Russell Roberts's Blog, page 1534

Munger on rent-seeking

The latest EconTalk is Mike Munger talking about rent-seeking. If public rent-seeking is wasteful, isn't private competition wasteful as well? Consider all the failed companies outperformed by the iPod. Weren't all those efforts wasteful? Mike and I discuss the similarities and differences. The opening of the podcast looks at issues of public transportation–Mike talks about his recent trip to Chile and looks at how the reform of the Santiago bus system is going.

Regulate THIS!

Here's a letter to the Wall Street Journal:

You're correct that the Credit Card Accountability, Responsibility and Disclosure Act of 2009 will discourage lenders from extending credit to households most in need of it by arbitrarily reducing the penalties that lenders may assess against dead-beat and delinquent debtors  ("The Politics of Plastic," August 24).  Our Leaders, though, cling to their peculiar faith that regulations never create incentives for people to do what Our Leaders would...

Presumptions Matter

Here's a letter to the New York Times:

According to Paul Krugman, for government not to raise taxes is for government "to cut checks" to persons whose taxes aren't raised ("Now That's Rich," August 23).

Economists say that money is a "veil" that obscures people's view of the economy's underlying reality – namely, the fact that people produce and consume, not money, but real goods and services.  So let's recast Mr. Krugman's understanding of taxation in terms of something real.

Suppose that Sue...

Doux Commerce

Here's a letter to the New York Post:

In light of China's military modernization, Peter Brookes warns that Uncle Sam should do more to prepare for a possible future war against the Chinese ("The China challenge," August 23).

An even more important task is to avoid future belligerencies.  To this end, Sen. Charles Schumer, Sen. Lindsey Graham, and other protectionists in Washington should stop trying to prevent Americans from buying goods and services from China.  The single best hope for...

A Note On the Pay of Undocumented Workers

A friend e-mailed the following question to me in response to my claim that the compensation received by undocumented immigrants is lower than it would be if the U.S. government placed no restrictions (other than those that it places on American citizens) on the ability of immigrants, documented or not, to find work and keep work in the U.S.:

But Don.. if they receive a depressed wage because of the fact they are "illegal"… then how does that square with economic theory of free market...

If Smith Grows an Apple and Eats It, Does the Apple Come from Jones?

Here's a letter to the New York Times:

Reasonable people can debate whether or not raising taxes is a sound means of funding government spending, but Paul Krugman isn't reasonable ("Now That's Rich," August 23).  Instead, he slings mud and insinuates that the proper relationship between Americans and their government is exactly the opposite of what the founders expressly took this relationship to be.

For government not to raise taxes on high-income earners is not, contrary to Mr. Krugman's...

43=6, When Government Officials Do the Math

My favorite television show of all time is Yes Minister and its sequel, Yes Prime Minister.  This 1980s comedy, produced by the BBC, offers on-going and deep lessons in public choice.  Here's one of my favorite scenes; this scene features the P.M.'s chief permanent secretary (Sir Humphrey) seeking advice, over lunch, from his predecessor in that secretarial role, Sir Arnold.

Humphrey wants to persuade parliament to approve a 43-percent pay raise (or "rise," as the Brits say) for the civil...

Social Responsibility and Market Signals

Over at The Big Questions, Steve Landsburg homes in on the most substantial objection to "locovorism" – and, by implication, to other attempts to persuade people to behave in allegedly 'socially responsible' ways by ignoring market signals.  This Landsburg post is a must-read.

(Relatedly, see this short article, published by PERC, by Hiroko Shimizu.)

Response to an Angry Critic

Dear Ms. ___________:

Thanks very much for writing.  I appreciate your thoughts.

I assure you, though, that you're mistaken in your conclusion that I am "a disgusting typical conservative corporate mouth piece."  First, I truly am not conservative.  Second, I very often speak out against policies that benefit corporations.  (Whether or not I am disgusting is not for me to say.)

Contrary to your accusation, to recognize (as I do in my offending blog-post) that statistical differences in the pay o...

Shifty Analysis

Here's a letter to the New York Times:

Monique Morrissey wants to fix Social Security by forcing employers to "pay their share of the [Social Security:] tax on their employees' full salaries" rather than on only the first $106,800 of each employee's annual earnings ("Employers Should Pay Up," August 22).  She illustrates by pointing out that, under her proposal, LeBron James's employer, the Miami Heat, would pay an additional $900,000 annually in Social Security taxes.

Ms. Morrissey's scheme...