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Free Markets are Not Irrational

from Bernie Sanders’s Dark Age Economics by Kevin Williamson in The National Review


It is a facet of the belief that free markets are irrational, and that if reason could be imposed on markets — which is to say, if reason could be imposed on free human beings — then enlightened planners could ensure that resources are directed toward their best use. This line of thinking historically has led to concentration camps, gulags, firing squads, purges, and the like, for a few reasons: The first is that free markets are not irrational; they are a reflection of what people actually value at a particular time relative to the other things that they might also value. Real people simply want things that are different from what the planners want them to want, a predicament that can be solved only through violence and the threat of violence. That is the first reason that this sort of planning leads to gulags. The second is that there are no enlightened planners; men such as Senator Sanders imagine themselves to be candidates for enlightened leadership, but put a whip in his hand and the gentleman from Vermont will turn out to be another thug in the long line of thugs who have cleaved to his faith. The third reason that this sort of planning always works out poorly is that nobody knows what the best use of resources actually is; all that the would-be masters know is that they do not approve of the current deployment of resources.

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Growth is Not So Easy to Measure

Martin Feldstein writes The U.S. Underestimates Growth in The Wall Street Journal:

Government statisticians are supposed to measure price inflation and real growth. Which means that, with millions of new and rapidly changing products and services, they are supposed to assess whether $1,000 spent on the goods and services available today provides more “value” or “satisfaction” to American consumers than $1,000 spent a year ago. Even more difficult, they are tasked with estimating exactly how much it costs now to buy the same quantity of “value” or “satisfaction” that $1,000 could buy a year ago.

These tasks are virtually impossible, and the problem begins at the beginning—when an army of shoppers go around the country at the government’s behest to sample the prices of different goods and services. Does a restaurant meal with a higher price tag than a year ago reflect a higher cost for buying the same food and service, or does the higher price reflect better food and better service? Or what combination of the two? Or consider the higher price of a day of hospital care. How much of that higher price reflects improved diagnosis and more effective treatment? And what about valuing all the improved electronic forms of communication and entertainment that fill the daily lives of most people?

In short, there is no way to know how much of each measured price increase reflects quality improvements and how much is a pure price increase. Yet the answers that come out of this process are reflected in the consumer-price index and in the government’s measures of real growth.


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Avatars of Progressivism

Victor Davis Hanson writes in the National Review, Moral Schizophrenics


The danger of the new hard-left progressivism is that the old sins of greed, connivance, and malfeasance are now offset by assertions of cosmic morality. The ostentatiously green Solyndra could hardly be thought of as shaking down operators in the Obama administration to provide a sweetheart loan for the crony-capitalist architects of a money-losing mess. Al Gore is so worried about how corporate culture promotes damage to the planet that he was forced to rake in hundreds of millions of dollars for his own green corporations to warn us about other such cynics. He is so shocked about CO2 emissions and the global petroleum culture that he unloaded his underperforming and overpriced cable channel to a carbon-exporting, anti-Jewish autocratic sheikhdom that paid him handsomely with its petrodollars.

Michelle and Barack Obama are so concerned about global warming that not long ago they left two huge carbon footprints, when simultaneously they took separate government jumbo jets to fly out to Los Angeles to appear on separate talk shows. This was worthy of Leonardo DiCaprio, who on his private jet flew to conferences on the carbon excesses of hoi polloi. Elizabeth Warren is so committed to a fair and just society where egalitarianism is the shared goal, and where we assume that no one creates anything without the government, that she and her husband often augmented the generous incomes from their Harvard law professorships with lucrative corporate consulting to achieve 1 percenter status, with nearly $1 million in annual income.

The avatars of modern progressivism are not distinguishable in the lives that they live from the targets of their attack. Those on campus who talk the most loudly of the bane of white privilege at Harvard or Stanford do not live like poor whites in Tulare or El Paso, who have no privilege, racial or financial. The pajama-boy progressives of Cambridge or Menlo Park can enjoy their white privilege freely — but only by damning it in others. (Do such young campus auditors ever drive down to a Bakersfield brake shop to explain to its grease-smeared mechanics in the pit that, being white, they enjoy too much racial advantage?) The Obamas and the progressive black elite have to decry stereotyping, profiling, and the prejudices of low expectations; only by such preemptive doublespeak can they jet to horse races with impunity or put their children in Sidwell Friends rather than in the Washington, D.C., public schools.

The Left created a culture of pajama-boy elites, one that sought cosmic absolution for its own privilege by attacking the less privileged — and then they called this ethical desert progressivism.

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Rational Ignorance


Why It’s So hard to Convince Warmists by Matt Manos


That type of smugness is almost impossible to penetrate. When a skeptic questions a warmist’s view on global warming/climate change, the warmist hears something vastly different than what the skeptic is saying. A skeptic might say, “The models don’t match the actual measured results.” What the warmist hears is how stupid deniers are because that’s what John Stewart told him he should think. If the warmist doesn’t prove that he thinks skeptics are stupid then he might be confused for a denier! And no one wants to be identified with being a denier because they’re mocked, don’t get tenure and don’t get invited to the right parties. No amount of science can penetrate the ROI the warmist has internalized in believing in CAGW.

Many of the warmist are running on pure rational ignorance. Rational ignorance is a belief that the cost/benefit to researching every issue is so low as to be a net negative in time utilization. Thus the ignorance is rational and everyone utilizes this mental process on certain topics. People who are rationally ignorant about global warming look to bellwethers that support their gut stance. Rationally ignorant warmists would look to world leaders, mockutainers and warmist scientists for guidance on how to communicate their position on global warming.

Penetrating rational ignorance is tough because the position warmists have taken isn’t based on logic. Their position is actually based on an appeal to authority. To question the rationally ignorant warmist is to question the field of science as a whole (to be a science denier) or to question the leadership of their favorite bellwether personalities. This will cause the rationally ignorant warmist to become defensive and try to stand up for their favorite bellwether. The rationally ignorant will also point to their favorite bellwethers and say, “Who am I to doubt all these intelligent people?” It’s intellectually offshoring. It’s lazy. It’s human nature.

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Asking the Right Questions

from the excellent blog, Cafe Hayek, Don Boudreaux posts Good Economists Ask Questions Such As These


As I argued in this earlier post, to do good economics is chiefly to ask the right questions.  The good economist is an incessant questioner; the good economist is neither blinded nor numbed by the popularity of familiar mantras or presumptions into accepting these mantras and presumptions as being valid.  Even if there is no specific answer to a probing question asked by a good economist, the asking of the question itself often serves to demolish the weak base of implicit assumptions and poor logic upon which arguments and assertions about the operation of the economy, and about the likely consequences of government interventions, are too often constructed.

Here’s a good example of a popular claim about the operation of the economy that is exposed as highly dubious by the asking of some very simple and straightforward questions.  The example comes from a recent New York Timeseditorial praising the Los Angeles city government’s action to raised the minimum-wage in that city eventually to $15 per hour:

Workers’ share of the economic pie has been shrinking for decades, as the gains from labor productivity have flowed increasingly to profits rather than pay.

Overlook the questionable (!) description of the economy as a “pie” (with its childishly mistaken implication that more ‘pie’ for some people necessarily means less ‘pie’ for others).  Overlook also the fact that it’s not at all a settled matter that workers’ pay has failed to keep pace with improvements in labor productivity.  Instead, ask: If it’s true that profits have been swelling for the past few decades because wages haven’t kept up with labor productivity, why are these profits not attracting even more firms in to the markets where these excess profits exist and persist?

– Or, alternatively, are there barriers that have arisen over the past few decades that prevent profit-hungry entrepreneurs and investors from diving in to try to grab some of these excess profits?

– Even if the U.S. is so bereft of new able and profit-hungry entrepreneurs, or if effective barriers to their entry into markets do exist, what’s with existing and successful entrepreneurs, businesses, and investors?  Why do they not compete amongst themselves to bid up workers’ wages, thus causing wages  to reflect workers’ improved productivity?  Are all existing entrepreneurs, businesses, and investors, while shameless at exploiting their current workers, unwilling to exploit workers even more fully by each trying to hire other firms’ underpaid workers?


The media pundits report to a narrative and either because of bias or ignorance allow false statements to escape simple scrutiny.