Economics

"Who’s Arrogant?"

Don Boudreaux teaches some elementary--but unfortunately too often unlearned--lessons about international trade.

First, specific jobs are destroyed (and created) by any and all economic change, not just by economic change that is connected with international trade.  If saving workers from the difficulties, financial and emotional, of losing jobs is a sufficient justification for government to obstruct voluntary exchanges, then Mr. Moroni (like the vast majority of protectionists) is far too modest when proposing government intervention: he should want government to stop all economic change because the concerns that motivate his opposition to free trade arise with all economic change.

When people reduce their likelihood of smoking, some workers in cigarette factories lose their jobs.  So the logic of Mr. Moroni’s argument should lead him to endorse government policies that prevent people from giving up smoking and from discouraging their children from smoking.  When automotive technology improves such that automobiles need fewer tune-ups, the logic of Mr. Moroni’s argument should lead him to endorse government polices to suppress technological improvements (in order to save auto mechanics the embarrassment and indignity of having to tell their families that they’ve lost their jobs).

I used to tell my classes that Jonas Salk threw a whole lot of iron lung makers out of work.


"Questions for income egalitarians"

Donald J. Boudreaux asks questions that Liberals should answer.

What, exactly, counts as income? Only what workers receive as take-home pay? Or does it include also the value of fringe benefits? What about the value to workers of above-average workplace conditions? Is a worker treated unfairly by society if she chooses a lower-paying job under a pleasant boss rather than a higher-paying job under an unpleasant boss?


"Trump's Budget Gets One Thing Right: Crop Insurance Reform"

As you might expect from my recent post, I approve of this:

The president’s first budget proposes to curtail subsidies for farmers through the federal crop insurance program in two major ways. According to estimates by the Office of Management and Budget, those reforms would together reduce government spending on crop insurance subsidies by about $28 billion over ten years. . . .

So, effectively, by subsidizing crop insurance, taxpayers are encouraging farmers to work less efficiently, produce fewer crops, and make smaller contributions to the overall productivity of the U.S. economy.


"CA single-payer bill passes out of committee … without any explanation of funding it"

Even by California's standards this is amazing.

Details, details! Who cares about how one pays for an entitlement program? The point is to pass it, and let your great-granchildren figure it out. In this case, however, the problem is so large that it’s impossible to do without the funding in place first, because of the need to pay providers for goods and services. California hardly has an extra $200 billion laying around, and even if it did, it would need to shore up its collapsing pension system first. The state is also on the hook for a $100 billion high-speed rail system whose funding is still unclear. Democrats don’t have much idea about how to pay for their current priorities, let alone their seizure of the health-care sector.

Related: "California's looming single-payer disaster".


"Dubai wants to drag icebergs from Antarctica for fresh water"

For years and years I used to tell my microeconomics students that one response to the water shortage in California caused by price controls was a proposal to use icebergs for fresh water. But unlike the company described in the this article as believing "they would not melt significantly during the voyage" the information I had indicated that melting was a big worry. But the engineers--practical, as always--proposed to wrap the icebergs in plastic, on site in the Antarctic.

And I told the students if you think that will be cheap, guess again. Such are the potential costs of tampering with the price system.