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#2. I know that economists care very little for democracy as it's inefficient and makes life difficult for corporations, but for once Cochrane is right: wealth inequality subverts democracy.

Which economist doesn't care for democracy?

As the best judge of my own situation, it is very inefficient if I do not have a say in it.

#3. Showed my 80 y.o. parents Borat w/ some trepidation. Trepidation turned to concern that they would choke from laughing too hard.

My grandfather, who sadly never lived to see it, would have loved Borat. He loved humiliation based humor. My humanitarian discomfort reduced the pleasure I got from it greatly. But then I hate reality tv.

I'm with you. I can't watch humiliation based television. I have to get up and leave the room.

According to the distinguished Ezekiel Emanuel, your parents shouldn't even be alive to consider the merits of Borat.

#4 Great article.

#2. An enjoyable romp. Lots of good stuff. I like Cochrane with the gloves off from time to time.

Don Boudreaux, in a mere 130 words, skewered Krugman's recent inequality-mongering but good:

http://cafehayek.com/2014/09/very-dry-water-hard-frozen-fire-and-the-ostentatious-invisible-rich.html

Cochrane has a strange take on what Krugman and Stiglitz don't want to talk about:

"Why is there a big political debate just now? Why is the Administration and its allies in the punditry, such as Paul Krugman and Joe Stiglitz, all a-twitter about “inequality?” Why are otherwise generally sensible institutions like the IMF, the S&P, and even the IPCC jumping on the “inequality” bandwagon?

That answer seems pretty clear. Because they don’t want to talk about Obamacare, Dodd-Frank, bailouts, debt,
the stimulus, the rotten cronyism of energy policy, denial of education to poor and minorities, the abject failure of their policies to help poor and middle class people, and especially sclerotic growth. "

When has Krugman not been talking about these things? Krugman hasn't talked about Obamacare, Bailouts, Stimulus, and debt?

It IS an interesting puzzle to figure out what people on the left who claim to be against cronyism but for higher taxes and bigger government are after -- are they really just deeply confused? I think the key to understanding this is that, in their minds, corporatism is not necessarily cronyism. In the progressive view, 'tame' corporations that willingly play ball with the government to support and implement what progressives consider worthwhile are automatically absolved of cronyism even if they lobby intensely for the programs and pull in huge sums of (low-risk, government provided) cash. In the progressive mindset, politically-connected businesses living on green-energy subsidies are not engaged in cronyism. Big health-insurers who played along with Obamacare are absolved. Elizabeth Warren doesn't see the Ex-Im bank as a fount of cronyism because GE and Boeing are the 'right sort' of progressive-friendly corporations. And so on.

Yep. Trickle down is bad when you give tax breaks to the Kochs, but its perfectly fine to subsidize green energy companies. Principals over princples.

If you're going to give a tax break, it may as well be for something we actually want.

Well at least the Kochs invest in useful things, greenie stuff, not very often.
I'd prefer to let them both figure it out for themselves.

Where is the cronyism in programs like Social Security, Medicare, Unemployment Insurance, etc? Does a bigger welfare state imply more cronyism?

Another reason they don't bother talking about govt cronyism because they do not believe it is any worse than the rent-seeking that takes place in the private economy.

Ideally this rent-seeking would be taken out by the market (efficient firms win, econ 101), but they do not believe it is.

If you share their views about the degree of rent-seeking going on in the financial industry, why would you reach the conclusion that moving money away from corporations to govt is bad? I actually think it's quite a coherent view

Boudreaux and Krugman have one thing in common; both are incapable of communicating with anyone who doesn't already agree with what they have to say.

Re Bodreaux: While I do not think that Krugman is correct that "flaunting" wealth is a big motivator of the wealthy to be wealthy, it is not inconsistent with the report that the public at large does not realize just how much wealthier the top x% is than the remaining (1-x)%. If "flaunting it" is a motivation, it is flaunting for an audience made up of others in the x%. Indeed the idea that some of the utility of consumption to high consumption folks comes from having relatively higher levels than others is one of the reasons that progressive taxation of consumption recommends itself as a source of revenue.

The public realizes very little and for Krugman to selectively point out only this innumeracy of their many is typical for his propagandist lies.

Boudreaux's argument is missing a step. The opinion polls Krugman cites -- and that Boudreaux in turn references in order to accuse Krugman of inconsistency -- attempt to measure what the median American thinks or believes. But Krugman's argument about conspicuous consumption is not that the rich are necessarily trying to impress the median American. Rather, they may be much more interested in impressing their friends and neighbors ("keeping up with the Joneses") and these will be people who increasingly inhabit the higher layers of the income distribution.

In other words, 1%-ers and 0.1%-ers may be trying to distinguish themselves from 5%-ers rather than 50%-ers. Think about basic human nature -- are all those Ivy League graduates living in Manhattan and earning six figures content with the knowledge that they are much better off than guys earning $40,000 in El Paso, Texas? Probably not -- instead, they are wondering why their classmates with the same education and experience go on nicer vacations and have nicer apartments than they do.

@ThomasH and Ricardo,

It's one thing to flub like Krugman did there. And The Man himself can blithely move forward and ignore the embarrassing contradiction.

For a distraught Krugman-sympathizer to come around here, after the fact, in the clear light of day, and try to put lipstick on this thing, well...

as the great philosopher Mike Ditka once said: "Who ya crappin'?"

#5 What was the control group in this study?

Economists tend to be ignorant of evolutionary biology and science more generally.

Any examination of the "permanent effect" of recessions or anything else for that matter that doesn't take into account natural selection is stupid and worthless.

It's like saying that the "permanent effect" of antiobiotics is reducing microorganism replication. Quite the contrary.

I think they mean it's permanent for the people who are adults in their early 20s at the time of the recession (i.e., the missed births don't get made up for later). They don't mean the tendency to have fewer children as a result of experiencing a recession is passed on to their progeny.

Jason Collins has written clever things about the effects of evolution on fertility, IIRC. He predicts a strong bounceback from current lows, for evolutionary reasons.

@Jason - that's a very Straussian take on antibiotics, and I think you think too much. It's like a chess player who is paralyzed by worrying about what his opponent will do in move twenty but gets mated in one move. In fact, antibiotics do reduce microorganism replication, at the first order, and natural selection in a non-linear system like human economics is largely worthless IMO.

I don't understand your comment, but I also disagree with the analogy to antibiotics. Antibiotics are something that is designed competing with something that evolves. It's not obvious how that will play out.

Human fertility changed in response to a series of shocks (technological shocks, at least viewed broadly) like the invention of birth control and the introduction of women to education and the workplace. Those shocks aren't going to happen again. So people will inevitably evolve around the problems and fertility will rise.

Humans, as conscious thinking animals that can plan their futures (or even have a concept of 'the future') and control their reproduction are not subject to Darwinian laws of fertility the same way unthinking living beings are. In other words, the decline in fertility worldwide will not be reversed. The question is will the decline stop at some equilibrium, and my guess is it will.

'People' don't 'evolve', species do, but our species is unique and does not evolve the same way as unthinking animals.

There's nothing magical about having brains that keeps us from being subject to evolution like any other replicator with mechanisms for heredity. I don't see how the uniformity you posit could be enforced, short of a global police state. If people are diverse with respect to fertility and fertility is heritable, both of which are true, change is coming.

I agree that the various shocks have not yet hit all peoples. For example, equal education of women (and the resultant loss of fertile years) is not yet global. Some populations will have declining fertility for some time before the rebound. Others are probably near the bottom already. It's likely that the bottom is in different places for different groups based on their genetic and cultural endowments.

Actually, there IS something 'magical' about brains (future planning) and technology (birth control and abortion) with respect to fertility. People are diverse wrt fertility, but with the advent of the technology the overwhelming trend has been to prefer fewer children across the entire world save a few small subcultures. And while people may inherit the physical ability to have many children, whether they do or not is now a matter of choice, and we see very clearly that humans are choosing to have fewer kids no matter how fertile their bodies are.

Compare it to another heritable trait like height. If being tall imparts some reproductive advantage (which is does at least for males), over time the species will get taller, because there's no technology to prevent your kids from being tall nor is there much if any desire to implement it. But having kids is now a definite CHOICE, in a manner that only our species can choose. Human intelligence has short-circuited Darwinian physical evolution, or distorted it at least. And fertility is very clearly no longer subject to 'natural' (unconscious, technology-free) selection.

I'm very open to being shown what I'm missing here, but the demographers are pretty much in agreement on this.

"with the advent of the technology the overwhelming trend has been to prefer fewer children across the entire world save a few small subcultures."

Yes, we're experiencing a technological shock. But we can't reinvent birth control. (Although there's a little room for improvement, particularly in making it better for men. But I think that's a relatively small improvement in the scheme of things on the near-perfect birth control we already have in the West, at least when measured by efficacy and unobtrusiveness.) So once the adjustment is made, it's done. You will have people with high desire for children eschew birth control and people with low desire for children die out, over the course of generations.

Oswald Spengler discusses this topic in "The Decline of the West': http://nailheadtom.blogspot.com/2014/09/according-to-oswald-spengler.html

What you're missing is that preferences and behavioral inclinations are heritable, just like everything else, and they're constantly under selective pressure, just like everything else.

In the current environment, people who are inclined to have fewer kids are being out-reproduced by people who are inclined to have more kids.

But is the INCLINATION to have more kids heritable? The kids of those who choose to have lots of kids, will they as well? The data shows otherwise. Will the worrld one day be full of only Mormons, Orthodox Jews, and children of harems? I'm skeptical.

Again, natural selection to me breaks down when human agency and technology comes into play.

Yes, behavioral tendencies and inclinations are heritable

Natural selection always operates.

In the current environment, there is no selective advantage to choosing to have fewer kids or wanting to have fewer kids. Quite the contrary.

I believe the literature says that fertility is strongly heritable. Anyone who's seen cases of baby fever must at least suspect a biological origin for the behavior. That said, it doesn't really matter if it's heritable because of genetics or culture or whatever. It only matters that it's heritable.

I'm also skeptical that religiosity is the only important parameter, but obviously it's one of the studied ones. So no, although I expect the religious to make up a larger fraction of the population in 2100, I also expect secular fertility to rebound. In fact, I'd expect it to rebound strongly given the extreme evolutionary pressure it's under. 50 years ago everybody physically capable and able to find a partner had kids, today it's only the people who really, really want kids. The next generation is mostly going to be made up of the kids of people who really, really wanted to have kids.

But even those that really really want kids, the ones with that 'baby fever' you mention...they limit themselves to generally 2, often 1, 3 is a rare large family. And of course many still choose to or are unable to have any children.

So we'll see I guess (or maybe our kids will see) but I'm still betting on the demographers: world's population plateaus and starts to slowly shrink around the year 2070-2080.

@ phoenix: Then why is fertility collapsing almost everywhere on the planet?

And you could make a case that having fewer, more carefully parented and endowed (financially, etc) kids is a superior strategy for selection.

I mentioned in another thread that I live in a wealthy East Coast suburb. Largish families are not rare around here. I could throw a baseball from my yard and hit four houses with four or more kids (though I've got a pretty good arm). These are not Mormons or Amish.

I don't think the demographic consensus you perceive exists. The UN publishes a return-to-trend forecast (which I think you are referencing) that is roundly criticized, and the future path of population is a matter of debate.

I'll note that the UN forecast is criticized in both directions, i.e., by people who are worried everybody is headed for Singapore-style collapse and people who foresee a rebound to above replacement. I'm not a demographer, and I might be wrong, but I don't think this is a settled matter.

Intuitively, though, the evolutionary argument seems very hard to dismiss. It's just hard to imagine how you'd get uniformity, and diversity combined with heritability implies rebounding fertility.

Natural selection always operates, even in an environment in which fertility is collapse. In fact selection for wanting to have more kids is heightened in an environment in which fertility is collapsing compared to an environment in which fertility is stable and not collapsing.

Having fewer, more carefully parented and endowed (financially, etc) kids can be a superior strategy, but it generally isn't in the current environment. It depends on the environment and its selective pressures.

If you want to understand the biomolecular basis of evolution, you need to understand gene transcription (i.e. protein synthesis), errors in DNA replication and the proteins which usually catch these mistakes and fix them.

For antiboitics, the problem is that a random error in replication will eventually be one which contributes to antibiotic resistance.

@Nathan W, I agree on antibiotic resistance, but as a first order, which means 'first pass', antibiotics kill germs dead. That's unavoidable. And something I think Lord Action and his kind miss. I tend to agree more with msgkinds on this thread, in that the laws of evolution tend to be thwarted when humans are involved, since they can plan their future, unless you take a very broad definition of evolution, such as 'whatever happens by conscientious choice is evolution'. BTW there is a school of economic thought that says 'organizations evolve over time, and usually become more complex, and for the better' that justifies why Big Government is actually good for society and unavoidable (from an evolutionary point of view).

None of this will matter once anti-aging technology comes of age.

At that point, the world's population will grow at a steady rate regardless of fertility.

Suppose that date is 2100, 2200, or even 2300. In the long run, it'll make little difference, whatever Baron Keynes might say.

To the contrary, even immortality won't change things much. Fertility still dominates the path of population because exponential growth is compared to linear growth. At best immortality provides some sort of floor - it says growth is greater than zero.

Cochrane says that inequality is not a problem that needs solving, believing as he does that liberals claim inequality is a problem as an excuse to confiscate other people's property. Thus, I suppose he sees no relationship between excessive inequality and financial instability. Well, maybe there's a correlation, but we all know that correlation doesn't mean causation. My view is that capitalism is an efficient system, and that the correlation between excessive inequality and financial instability is evidence of that efficiency, as the financial collapse is simply capitalism's way of correcting excessive inequality. It's a blunt instrument but it works. Indeed, it worked extremely well in 1929, as inequality plummeted after the financial collapse and stayed low for generations. My view is that the system's instrument for inequality self-correction is too blunt, and I'm thankful that Paulson, Geithner, and Bernanke share that view and employed the tools to prevent the value of financial assets from plummeting and sending us into another great depression. I suppose Cochrane is confident that, even if excessive inequality correlates with financial instability, the government and central bank will always use the tools at their disposal to manage each financial crisis, as did Paulson, Geithner, and Bernanke. How confident are you that President Cruz will appoint men and women who share the view of Paulson, Geithner, and Bernanke? Confident enough to ignore the correlation between excessive inequality and financial instability?

Good grief. The Great Depression, and now The Great Recession.

Two words: monetary policy.

Too bad Mr Cochran was so grumpy about inequality with talk of "confiscation," "off-with their heads," and "the left." I take it he in not interested in talking to anyone who is not of "the left" and thinks that what they see as increasing concentration of income and wealth might be addresses in ways other than "confiscation" and "off with their heads" policies.

#2...I agree in general with Cochrane ( there are specific differences ) , but there's a basic sense of difference of emphasis between us. It might be because he's an economist. I don't know. But here's my view. I don't care that much about taxation. So far in life, I've found myself with money after taxation, and the govt does provide some services I pay for, some of which I even agree with. Of course, taxes can hurt your business or your personal projects, but that's generally not the whole story. As well, those taxes can dovetail into my main gripe about govt. It forbids me from doing some things that I think I should be allowed to do and will punish me if I do them.

And that brings me to cronyism and inequality. The govt can, for example, outlaw a drug that I believe I should have access to. It can do that for some high- sounding reasons but actually be doing it at the behest of businesses that benefit from that drug being outlawed. The govt can pass ordinances forbidding me to alter my property, again, for high-sounding reasons, and yet actually be furthering someone's business interests. It's these impingements on my liberty that really piss me off. And I believe wealth and cronyism and power do have a lot to do with my being forbidden from doing these things, and having the govt be willing to punish me if I do them.

Here's the thing...I'll pay more taxes to be left alone and have more freedom of action. I won't like it, but that's me.

+1

As long as everyone -- or at least my business and professional competitors -- is paying similar taxes and those taxes allow me to earn a middle class standard of living, I don't care much if they're low or high.

But if the government tells me how to live my life and chooses specific businesses to be winners and losers and grants monopolies over essential functions that I have to submit to, then life will be crappy no matter how low taxes are.

6. Telemedicine has great promise for increasing efficiency in the delivery of health care services. One obstacle is that physicians are regulated and licensed by the states, so a physician licensed in one state generally is prohibited from practicing in other states in which he/she isn't licensed. For this purpose, providing physician services via telemedicine is considered practicing in the state where the patient is located. Physicians have been very successful in convincing the regulators to limit the ability of out of state physicians from practicing medicine on local residents, including via telemedicine. Short of nationalizing the regulation of physicians, this will be a major obstacle in the development of telemedicine. Last year my state legislature considered a comprehensive bill for the regulation of telemedicine. The bill did not pass, but it included an interesting provision that could go a long way to resolving this dilemma: reciprocity - my state would allow physicians licensed in another state to provide services to residents of my state via telemedicine if the other state allows physicians licensed in my state to provide services to residents of that other state via telemedicine.

3. No and neither will your grandson or granddaughter. Comedy is extremely tied to age.

So, if there's a policy which prevents people who use certain plants which have been classified as illicit from obtaining employment, then that's basically a nazi policy.

And what illicit plant are you on? Alcohol?

I don't even find Borat funny!

Is Borat anywhere in the story? I think he's qualitatively different from much of what the study looks to have put out there.

And Mr. Bean is one of the greatest things this planet has ever coughed up. (I'm old, for the record)

Baron Cohen doesn’t portray Borat as an exotic Central Asian; he plays him as one long Polack joke. In an essay in the Jewish Daily Forward about the roots of Baron Cohen’s comedy perceptively titled “Life Among the Goyim,” Andrew R. Heinze, author of Jews and the American Soul, notes:

"In Borat, we see the recycling of one of the most basic stereotypes in the Jewish imagination: the viscerally antisemitic Slavic peasant."

So, if you're grandmother is a Slav, it might be asking a little much of her too laugh at "Borat."

http://takimag.com/article/comedy_that_never_forgets_steve_sailer/print#ixzz3EqmCOQVe

Indeed. Kazakh's lean Mongoloid whereas Cohen is a typical Semitic-Caucasoid.

One of the interesting phenomena in Central Asia and the Middle East is the extent to which so-called Turkic peoples are interracial. Was Tamerlane more Mongol or Caucasian, for example? And of course, the Khazar's came from the same miscegenated stock.

1. Mining Bitcoin. As one who doesn't have a clue what a bitcoin looks like or what it could be used for, save as perhaps a marker in a trivial pursuit game, I was happy to skim this article and find that not only is my ignorance completely justified, but so is my unwillingness to become bitcoin-educated.

The geologist in me was a little disappointed, however.

#2: I'm certainly missing something, so someone please fill me in. Cochrane dismisses Keynesian arguments, claiming that they're

incoherent. If Keynesian "spending" and "aggregate demand" are the problems behind low long-run growth rates – and that’s a big if - standard Keynesian answers are a lot easier solutions than confiscatory wealth taxation and redistribution. Which is why standard Keynesians argued for monetary and fiscal policies, not confiscatory anti-inequality taxation, until the latter became politically popular.

I'm not sure what these "monetary and fiscal policies" are, but I usually think of additional "useful" government spending. (People can reasonably argue over what's actually "useful," but that seems like a separate issue.) As I see it, plenty on the Left would be quite happy with such spending, but whenever they fight for such changes they get shot down by those on the Right who are suddenly worried about the deficit and ever-increasing national debt. Although taxing the wealthy purely to cut them down would certainly be a lousy social policy, taxing them to afford more and better social programs doesn't seem inherently absurd.

It's inherently absurd, because it's NEVER enough. There are an infinite number of new and current "social programs" that people can and do argue in favor of. Current discourse has proved that people cannot reasonably argue over what's actually useful and it has become increasingly apparent that government cannot effectively draw a line.

And then there is the inherent problem of whether or not the agreed upon programs are even "useful" or "beneficial". This is the pitfall for the leftists you cry for (it's a problem for the right too), especially the lazy ones who just advocate for throwing money at serious problems like poverty, because it is easy and agreed upon.

No disagreements here -- people are going to argue about what programs are beneficial, and it does sometimes seem easier to create a program than to eliminate one. However, accepting that people can't always agree on what programs are "useful" is quite different from claiming that anyone asking for more spending is "incoherent" or that anyone asking for higher taxes on the wealthy is doing so purely out of spite. (I'm sure that some are, but others just want to pay for social programs without increasing [and maybe even reducing] the deficit.)

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