JIM TREACHER: New Yorkers Boo De Blasio At Veterans Day Parade. “And this slice of Americana is brought to you by all our veterans. They fight to preserve our way of life, which includes telling our leaders exactly what we think of them, without fear of reprisal. You can boo your mayor at a parade, […]
GUESS WHO WAS CALLED A ‘FASCIST,’* BACK IN THE DAY: Bigotry. Fascism. A threat to women’s rights. Alliances with foreign dictators. A president as entertainer, trampling labor and the environment. It sounds like the contemporary complaints against President Trump. Actually, it’s a 1984 newspaper advertisement from “Scholars Against the Escalating Danger of the Far Right.” […]
The Bay Area of California is ground zero of NIMBYism. Daniel Herriges has a very good article on the issue: A few months ago, I wrote about San Bruno, California’s rejection of a 425-unit apartment complex, even after the developer jumped through an insane series of hoops. To get the project approved, Mike Ghielmetti’s Signature Development followed San Bruno’s own voter-approved downtown vision to the letter. The project was near mass transit. It would have had 64 affordable homes, a grocery store, community space, and Ghielmetti would also have paid $10 million into the city’s general fund—a concession that feels like a bribe in all but name. The rejection, by a single vote and two abstentions on San Bruno’s city council, was easy to treat as a symbol of California’s utter dysfunction when it comes to housing: in a county with a universally recognized housing crisis, which added 19 jobs for every one new home from 2010 to 2015, someone wanting to build housing could do everything the city asked for and still be capriciously turned down (in part due to a bizarre procedure in San Bruno in which abstaining council members’ votes were counted as “no” votes). Well, now there’s an update on the story: predictably, the developer is taking advantage of a state law to move ahead anyway with a *larger* project with *fewer* concessions! . . . There’s a much deeper source of dysfunction here, and that is that it’s so onerous to develop in San Bruno (or virtually anywhere in coastal California), and there are so many costly regulatory hurdles and delays involved that it’s virtually only viable to do so at an enormous scale like 425 or 600 apartments. Imagine jumping all those same hurdles just to build 20 or 30 apartments on a much smaller piece of land. Who would be crazy enough to try? This is a system designed to turn each individual development proposal into a high-stakes battle. And when that’s the case, the only developers in the arena will be the ones big enough to throw their weight around. A new Cato study of wealth inequality (by Chris Edwards and Ryan Bourne) also points to the role of regulation: Section 4 looks at cronyism, which refers to insiders and businesses securing narrow tax, spending, and regulatory advantages. Cronyism is one cause of wealth inequality, and it has likely increased over time as the government has grown. When I was young, lots of smaller developers built 4 unit apartment buildings all over the place. I don’t see much of that anymore. Regulation (and intellectual property laws) increasingly favors big business. HT: Tyler Cowen (0 COMMENTS)
Sadly, nothing changes and masses will still remain addicted to their devices. We forget that life isn't where we aren't. Life is now, precisely where you stand, sit or walk. The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]
Last week, I wrote Part I of my critique of a recent long article in the New York Times by new Nobel Prize in economics winners Esther Duflo and Abhijit Banerjee of MIT. The op/ed is titled “Economic Incentives Don’t Always Do What We Want Them To,” New York Times, October 26, 2019. This is Part II of the critique. The authors write: On the flip side, when jobs vanish and the local economy collapses, we cannot count on people’s desire to seek out a better life to smooth things out. The United States population is surprisingly immobile now. Seven percent of the population used to move to another county every year in the 1950s. Fewer than 4 percent did so in 2018. The decline started in 1990 and accelerated in the mid-2000s, precisely at the time when the industries in some regions were hit by competition from Chinese imports. When jobs disappeared in the counties that were producing toys, clothing or furniture, few people looked for jobs elsewhere. Nor did they demand help to move or to retrain — they stayed put and hoped things would improve. As a result, one million jobs were lost and wages and purchasing power fell in those communities, setting off a downward spiral of blight and hopelessness. Marriage rates and fertility fell, and more children were born into poverty. That’s bad. And it is true that many of us economists thought that people would adjust more quickly. But there is a big difference between the 1950s and now. The difference is that the higher-paying jobs are disproportionately available in cities where housing prices, adjusted for inflation and relative to real income, are much higher than in the 1950s. And that is mainly due to government restrictions on building. Harvard economist Edward Glaeser and Wharton economist Joseph Gyourko have written on this extensively. Could that matter for mobility? I think so. And, if it does matter, that’s evidence for the importance of incentives, not, as Duflo and Banerjee assert, for their unimportance. Duflo and Banerjee go on to write: Despite this, the faith in incentives is widely shared. There’s that word “faith” again. They continue: We [the authors plus Stefanie Stantcheva] asked half of them [half of 10,000 Americans surveyed] what they thought someone should do if he or she were unemployed and a job was available 200 miles away. Sixty-two percent said the person should move. Fifty percent also said that they expected at least some people to stop working if taxes went up, and 60 percent thought that Medicaid beneficiaries are discouraged from working by the lack of a work requirement. Forty-nine percent answered yes when asked whether “many people” would stop working if there were a universal basic income of $13,000 a year with no strings attached. But here is the twist: When we asked the other half of our sample the very same questions in reference to themselves, we got very different responses. Only 52 percent said they would move for a job, and this fell to 32 percent of those who were actually unemployed. Seventy-two percent of them declared that an increase in taxes would “not at all” lead them to stop working. Thirteen percent of respondents said they would probably work less if they received Medicaid without a work requirement; 12 percent said they would stop working if there were a universal basic income. In other words, “Everyone else responds to incentives, but I don’t.” They are suggesting a contradiction. But look more carefully at the questions and answers, one by one. 62 percent said the unemployed person should move, and 52 percent said they would move. Is 10 percentage points a huge difference? It’s substantial but not earth-shattering. They try to make it huge by telling us that only 32 percent of those actually unemployed said they would move. But then shouldn’t they compare that with the percent of unemployed people who thought the unemployed person should move? Why don’t they give that number? Next, they found that “Fifty percent also said that they expected at least some people to stop working if taxes went up.” But “Seventy-two percent of them declared that an increase in taxes would ‘not at all’ lead them to stop working.” They seem to see a contradiction. There isn’t one. It’s quite conceivable that 50 percent would expect some people to stop working. 28 percent said an increase in taxes would cause themselves to stop working. Isn’t 28 percent some? And, by the way, this is awfully “all or nothing” thinking rather than the “on the margin” thinking that economists usually recommend. I think their data show up the problem of surveys as a measure of what people would actually do. I would be shocked if an increase in taxes caused as many as 28 percent of people to stop working. But I would be equally shocked if an increase in taxes didn’t cause some people to work less. Next, they write, “60 percent thought that Medicaid beneficiaries are discouraged from working by the lack of a work requirement.” And then, “Thirteen percent of respondents said they would probably work less if they received Medicaid without a work requirement.” That is a big gap and at least the two questions are symmetric. But those in the first group aren’t typically Medicaid recipients. They are answering what they think Medicaid recipients would do and and many of them probably view Medicaid recipients as being not very motivated. Ask them what they would do if they were Medicaid recipients and they will input their own circumstances, and will probably have trouble thinking that they themselves would cut work. So again there’s no necessary contradiction. Look at the final survey question. First, “Forty-nine percent answered yes when asked whether ‘many people’ would stop working if there were a universal basic income of $13,000 a year with no strings attached.” Then, “12 percent said they would stop working if there were a universal basic income.” This is a contradiction only if one thinks that 12 percent is not many. I think it is many. This is turning out longer than expected. Later this week: Part III. (0 COMMENTS)
HEH: “William Faulkner wrote his novel As I Lay Dying while working at his night shift job at a pow…
HEH: “William Faulkner wrote his novel As I Lay Dying while working at his night shift job at a power plant. Good thing he didn’t have Twitter.”
(Don Boudreaux) TweetIn the latest issue of Economic Affairs (gated), I have a new, academic-ish article on comparative advantage. It’s titled “The disadvantage of misunderstanding comparative advantage: a response to Sherman Xie.” I wrote it in response to what I believe to be Prof. Xie’s misunderstanding of the principle of comparative advantage and of this principle’s role […]
from Iconoclast The above discussion “The new minds of young people will be open to the new empirical evidence.” illustrates the difficulties encountered by heterodox thinkers. Orthodox thinkers share a dogma, or at least a set of a priori assumptions, and usually a methodology. In essence, this makes orthodox thinking an echo chamber where basic […]
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The world is now 188 trillion dollars in debt, and that number continues to grow rapidly each year. It is a form of enslavement that is deeply insidious, because most of those living on the planet do not even understand how the system works, and even if they did most of them would have absolutely... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]
AN OLDIE BUT A GOODY: Marxists’ Apartment A Microcosm Of Why Marxism Doesn’t Work. From back before The Onion was surpassed by The Babylon Bee.