If the US government defaults its credit rating will fall a lot more than that. Overnight it would become effectively impossible for the US government to borrow (try borrowing money with a credit rating of D), that means closing the primary deficit immediately. I may think its necessary for the US government to cub its spending, but a handbrake turn like that is never good for an economy, no matter the direction in which the change occurs.
And Truing is a good person to use if you want to discuss the politics of sexuality in the past. After all he was tried, convicted and ultimately driven to suicide because of his sexuality.
I agree, the debt ceiling makes no sense as a policy. It's an attempt to constrain a variables with no degrees of freedom. If spending exceeds tax revenue, borrowing is the inevitable result. If you want to cap borrowing, you need to have a provision to cap spending (or push up tax income) so as to enforce the cap. Otherwise it's just bluster.
You're never going to be able to make employers pay much more for an employee than their marginal product of labour; if you try, employers will shed employees instead until their marginal product of labour is high enough to make hiring people worth it again (in accordance with the law of diminishing returns, marginal product of labour falls with the quantity of labour being used, all things being equal). In other words, forcing employers to pay more requires creating a permanent class of unemployed people.
If you want to help improve the lives of low productivity workers, you'll need to do more than just force employers to act like charities (or at least part-charities). I'd suggest supplementing their incomes directly.
In New Zealand our welfare system allows people on the unemployment benefit to get one-off payments to buy basic clothes that can be used in job interviews, on the theory that it's an investment in getting them off welfare. By the same token, offering people a ticket out of town (and perhaps relocation assistance) may have merit.
It seems to me there are two reasons why this might happen:
1) the boss is being an ass. In this case unions or looking for another job would be my recommendation, with the focus being on the first of those options if your alternative job prospects are poor in your area.
2) monopsony rents, as I mentioned above. I'd definitely go with a union for this case.
3) your marginal product of labour in your current job (marginal product of labour is at least as much about your employer as about your skills or work ethic) is too low for you get decent pay or conditions. All a union (or legislation for that matter) will do is drive the firm out of business. You're only real option here is to get out, and if your town has nothing else you need to find a new town. That might sound a bit "let them eat cake", but my parents have changed cities 4 times for work reasons (including just recently, in their early 50s). I myself have done it once, and I'm not yet 30. It can be hard, but people have been migrating for work since the Industrial Revolution at least. Plus, I have some thoughts about welfare reforms that would help make it easier to move.
Herb, New York's local government practices rent control, which one of my fellow economist once described as the surest was of destroying a city short of bombing it. I'm not surprised when they get something wrong, I'm surprised when they get something right.
And an abundance of unprofitable, poorly-maintained cabs is not a market failure, in fact it is most likely a sob story told by taxi companies in the hope the legislature would be mutton-headed enough to buy it, and legislate them more profits. If the badly-maintained taxis are a danger on the road, then enforce vehicle standards. If the surplus of taxis is causing congestion, then use the tax system I outlined in my original post. And if profits in the taxi industry were really too low, people would leave and go do somethign else which would drive up taxi fares to restore equilibrium. None of these scenarios require a medallion system.
Exploitation is a tricky word, ideally I'd like a few concrete examples. The only thing that comes to me (in terms of purely private exploitation) is an employer extracting monopsony rents from employees by offering them lower wages or poorer conditions than the market would bear. My response to this would be unions and perhaps antitrust law would be appropriate tools.
The “market” is casual transport simply doesn’t work without strict government regulation, including, if necessary, and it almost always IS necessary when a city gets big enough to matter, artificial barriers to entry.
As far as artificial barriers to entry go, you are simply wrong. I cannot think of a situation when you would ever need to impose artificial barrier to entry as a deliberate policy. And you are wrong empirically, New Zealand has no medallion system and our taxi services run just fine, even in Wellington and Auckland, our highest density areas.
What is it exactly that you think a medallion system does that makes it so essential?
Not to this libertarian, environmental policy is one area where I think libertarians can learn from liberals. And I don't think the strong-weak spectrum is very helpful here. What I want to do is make government pass general rules, rather than letting government do special deals. An institution may have a lot of power in some areas and very little in others.
There is already a perfectly good market mechanism for transferring income from your younger self to your older self - it's called savings. If people don't earn enough in their lifetime to save enough then they the problem is that they're poor, not that they're old.
I'm not saying there aren't old and sick people who need help, I'm saying that treating all old and sick people as if they needed help (and a lot of help, given how much Social Security and Medicare cost) is a mistake.
Welfare was one area as I alluded to in my post, but I think environmental policy and consumer protection are two other areas where liberals have some good points to make. I'll go into more detail in a follow-up post.
Clearly drugs need to be made Double Illegal. Any action other than doing this immediately is morally equivalent to murdering babies (plus, mugging BlaiseP).
In response, liberal columnist and economist Paul Krugman proposes in his book, The Conscience of a Liberal, that liberalism be defined by a commitment to preserving and extending the objectives of the New Deal.
The first thing that I notice about this definition is how provincial it is. The New Deal doesn't mean all that much to the rest of the world.
Also, which parts of The New Deal are we talking about here? The New Deal could be construed to include hundreds of separate policy initiatives, some almost everyone would accept were good ideas, almost everyone would accept were bad ideas, with quite a few in the middle.
It sounds more like Krugman trying to signal affiliation to modern US liberals than a serious attempt at political philosophy.
How much was Portugal spending on drug law enforcement before decriminalisation? Because that's what's going to determine how much better things will get when you start legalising drugs.
While marijuana and harder drugs are illegal everywhere these days, the effort that goes into enforcement varies widely. In New Zealand you generally won't get arrested for simple possession of marijuana because the police don't consider it worth their time. By contrast, I understand the US government spends a ridiculous amount of money on drug enforcement.
Welcome to the League Chris, I look forward to reading about your exploits. As a policy economist dysfunctional systems hold a certain fascination for me.
*Comment archive for non-registered commenters assembled by email address as provided.
On “Occasional Notes: Allaying Fears Edition”
If the US government defaults its credit rating will fall a lot more than that. Overnight it would become effectively impossible for the US government to borrow (try borrowing money with a credit rating of D), that means closing the primary deficit immediately. I may think its necessary for the US government to cub its spending, but a handbrake turn like that is never good for an economy, no matter the direction in which the change occurs.
On “In Which I Return To Dangerous Territory About Which I Am Admittedly Ignorant”
And Truing is a good person to use if you want to discuss the politics of sexuality in the past. After all he was tried, convicted and ultimately driven to suicide because of his sexuality.
On “Libertarianism and Privilege”
At some point the McDonalds becomes uneconomical to run and simply gets shut down. This point is probably sooner than you realise.
On “Mitch McConnell’s minor masterpiece”
I agree, the debt ceiling makes no sense as a policy. It's an attempt to constrain a variables with no degrees of freedom. If spending exceeds tax revenue, borrowing is the inevitable result. If you want to cap borrowing, you need to have a provision to cap spending (or push up tax income) so as to enforce the cap. Otherwise it's just bluster.
"
There's also the little problem that default would require your government to close its primary deficit overnight. That would be very unpleasant.
On “Libertarianism and Privilege”
I'm speaking of Wellington, not DC.
"
You're never going to be able to make employers pay much more for an employee than their marginal product of labour; if you try, employers will shed employees instead until their marginal product of labour is high enough to make hiring people worth it again (in accordance with the law of diminishing returns, marginal product of labour falls with the quantity of labour being used, all things being equal). In other words, forcing employers to pay more requires creating a permanent class of unemployed people.
If you want to help improve the lives of low productivity workers, you'll need to do more than just force employers to act like charities (or at least part-charities). I'd suggest supplementing their incomes directly.
"
You are mistaken. Taxis are required to display their prices, but prices themselves are not set by government.
"
In New Zealand our welfare system allows people on the unemployment benefit to get one-off payments to buy basic clothes that can be used in job interviews, on the theory that it's an investment in getting them off welfare. By the same token, offering people a ticket out of town (and perhaps relocation assistance) may have merit.
"
Thanks Rufus, that's very helpful.
It seems to me there are two reasons why this might happen:
1) the boss is being an ass. In this case unions or looking for another job would be my recommendation, with the focus being on the first of those options if your alternative job prospects are poor in your area.
2) monopsony rents, as I mentioned above. I'd definitely go with a union for this case.
3) your marginal product of labour in your current job (marginal product of labour is at least as much about your employer as about your skills or work ethic) is too low for you get decent pay or conditions. All a union (or legislation for that matter) will do is drive the firm out of business. You're only real option here is to get out, and if your town has nothing else you need to find a new town. That might sound a bit "let them eat cake", but my parents have changed cities 4 times for work reasons (including just recently, in their early 50s). I myself have done it once, and I'm not yet 30. It can be hard, but people have been migrating for work since the Industrial Revolution at least. Plus, I have some thoughts about welfare reforms that would help make it easier to move.
Does that make sense?
"
Herb, New York's local government practices rent control, which one of my fellow economist once described as the surest was of destroying a city short of bombing it. I'm not surprised when they get something wrong, I'm surprised when they get something right.
And an abundance of unprofitable, poorly-maintained cabs is not a market failure, in fact it is most likely a sob story told by taxi companies in the hope the legislature would be mutton-headed enough to buy it, and legislate them more profits. If the badly-maintained taxis are a danger on the road, then enforce vehicle standards. If the surplus of taxis is causing congestion, then use the tax system I outlined in my original post. And if profits in the taxi industry were really too low, people would leave and go do somethign else which would drive up taxi fares to restore equilibrium. None of these scenarios require a medallion system.
"
Except that you are wrong, there is no need. Why do you think there is?
"
Exploitation is a tricky word, ideally I'd like a few concrete examples. The only thing that comes to me (in terms of purely private exploitation) is an employer extracting monopsony rents from employees by offering them lower wages or poorer conditions than the market would bear. My response to this would be unions and perhaps antitrust law would be appropriate tools.
Beyond that, I would need more details from you.
"
As far as artificial barriers to entry go, you are simply wrong. I cannot think of a situation when you would ever need to impose artificial barrier to entry as a deliberate policy. And you are wrong empirically, New Zealand has no medallion system and our taxi services run just fine, even in Wellington and Auckland, our highest density areas.
What is it exactly that you think a medallion system does that makes it so essential?
"
Not to this libertarian, environmental policy is one area where I think libertarians can learn from liberals. And I don't think the strong-weak spectrum is very helpful here. What I want to do is make government pass general rules, rather than letting government do special deals. An institution may have a lot of power in some areas and very little in others.
"
There is already a perfectly good market mechanism for transferring income from your younger self to your older self - it's called savings. If people don't earn enough in their lifetime to save enough then they the problem is that they're poor, not that they're old.
I'm not saying there aren't old and sick people who need help, I'm saying that treating all old and sick people as if they needed help (and a lot of help, given how much Social Security and Medicare cost) is a mistake.
"
Thanks Erik.
"
Welfare was one area as I alluded to in my post, but I think environmental policy and consumer protection are two other areas where liberals have some good points to make. I'll go into more detail in a follow-up post.
On “Libertarianism & Power”
Clearly drugs need to be made Double Illegal. Any action other than doing this immediately is morally equivalent to murdering babies (plus, mugging BlaiseP).
"
Funny, I recall us having a conversation not so long ago about sentences with this construction ;)
"
This is an excellent post Erik, and the conversation sparked here is very interesting. I'll have to compose a post of my own some time in the weekend.
On “The Conscience of a Liberal”
As large an audience of Americans apparently.
"
The first thing that I notice about this definition is how provincial it is. The New Deal doesn't mean all that much to the rest of the world.
Also, which parts of The New Deal are we talking about here? The New Deal could be construed to include hundreds of separate policy initiatives, some almost everyone would accept were good ideas, almost everyone would accept were bad ideas, with quite a few in the middle.
It sounds more like Krugman trying to signal affiliation to modern US liberals than a serious attempt at political philosophy.
On “A Decade of Decriminalization”
How much was Portugal spending on drug law enforcement before decriminalisation? Because that's what's going to determine how much better things will get when you start legalising drugs.
While marijuana and harder drugs are illegal everywhere these days, the effort that goes into enforcement varies widely. In New Zealand you generally won't get arrested for simple possession of marijuana because the police don't consider it worth their time. By contrast, I understand the US government spends a ridiculous amount of money on drug enforcement.
On “Quick Introduction and Statement of Purpose”
Welcome to the League Chris, I look forward to reading about your exploits. As a policy economist dysfunctional systems hold a certain fascination for me.
*Comment archive for non-registered commenters assembled by email address as provided.