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CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Thursday, March 15, 2012
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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24 Comments:
Go ahead and laugh if you like, but to the Democrat Party cronies who are getting filthy rich at your expense this all seems very innovative.
It does not matter.
"$50 IS cheap considering the cost of destroying the environment for all future generations because we use so much electricity" (Never mind that we do not destroy the environment)
"ObamaCare IS cheap because it insures all for a lot less than those private, greedy insurance companies" (Never mind what may happen to private insurance or never mind why we have the mess to begin with and the refusal to change tax laws)
"Government IS the solution to ALL problems because Republicans are profiteers and greedy and consume energy" (Never mind how much energy the Hollywood Elite and others running the EPA and Government agencies consume and how they live)
I have concluded that there is a fraction that hates progress for the ordinary man/woman because progress/growth shrinks the distance between the haves and the have nots - and they cannot stand it. Industrial development - the design and implementation of mass production - novel ideas in energy generation and usage are all anathema to these elites, who are determined to turn the clock back on development, growth.
Mark Perry highlighted over at James Tarantos "Best of the Web" today.
krishnan-
you have very strange notions of cheap. i suspect it is because you are unfamiliar with the facts.
greedy insurance companies? they have lower profit margins than nearly any US industry. sneaker manufacturers have twice the gross margin.
obamacare is NOT cheaper than they are and worse, it makes them more expensive.
the whole thing is a trojan horse for single payer. you put a harsh tax on plans over X dollars, then pass laws that massively increase the price of plans. it's a cliff and a bulldozer to push you over it.
cash pay is MUCH cheaper. cash pay procedures actually drop in price every year while insured ones soar.
single payer systems are failing all over the world.
in private enterprise, it's cheap, good, fast, pick 2.
government is likely to get you only one (like canada) or even none like uhs in the uk.
the systems that do best are cash pay (like singapore).
once you give consumers no incentive to price shop (by having someone else pay) you get massive over-consumption and cost spirals.
no one goes to the buffet at the ritz and fills up on rolls to save the hotel money. you pay, and you eat like crazy.
healthcare is no different.
and i'd love to see your justification on a $50 lightbulb being cheap.
how about some actual numbers as opposed to hippie platitudes?
what's the "harm" of a lightbulb? what's the savings?
many enviro products (like a prius) are actually disasters for the environment. they save on fake costs (like CO2) and impose massive real ones like all the horrendous processes that go into making a battery and disposing of it.
you'd be better off buying a f-150.
you seem long on emotion, but short on fact.
how about backing up these strident claims with some actual facts?
thus far, you have not done so and have made claims about costs (greedy insurance companies) that hold no water. with <3% profit markins, insurers are not causing the problem by profiteering. they could all be run as non profits and it would make no material difference in price and they are incredibly efficient compared to medicare/aid who are in the process of getting dropped by providers all over the country because they are such bad payers and no doc can make money dealing with them.
Morganovich-
He was being sarcastic. :-P
I have a feeling Krishnan is quoting someone else. This does not sound like the Krishnan I know from Cafe Hayek.
But, give Bernanke time. Soon $50 for a stick of gum will be cheap and we'll be thanking God for electronic transactions so we don't have to take a wheel barrow to the store to carry the dough with which to buy groceries.
jon-
oh. oops. if he was, i totally missed it.
we really need a sarcasm font. can be hard to tell when you do not know the speaker.
Yea (!) sarcasm ...
But seriously, I am pessimistic about changing some minds about the economic foolishness of "green energy" or how by taking over an entire industry the Government can make it cheaper and better
There are those that DO think that paying $50 for a light bulb is better and that we all better pay $8/gallon for gas (or more) ... They are impervious to logic - there is no reaching them ... Unfortunately, many such people have their hands on power and are using it to advance loony ideas that destroy ...
I am just glad that there are economists like Perry and Boudreaux and Roberts and ... who have the stomach (and the ability) to confront stupidity headon with logic and persuasion - even as we know that it often falls on deaf years - ...
"Government IS the solution to ALL problems"
See the problem is that there are indeed people who think this, but on the other hand there are people who think government can't do ANYTHING.
Its important to recognize that both of these are wrong. True, the latter is more wrong than the former. But they are both wrong.
There are a few specific things that government does and can do "better" then the alternative. It is important to recognize what these are, and make sure that it remains confined to those areas.
But when confronting people who think government can solve "all problems", or people who think gov. can solve "a lot of problems", arguing the absolute opposite isn't going to change anyone's mind, because everyone can think of a t least 1 thing that the gov. does, in fact, do better than the alternative.
So the point is, don't confront extremism with extremism; the vast majority of people are in the middle and can be persuaded, quite easily, to move further in your direction. Aim for that.
"They are impervious to logic - there is no reaching them ."
There are such people, no doubt. But they are in the minority. Even I'm not convinced by your logic, and I'm on your side!
"I am just glad that there are economists like Perry and Boudreaux and Roberts and ... who have the stomach (and the ability) to confront stupidity headon with logic and persuasion"
While Dr. perry does a fairly good job, I always have a problem with the way Boudreaux tries to respond to the type of "extremism" which we often find ourselves responding to. He often does so using examples that are so outlandish, one often gets lost in the logic of the example. This, when there are perfectly easier ways to make a point.
IE, there's a reason why Milton Friedman was infinitely more convincing to ordinary people, even those who opposed him, than John Stossel is. There's a reason why Richard Epstein is infinitely more interesting that Walter Block is, even when arguing the same point. Most people aren't extremists, and most people want the same outcome as you; they just disagree with you on how to get there.
Go ahead and laugh if you like, but to the Democrat Party cronies who are getting filthy rich at your expense this all seems very innovative.
Both parties are not credible when it comes to doing the right thing. Both need to be booted out.
Don't forget about "Affordable Housing"
It Lowes the $65 bulbs we a GREAT to buy them for - or not 50 cents for China - OK?
Don't forget about "Affordable Housing"
Ah, yes. So affordable, yet so out of reach. Nice :)
Orlin: "It Lowes the $65 bulbs we a GREAT to buy them for - or not 50 cents for China - OK?"
What?
"I have concluded that there is a fraction that hates progress for the ordinary man/woman because progress/growth shrinks the distance between the haves and the have nots - and they cannot stand it. Industrial development - the design and implementation of mass production - novel ideas in energy generation and usage are all anathema to these elites, who are determined to turn the clock back on development, growth"...
Well krishnan personally I think you've hit the nail on the head in your description of what for liberals and progressive today.
Note what they're attempting in Australia...
to echo krishnan's snetiments, i think it really come down to a simple fact:
most "liberals" are far to conservative to accept capitalism.
they have a sense, like some sort of eden story, of a perfect world than is disrupted by man and that needs strong government control to protect it.
they are far to frightened of change to believe in emergent order from many individuals seeking their own well being.
deep down, they doubt a private market could ever supply enough thanksgiving turkeys and long for a turkey czar to handle it (and what a telling word choice czar is...).
the irony of this is quite rich around environmentalism. to protect that wonderful example of emergent order that is nature, they seek to disrupt emergent order. is it any wonder that their top down economic policies work about as well as their top down stewardship of yellowstone.
worse, many seems to have chosen a terrible period of climate to use as the benchmark for "perfect".
150 years ago we were just climbing out of the little ice age, the coldest period in 9000 years. it was a terrible time for humanity. harvest were small and famine frequent. a great deal of the decent into the dark ages can be raced back to the weather getting cold.
the medieval period was considerably warmer than today, the roman warmer still, and the minoan warmer yet.
these were great times for humanity. the polar bears were just fine.
the vikings grew wine on newfoundland. the romans did so in london. try that today.
if you are goig to try and maintain "ideal" climate (assuming there is such a thing) then you should at least pick a time of plenty, not poverty.
Morganovich, i concur he might have made his facetiousness a teensy bit more clear, but I could tell he wasn't serious by reading the parts in parenthesis, which clearly run counter to the main text in content.
Krishnan, I'd say to reduce the possibility of confusion, make that parenthetical part in italics and bold next time, perhaps... ;-)
>>> the problem is that there are indeed people who think this, but on the other hand there are people who think government can't do ANYTHING.
Well, there are two problems with this claim
1) While nominally true as a whole, the latter is much closer to the truth than the former.
2) Most people don't think the government can't do ANYTHING. We think the government can't do anything BETTER. That word makes all the difference in the world.
The error is most people think of government as the cart and horse to carry about the needs of society.
This is most emphatically WRONG.
Business is the cart-and-horse.
Government should be the carrot-and-stick.
A prime example of this is from the days when Microsoft was being (correctly) challenged as a monopoly.
The government solution was to try and tell M$ how to run their business.
The proper solution would have been to use Federal, State, and Local purchasing powers to create a market for an alternative OS, by, say, mandating that a percentage of all offices use Linux and Open Software tools, and that there needed to be seamless data interconversion between the two.
The software industry would have gone after that business, which would represent a significant guaranteed "seed business" to pay for the development costs, and which thusly would have eliminated M$ monopoly control over the OS and its abuse of that power.
Then the market would force M$ to do things right instead of screwing over their customers because they CAN.
OBH-
i'd frame it a little differently.
the role of government is to protect the rights of the individual. as soon as it exceeds that mandate, it begins to encroach and usurp functions better handled by private actors.
we still get into problems with how rights are defined, but i think that can be easily handled by applying one simple test. if you cannot have it alone on a desert island, then it is not a right.
you have the right to free speech. you can say whatever you like on an island.
you cannot have a right to healthcare. that requires others to perform positive actions for you. someone is forced to pay for it, and you violate their right to self determination and to keep the fruits of their labors.
it is precisely these "positive" rights that cause problems.
the right to safety in your person and property is a negative right. it requires that others NOT do things to you and your property.
but as soon as it demands that others do something positive, like build you a house, it cannot be a right as it is akin to indentured servitude for others.
if we could just get back to first principles on this, 99% of government caused problems would go away.
OBH: "The proper solution would have been to use Federal, State, and Local purchasing powers to create a market for an alternative OS, by, say, mandating that a percentage of all offices use Linux and Open Software tools, and that there needed to be seamless data interconversion between the two."
You're kidding, I hope.
Do you really mean to suggest that government agencies should coordinate their efforts to pick business winners and losers using taxpayer's money as is now done for alternate energy sources?
Should a government entity ignore common business sense when shopping for software instead of shopping for the best product at the lowest price, as a private business would do?
Should they instead buy some amount of competing software, a quota system if you like, no matter the cost or effectiveness - using my money?
That's BS. If you are serious, you might want to rethink what you're advocating.
Sometimes new technologies are expensive, but it's not unusual for the price to then drop. Computers were extremely expensive and not all that useful. Billions was poured into them by the government over multiple decades and I suppose you could say it was hard to imagine that investment could possibly be worth it by the end of the 70's.
If Mark and the rest of the right wingers had their way there would be no computers.
Jon: "Sometimes new technologies are expensive, but it's not unusual for the price to then drop."
And why do you suppose that happens? Is it just random occurrences, or government edict, or something you don't like to admit to?
"Computers were extremely expensive and not all that useful. Billions was poured into them by the government over multiple decades and I suppose you could say it was hard to imagine that investment could possibly be worth it by the end of the 70's."
You are making more out of this than exists. Government didn't pour billions into computers because someone in government thought computers were a good idea, but because computers were either the only way to accomplish a particular end, or they provided savings over previous methods of doing the same thing.
In aerospace applications, for example, there is no way to calculate and control an Apollo space mission using only a warehouse full of engineers with hand held calculators.
Of course, a government venture need not consider cost, as there is always more taxpayer money available, and no competition to worry about.
In the business world, a computer has always provided cost savings over doing the same task using rooms full of people with pencils, and hundreds of telephones to communicate results. I that were not true, computers would, indeed, have NOT developed to where they are today.
Give credit where credit is due, Jon.
"If Mark and the rest of the right wingers had their way there would be no computers."
It must be comforting to be able to lump large groups of people together as you do, as if they were identical widgets. Not very realistic or useful, but comforting nonetheless.
Get a clue, Jon.
jon whines: "If Mark and the rest of the right wingers had their way there would be no computers"...
Well golly gee jon if you and your fellow lotus eaters had your 'collective' way we'ed still be going behind some rock to take a dump...
Consider the following FAILED adventure into "venture socialism" your socialist clowns have wasted extorted tax dollars on...
10 Reasons Why Fisker May Be Worse Than Solyndra
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