Economics

The more fundamental error in AOC's reference to "Milton Keynes"

Tim Worstall nicely explains.

What the congresswoman meant to talk about was John Maynard Keynes and his essay “Economic Possibilities for our Grandchildren.” In this essay, Keynes muses that by about 2030, we'd all be so rich that we'd only work 15 hours a week, which is what Ocasio-Cortez tries to cite to argue that this hasn't happened because of economic inequality, i.e., the rich idle while the rest of us labor on, or something.

This is not correct. In fact, much of that reduction in labor has happened, but it is so-called women’s work that has vanished.

BONUS: Washington Post columnist lectures AOC about how to eat breakfast in DC.


"If the Only Way You Can Get Your Great Idea Implemented . . ."

Bryan Caplan is so very, very correct:

Once you pay proper respect to public choice theory, however, you cannot simply continue on your merry way.  You have to ponder its central normative lesson: Don’t advocate government action merely because a clever-and-appealing policy proposal passes a cost-benefit test.  Instead, look at the trendy-but-awful policies that will actually be adopted – and see if they pass a cost-benefit test.  If they don’t, you should advocate laissez-faire despite all those shiny ideas in the textbook.

Related: "Prohibition and the Great Society show that the government should not legislate vast social trends".


"New York's Progressive Rent Regulations Having the Exact Same Negative Consequence That Skeptics Predicted"

Economists are criticized a lot for what we don't know. But we do know some things. Here's one: "New York told landlords they couldn't pass along renovation costs, so landlords stopped doing renovations".

(And I think Stephen Green has an excellent chance at being correct when he predicts, "Big, connected players will snap up these properties at a steep discount, at which point the city will grant relief and exemptions from the new regulations.")

Related: "Why New York’s pols’ ‘affordable housing’ fixes only make everything worse".


"Macroeconomic Inferences and the New Fed Regime"

Yet another application of Goodhart's Law:

Monetary policy is typically concerned with keeping inflation low and stable while also trying to keep the unemployment rate down. By all appearances, the Fed is doing an admirable job. Inflation is currently around 2.5 percent, and the unemployment rate around 3.5 percent. These are exceptional numbers, and in any other era they would paint a picture of economic vigor.

But we cannot assume that anymore. Why not? The short answer is, the monetary policy regime has changed so much since the 2007–8 financial crisis that we cannot reasonably infer the same things from the usual data that we could prior to the crisis.


"'Let Them Eat Whole Foods': The Appalling Elitism of Dollar Store Bans"

Laura Williams nails it:

Opponents of dollar stores often contradict each other or even themselves.

Critics objected when suburban growth sent stores running for whiter, more affluent suburbs. But dollar stores’ explicit attempts to reverse this trend—to set up affordable retail options in poorer, underserved neighborhoods—are somehow also the target of scorn.

You’ll also hear critics claim dollar stores engage in “predatory” behavior by offering prices that are simultaneously too low (undercutting potential competitors) and also too high (as compared to a per-unit cost at the Costco 15 miles away).