Month: February 2008

A new Cato study, by Indur Goklany, suggests that instead of carbon taxes we should spend money on better water policy, drought prevention, anti-malarials, sea level protection, and so on.  In general we should make the world as wealthy as possible.  Here is the link, the piece is intelligent throughout and well worth reading.

Two questions suggest themselves.  First, is the choice either/or?  I don’t see arguments against a revenue-neutral carbon tax.  Second, is there really enthusiasm for the proposed measures or is the real intent to do little or nothing on carbon?  Since this is both a Goklany piece and a Cato piece, an interesting question arises: who exactly is now obliged to push for anti-malarial foreign aid?  Cato?  Goklany?  Either/or?  Both?  Or is it enough to just make the comparison once and leave it at that?

When it comes to big business, appearances it seems, matter a lot.
Companies tend to be more profitable if they have a chief executive
with a face rated by observers as being more competent, dominant and
mature.

Similarly, companies with a chief executive judged to be
a good leader, based purely on his facial appearance, also tend to be
more profitable. These associations still hold even after controlling
for the influence of age and attractiveness.

As Nicholas Rule
and Nalini Ambady, who conducted the research, point out: it isn’t at
all clear whether chief executives with a certain kind of appearance
help their company towards profit, or if instead profitable companies
choose to employ chief executives who look a certain way.

Here is more information.

In a frightening inversion of satire into reality, European candlemakers are petitioning for protection; here is Bastiat’s take on that.  This time it’s against — can you guess?  — the Chinese.

Thanks to Tim Worstall for the pointer.

This is from Bryan Caplan:

Fun facts from Kip Viscusi‘s article on "Job Safety" in David Henderson’s encyclopedia:

Annual OSHA penalties for safety violations (2002): $149,000,000

Annual Workers Compensation Premiums (2001): $26,000,000,000

Estimated Annual Wage Premiums for Risky Activities (2004 dollars): $245,000,000,000

His point: Market incentives for worker safety dwarf legal incentives, which in turn dwarf regulatory incentives. The level of safety we see in the workplace today is about the same as the level we’d see if government just looked the other way.

Addendum: This picture shows how much OSHA has increased American job safety.

Here is his non-excerptable attempt, via Brad DeLong.  Still I am not convinced.  Using the Law of the Excluded Middle, yes you can get me to agree that the stimulus package is unlikely to do direct economic harm.  I still see the stimulus plan in terms of larger symbolic battles.  We pass too many policies just to show politicians are "doing something," just because it is an election year, just because voters think government should solve every problem, and just because politicians know that voters don’t understand any real economics.  This fits all those categories.  On the substance, I would add that for the U.S. "not going bankrupt" is a matter of degree.  Compared to Brad or Arnold Kling, I’m still a fiscal optimist.  But I’ve spent too much time reading papers on the intransitivity of indifference relations:  "Just another grain of sugar in your coffee, dear.  It won’t change the taste even a tiny bit…"

Paul Krugman points to the new Federal Reserve senior loan officer survey which reports that standards for commercial real estate loans are tightening creating in Krugman’s words "an incredible credit crunch in progress."

Over at Carpe Diem, however, Mark Perry looks to Federal Reserve data on actual loans and finds that commercial loans from large banks are at an all time high and increasing rapidly.

The credit crunch, if that is what one should call higher standards, appears to be contained to the real estate market.