Economics

"The Post-Modern Emphasis on 'Dumb Luck'"

The Left seems to have pulled back some from "You didn't build that"--perhaps because of the strong reaction against it, perhaps because if you have dopey ideas you'll want to reframe them frequently--so a new version is "You just got lucky!" Helen Smith beautifully explains why this is so useful to the Left:

Attributing one's success in life to dumb luck makes it politically expedient for politicians to raise taxes on those who are successful and pander to the "less fortunate" by telling them nothing is their fault as they are victims of circumstances beyond one's control. The unsuccessful (who are the majority) feel vindicated and the politicians have goodies to pretend to distribute--the goodies of those with dumb luck.


"How to Start Thinking Like a Public Choice Economist"

Almost everybody interesting in public policy could use some public choice economics.

The core insight of public choice economics is that all people respond to incentives . . . even politicians. And judges, and regulators, and the chairman of the PTA, and the president, and the pope, and so on. I recognize the statement may seem a little obvious, but I don’t mean it flippantly. Few disagree with the statement that “all people respond to incentives” when thinking about buyers and sellers in the marketplace, but there is a long tradition of scholarship that presumes political leaders and civil servants to be the folks who rise above the fray. The uniqueness of the public choice insight is in how much understanding can be gained from instead treating actors in political systems as if they have the same knowledge and moral compass as the rest of us.


"Land Everywhere and Not a Place to Live"

Hey do-gooders: want to make the world a better place? Start with excessive zoning regulations. Alex Tabarrok:

Land use regulations raise prices, reduce mobility and increase income inequality in the United States. In many parts of the developing world, however, the situation is worse, much worse.

Related: "How Anti-Growth Sentiment, Reflected in Zoning Laws, Thwarts Equality".


"Who Will Pay For the Pension Benefit Guaranty Corporation's Huge Losses?"

Good question.

The PBGC has two programs, one insures single employer pensions and the other multiemployer, union-sponsored pensions. Both are insolvent, but the multiemployer program is in far worse shape: it is well and truly broke. Its liabilities of $54 billion are 27 times its assets of $2 billion. There are on top of that "reasonably possible" losses of another $20 billion.

Very much related:

"Politicians ignore long-term effects as they seek instant payoff".

"California's Retirement Fund Is In Big Trouble". (Note the source.)

"California’s ignored pension crisis is only getting worse". (By Chuck Reed.)

We have created a system that is routinely and massively underfunding our obligations. With few exceptions, such as Fresno, other pension plans in California suffer from similar problems. Our accumulated debt for government employee retiree health care is nearly as large as the debt for pensions. Our failure to acknowledge the problem and to take reasonable remedial actions has run up an enormous debt that will not only burden current taxpayers, but future generations.

Our public employee union leaders say the solution is to raise taxes and cut services. That’s what we have been doing for years and no doubt more will have to be done. But it’s not enough.

"The California Pension Bomb Just Got More Explosive".

"What are Illinois' real pension options now?"

"Rising Pension Costs . . ."

Five of these last six links via Pension Tsunami, an excellent source for bad news.


"Pensions Are a Big Old Slow-Moving Disaster"

Fine, concise discussion until the conclusion: "We need a well-funded Social Security program for everyone who needs it (and not those who don’t need it because they are wealthy)." News flash: Social Security is run by the same types of folks, facing the same lousy incentives, as the ones badly running many state and local pension plans.

(And let's not mention that Social Security has been sold, lo these many years, to the American public as a social insurance program, not a transfer program.)

Related: "CalPERS’ unfunded liabilities grow as investment earnings lag".

You can smear lipstick on a pig, but that doesn’t change its innate porcinity.

Officials of the California Public Employees Retirement System, the nation’s largest pension trust fund, tried Monday to cast its very anemic investment earnings – well under 1 percent – in a positive light.