I've been following recent disputes among academic economists in the blogosphere. Very interesting.
I think macroeconomist Brad DeLong has put his finger on one of the essential differences in approach that feeds economic disputes, as well as political disputes.
Commenting on a presentation by Robert Lucas, Jr., a noted economist of the Chicago School, who cites taxes, unions, financial regulation and the expanding welfare state as causes of the persistent depression, DeLong has this to say:
"[A]s Gavyn Davies [another economist blogger] drily notes, Lucas "seems to have ruled...out [alternate explanations] by a priori conviction, rather than any detailed empirical work."... Lucas seems to be discarding the very idea that economics, like the natural sciences, should be based on the evidence. He appears to believe that the state of the world can be ascertained by deductive logic, without ever looking out the window. That's fine, I suppose, if you believe that economics is a branch of philosophy rather than a branch of science. But it does not seem to be an approach that is likely to enable many practical improvements in the lives of human beings."
Reminds me a bit of the Queen of Hearts in Alice in Wonderland: "Sentence first - verdict afterwards." And perhaps then a bit of evidence, if ever we get around to it.
But I'm afraid too many in Congress treat economics as a branch of philosophy rather than science.
Saturday, June 4, 2011
Friday, June 3, 2011
Milk Jug Protests
Remember the local protests against President Obama's health care reform proposal at the Oriental post office last year? The protesters, mostly Republicans, said they didn't want any government interference in health care, though most of them were users of Medicare, VA and other US Government health care programs. Some seemed to fear that health care reform would take these away.
We now know that it is the Republicans who want to replace Medicare with a voucher system, thus turning it into something entirely different from the present system. But they get upset if anyone points out that Congressman Ryan's plan is a voucher system (which it is) and will end Medicare as it now exists (which it will).
Paul Krugman points out quite clearly in his blog why Medicare is sustainable in its present form, but is susceptible to improvement. If you are interested in his explanations, look here. For even more information, once on his blog, keep clicking on the "previous post" button. Eventually, you will come to an explanation of liquidity preference and an informative graph.
Personally, I think a better health reform would have been to adopt a system like VA. For various reasons, in any event, doctors are increasingly withdrawing from their own private practices and going on salary. This brings many benefits to them as well as to their patients. I, for one, would be more comfortable knowing that the physician isn't recommending a procedure because it improves his own personal income.
We now know that it is the Republicans who want to replace Medicare with a voucher system, thus turning it into something entirely different from the present system. But they get upset if anyone points out that Congressman Ryan's plan is a voucher system (which it is) and will end Medicare as it now exists (which it will).
Paul Krugman points out quite clearly in his blog why Medicare is sustainable in its present form, but is susceptible to improvement. If you are interested in his explanations, look here. For even more information, once on his blog, keep clicking on the "previous post" button. Eventually, you will come to an explanation of liquidity preference and an informative graph.
Personally, I think a better health reform would have been to adopt a system like VA. For various reasons, in any event, doctors are increasingly withdrawing from their own private practices and going on salary. This brings many benefits to them as well as to their patients. I, for one, would be more comfortable knowing that the physician isn't recommending a procedure because it improves his own personal income.
Jobs, Jobs, Jobs
Today's employment news isn't good.
Unemployment is up to 9.1%.
I hate to be a pessimist, but I'm not surprised. The stimulus plan (ARRA) wasn't big enough, and included too many tax reductions in lieu of direct government expenditures.
To understand why, you need to be familiar with three concepts:
A. Liquidity trap. That is when our national monetary authority reduced short term interest to zero, but banks aren't lending and companies aren't borrowing. We are in a liquidity trap. There are many reasons for this - companies, for example, aren't investing because they have no expectation that new customers will suddenly appear. Another reason is:
B. Liquidity preference. In uncertain economic times, companies prefer to hold liquid assets (that can be readily converted to money, like bonds) rather than illiquid assets, like real estate and other commodities;
C. Aggregate Demand. Classical economists have believed for nearly two centuries that there will never be an overall shortage of aggregate demand. Time and again they are proven wrong, but the belief persists. Our aggregate demand is way down because we have the lowest percentage of the population employed since the great depression.
The reason our recovery is stalled is that, in a liquidity trap only government expenditures have a realistic chance of overcoming liquidity preference, improving aggregate demand for goods and services, and therefore stimulating businesses to hire workers and invest in increasing productive capacity.
Businesses aren't refusing to invest because Democrats have hurt their feelings, as some seem to suggest.
Unemployment is up to 9.1%.
I hate to be a pessimist, but I'm not surprised. The stimulus plan (ARRA) wasn't big enough, and included too many tax reductions in lieu of direct government expenditures.
To understand why, you need to be familiar with three concepts:
A. Liquidity trap. That is when our national monetary authority reduced short term interest to zero, but banks aren't lending and companies aren't borrowing. We are in a liquidity trap. There are many reasons for this - companies, for example, aren't investing because they have no expectation that new customers will suddenly appear. Another reason is:
B. Liquidity preference. In uncertain economic times, companies prefer to hold liquid assets (that can be readily converted to money, like bonds) rather than illiquid assets, like real estate and other commodities;
C. Aggregate Demand. Classical economists have believed for nearly two centuries that there will never be an overall shortage of aggregate demand. Time and again they are proven wrong, but the belief persists. Our aggregate demand is way down because we have the lowest percentage of the population employed since the great depression.
The reason our recovery is stalled is that, in a liquidity trap only government expenditures have a realistic chance of overcoming liquidity preference, improving aggregate demand for goods and services, and therefore stimulating businesses to hire workers and invest in increasing productive capacity.
Businesses aren't refusing to invest because Democrats have hurt their feelings, as some seem to suggest.
Thursday, June 2, 2011
Modern Anarchism
Government isn't the solution - government is the problem!
Did you ever hear that? If you really believe it, you are an anarchist.
Tea Party adherents say they believe it.
Until the pot holes on the way to work don't get fixed. Or they lose their job. Or their house catches fire.
Did you ever hear that? If you really believe it, you are an anarchist.
Tea Party adherents say they believe it.
Until the pot holes on the way to work don't get fixed. Or they lose their job. Or their house catches fire.
Wednesday, June 1, 2011
Rich Man's War - Poor Man's Fight
I just finished reading an interesting book about the Civil War in Mississippi: The State of Jones.
I had long known that something happened during the war in Jones County, Mississippi. The county became a refuge for deserters and supporters of the Union. The central figure was Newton Knight, a yeoman farmer who opposed the planter class. He not only organized and led a force of Unionists who opposed the Confederacy, he established an interracial community in the county.
I don't know if it was these farmers who invented the phrase, "it's a rich man's war and a poor man's fight," but it might well have been.
Bitter as Newton Knight's fight was during the war, the struggle afterwards was even more challenging as the planter class reestablished control of the state after the war through a reign of terror. They even succeeded to a great extent in reestablishing white dominion over black laborers. How Knight survived the assassination attempts and the violence of the Klan to die in his old age is in itself a remarkable story.
I have also been reading the New York Times' Disunion series of articles. I'm learning a lot about the Civil War I never knew. A complicated tale.
I had long known that something happened during the war in Jones County, Mississippi. The county became a refuge for deserters and supporters of the Union. The central figure was Newton Knight, a yeoman farmer who opposed the planter class. He not only organized and led a force of Unionists who opposed the Confederacy, he established an interracial community in the county.
I don't know if it was these farmers who invented the phrase, "it's a rich man's war and a poor man's fight," but it might well have been.
Bitter as Newton Knight's fight was during the war, the struggle afterwards was even more challenging as the planter class reestablished control of the state after the war through a reign of terror. They even succeeded to a great extent in reestablishing white dominion over black laborers. How Knight survived the assassination attempts and the violence of the Klan to die in his old age is in itself a remarkable story.
I have also been reading the New York Times' Disunion series of articles. I'm learning a lot about the Civil War I never knew. A complicated tale.
Tuesday, May 31, 2011
Zoning in Oriental
I previously mentioned proposed changes to our zoning ordinance. I just transmitted the following e-mail to the town manager:
"Dear Bob,
I just came across a School of Government handout prepared by Professor David Owens of the Institute of Government concerning Published Notice for Hearings on Rezonings and Zoning Text Amendments. On rereading that handout, I wonder if the notice published May 18 in Pamlico News and the week of May 26 in County Compass meets the requirements of NCGS 160A-364. The relevant portion of Professor Owens' handout says "the notice must be published in a newspaper of general circulation in the community once a week for two calendar weeks,...." The wording seems to imply that the notice would be published in the same newspaper. I assume you checked with the Town Attorney on this point.
More to the point, Professor Owens explains, "The notice must be sufficiently detailed to allow citizens to discern what is being proposed and whether they would be affected." He goes on to say, "The notice should clearly indicate: (1) what property is potentially affected; (2) the nature of the proposed regulation; and, (3) the time and place of the public hearing." Arguably, the notice as published only meets requirement (3).
Before addressing the substance, it seems to me that, if Article XV concerning amendments to the GMO is so deficient and confusing as to require amendment, the hearing on this amendment should be held separately. Any amended version of Article XV should then be followed in considering the other amendments.
I believe the public notice is inadequate in the following respects:
Article IV: Table of Permissible Uses - The proposed amendment introduces three new or modified categories of uses - Religious institutions including associated residential structures and buildings. Taken together with other amendments, this will affect other property owners; Travel Trailer/RV; Residential Nursing Care Institutions.
Readers of the public notice will have no idea that these measures are under consideration.
Article VI: Development Standards for Section 80 - introduces standards for town houses, exempting them from minimum lot width, minimum lot size and setbacks.
This is a significant new departure, to which the public notice calls no attention.
Article VIII: Signs - This is a complete rewrite. It is almost impossible from the version published on the town's web site to ascertain which provisions of the proposed ordinance are new. I notice the draft requires new signs to comply with the building code of the town. I have been unable to find a copy of the Town of Oriental's building code.
Article XV: Amendments - I believe this draft should be considered first. If changes are adopted, the procedure as amended should be used for considering the others. Even though it is possible to access a very helpful compilation of the suggestions incorporated in the proposed amendment, it is not possible to tell from the published notice what is being proposed and how it would affect individual citizens.
Article XVI: Word Interpretations and Basic Definitions - The major innovation here is to provide definitions for a townhouse and a townhouse development. It is not possible to tell this from the public notice. There are significant issues associated with the adoption of this amendment in conjunction with the proposed amendment to Article VI.
I believe we have time to do this right.
"Dear Bob,
I just came across a School of Government handout prepared by Professor David Owens of the Institute of Government concerning Published Notice for Hearings on Rezonings and Zoning Text Amendments. On rereading that handout, I wonder if the notice published May 18 in Pamlico News and the week of May 26 in County Compass meets the requirements of NCGS 160A-364. The relevant portion of Professor Owens' handout says "the notice must be published in a newspaper of general circulation in the community once a week for two calendar weeks,...." The wording seems to imply that the notice would be published in the same newspaper. I assume you checked with the Town Attorney on this point.
More to the point, Professor Owens explains, "The notice must be sufficiently detailed to allow citizens to discern what is being proposed and whether they would be affected." He goes on to say, "The notice should clearly indicate: (1) what property is potentially affected; (2) the nature of the proposed regulation; and, (3) the time and place of the public hearing." Arguably, the notice as published only meets requirement (3).
Before addressing the substance, it seems to me that, if Article XV concerning amendments to the GMO is so deficient and confusing as to require amendment, the hearing on this amendment should be held separately. Any amended version of Article XV should then be followed in considering the other amendments.
I believe the public notice is inadequate in the following respects:
Article IV: Table of Permissible Uses - The proposed amendment introduces three new or modified categories of uses - Religious institutions including associated residential structures and buildings. Taken together with other amendments, this will affect other property owners; Travel Trailer/RV; Residential Nursing Care Institutions.
Readers of the public notice will have no idea that these measures are under consideration.
Article VI: Development Standards for Section 80 - introduces standards for town houses, exempting them from minimum lot width, minimum lot size and setbacks.
This is a significant new departure, to which the public notice calls no attention.
Article VIII: Signs - This is a complete rewrite. It is almost impossible from the version published on the town's web site to ascertain which provisions of the proposed ordinance are new. I notice the draft requires new signs to comply with the building code of the town. I have been unable to find a copy of the Town of Oriental's building code.
Article XV: Amendments - I believe this draft should be considered first. If changes are adopted, the procedure as amended should be used for considering the others. Even though it is possible to access a very helpful compilation of the suggestions incorporated in the proposed amendment, it is not possible to tell from the published notice what is being proposed and how it would affect individual citizens.
Article XVI: Word Interpretations and Basic Definitions - The major innovation here is to provide definitions for a townhouse and a townhouse development. It is not possible to tell this from the public notice. There are significant issues associated with the adoption of this amendment in conjunction with the proposed amendment to Article VI.
I believe we have time to do this right.
Monday, May 30, 2011
War Movies
Every Memorial Day we are treated to war movie marathons. They invariably include the good, bad and ugly.
Since Leonard Maltin is an unreliable judge of war movies, I thought I'd give my thoughts on some of the movies screened this weekend.
Pearl Harbor. This 2001 movie is full of special effects, an unlikely love story and totally inaccurate depictions of the war. The computer graphics scenes of the attack on Pearl Harbor include among the ships attacked, several Aegis cruisers (vintage 1980's), Knox class frigates (vintage 1970's), and several other anachronisms. Since the scenes were obviously computer generated, I don't know why the producers couldn't have used accurate graphics. The Doolittle raid at the end of the movie borrowed heavily from images in "Thirty Seconds Over Tokyo," but totally distorted the events. Not historically accurate. If you want to see an accurate portrayal of the attack on Pearl Harbor, watch "Tora, Tora, Tora."
If you want to see an accurate portrayal of the Doolittle raid, watch "Thirty Seconds Over Tokyo." The technical quality is high, the story is accurately told, and for a movie filmed during the war, there is a minimum of chauvinistic propaganda. I think this is the best WWII movie filmed and released during the war.
Midway. Fairly accurate. Includes some unnecessary dramatic conflict. Would be improved by the removal of Charleton Heston's grimacing. Drags at times. Pretty accurate concerning the events of the battle, including the intelligence that made it possible.
A Bridge Too Far. Great Movie. [Leonard Maltin didn't like it much.] For a British movie, it follows author Ryan's negative portrayal of the British Army leadership pretty faithfully. Filmed at many of the actual sites of the events. If you happen to be traveling to Europe, a visit to the Airborne Museum in Arnhem is worth a side trip.
The Devil's Brigade. Mildly entertaining variation of the theme of nonconformist officers and men confounding their hidebound superiors.
The Best Years of Their Lives. One of the best war movies ever. And it all takes place after the war. If you haven't seen it, do so.
These are just some movies I happened to catch this weekend. There are other good war movies, but I'll save them for later.
Since Leonard Maltin is an unreliable judge of war movies, I thought I'd give my thoughts on some of the movies screened this weekend.
Pearl Harbor. This 2001 movie is full of special effects, an unlikely love story and totally inaccurate depictions of the war. The computer graphics scenes of the attack on Pearl Harbor include among the ships attacked, several Aegis cruisers (vintage 1980's), Knox class frigates (vintage 1970's), and several other anachronisms. Since the scenes were obviously computer generated, I don't know why the producers couldn't have used accurate graphics. The Doolittle raid at the end of the movie borrowed heavily from images in "Thirty Seconds Over Tokyo," but totally distorted the events. Not historically accurate. If you want to see an accurate portrayal of the attack on Pearl Harbor, watch "Tora, Tora, Tora."
If you want to see an accurate portrayal of the Doolittle raid, watch "Thirty Seconds Over Tokyo." The technical quality is high, the story is accurately told, and for a movie filmed during the war, there is a minimum of chauvinistic propaganda. I think this is the best WWII movie filmed and released during the war.
Midway. Fairly accurate. Includes some unnecessary dramatic conflict. Would be improved by the removal of Charleton Heston's grimacing. Drags at times. Pretty accurate concerning the events of the battle, including the intelligence that made it possible.
A Bridge Too Far. Great Movie. [Leonard Maltin didn't like it much.] For a British movie, it follows author Ryan's negative portrayal of the British Army leadership pretty faithfully. Filmed at many of the actual sites of the events. If you happen to be traveling to Europe, a visit to the Airborne Museum in Arnhem is worth a side trip.
The Devil's Brigade. Mildly entertaining variation of the theme of nonconformist officers and men confounding their hidebound superiors.
The Best Years of Their Lives. One of the best war movies ever. And it all takes place after the war. If you haven't seen it, do so.
These are just some movies I happened to catch this weekend. There are other good war movies, but I'll save them for later.
Decoration Day
We call it Memorial Day now. It had its origin as a day to decorate the graves of those who fell in defense of the Union.
It was about the Civil War.
It has morphed into a more universal day of recognition of those who have given their lives in the service of their country in any war.
But we shouldn't forget the beginning, in Charleston, SC in 1865.
Here is the story.
It was about the Civil War.
It has morphed into a more universal day of recognition of those who have given their lives in the service of their country in any war.
But we shouldn't forget the beginning, in Charleston, SC in 1865.
Here is the story.
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