surprise nobody. But, I think that's the trick about economics. Many people don't consider it easy, because those same people might look at the issues with blind eyes. Emotion, that is, tends to play a far larger role concerning economic issues than more "objective" sciences, such as physics or biology.
That's why I really appreciate lecturers who can make economics entertaining. Art Carden did that this summer, at Mises University. His Mises page, with his lectures in MP3 format, are here. Making economics entertaining is among the many ways to get otherwise emotional people to see what "good intentions" result in.
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